To say the economic news coming out lately has been disconcerting would be an understatement. Statistics concerning job losses, furloughs, and unemployment figures have pointed to upheaval in the global economy as a result of social distancing measures, which were put in place by governments to contain the global COVID-19 pandemic.
But according to recent data from Realtor.com, there is one statistic that should give homeowners (especially potential sellers) some comfort—home prices still appear to be on the rise. In the week ending April 25, the median home list price ticked up by 1.6% annually, compared to one year ago. The data comes from the 99 largest metropolitan areas.
To be sure, price growth was higher a few months ago, when prices were rising by over 4% prior to the lockdown. But this is still a positive sign given the turmoil in other segments of the economy, and could provide reassurance about the stability of the housing market for those considering buying or selling their property.
So why do housing prices appear to be holding steady despite uncertainty in the broader economy?
First, it could be that prices are “sticky”, according to Realtor.com Chief Economist, Danielle Hale:
“The slight increase this week is because prices are sticky. Home sellers are strongly resistant to lowering prices, and they’d gotten really close to declining, so we see a bounce-back. I don’t think this is a return to big price increases.”
The second reason might have to do with the reduction in inventory. The number of homes for sale has been on the decline for years, leading to a much publicized housing shortage in many parts of the country. Low inventory and high demand tends to drive prices up as more buyers compete for fewer houses.
And, after the pandemic hit, available inventory has plummeted. Some estimates put the decline of annual inventory at upwards of 17% compared to last year. Meanwhile, according to the Realtor.com data, the number of new listings has plummeted by a whopping 43.1%.
People are pulling their homes off the market, or waiting to list them because they’re worried about their own economic prospects, concerned with moving during such an uncertain time, or believe that the health risk of having strangers visiting their property isn’t worth it. In any event, listings have slowed, which has helped keep prices of homes that are on the market fairly high.
So, despite the constant deluge of health and economic news, home prices appear to be holding steady. This is good news for anyone who is considering selling, or wants confidence that they’ll be buying a home that has value. It might also give buyers and sellers an edge in a market where many others are choosing a “wait and see approach.”
As always, if you’re thinking about buying or selling a property, or have any real estate questions at all, don’t hesitate to reach out. Even during these difficult times, there are still great opportunities for sellers and buyers.
If you or someone you know is interested in buying or selling Oakland County MI real estate, please give Tom a call today at 248-790-5594 or you can get in touch here.
Tom Gilliam, REALTOR®
29630 Orchard Lake Rd.
Farmington Hills 48334
Email: Tom @ Homes2MoveYou.com
We all think that painting is a personal choice and that the paint color is a personal preference and this is true if your not planning on selling your home any time soon. But if you are planning to sell in Oakland County Michigan, then it is better to re-think this approach.
So if you’re thinking about putting your Oakland County Michigan house on the market, obviously you want to do everything you can to increase the value before you sell. And if you want to add to that value without breaking the bank? Try a little paint, but choose wisely the paint colors you want to use as it will affect your bottom line.
Paint Color Analysis
According to Zillow’s 2018 Paint Colors Analysis, which analyzed the effects different paint colors had on Oakland County home values, choosing the right paint colors—and incorporating those paint colors in the right way—can make a huge difference when you list your home and your net proceeds.
Which paint colors will give you the most bang for your buck? According to the analysis, painting your door black can boost your home’s sales price by 2.9% while covering the bathroom walls in a periwinkle blue can add another 1.3%.
The kitchen is another area where the right paint colors can add serious value. The analysis found that a “tuxedo kitchen” (which features light walls and dark cabinetry) can increase the value of a home by an impressive $1,547. But the wrong paint color in the kitchen can cause prices to plummet; a brick red shade can lower a home’s selling price by $2,310.
If you’re thinking about putting your home on the market, you should definitely consider painting. The right paint and a few strokes of the brush may be all it takes to add thousands of dollars to your home’s final sales price.
How Comparable Sales are Use to Price Your House
Comparable sales are one of the biggest weapons in the real estate agent’s arsenal that he uses to set the sale price of your house. It involves looking at the previously sold neighboring houses and drawing comparisons based on its features. Of course, the current market value tells you a lot about how much the house can be sold for but if you want to find out the sale price to the last dollar, then looking at comparable sales will give you a clear idea on how high you can go on your asking price.
The reason why this step of the home-selling process is best handled by a real estate agent is because they have been inside hundreds of houses. They know what features impress buyers and what they see as frivolous and a waste of money. So, if you are planning to go the FSBO route to save on the commission, know this that you might lose a winning deal.
How Comparable Sales Help In Setting the Asking Price
Your home for sale in Oakland County, Michigan is valued on many factors, which include:
Location: The closer the comparable sale is to your house, the better the chances are that it has the same layout.
Home Type: From the square footage to the construction material, home style including the number of rooms, basement and attic… everything is taken into account.
Upgrades: Any upgrades that you have made in the past year are included in the comparable sale. However, if these renovations do not match the basic requirements of the buyer, you might not see any ROI.
Date of Sale: When using comparable sales, make sure the house was sold within the 90-day window.
Sale Sweeteners: If the comparable sale offered sale sweeteners such as paying for the closing costs or low down payment, then you will have to lower the asking price of your house or offer the same benefits.
Insider Insights Allow Real Estate Agents to Settle on the Price
Subdivisions present a problem when selling your home for sale in Oakland County, Michigan because they are different than the comps. However, since the real estate agent has insider knowledge about the comps in your areas, they will be able to negotiate on the asking price with the buyer based on other factors such as land value and major repairs.
This way, even if the buyer comes back with a counteroffer, you will be able to show him the comps as proof that the house is in fact valued just right. Of course, at this point you can use sale sweeteners to entice the buyer. However, even this should be done keeping in mind that you are not giving away something that will cost you more.
In such cases, what you can do is offer home insurance or kitchen appliances for free. These big gestures will show the buyer that you are willing to offer something in return for the high asking price on the house.
They Pick the Right Home Listing Price
Say, there are about four comps in your neighborhood. Some of them were sold cheap and some of them were sold at a high price. At this step, the real estate agent evaluates each and every feature of the house from the quality of the paint to the durability of the roof and more to set the right asking price to the last dollar.
So now you know why having a real estate agent is so important when it comes to setting the asking price on your house. Looking for a real estate agent to help you put up your home for sale in Oakland County, Michigan? Visit my website Homes2MoveYou or you can reach me at 248-790-5594 for the right listing price.
When homeowners are preparing to put their properties on the market, one aspect is usually foremost in their minds: money. Setting the asking price accurately can mean the difference between getting an offer quickly and having a house languish for months, drawing little interest.
With that in mind, it’s important that potential sellers block out a lot of the noise that often surrounds the intricate art and science of pricing. There are plenty of myths that may cause sellers to lose sleep at night as they attempt to separate fact from fiction.
The following are statements that can stand in the way of a successful sale.
1. ‘If we keep waiting, a better offer will come along!’
When sellers receive an offer from the first showing, they may be skeptical or hesitant to accept it, wondering if other prospective buyers would be inclined to pay more. Thoughts of potential bidding wars could cause sellers to want to wait and see who else falls for their place. But, remember the old adage, “A bird in the hand is worth two in the bush?” There’s no guarantee other would-be buyers are waiting around the corner. If the offer is a fair one, entertain it and count your blessings.
2. ‘Getting an offer right away, means the agent priced it too low!’
When sellers receive an offer early in the process, as excited as they might be, many can’t help but wonder, “Should we have asked for more money? Did our agent price it too cheaply?” While it’s natural to be skeptical (and even a little greedy), receiving an offer on the early end of the spectrum most likely means your home was priced accurately and attractively. If you trust your agent, you know he or she didn’t pick a number out of the sky, but rather based it on extensive market research. So, be glad your sale is moving in the right direction.
3. ‘We should price it so there’s room to negotiate!’
Let’s be honest: Most sellers would love to get top dollar for their homes. But overpricing it with the intention of being willing to accept a lower offer may just leave you empty handed in the long run. Plus, if you have to drop your ask multiple times, buyers may begin to wonder what’s wrong with the place — other than the price, that is.
4. ‘That’s not what my Zestimate says it’s worth!’
Have you ever noticed how homeowners are eager to believe Zestimates or other automated valuation models when that price exceeds their expectations? Yet, when the opposite happens, they assume it’s outdated or erroneous information? The point we’re making is, these numbers can be inaccurate, so again, trust your agent over the Internet. Enough said.
5. ‘We can add all renovation costs to the asking price!’
Sellers may adore the improvements and renovations they’ve made and want to add in those costs to the asking price. But remember, not every change is going to land a huge return on investment. If you’re curious about what you can expect on those fixes, check out Remodeling Magazine‘s annual ‘Cost Versus Value’ report to get an idea of which upgrades yield the biggest bang for your buck. Also, as you’re making changes, bear in mind that the infinity pool you view as an asset may just seem like a huge liability to a buyer.
6. ‘My Realtor® overpriced my house to make a larger commission.’
Agents are paid a percentage of the selling price of the home. However, even if they were to raise the ask by $25,000, in most cases that would yield an additional $1,500 in commission, which would then be divvied up between the broker the agent is working for and the buyer’s agent, leaving your agent with less than $750 more in his or her pocket. It’s hard to imagine an agent would blow a potential quick sale — and take on weeks or months of additional showings and marketing expenses — for a few hundred dollars.
7. ‘Reducing the price is a sign of weakness!’
While no homeowner is eager to drop the listing price, if time is passing and there’s been little interest, it could be time to consider lowering the ask. Remember, time is money. While you’re waiting for someone to meet your price, you’re still paying the mortgage, taxes, utilities, and insurance etc. Plus, sometimes, lowering the price can put your home in front of a group of new buyers, which could generate a lot more interest and, ultimately, get the price back up closer to where it was in the first place.