What a difference 4 months make!  In April, the National Association of Homebuilders (NAHB) recorded a Housing Market Index (aka "builder confidence") of 77.0.  While that was off the recent peak, it was still higher than anything else before the pandemic going all the way back to 1998, and the 2nd highest pre-pandemic level since record keeping began in the mid 80's. 

Homebuilding headwinds are well known at this point.  They include things like shortages of materials and labor, but those factors alone weren't enough to put much of a dent in confidence.  It wasn't until they were joined by a rapidly rising rate environment colliding with 2 years of record-setting price appreciation that confidence really began to plummet.

In and of itself, price appreciation isn't necessarily a bad thing for homebuilding.  If it's moderate and stable, it can actually contribute in a positive way.  But 2 straight years of 20% price appreciation had already taken a toll on affordability even before 2022's rate spike.  When rates jumped at one of the fastest paces on record in the first half of the year, it added up to rapid cooling of what had been an arguably unhealthy frenzy of homebuying demand.  A vast majority of builders cited the rate spike as having the biggest impact on buyer demand.

Unsurprisingly, the portion of the homebuilder confidence index tracking present-day buyer traffic is leading the way to long-term lows.  Whereas the overall headline (which includes things like the 6 month outlook and present level of home sales) is still more than 4 points above 2014's lows, the buyer traffic component is only 1 point higher--effectively back to 2012's levels.

The housing market has been a seller's market throughout the pandemic, but is this still the case? The current trends are pointing towards an end to the real estate market conditions that created a bonanza for sellers. Many issues created a high-pressure market environment severely skewed in favor of sellers. From sky-high home prices, intense competition between buyers, and tactical play from sellers waiting for the right moment to put their homes for sale. 

It's worth saying outright: things are changing, and there are things home sellers need to be aware of today that weren't true last year. Here's what they are:

1. Home prices growth is returning to pre-pandemic levels

This is not the same as saying home prices are declining; they're not. Prices are still growing and won't begin falling in the foreseeable future. It's the rate at which they're increasing that's changing. All the signs point to a return to pre-pandemic levels of growth. So, instead of the unprecedented near-20% year increases, we're now seeing the more modest 7-8% year-over-year growth, according to the Zillow Home Value Forecast. The number of home sales expected to go through in 2022 is 5.46 million,10.8 percent down from 2021. 

This means that the waiting game is over for sellers in practice. You might have been thinking about selling your home but were waiting for home prices to reach their peak to maximize their returns on the sale. But the peak has already passed. It is doubtful that we'll see any more of the skyrocketing levels of home price increases any time soon. So, if you're unsure whether you should be putting your home up for sale right now, the answer is yes.

2. Popular relocation hotspots have the highest home prices

The way local home prices behave is always different from national averages. An area that's extremely popular with homebuyers will have different housing market conditions from one that homebuyers are keen to leave. In many cases of post-pandemic migration patterns, these local conditions have a marked effect on home values. If you are in a popular neighborhood, you are in luck. You can command a higher home price even if the overall trend is for slower growth. Redfin calls these "migration hotspots" and reports that they have the highest inflation rates. 

If you're not in one of those areas, you can still sell at a reasonable price if you know who your potential buyers are. An excellent real estate agent with local knowledge of your area can help find these buyers.

3. More affordable areas are in demand

The overall trend among homebuyers right now is downsizing and saving on housing as much as possible. Moving patterns indicate a strong preference for more affordable areas. People are moving from the biggest and most expensive cities to smaller urban and suburban areas. These smaller communities offer good amenities and schooling but don't cost as much as the traditional vast metropolitan areas. Home sellers need to be aware of this.

This doesn't mean you won't be able to sell if you are a home seller living in a metropolitan area. There is always movement both ways, and a general pattern away from a city doesn't equal an exodus. You need to market your home to the right buyer.

4. Homebuyer competition is still incredibly high

As a home seller, you will see headlines like "homebuyer competition drops to the lowest levels in two years" and think you'll struggle to sell. This is not the case. Homebuyer competition pre-pandemic was already very high, with record numbers of millennial homebuyers entering the housing market in search of their first home. This is a generational trend, and it won't go away any time soon. Indeed, you may not sell your home within days of it going on the market, as was so often the case during the pandemic. But you will still sell within weeks in many places.

5. You may not get your first buyer

One of the most prominent features of the pandemic-era housing market conditions was that many homebuyers were willing to waive contingencies to secure a home. There is evidence that this is no longer the case. As Redfin deputy chief economist Taylor Marr says: "buyers are increasingly keeping rather than waiving inspection and appraisal contingencies. That gives them the flexibility to call the deal off if issues arise during the home buying process".

Some buyers may call off a deal after finding a cheaper home. Others may be forced to backtrack after a mortgage application falls through. While inconvenient, this is a common occurrence and something you must prepare for by giving yourself more time to sell this year than last year.

6. An experienced real estate agent is more important than ever

Housing market conditions are a little trickier for home sellers this year than last year. It is even more critical this year than last year to get a real estate agent with solid experience and expertise in selling your type of home in your area. This will maximize your return on the sale and minimize the potential for delays and a deal falling through.

Richmond Area Weekender Guide

Here are some of the MARCUMsold Team's favorite things to do in-and-around Richmond, KY!

What: Movies In The Park

Where: Irvine-McDowell Park,  Richmond

When: Sept 2nd, Sept 23rd & Sept 30th

Details: Join us for a FREE Movie in the Park! We will be showing "Encanto" at dusk! Food Trucks such as Comete Alguito, Poppy's Ice Cream and Cotton & Cone will all be on site!

What: Daniel Boone Pioneer Festival

Where: Downtown Winchester, KY

When: Sept 3rd-4th, 2022

Details: Mark your calendar's for the 43rd Annual Daniel Boone Pioneer Festival September 3rd and 4th in historic Downtown Winchester! Enjoy arts, crafts, music, and more, plus the added bonus of our countless downtown shops and restaurants.

What: Trivia Night at Elmwood Mansion

Where: Historic Elmwood Estate

When: Thursday Sept 8th, 2022 AT 5 PM – 9 PM

Details: Put your wits to the test with fellow Alumni and Friends at our annual EKU Trivia Night! Enjoy a summer evening on the Elmwood lawn where you can tour the estate, compete to win prizes, and connect with your Colonel family, all while enjoying delicious food and live music. The event will be hosted on Thursday, September 8th from 5:00pm - 9:00pm.

🚶 Tour the Estate 🎶

Tours of the historic home will be available starting at 5:00pm and last until 6:00pm. If you would like to tour the home but don't wish to join us for trivia there is no need to register a trivia team. You are also welcome to explore the Elmwood grounds while listing to live music. Our featured artist this year is Lauren Mink, who was on seasons 11 and 12 of American Idol, accompanied by Dale Adams.

🍴 Come Hungry 🍔

You are welcome to bring a picnic blanket, lawn chairs, and a meal of your choice. In case creating the perfect team name is the only prep you want to do - tables and chairs will be provided and food trucks will be available to purchase dinner and drinks! Vendors include Comete Alguito, Kyle’s Kitchen, The Chuck Wagon, Poppy’s Ice Cream, Dreaming Creek Brewery, and Chenault Vineyards.

💡 Test Your Knowledge 🧠

The trivia game will begin promptly at 6:30pm and last roughly 2 hours. It will consist of 6 rounds containing 3 questions each, as well as a final question. Questions will be general knowledge, with a few EKU related questions thrown in. We will be using standard team trivia rules and point wagers, which will be explained at the beginning of the game for those that are unfamiliar. Pre-registration is encouraged but not required - maximum of 8 players per team. Parking will be available in both lots to the right and left of Elmwood off of Lancaster Ave.

🔗 Registration: CLICK HERE

What: Kayak Fun Float

Where: Lake Reba Kayak Launch

When: Sept 10th, 

Details: Come check out Kayak Fun Float on Saturday, September 10th from 10am-12pm at the Lake Reba Kayak Launch. This is a laid back float, all experience levels and all ages. Excel Health, LLC will be on site to give kayaking tips if needed!

Bring your own kayak or rentals will be available through Lake Reba Adventure. Lifejackets are required!

Questions? Call (859) 623-8753 or email parksandrec@richmond.ky.us

What: Spoonbread Festival

Where: Berea Folk Center

When: Sept 16th-18th, 2022

Details: The Berea Chamber of Commerce invites you to join in the fun of a fabulously exciting hometown festival that has grown larger every year for more than 25+ years!

This exciting festival offers: free admission, free entertainment, a hot air balloon glow, a motorcycle show, a car show, a parade, plus tons of vendors and foods to enjoy and so much more!

Come visit the Spoonbread Festival in the beautiful foothills of the Appalachian mountains at our convenient location off I-75 at Exit 76 & 77 at Berea, KY.

* To find the current calendar of events hosted by the Madison County Public Library  CLICK HERE

☀️ Selling Sunset.... Not quite the same as selling in Kentucky!

I have just starting watching Selling Sunset on Netflix. I am not one to watch real estate shows, but this ones houses are pretty enough and the clothing/fashion keeps me really really interested! It is just so interesting how different real estate sales are depending on location. For example the fact that listing agent attends showings, that is something I definitely do not recommend. It is super fabulous to watch but I want to make sure people really know that real estate in Kentucky is nothing like it is on that show!

#SellingSunset #MARCUMsold #BHHSFosterRealtors #Fashion #RichmondKY #MyRichmond #BereaKY #HomeSellers #HomeBuyers #KentuckyRealEstate

Catch up on our past episodes of The #MARCUMsold Show!

If you’re thinking about selling your home, it's important to have a good understanding of what’s going on in the Madison County market.

Knowing the most important data such as the average sales price, number of homes sold, and days on market will better prepare you to sell your home.

Our market report showcases everything you need to know about local real estate trends.

131

New Listings

199

Active Listings

134

Under Contract

132

Closed Sales

Homes Sold

99%

Sale-to-List Price

$271,000

Average Sales Price

1.5

Months of Supply

29

Average Days on Market

$142

Average Price per Square Foot

📍Why Hire A Super Hyper Local Realtor?

Real estate is a hyper local business. Having a hyper local expert on your side is going to make such a difference! A perfect example is knowing what is going behind your home. You have beautiful farm views behind this awesome house. Well, do you know what is actually in the works to be developed behind it? Probably not unless you live in the area, pay taxes & know all the local political people. Hiring a super hyper local realtor is absolutely critical if you want to protect your largest investment. I would love to earn your trust. Reach out to me today!

#MARCUMsold #BHHSFosterRealtors #RichmondKY #MyRichmond #HomeSellingTips #Agent #LocalRealtor #BereaKY #MadisonCountyKYRealEstate

 #MARCUMsold #BHHSFosterRealtors #TrustedAdvisor #RichmondKY #BereaKY #madisoncountykyrealestate

Catch up on our past episodes of The #MARCUMsold Show!

As the market continues to shift, more and more questions are being asked about how home prices will behave in the coming months. Will home prices continue to rise, or will they finally start to come down? If you’ve been interested in selling your home and/or buying a new one but have been intimidated by the fast-moving market, you’re in the right place. This post will explore real estate market conditions and when we may start to see home prices drop.

Rising Interest Rates: What They Mean for the Real Estate Market

The cost of buying a home skyrocketed by more than 20% across the country in April of this year compared to last year. In some cities, that number was even higher, including:

• 34.8% in Tampa
• 32.4% in Phoenix
• 32.0% in Miami

The red-hot real estate market conditions were caused by a few factors, including the Covid-19 pandemic and ensuing Great Resignation, limited inventory, and historically low interest rates. Interest rates are now on their way back up — while this may not sound like the best news for home sellers or home buyers, it does mean the market has started to settle. In fact, rates are expected to rise to 5.7% by the end of the year. These increased costs are putting pressure on the housing market. 

According to the Mortgage Bankers Association, there has already been a steep drop in mortgage applications. The drop was so significant that it pushed the market index down to its lowest level since 2000.

About 20% of home sellers dropped their prices during the month of May, but that doesn’t signify a serious shift in the market quite yet. Although the real estate market conditions are cooling, that doesn’t mean you can expect significant drops in home prices overnight. Most experts agree it will be at least 2023 before we see home prices drop.

Will the Housing Market Crash?

There have been a lot of murmurings online and in social circles that we may be heading towards another 2006-style housing market crash. Most experts are not anticipating this kind of “bubble burst.” 

Instead, Capital Economics predicts we’ll see a 5% drop in home price growth by the middle of next year. Then, they expect a gradual recovery to happen to 3% annual price growth by the end of 2024.

Should I Wait for Real Estate Market Conditions to Improve?

Since there are no signs of a chaotic downturn in the housing market, if you are interested in selling your home, you should not wait. Start the process now! Remember, there’s a lot that goes into selling a home — getting it deep cleaned, de-cluttered, and staged, fixing broken appliances and cosmetic issues, finding a real estate agent, listing the home, preparing the home for showings, having an inspection and appraisal and fixing issues these processes find — and the list goes on. 

If that list seems excessively long, it’s because the process can be arduous. So, there’s no need to wait. Get ahead of it and get started now! As the market slows down, it is taking longer for homes to sell — they are still selling fast, but we’re not seeing people lined around the block, and multiple above-asking price cash offers roll in like we were a few months ago. 

If you’re a home seller, it’s also important to list your home before the real estate market conditions change and prices drop. This is key so that you can make the highest profit possible on your home. If you wait too long, you risk missing out on full-price offers that will likely be a thing of the past when the market changes later this year and into next. 

The bottom line is that continued supply shortages and high buyer demand mean that now is a great time for home sellers to list their homes before prices start dropping significantly as interest rates continue to rise.

My Top 3️⃣ Staging Tips

Here are my top 3 staging tips. If you are thinking about selling your home these are minimum things I tell my sellers to do to get them biggest bang for their buck!!

1️⃣ Spruce Up Your Landscaping

2️⃣ Declutter Your Kitchen

3️⃣ Depersonalize Your Home

Are you thinking about selling? If so, I would love to talk and go over a staging plan for your home!

#MARCUMsold #BHHSFosterRealtors #RichmondKY #MyRichmond #HomeSellingTips #StagingHomes #BereaKY #MadisonCountyKYRealEstate

#MortgageRates #MortgageLender #BenchmarkMortgage #MARCUMsold #BHHSFosterRealtors #TrustedAdvisor #RichmondKY #BereaKY #madisoncountykyrealestate

Catch up on our past episodes of The #MARCUMsold Show!

You may have heard that changing market conditions have created a seller's market that's forcing buyers to spend a lot of money. People in many areas are experiencing housing shortages that make the seller's market strong. When you don't have enough supply to meet demand, you can expect to pay higher prices.

Changing market conditions can make it challenging to purchase real estate right now. They don't make it impossible, though. As the Fed looks to increase interest rates again, you need to work closely with a real estate agent and mortgage broker that can get you a fair deal. You won't believe how much money you save when you lower your interest rate by a small amount.

Of course, it helps to have a real estate professional searching for ways to lower your interest rate!

How Much Does Your Interest Rate Affect Home Prices?

The average home price in the United States is about $507,800. Obviously, real estate prices can differ significantly by location. For simplicity's sake, let's assume you want to buy a house that costs $500,000, and you have $100,000 for your down payment. At 20%, $100,000 should mean you don't need to pay private mortgage insurance (PMI).

You're borrowing $400,000 to purchase the home. How much will interest rates affect the full amount you pay before you own the house?

7% Interest Rate

If you get a 30-year fixed-rate mortgage with a 7% interest rate, you can expect to spend $958,035.59 plus the $100,000 you used as a down payment. This amount does not include insurance, property tax, and other expenses.

That's right. Your $500,000 house now costs nearly a million dollars. How does that happen?

Over the years, you paid a total of $558,035.59 in interest. You spent more money on interest than the actual property!

5% Interest Rate

In this scenario, everything stays the same, except you qualify for a 5% interest rate. You might not think that 2% seems like a lot. The numbers say otherwise.

With a 5% interest rate, you spend $373,023.14 on interest and a total of $773,023.14 buying the home. Lowering your interest rate by 2% saves you $185,012.45 over 30 years. Think about all of the things you can do with that much money!

3% Interest Rate

In today's real estate lending market, you will struggle to find a mortgage that only charges a 3% interest rate. It isn't impossible, but it's becoming increasingly unlikely as the Fed raises its interest rates.

Still, let's assume that you can qualify for a 3% interest rate to see how much money you would save. At 3% over 30 years, you would pay $207,109.81 in interest. The total purchase, not including your down payment, comes to $607,109.81.

Compared to a 7% mortgage, you save nearly $351,000. You save almost $166,000 compared to the 5% mortgage.

Know What You Can Control

You can control some factors easier than others when you buy a home. For example, you can probably get a lower interest rate by saving money for a larger down payment and working to improve your credit rating. In the end, your lender will choose the rate, though.

You also don't have much control over home prices. In a seller's market, you can expect to pay above the asking price.

However, you can control how much money you pay toward your mortgage each month. As long as your lender doesn't charge an early repayment penalty, you could save a lot of money by making a small additional payment each month.

By contributing an extra $100 per month toward your mortgage, you save:

• $72,851.78 on a 7% mortgage
• $41,552.74 on a 5% mortgage
• $20,087.25 on a 3% mortgage

You will also repay your loan a couple of years earlier than scheduled. It feels really good to get out of debt and own your home outright!

It's undeniable that the real estate market has been hot over the last couple of years, with low inventory across the boards and high competition among buyers. However, the market now seems to be making a shift. After three years, the inventory of homes for sale has finally increased for the first time since June 2019, with newly listed homes up 6.3% nationally compared to a year ago. 

While sellers are still listing at rates 6.4% lower than the pre-pandemic years from 2017 to 2019, the market is in the process of making major shifts. It's still a seller's market right now, but for how much longer? As a first-time homebuyer or even a seasoned homebuyer, it's important to keep up with the shifting market trends in order to secure a successful transaction. Read on to learn more about the shifting real estate market and discover how to better navigate these changes. 

What Does the Shifting Market Look Like?

In May 2022, Realtor.com released some housing data that revealed some major turning points in the market. In terms of inventory, the data shows that the number of active home listings entering the market is higher than it's been since 2019. Nationally, the inventory of active home listings has increased by 8% over the past year, amounting to 38,000 more active home listings compared to May 2021. 

While having more homes on the market is good for buyers, homes are still spending less time on the market compared to last year, and home prices are still rising. The market is definitely shifting, but not necessarily in a buyer's favor just yet. Interest rates are continuing to rise. These rising interest rates coupled with all-time high listing prices have increased the cost of financing 80% of the typical home by 48% compared to a year ago. 

In addition to rising prices, newly listed homes are larger. In May 2022, the share of newly listed homes less than 1,750 square feet declined from around 47% to around 45%. In comparison, the share of newly listed homes more than 1,750 square feet increased from around 52% to around 54%. This may cause frustration for first-time homebuyers because while more homes are being listed on the market, many are larger and more expensive. For example, the national median listing price for active listings in May 2022 was $447,000. This is up 17.6% compared to May 2021 and up 35.4% compared to May 2020. 

Tips for Navigating Market Shifts as a Buyer

In addition to partnering with a local, expert real estate agent, utilizing the following tips can help first-time homebuyers better navigate continued market shifts. 

Know Your Budget

With rising mortgage rates and increased home prices, it's essential to do your homework and plan what you can truly afford in advance. In a seller's market, you should be prepared to pay the asking price. However, it is essential that you make buying decisions based on your finances and not on your emotions. Just because you can financially afford to pay over the market value of a home doesn't mean that you should or that it's in your best interest over the long term. 

Get Preapproval From a Trusted Lender

Along with having a thorough understanding of your budget before buying a home, you should obtain a preapproved loan with a trusted lender. Getting a preapproved loan signals sellers that you are a serious buyer, and it may even gain you access to earlier showings ahead of other buyers. 

Be Flexible and Patient 

A final tip for first-time homebuyers navigating today's market shifts is to be flexible and patient. There will undoubtedly be ups and down on your homebuying journey, especially with today's market and continued market shifts. While there will be ups and downs, just remember that buying a home is still within reach, and when in doubt, always reach out to a local, expert real estate agent for help. 

Tips for Navigating Market Shifts as a Seller

While the market is shifting, it's still an ideal time for sellers. The following tips will help you get the most out of your home selling experience.

Work With a Trusted Local Real Estate Agent 

Even during a seller's market, it's important to work with a local expert real estate agent when listing your house. A local real estate agent will be able to give you the most up-to-date information on the market, navigate stressful contracts, and help you get the best price for your property.  

Have a Pre-Inspection Before Putting Your Home on the Market 

In addition to working closely with a local real estate agent, it would be to your benefit to have a pre-inspection completed on your home before you list it on the market. Having a pre-inspection can save you a ton of time, headaches, or delays down the road.