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First-Time Buyers Give Home Sales a Boost


The housing market in June shifted as fewer investors closed on homes. The gap in the market was filled by first-time buyers, who accounted for 33 percent of the market in June, up 3 percent from both a month and a year ago. The number of first-time buyers closing on properties hasn't been this high since July 2012. For the first half of 2016, the share of first-timers in the market averaged 31 percent; for all of 2015, the average was only 30 percent. "The modest bump in June sales to first-time buyers," says Lawrence Yun, chief economist with the National Association of Realtors (NAR), "can be attributed to mortgage rates near all-time lows and perhaps a hopeful indication that more affordable, lower-priced homes are beginning to make their way onto the market."

Sales Are Up
Those first-time buyers helped boost national home sales. June's existing-home sales increased for the fourth month in a row, rising 1.1 percent to a seasonally adjusted annual rate of 5.57 million. According to NAR, this is 3 percent higher than June 2015's annual rate of 5.41 million. What's more, this is the highest annual pace set since February 2007 when the annual rate reached 5.79 million. While the Northeast saw a drop in closings, every other region remained steady or posted gains. Despite the fact that some competitive areas of the country are still seeing a lack of supply and a surplus of demand, June's existing-home sales climbed in part because higher employment numbers and lower mortgage rates made purchasing a home more affordable.

Future Predictions
The outlook for the rest of 2016 appears to be hopeful, as record-high stock prices, low mortgage rates, and job growth are all expected to accelerate the sales pace. But, warns Yun, a lack of inventory and ever-climbing home prices might temper any further acceleration. The median existing-home price climbed to $247,700 in June, a 4.8 percent rise from a year earlier. And with 2.12 million existing homes available for sale, housing inventory dropped 0.9 percent from a month ago and 5.8 percent from a year ago.

Northeast - Existing-home sales annual rate: down 1.3 percent to 760,000. Sales are still 5.6 percent higher than June 2015.

Midwest - Existing-home sales annual rate: up 3.8 percent to 1.35 million. Sales are 4.7 percent higher than June 2015.

South - Existing-home sales annual rate: unchanged from May's annual rate of 2.26 million. Sales are 3.2 percent higher than June 2015.

West - Existing-home sales annual rate: up 1.7 percent to 1.2 million. Sales are 0.8 percent lower than June 2015.

Eventually almost everyone faces the task of selling their home. During these transitions, many people wonder if they should save some money and list their house for-sale-by-owner (FSBO) instead of using a real estate agent. In reality, using a qualified agent can simplify the process and save you thousands of dollars in the long run. Here are seven perks that a qualified real estate professional can provide:

1. Multiple Listing Service (MLS) Database
This is the digital age and buyers no longer rely solely on their agent to identify possible homes. In fact, many buyers become obsessed with searching the easily accessible online MLS database both before and during the actual home-search process.

2. Marketing Plan
The MLS database is a great place to begin, but savvy real estate agents develop comprehensive marketing plans that go beyond the database. In this recovering real estate market, a combination of selling tools is often necessary to reach your closing date quickly. A variety of advertising strategies is important, but so is networking with other real estate agents.

3. Attracting Buyers' Agents
Many buyers' agents are wary of showing a house without a listing agreement even if the FSBO advertising promises a reasonable commission. There is great risk involved when an agent works without the usual contracts. Since most home buyers have an agent, listing your home FSBO excludes a large portion of your customer base.

4. Faster Results
Real estate agents know how to price homes correctly. Also, having a professional marketing plan accelerates the traffic to your home, increasing your odds of a quick sale.

5. Security
When your home is FSBO, you must choose between leaving strangers inside without any accountability and showing the home yourself. Since leaving people alone is not a safe option, FSBO homes are usually shown by the owner. Naturally, when you show the home yourself, your potential buyers will spend less time discussing the pros and cons of your property. They don't wish to prejudice negotiations by telling you what they like, or offend you by telling you what they don't like. This silence leaves you unable to encourage the pros and reasonably discuss the cons―a finely honed skill of quality real estate agents.

6. Negotiations
Sometimes negotiating can get a little sticky. Buyers may want repairs that weren't in the sellers' budget, or they may try to "test the water" with lowball offers. Real estate agents can work with each other rather than directly with buyers and sellers, distancing themselves and keeping emotional clients focused on the big picture. The result is often a compromise that pleases everyone.

7. Closing
The buying and selling of property is one of the largest business transactions most families face. Sometimes closings are not simple affairs. They can become clouded by chain-of-title issues or conflicting survey results. Even homeowners' association disputes can complicate the closing process. It just makes sense to use a professional when dealing with complex legal documents.

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Tom Smith Team
Coastal Properties Group International
423 Mandalay Ave., #102
Clearwater Beach FL 33767
(727) 776-3375