Rising Mortgage Rates Expected - Consumer Impact

It is going to happen...interest rates will rise as the economy and real estate markets improve.  Based on what the Federal Reserve tells us, that scenario may be set in motion soon.

The Fed isn't expected to raise base interest rates when they meet this week, but it's expected that they will send signals of what is to come.  They said that they would consider raising rates when unemployment goes below 6.5% and inflation is hovering around 2.0%, but the Fed will look at many more issues before deciding to raise rates.

Interest rates have been staying around 4.3%-4.5% for 30 year home purchase financing over the past several months, which is about 1% higher than a year ago.  Rates are expected to climb to between 5 and 5.5% by the end of 2014.

Of course, rising interest rates will have an effect on purchasing power.  A home buyer will be able to finance a higher sales price now versus what they can qualify for as rates increase.  At 4.5% for 30 years, the principle and interest payment is $1,013.37 on a $200,000 mortgage loan.

See below for principle and interest calculations at rising interest rates:

$200,000 at 4.50% = $1,013.37
$200,000 at 4.75% = $1,043.29
$200,000 at 5.00% = $1,073.64
$200,000 at 5.25% = $1,104.41
$200,000 at 5.50% = $1,135.48

            CLICK HERE to perform mortgage calculations for your price range

As you can see, going from 4.5% to 5.5% causes an 11% increase in monthly payment.  Assuming a $200,000 mortgage is a buyer's maximum approval at 4.5%, a 5.5% interest rate will reduce a buyer's spending power to $178,475.  Couple that with rising home prices (6.1% increase overall last year) in many locations, one can see the significance.  This will affect home buyers, as well as home sellers.

Rate increases are expected to be gradual throughout the year, but they are expected to rise.  Rates are still at or near historical lows we had not experienced priot to the past several years.  Before that, 6-7% rates were considered great.  The point here is to provide some persective on how rates will affect home purchases in the future.

11 Reasons To List Your Home During The Holidays

You’ve heard it from real estate agents before. “The Winter season is slow.” Or, “No one is really buying or selling.” And even, “I’ll get started in the New Year, it’s a new start right?”  Wrong. The truth is, it’s better to be ahead than behind.

Here are 11 reasons to have your home listed during the holidays:

11. By selling now, you may have an opportunity to be a non-contingent buyer during the Spring, when many more houses are on the market for less money! This will allow you to sell high and buy low.

10. You can sell now for more money and we will provide for a delayed closing or extended occupancy until early next year.

9. Even though your house will be on the market, you still have the option to restrict showings during the six or seven days around the Holidays.

8. January is traditionally the month for employees to begin new jobs. Since transfers cannot wait until Spring to buy, you need to be on the market during the Holidays to capture the market.

7. Some people must buy before the end of the year for tax reasons.

6. Buyers have more time to look for a home during the Holidays than they do during a work week.

5. Buyers are more emotional during the Holidays, so they are more likely to pay your price.

4. Houses may show better when decorated for the Holidays.

3. Since the supply of listings will dramatically increase in January, there will be less demand for your particular home. Less supply and more demand means more money for you.

2. Serious buyers have fewer houses to choose from during the Holidays and less competition means more money for you.

And the number one reason why your seller should list during the Holidays…

1. People who look for homes during the Holidays are more serious buyers!


*Information courtesy of the Keller Williams Greater Cleveland SW blog

Cleveland, Northeast OH Area Real Estate Market July 2013

According to the Northeast Ohio Regional Multiple Listing Service (NORMLS) and an article from the Cleveland Plain Dealer newspaper, homes sales in the region continue to surpass last year's sales figures. Lower home inventory, higher rental prices and higher buyer demand due to low (but climbing) interest rates, is driving this increase in activity and increase in sales prices.  The low inventory continues to increase new construction demand, as well.
Sales comparing July 2012 to July 2013 show increasing sales figures by double digits, like they did in May and June.  Among the 15 counties in Northeast Ohio, single family home sales are up 22.6% and 30.2% for condominium sales.  From June to July 2013, sales rose by 9%. 

By comparison, Northeast Ohio is showing a 6.3% price increase from last year, with the state of Ohio's at 7.2%. Ohio's sales volume increase was also up by over 25.8% from July 2012.  The US market saw a 13.7% increase in sales price from the year before, and is showing a sales volume increase of only 17.2%.  Northeast Ohio's price increases have improved to a lesser degree the past couple months, while Ohio and the US have been fairly stable.

"Although housing affordability conditions will become less attractive, jobs are being added to the economy," Lawrence Yun, chief economist for the National Association of Realtors, said in a written statement. "And mortgage underwriting standards should normalize over time from current stringent conditions as default rates fall."

The key point here is that the market is starting to stabilize and shifting to a seller's market.  Sellers are getting more for their homes than last year, with buyers paying a bit more to purchase a home to take advantage of the low interest rates.  Buyers should note that interest rates have begun to increase over the past several months, hovering around 4.5%. 

This is a great time for buyers who also have a home to sell, because rates are still relatively low on the buying side, but home values have risen in many areas to improve the financial return on the selling side.  If the economy continues to improve, buyers in the current market will be able to realize value gains for the homes they purchase as well.

Consider Home Staging to Sell Your Home

So, you're selling your home, or at least considering it.  But how do you compete with the rest of the market around you?  Pricing? Condition? Listing with an agent that knows how to market your home properly?  YES!

For the purposes of this post, we're going to concentrate on the condition of the home...

Why to Consider Staging

As a seller, you want to put yourself in the best position to get buyers' attention and have them perceive a value for your home, in comparison to other homes on the market in the area.  A buyer needs to see themselves living in your home.  Whether you're currently living in your home or have left it vacant, home staging may be what you need to set your home apart from the rest.

The purpose to home staging is to give your home an updated look, and to give a buyer the ability to see what the home would look like in it's best possible condition.  It helps highlight the home's best features, with the goal of appealing to a broad range of buyers, selling faster and for a higher dollar amount.  According to statistics from the Accredited Staging Professional website, the success rate (see below) can be quite substantial.


Return on Investment

Costs can vary, depending on the size of the home and how much staging work is done.  It can be a few hundred dollars to several thousand, but if it results in a quick sale for top dollar, it may prove to be well worth the investment. According to staging professionals, it can provide a 3-7% higher sales price.

The following is a summary of the results of HomeGain's national survey, based on the ten areas of home improvement identified by real estate agents in HomeGain's survey. They are listed from the highest to lowest returns on investment:


Bottom Line

As I always advise my sellers, if there is something that can place your home above all the rest, it should always be considered.  In regards to home staging, if the results and the return on investment can be achieved, it may be a way for a seller to "beat the market" in a time when the market heavily favors the buyer.

Cleveland, Northeast OH Area Real Estate Market March 2013

According to the Northeast Ohio Regional Multiple Listing Service (NORMLS) and an article from the Cleveland Plain Dealer newspaper, homes sales in the region continue to surpass last year's sales figures. Lower home inventory (which is beginning to increase), higher rental prices and higher buyer demand due to low interest rates, is driving this increase in activity and increase in sales prices.  Competition over available homes has been more common over the past several months.
Sales comparing March 2012 to March 2013 show increasing sales figures.  Among the 15 counties in Northeast Ohio, single family home sales are up 15.8% and condo sales are up a 15.6%.  From February to March 2013, single family home sales increased 48.9% and condos increase by 33.3%.  In addition to the increase in sales activity, Northeast Ohio is showing a 6.9% increase in single family home prices and 1.0% increase for condos, compared to last March. 

The key point here is that the market is starting to stabilize and shifting to a seller's market.  Sellers are getting more for their homes than last year, with buyers paying a bit more to purchase a home to take advantage of the low interest rates.  Buyers should note that interest rates have reached nearly as low as they can go, when deciding the best time to make a purchase.  In fact, rates have already shown increases over the past several months.  The data also indicates we have seen the bottom of the local real estate market.



By comparison, Northeast Ohio is showing a higher price increase of 6.9% versus Ohio's 5.2%. The US market actually saw a 0.6% decrease in sales price from the year before, but is showing a home price increase of 6.9%.  Nationally, 4.92 million homes have sold, which is just shy of meeting the lower part of the 5-6 million of annual home sales considered to be a normal or healthy range.

NAR Chief Economist Discusses U.S. Real Estate Market

The National Association of Realtors Chief Economist Lawrence Yun joined C-SPAN yesterday morning to discuss the U.S. housing market, and he responded to telephone calls and electronic communications. Topics included the March 2013 jobs numbers, Obama administration efforts to boost the housing market, and the real estate markets in individual states.

Mortgage Interest Rates Are On The Rise

Interest rates have reached a 6 month high for 30 year loans, with an average rate of 3.63%, up from last week's average of 3.52%.  For comparison, in November-December 2012 the rates were at a 3.35% national average. The average 15 year rate also saw a small increase from 2.76% to 2.79%.

The main contributors to the increase are the improved economy and the drop in unemployment rates.  In fact, unemployment rates dropped below expectations to 7.7%.  The short version of why these indicators affect interest rates, is due to consumer confidence and the obvious fact that if more people are working, there will be more people with the ability to make a home purchase.

So, what this means for a home buyer is that interest rates are on the rise.  They fluctuate daily and we will see peaks and valleys, but the rates will be trending upward as the economy improves.  That is why this year would be a great time to consider making a home purchase.  Economists are projecting that rates will reach 4% by year's end.  It's still a fantastic rate, but as the rates increase, it will affect a buyer's purchasing limit.

For sellers, we are seeing in most communities, that there is high buyer demand due to the rising rates and not enough homes for sale yet to meet the demand.  When there is high demand and lower supply, that indicates a trend leaning toward a seller's market.  That is why we are also seeing a slight increase in home sales prices, shorter days on the market and multiple offer situations on homes. 

This is a very exciting point-in-time where a homeowner can experience a better seller's market, and still take advantage of the low interest rates and great sales prices, before we see further increases in those rates and prices.  I would enjoy speaking to anyone considering a move, to discuss the local market and how it affects your specific situation and needs.

Cleveland, Northeast OH Area Real Estate Market January 2013

According to the Northeast Ohio Regional Multiple Listing Service and an article from the Cleveland Plain Dealer newspaper, homes sales in the region continue to surpass last year's sales figures. Lower home inventory, higher rental prices and higher buyer demand due to low interest rates, is driving this increase in activity and increase in sales prices.  Competition over available homes has been more common over the past several months.

Sales comparing January 2012 to January 2013 show improvement after a small decline in December.  Among the 15 counties in Northeast Ohio, single family home sales are up 6.2% and condo sales are up a 29.7%.  An increase in sales contracts early in the year, indicate strong sales probable in February and March.  In addition to the increase in sales activity, Northeast Ohio is showing a 6.4% increase in single family home prices and 6.0% increase for condos, compared to last January. 

The key point here is that the market is starting to stabilize and shifting to a seller's market.  Sellers are getting more for their homes than last year, with buyers paying a bit more to purchase a home to take advantage of the low interest rates.  Buyers should note that interest rates have reached nearly as low as they can go, when deciding the best time to make a purchase.  In fact, rates have already shown increases over the past couple weeks.  The data over the past several months indicates we have seen the bottom of the local real estate market.



By comparison, Northeast Ohio is currently being outpaced by the national sales increase of 9.1% in January.  Prior to that, Northeast Ohio was ahead of the national numbers.  The US market has also seen a 12.3% increase in sales price from the year before.  Nationally, 4.92 million homes have sold, which is just shy of meeting the lower part of the 5-6 million of annual home sales considered to be a normal or healthy range.  

Realtor Confidence Levels Up Nationally, January 2013 Report

Realtor confidence levels are up significantly across the nation. The market is still being held back by a few obstacles, but the national market showing great improvement and going in the right direction.

Here is a recent article from the National Association of Realtors on the subject:

On January 24, 2013, in Economist Commentaries, by Jed Smith, Managing Director, Quantitative Research

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The year 2012 ended on a high note. Based on information gathered from the  December 2012 REALTORS® Confidence Index Survey, the Current Conditions Confidence Index increased for all property types. The index for single family homes rose to 56 from from 32 a year ago, indicating a shift in expectations from “below moderate” to “above moderate”.  An index of 50 means moderate conditions or expectations.   The index for townhouses ended at 39 compared to 19 last year, while the index for condominiums was at 31 compared to 14 last year.


REALTORS® generally reported brisker sales, rising home prices, and shorter days on the market.   However,  the market recovery continued to be held back by low inventory and  a tight  and drawn out underwriting process, especially for shortsales. Appraisal issues, the modest pace of economic recovery and job growth, and the potential adverse impact of ‘fiscal cliff” measures and  regulations on mortgage lending (e.g, Qualified Mortgage rules) were major concerns. REALTORS® also reported reduced activity in the areas affected by Hurricane Sandy and  concerns over the potential dampening effect of higher flood insurance rates.

Why Your Listing Expired, Why Your Home Didn't Sell

So, has your listing expired recently?  If you have experience with your listing expiring, I’m here to help you understand why your listing failed.  You really need to understand why your home didn’t sell, before relisting, otherwise, you’re risking a repeat result, wasting more of your time and money.  

I recommend thinking back through entire process, from the initial agent interview to the moment your listing expired.  This will help you learn what may have gone wrong.  In the e-book, I offer a number of questions and topics to think about that will help you reflect back through the listing period.

There are five primary reasons homes don’t sell.  Those reasons are:

1. condition,
2. location,
3. poor marketing plan,
4. the agent you selected, and
5. the price. 
With exception of location, all of these reasons are items that you can change.  To successfully sell a home, you must set your home apart from the competition.  The home should be in the best condition possible, priced correctly, marketed extensively and creatively and handled by an agent that has what it takes to manage the process. 

I know you may be discouraged by your expired listing, but please keep in mind:

“ANY HOME THAT IS PROPERLY PRICED AND MARKETED WILL SELL IN ANY REAL ESTATE MARKET!"

Once again, I go into more detail in my expired listing e-book.  To get a free copy of my e-book, simply fill out the form provided at www.expiredlistinghelp.com  and I’ll send it to you immediately.   

Whether the home your selling is in the Cleveland/Northeast Ohio area or not, I invite you to call me anytime if I can be of further assistance.  Feel free to Contact Me anytime for more information.

Hinckley, Ohio Real Estate and Information Source

Hinckley, Ohio

City Information and History

Hinckley, Ohio, in Medina county is exactly five miles square but contains 1133 acres more than the conventional 16,000 acres, due to the hills and valleys and generally 'wrinkled' surface.  The township is known as the home of the buzzards. On March 15 of every year, large flocks of buzzards arrive.  Hinckley is just over 30 minutes from Cleveland, 15 minutes from Medina and 30 minutes from Akron, with nearby access to I-71, I-227 and the turnpike.

The Hinckley area became available to Judge Samuel Hinckley of Northampton Massachusetts. He was reputed to be one of the shrewdest land proprietors of his time. He predicted that the day would come when his land in Hinckley would sell for as much as $10 per acre but he did not expect to live long enough to realize such profits.  As the pioneers from the East began to move westward, the Judge was quick to place his holding in other parts of the Western Reserve for sale. He was in no particular hurry to dispose of his Hinckley holdings because they were of less value and Hinckley remained a wilderness for quite a while after adjoining townships had been settled.

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Real Estate

Hinckley Township residents enjoy its rural atmosphere and its convenient location. The city has homes and neighborhoods to suit most budgets and life styles – whether you are newly married or an empty nester, have a growing family, or are an executive with large space needs. Homes range from $120,000 to well-over $1,000,000. The Metro Parks are literally a few minutes away. They offer picnicking, hiking, bicycling, fishing, skiing, and unspoiled nature.

Hinckley is a considered a desirable Cleveland area suburb.  The current real estate market data for the city can be viewed below, which is great information if your looking to buyer or sell a home in Hinckley.  Also provided is full access to all current listings for sale in Hinckley.

Current Hinckley Market Data

Homes For Sale In Hinckley

Helpful Area Links

City Government Website
Demographics
School Ratings
School Board
Area Attractions
Weather Forecast
Utility Providers/City Services
Nearby Shopping, Restaurants, Hospitals, Parks, and more

Strongsville, Ohio Real Estate and Information Source

Strongsville, OH

City Information and History

Strongsville is a located in Cuyahoga County, Ohio, situated about 25 minutes from downtown Cleveland and about 15 minutes from the Cleveland International Airport.  The city's nickname is "Crossroads of the Nation," as this is where the Ohio Turnpike and Interstate 71 intersect. The Strongsville Recreation Center and Senior Center were named after former mayor Walter F. Ehrnfelt. The population was 44,750 as of the 2010 Census, and the city is well known for its school system, MetroParks access, and abundance of shopping and restaurant locations.
Strongsville officially became a township on February 25, 1818, a village in 1923, and was ultimately designated a city in 1961. Founded by settlers arriving in the newly purchased Connecticut Western Reserve, the city was named after John Stoughton Strong, the group's leader. Many of the main streets in the city are named after other principle figures and landowners from the city's history, e.g. Howe, Drake, Shurmer, Whitney.
In the mid-19th century, the Pomeroy House, then called The Homestead, was a stop on the underground railroad. Alanson Pomeroy, the home owner and a prominent Strongsville resident, concealed runaway slaves on his property. From this residence in Strongsville, the runaway slaves were taken to boats on Rocky River for passage to Canada.



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Real Estate

Residents like Strongsville because of its atmosphere and convenient location. The city has homes and neighborhoods to suit most budgets and life styles – whether you are newly married or an empty nester, have a growing family, or are an executive with large space needs. Condominium prices range from $70,000 and up, and homes range from $80,000 to over $1,000,000. The Metro Parks are literally a few minutes away. They offer picnicking, hiking, bicycling, fishing, skiing, and unspoiled nature.

Strongsville is a considered a desirable Cleveland area suburb.  The current real estate market data for the city can be viewed below, which is great information if your looking to buyer or sell a home in Strongsville.  Also provided is full access to all current listings for sale in Strongsville.

Current Strongsville Market Data

Homes for Sale in Strongsville

Helpful Area Links

City Government Website
Demographics
School Ratings
School Board
Area Attractions
Weather Forecast
Utility Providers/City Services
Nearby Shopping, Restaurants, Hospitals, Parks, and more