Yes, Home Prices Are Rising. No, a New Housing Bubble is NOT Forming!

Bubble-KCM

We recently reported that home prices are continuing to rise across most of the nation. This has created concern in some pundits that a housing bubble, like we saw ten years ago, is forming again. We want to explain why these concerns are unfounded.

The current increase in home values can be easily explained by the theory of supply and demand. Right now, the number of families looking to purchase a home is greater than the supply of homes on the market.

Here is a chart that explains how the months’ supply of housing inventory impacts home values:

KCM-ENG-1

According to the latest Existing Home Sales Report from the National Association of Realtors, there is currently a four-month supply of inventory. That puts us in the blue section of the above graphic. Home prices should be appreciating.

The difference in 2006…

A decade ago, the demand for housing was artificially boosted by lending standards that were far too lenient. Today, the strength of the demand for housing is legitimate, as lending standards are nowhere near what they were a decade ago.

For proof of this, let’s look at a graph of the Mortgage Bankers’ Association’s Mortgage Credit Availability Index:

KCM-ENG-2

The higher the number, the easier it was to get a mortgage. We can see that from June 2005 to June 2007, mortgage standards were much more lenient than they have been over the last nine years.

Bottom Line

Today’s price increases, unlike those a decade ago, are the result of qualified buyer demand exceeding the current inventory of homes available for sale. Once the supply increases, prices will level out.

How can I help you achieve your real estate goals?

 

 

About Carol Juntunen:
I'm a Realtor® with Baird & Warner in the Chicago NW suburbs.
My intention is to provide insights and information to empower you to make informed real estate choices and decisions, and guide you through the home buying, selling or renting process.

Contact me:
Carol Juntunen
Baird & Warner
Realtor® & Broker Associate
CNE, CSC, e-PRO
carol.juntunen@bairdwarner.com
www.caroljuntunen.com
224-523-2217


Housing Market To “Spring Forward” This Year

 

SpingForward_2016Just like our clocks this weekend in the majority of the country, the housing market will soon “spring forward!” Similar to tension in a spring, the lack of inventory available for sale in the market right now is what is holding back the market.

Many potential sellers believe that waiting until Spring is in their best interest, and traditionally they would have been right.

Buyer demand has seasonality to it, which usually falls off in the winter months, especially in areas of the country impacted by arctic temperatures and conditions.

That hasn’t happened this year

Demand for housing has remained strong as mortgage rates have remained near historic lows.

The National Association of REALTORS (NAR) recently reported that the top 10 dates sellers listed their homes in 2015 all fell in April, May or June.

Those who act quickly and list now could benefit greatly from additional exposure to buyers prior to a flood of more competition coming to market in the next few months.

Bottom Line

If you are planning on selling your home in 2016, let’s chat! I’d love to help you evaluate the opportunities in your market.

Contact me: 
Carol Juntunen
Realtor® with Baird & Warner in Chicago NW suburbs
Cell:  224-523-2217
Website: www.caroljuntunen.com

5 Things to Expect at an Open House

So you’re house hunting or maybe you’re out and about and see some open house signs and decide to check it out.

Do you know what to expect or the etiquette involved when you attend an open house?

Who is hosting the open house?

Open houses are part of the real estate marketing process; they are a great vehicle for creating excitement and “buzz” when introducing a new listing to the market.

Keep in mind that the agent/broker hosting the open house may be the agent representing the seller (the listing agent) or another agent who may be trying to meet new buyers or obtain new clients. The easiest way to make that determination is to note the name of the agent on the sign in the yard and then check the name of the host. If the listing agent is hosting the open house and you’re a serious buyer and very interested in this particular house, you might want to watch what you say and not divulge too much information about your situation. Remember the listing agent works for the seller – you don’t want to compromise your negotiating position if you end up making an offer on the house.

Either way, the person holding the open house is most likely an expert on the market and the neighborhood.  Some buyers actually find an agent to work with and represent them at an open house, especially if the agent seems knowledgeable and you connect with them. Once you get serious about buying or selling, you’ll want and need an advocate on your side so use the open house as a way to interview agents.

Take off your shoes

It’s basic common courtesy, so take off your shoes or put on a pair of booties (usually provided at the door). Also to avoid the risk of spills, stains or crumbs, avoid bringing food or drink into the house.

For Safety Purposes — Sign in

Yes, there will be a sign-in sheet or an electronic device with an open house sign-in app. You might not want to share your information but remember you are in someone else’s home.  If it were your home wouldn’t you want to know who was coming through it?

Brokers have a responsibility to know who was in the house for the security of the seller’s property. Signing in also allows brokers to keep track of the number of people who attend the open house and where they come from.  Then they share the number of people and any feedback about the house with the owner so as to help gauge the amount of interest in the home. Also agents typically send a follow-up thank you note or email (sent automatically with a sign-in app) for attending their open house but they won’t continue to contact you if you ask them not to.

Consider too that agents are in a vulnerable position. You never know if someone nefarious could use the open house to case the home or even possibly attack the agent; knowing who has been through the house adds an extra layer of security. In some markets, people might even be asked for their photo ID before touring the home.

If you are already working with an real estate agent, ask your agent to give you some of their business cards. That way you can present their card to the agent hosting the open house; they’ll just ask for your name and won’t ask for the rest of your information. Agent relationships are very important and we wouldn’t want to offend another agent by contacting their client.

Keep an Eye on the Kids and Stay Together

Agents are responsible for the home during the open house and do their best to make sure the homeowner’s possessions don’t get broken or stolen. So stay together and keep an eye on the kids and don’t let them run around or touch anything. Feel free to open cabinets and closets but don’t go through the homeowner’s things. If you want to take photos or video, ask the broker’s permission.

Agents don’t bite!

Yes, the hosting agent will ask you for your sign-in information–keep in mind it is someone else’s property–but we’re just there to help. We typically know all about the house, the market, the neighborhood, and the schools, so feel free to ask questions.

Of course, not all homes on the market have an open house. To expand your touring options, you might consider working with a buyer’s agent. I’d be happy to represent you as your buyer’s agent. Just call or text me!

About Carol Juntunen: I'm a Realtor® with Baird & Warner in the Chicago area. My intention is to provide insights and information to empower you to make confident, informed real estate choices and decisions, and guide you through the home buying and selling process.

How can I help you achieve your real estate goals?

Ready to buy or sell? Call or text me today:
Cell:    224-523-2217
Website: www.caroljuntunen.com
Email:   carol.juntunen@bairdwarner.com

Designations: 
Certified Probate Real Estate Expert (CPRES)
Seniors (50+) Real Estate Specialist (SRES)
Certified Negotiation Expert (CNE)
Pricing Strategy Advisor (PSA)
Certified Staging Consultant (CSC)
Internet Marketing Expert (e-PRO)

Do you understand “agency”?

real estate word cloudAgency” is a term used in real estate to determine what legal responsibilities your realtor owes to you and other parties in the transaction.

The seller’s representative (also known as the “listing agent” or seller’s agent) is hired by and represents the seller through a signed exclusive listing contract.

The buyer’s representative or buyer’s agent is hired by and represents the buyer through a signed exclusive buyer representation agreement.

There are also rental listing representatives or agents who are hired by and represent a landlord through a signed rental listing agreement and renter’s agents who are hired by and represent renters through a signed exclusive tenant representation agreement.

In Illinois, both buyers and tenants sign the “Exclusive Buyer/Tenant Representation Agreement”.

A “duel agent” represents both the buyer and the seller in the same transaction.  Duel agency requires written consent from all parties due to the potential for conflicts of interest.