Are big investors really buying up all the homes today? If you’re trying to find a house to buy, this may be something you’re wondering about. Maybe you’ve read about it or seen reels on social media saying investors buying all the homes is making it even harder to find what the average buyer is looking for. But spoiler alert – there’s a lot of misinformation out there. To clear things up, here's the scoop on what's really happening. A lot of the big investor activity is actually in the rearview mirror already. The Wall Street Journal (WSJ) explains: “Investors of all sizes spent billions of dollars buying homes during the pandemic. At the 2022 peak, they bought more than one in every four single-family homes sold, though more recently their activity has slowed as interest rates rose and supply became tighter.”The key here is investor activity has slowed significantly, and even during the peak of investor buying, 3 out of every 4 single-family homes purchased were by regular, everyday buyers – not investors. And of the investors who bought over the past few years, most weren’t the big investors you may be hearing about. The vast majority were small mom-and-pop investors – people like your neighbors who own only a couple of homes, maybe even just their main residence and a vacation home. But let’s focus on the giant, mega-investor firms since that's what is being talked about so frequently on social media right now. Mega investors are those who own 1,000+ properties. You may be surprised to see that, according to the Wall Street Journal, they don’t buy all that many homes (see graph below): This graph tells us two things. First, institutional investors were never buying a large percentage of available homes. During the peak in 2022, they bought about 2% of available single-family homes. Second, that percentage has gotten even smaller recently (so small the number rounds down to 0%).
In an effort to understand why that percentage is trending down, private lender RCN Capital asked investors about the challenges they’re facing. Here’s what Jeffrey Tesch, CEO of RCN Capital, found out: “Investors are already facing many challenges in today’s housing market – rising prices, limited inventory, and higher financing costs.”Understanding these challenges is important because they show big, mega investors aren’t taking over the housing market. So, don't fall for everything you hear. They aren't snatching up all the homes and making it impossible for regular people to buy. Bottom LineBig investors aren’t buying all the homes out there. If you've got questions about what you're hearing about the housing market, let's chat. I can help you understand what's really going on.
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There’s no denying mortgage rates are having a big impact on today’s housing market. And that may leave you with some questions about whether it still makes sense to sell your house and make a move. Here are three of the top questions you may be asking – and the data that helps answer them. 1. Should I Wait To Sell?If you’re thinking about waiting to sell until after mortgage rates come down, here’s what you need to know. So are a ton of other people. And while mortgage rates are still forecasted to come down later this year, if you wait for that to happen, you may be dealing with a lot more competition as other buyers and sellers jump back in too. As Bright MLS says: “Even a modest drop in rates will bring both more buyers and more sellers into the market.”That means if you wait it out, you’ll have to deal with things like prices rising faster and more multiple-offer scenarios when you buy your next home. 2. Are Buyers Still Out There?But that doesn’t mean no one is moving right now. While some people are holding off, there are still plenty of buyers active today. And here’s the data to prove it. The ShowingTime Showing Index is a measure of how frequently buyers are touring homes. The graph below uses that index to show buyer activity for March (the latest data available) over the past seven years: You can see demand has dipped some since the ‘unicorn’ years (shown in pink). That’s in response to a lot of market factors, like higher mortgage rates, rising prices, and limited inventory. But, to really understand today’s demand, you have to compare where we are now with the last normal years in the market (2018-2019) – not the abnormal ‘unicorn’ years.
When you focus on just the blue bars, you can get an idea of how 2024 stacks up. And that gives you a whole new perspective. Nationally, demand is still high compared to the last normal years in the housing market (2018-2019). And that means there’s still a market for your house to sell. 3. Can I Afford To Buy My Next Home?And if you’re worried about how you’ll afford your next move with today’s rates and prices, consider this: you probably have more equity in your current home than you realize. Homeowners have gained record amounts of equity over the past few years. And that equity can make a big difference when you buy your next home. You may even have enough to be an all-cash buyer and avoid taking out a mortgage altogether. As Jessica Lautz, Deputy Chief Economist at the National Association of Realtors (NAR), says: “ . . . those who have earned housing equity through home price appreciation are the current winners in today's housing market. One-third of recent home buyers did not finance their home purchase last month—the highest share in a decade. For these buyers, interest rates may be less influential in their purchase decisions.”Bottom LineIf you’ve had these three questions on your mind and they’ve been holding you back from selling, hopefully, it helps to have this information now. A recent survey from Realtor.com shows more than 85% of potential sellers have been considering selling for over a year. That means there are a number of sellers like you who are on the fence. But that same survey also talked to sellers who recently decided to take the plunge and list. And 79% of those recent sellers wish they’d sold sooner. If you want to talk more about any of these questions or need more information, let’s connect. How VA Loans Can Help You Buy a Home
For over 80 years, Veterans Affairs (VA) home loans have helped millions of veterans buy their own homes. If you or someone you know has served in the military, it's important to learn about this program and its benefits. Here are some key things to know about VA loans before buying a home. Top Benefits of VA Home LoansVA home loans make it easier for veterans to buy a home, and they're a great perk for those who qualify. According to the Department of Veteran Affairs, some benefits include:
“For the vast majority of military borrowers, VA loans represent the most powerful lending program on the market. These flexible, $0-down payment mortgages have helped more than 24 million service members become homeowners since 1944.”Bottom LineOwning a home is the American Dream. Veterans give a lot to protect our country, and one way to honor them is by making sure they know about VA home loans. You’re ready to sell your house. But what do you need most from your real estate agent? Well, the National Association of Realtors (NAR) asked that very question to recent sellers and found one of the top things they were looking for is help marketing their house to potential buyers. Maybe that’s what you need the most help with too. You expect your real estate agent to write a great description of your house for the listing and pair it with some high-quality photos. But that’s not all you’re going to get when you partner with a great agent. They’ll do a lot more to make sure your house stands out. Here are some of the most common methods real estate agents use to market homes according to that same report from NAR (see graph below): So, how can you benefit from your agent using these methods?
“A good real estate agent will have a robust plan to promote your listing in an effort to find the right pool of buyers. Adding your home to databases of available homes called multiple listing services (MLS), open houses, 3D virtual tours, professional photography and broker tours for buyers’ agents (particularly for luxury homes) are all factors that may go into a marketing plan.”As a seller, it’s smart to work with a creative local real estate agent who can maximize them to make sure you get as many eyes on your house as possible. Bottom LineWhen it comes to marketing your house, working with a local real estate agent has tons of benefits. If you’re ready to sell, but don’t know where to start, let’s chat. The Biggest Mistakes Buyers Are Making Today
Buyers face challenges in any market – and today’s is no different. With higher mortgage rates and rising prices, plus the limited supply of homes for sale, there’s a lot to consider. But, there's one way to avoid getting tripped up – and that’s leaning on a real estate agent for the best possible advice. An expert’s insights will help you avoid some of the most common mistakes homebuyers are making right now. Putting Off Pre-approvalAs part of the homebuying process, a lender will look at your finances to figure out what they’re willing to loan you for your mortgage. This gives you a good idea of what you can borrow so you can really wrap your head around the financial side of things before you start looking at homes. While house hunting can be a lot more fun than talking about finances, you don’t want to do this out of order. Make sure you get your pre-approval first. As CNET explains: “If you wait to get preapproved until the last minute, you might be scrambling to contact a lender and miss the opportunity to put a bid on a home.” Holding Out for PerfectionWhile you may have a long list of must-haves and nice-to-haves, you need to be realistic about your home search. Even though your ideal state is you find a home that checks every box, you may need to be willing to compromise – especially since inventory is still low. Plus, a home that has everything you want may be too pricey. As Investopedia puts it: “When you expect to find the perfect home, you could prolong the homebuying process by holding out for something better. Or you could end up paying more for a home just because it meets all your needs.”Instead, look for something that has most of your must-haves and good bones where you can add anything else you may need down the line. Buying More House Than You Can AffordWith today’s mortgage rates and home prices, there’s no arguing it’s expensive to buy a home. And while it may be tempting to stretch your finances a bit further than you’re comfortable with to make sure you get the house, you want to avoid overextending your budget. Make sure you talk to your agent about how changing mortgage rates impact your monthly payment. Bankrate offers this advice: “Focus on what monthly payment you can afford rather than fixating on the maximum loan amount you qualify for. Just because you can qualify for a $300,000 loan doesn’t mean you can comfortably handle the monthly payments that come with it along with your other financial obligations. Every borrower’s case is different, so factor in your whole financial profile when determining how much house you can afford.” Not Working with a Local Real Estate AgentThis last one may be the most important of all. Buying a home is a process that involves a lot of steps, paperwork, negotiation, and more. Rather than take all of this on yourself, it’s a good idea to have a pro working with you. The right agent will reduce your stress and help the process go smoothly. As CNET explains: “Attempting to buy a home without a real estate agent makes the process more arduous than it needs to be. A real estate agent can give you professional legal guidance, market expertise and support, which will save you time, money and stress. They can also increase your chances of finding the right home so you don’t have to spend hours scouring the internet for listings.” Bottom LineMistakes can cost you time, frustration, and money. If you want to buy a home in today’s market, let’s connect so you have a pro on your side who can help you avoid these missteps. If you’ve been looking for a home at the high end of your market, but haven’t found the right one, you may have put your search on hold. But according to recent data, now may be the time to jump back in. Here’s why. There Are More Luxury Homes To Choose FromWhat’s considered the top-end of the market, or a luxury home, will always vary by location. But generally speaking, they’re homes that are valued in the top 5% of any given market. According to a recent report from the Institute for Luxury Home Marketing, the selection of luxury homes is increasing (see graph below): As the graph shows, there are considerably more single-family luxury homes available now than there were a year ago. In fact, there are even more than there were just a month ago. This means you should have a wider variety of top-of-the-line homes to choose from, each with unique features and styles.
Whether you were searching for the latest design elements, like modern kitchens with chef-grade appliances, a breathtaking view, or integrated smart home technology, more luxury inventory means you should have an easier time finding one that matches your taste and lifestyle. Rising Luxury Home Prices Can Help You Build WealthAnother important factor to consider is that luxury home prices are on the rise. According to HousingWire, luxury home prices have increased by 8.7% over the past year. That’s why: “People with the means to buy high-end homes are jumping in now because they feel confident prices will continue to rise . . . They’re ready to buy with more optimism and less apprehension.”This means buying before prices climb higher – and while more inventory is on the market – may be your sweet spot. Because home prices are rising, owning a home could help you build more generational wealth over time. On the other hand, if you wait to buy, you might end up paying more for the same home later on as luxury prices continue to rise. Bottom LineWith growing inventory and rising prices, you have a greater selection of luxury homes to choose from and an opportunity in front of you. Want to see the higher-end homes that are available in our area? Let’s connect today. June is a busy month in the housing market because a lot of people buy and sell this time of year. So, if you’ve got a move on your mind and you’re looking to make it happen this month, here’s a snapshot of what you need to know to make sure you’re ready. If You’re Buying This June A lot of homebuyers with children like to move after one school year ends and before the next one begins. That’s one reason why late spring into summer is a popular time for homes to change hands. And whether that’s a motivator for you or not, it’s important to realize more buyers are going to be looking right now – and that means you’ll want to be ready for a bit more competition. But there is a silver lining to a move this time of year. This is also when more sellers will list – so you should find you have more options. As an article from Bankrate says: “Late spring and early summer are the busiest and most competitive time of year for the real estate market. There’s usually more inventory listed for sale than other times of year . . . This is a double-edged sword for a buyer, as you will be met with more opportunities but [also] much more competition.”During this busy season, it’s extra important to work with a trusted real estate agent. Your agent will help you stay on top of the latest listings, share expertise on how to make a strong offer in a competitive market, and give you insight into things like what the home is actually worth so you can make an informed decision when you buy. As Forbes says: “Approaching the market confidently, armed with good information and grounded expectations will take you far. Don't let the hustle of the market convince you to buy something that’s not in your budget, or not right for your lifestyle.” If You’re Selling This June Because there are more buyers this time of year, you’re in a great spot as a seller. Many of those buyers are highly motivated to make their move happen before the next school year kicks off – so they’ll likely put in strong offers to try to make that possible. That means, if your house shows well and is listed at market value, you could see your house sell faster or for a higher price. According to the National Association of Realtors (NAR): “Warmer weather and the end of the school year encourage more people to buy and sell, respectively. Buyers are looking to move and settle before the new school year begins, contributing to increased competition and, consequently, higher prices.” You want to be sure you’ve got a great agent on your side to help you with the contingencies on those offers and any negotiations that take place so you can pick the best offer. Make sure you go over closing dates with your agent. Buyers trying to time their move with the school year may need to delay a bit or move faster. This can depend on the school calendar where you live. As U.S. News Real Estate explains: “ . . if your house goes under contract in early summer, the buyer may ask for a delay in closing or move-in until the school year finishes or their current home has sold. Alternatively, a buyer later in summer may be looking to close quickly and move in under a month. Remain flexible to keep the deal running smoothly, and your buyer may be willing to throw in concessions, like covering some of your closing costs or overlooking the old roof". Bottom Line If you’re looking to make a move this June, let’s chat so you know what to expect. We’ll come up with a plan that factors in current market conditions, but still works for you. With all the headlines and talk about housing affordability, it can be tempting to get lost in the financial side of buying a home. That’s only natural as you think about the dollars and cents of it all. And while you ultimately need to be able to afford a home you buy, don’t lose sight of why homeownership was so important to you in the first place. That’s because buying a home is so much more than just a financial transaction. As the National Association of Realtors (NAR) says: “The benefits of purchasing and owning your place of residence are both financial and emotional – pride in homeownership and the feeling of security are huge intangible benefits.” Here’s a look at just a few of those more emotional or lifestyle perks, to help anchor you to why homeownership is one of your goals. A Sense of Satisfaction Owning a home is often associated with better mental health and well-being. That’s probably because buying a home is a big milestone. And the sense of satisfaction and pride that comes with achieving that goal just feels good. A recent article from the Mortgage Reports says: “By and large, homeownership brings more satisfaction than renting. . . Surveyees scored the overall happiness level of homeowners at 88% compared to 67% for renters.” More Stability for Your Family Another thing that may make homeowners feel more satisfied is that they’re finally able to put down roots. Think about it. If you’re used to moving each time your lease renews and your rent climbs, staying put for a while would be nice not just for you, but for any loved ones that live with you. A home can provide more predictability and the chance to make long-term friends. That should reduce everyone’s stress too. As NAR explains: “Families also benefit from homeownership, with studies proving that parents are able to spend less time in a stressed state, therefore spending more time with their children. The ability for parents to feel stable has a huge impact on children’s behavioral issues, educational success, and future economic success.” A Stronger Feeling of Community And if you’re also looking for a sense of belonging for yourself, homeownership can help with that too. As FinHabits says: “Homeowners tend to be more involved in their local communities, leading to a stronger sense of belonging . . .” It makes sense. Your home connects you to your neighborhood and, by extension, your broader community. That’s because owning a home gives you a stake in that community’s future. So, becoming more involved and wanting to do what you can to help improve the area while making long-term relationships with neighbors is only natural. The Ability To Make the Space Your Own And don’t forget, your home is a place that’s all yours. Unless you’ve got specific homeowner’s association requirements, you’re free to customize it however you see fit. So, if renting has been cramping your style, it’s time to express yourself and jump on the latest trends (if you want to). Whether that’s small home improvements or full-on renovations, your house can be exactly what you want and need it to be. And as your tastes and lifestyle change, so can your home. Picture coming home each day to a place that feels like you. That’s a feeling like no other. Bottom Line If you want to enjoy a sense of accomplishment and pride in where you’re living, let’s have a conversation to go over what you need to do now to make this future happen for you. |
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Jacquelyn Duke, Realtor®
Licensed to Sell in the State of Iowa [email protected] (515) 240-7483 Realty One Group Impact 617 SW 3rd Street Ste 101 Ankeny, IA 50023 Disclaimer: The material on this site is solely for informational purposes. No warranties or representations have been made. |