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June Housing Market Numbers Soften

Alright, here is the latest Greater Capital Association of Realtors market skinny. Interestingly prices and pending sales both dipped in June as compared to the same month in 2013. Inventory of available homes for sale also declined, all while interest rates hit a 12 month low. If you’re thinking of selling there are 3 solid moths left of selling. If you’re thinking of buying you can expect to see more inventory over the next 8 weeks. Buyer tend to have more leverage in winter months – most people don’t buy and/or move when there’s snow on the ground.

Even if you’re thinking of selling your home in Spring 2015, make sure to take exterior photos now while the house, lawn, garden, and landscaping are looking the best. If you have questions, don’t hesitate to contact us.

Home Prices vs. Mortgage Interest Rates

One of my clients recently asked about home prices and interest rates. Specifically we were talking about the Albany housing market in 2014 and where we think home prices and interest rates will be in 2015.

First off, let me just put out the disclaimer. I’ve been wrong before and I’ll be wrong again. So I won’t try to predict where interest rates are going to be in 2015 (5.0%, 4.75%, 5.5%?).  But the question arose will buying a house today cost more, less, or about the same in 2015. My answer is based on where the market has been the last two years, national economic indicators, and US real estate data. More than likely home prices and interest rates will rise in 2015, so whatever homes you see today will cost more in 2015 (both because of rising home prices and increase costs to borrowing).

Now its important to note, when interest rates rise, the cost of buying a home increases (your mortgage payment for the same mortgage is higher), and therefore usually housing prices erode.  Nationally over the last 12 months, rising prices have actually stalled and in some cases reduced housing prices. But locally we’re seeing a different story. (Note: there are usually momentary price drops during big interest rate spikes as we saw in Spring of 2014. However the yearly trend was much different).

Out of curiosity I went back to the 2013 year end real estate numbers. Albany County saw a 3% rise in home prices  in 2013, despite the 25-30% increase in mortgage interest rates (3.5% to 4.25%/4.5%). (see Albany Business Review). Prices only edged up 1.0% for the entire Capital Region housing market. In Albany County I’m guessing home prices edged up around 2%, in between the Albany County (3%) and Capital Region wide (1%) price gains.

Looking at the 2014 year to date (YTD) numbers for the Albany County real estate market, illustrates a continuous positive trend. So far in 2014, home prices are up 5% in Albany County and 3% in the City of Albany in 2014 (despite a price dip in April 2014). Buyers have just adapted to the step up in the interest rates from 2013 and adjusted expectations. The rise in Albany home prices is due in part to the continued positive economic growth, supported by relatively flat mortgage interest rates over the last 10-12 months.

The data is always a month behind. May’s numbers will be out by the end of this week so we’ll have another data point soon. Obviously rising home prices also will help sellers, so rising prices are not all bad news.

 

Latest Capital Region Real Estate Numbers

Here are the latest highlights of the Capital Region real estate numbers, as released by the Greater Capital Association of Realtors. These numbers were released at the end of May and reflect the most recent reported sales data in 2014 (from the month of April). Interestingly pending sales and home prices declined, as did inventory from April 2013.

The biggest challenge to this housing market is the lack of inventory. I’ve had the pleasure of working with dozens of buyers year to date, and our biggest challenge has been finding suitable inventory to meet their needs. While most sellers usually are ready to list their homes by June, the long, hard winter has likely set back sellers (and their home repairs). We could run the risk of sellers pushing off listing until the fall or even next year, which will surely put a squeeze on inventory. We’ll be watching May’s numbers when they are released later this month to see what happens to inventory, prices, and sales.

Below is the latest video. As always, if you have any questions just call.

TU: Monticello’s Secret Sauce To Selling Homes

We reveal the Monticello secret sauce to selling real estate. From Today’s Times Union:

In this new real estate market, buyers are using the Internet to search for their home, and they have thousands of homes to view. If you don’t have the cleanest, brightest, picture of your home’s best side, buyers are just going to click past your home. I call it the 2-second rule: You have 2 seconds to capture a buyer’s attention, so make it count. — Alex Monticello, principal broker and owner of Monticello, Licensed Real Estate Broker.

You can view this listing as an example of how professional photos make a big difference: www.223Lancaster.com.