Home Prices Still Up?

Despite the mortgage rates, demand continues to exceed supply. The encouraging news is that new listings are up 14.4% statewide thru April. NH sales thru April 2024 increased 5% compared to the same time in 2023 however the median sales price is up 11% at $485,000. Houses are basically selling at 100% of their asking price with an average of 33 days on the market.

A more local snapshot, which includes 10 towns in our area, shows that sales increased 7% thru April with a median sales price of $479,000 ( down 2% from 2023). Homes are on the market an average of 42 days and are selling at asking price.

So what's next for home prices? According to the Home Price Expectation Survey (a survey of over 100 economists, real estate experts, & market strategists), experts are projecting home prices will continue to rise for at least the next 5 years. The percentage of appreciation is expected to be at a much more normal rate, from 3.3% to 4.1%. 

Whether buying or selling, contact me if you'd like to make an informed decision on your next move.

        

Donna Forest

M: 603-731-5151
donna@donnaforest.com
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Thoughts on the NAR Lawsuit

Since the announcement of the proposed settlement with the National Assoc. of Realtors (NAR), the media has erroneously made several claims about what it means for sellers and buyers. Below are some thoughts to help clarify.

  1. The settlement does not lower home prices. Home values are based on supply and demand - not what a seller pays for commission. Prices have increasingly gone up because there are fewer homes for sale and more buyers.
  2.  There is no mandate on what Realtors can charge for their professional services. Commissions have always been negotiable. What will change is the offer of compensation to a buyer's agent can't be posted in the MLS.
  3.  Sellers can elect not to pay buyer agent compensation. However, buyers may write into any offer a contingency requiring the seller to cover the cost or other concessions to compensate what they pay their buyer agent.
  4.  Written buyer agency agreements will now be required for all Realtors working with buyers. NH has been requiring this for many, many years.

"This will be a time of adjustment, but the fundamentals remain: Buyers and sellers will continue to have many choices when deciding to buy or sell a home, and NAR members will continue to use their skill, care and diligence to protect the interest of their clients."

Contact me if you would like to work with a Realtor who will always look after your best interests and consistently stays on top of the changing real estate landscape.

        

Donna Forest

M: 603-731-5151
donna@donnaforest.com
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A Look at 2023

This past year we continued to see rising prices and low inventory, making it challenging for buyers. NH saw fewer home sales than any other year since 2011. The total number of closed sales was down 19% compared to 2022. December had only a 1.4 month supply of homes to sell – 1382 homes for sale In the whole state compared to 1551 in 2022 (a balanced market has a 5-6 month supply). Since demand exceeded supply, this pushed the median sales price of a home in NH to an all-time high of $470,000 – a 6.8% increase over 2022.

Looking closer to home, the combined sales for Newbury, New London, and Sunapee followed the same trends as the whole state. Sales were down 19% from the year before with 126 homes sold for the year vs. 155 in 2022. The average days on market was 22 days and the median selling price was $645,000, up 7.5% from 2022.

Whether buying or selling, contact me to find out how low inventory and increasing buyer demand impacts you.

        

Donna Forest

M: 603-731-5151
donna@donnaforest.com
Follow her on Facebook

2024 Market Predictions

Economists are optimistic about this coming year, especially as mortgage rates are expected to be lower and inflation appears to be slowing. Below are some top predictions from the experts.

  • Mortgage rates are expected to ease. Forecasters are calling for rates to be in the 6% range.
  • Home prices will continue to rise. The Home Price Expectation Survey from Fannie Mae, on average, anticipates home price growth at 5.95% in 2023, followed by slower growth in 2024 at 2.4% and 2.7% in 2025.
  • The housing market will remain competitive. This is due to several factors, including population growth, strong job growth, and a limited supply of homes for sale.
  • The supply of homes should loosen up somewhat as mortgage rates drop and changing circumstances will lead to more moves and new listings.

Overall, there are positive signs this will be a better year for the housing market with the expectation 2024 will see slight home-price gains, lower mortgage rates, and a somewhat easing of inventory constraints. Prices will vary by local markets, but experts project they will continue to rise across the country at a pace that’s more normal. 

Contact me to find out how the market may impact your buying or selling goals.

        

Donna Forest

M: 603-731-5151
donna@donnaforest.com
Follow her on Facebook

Do More Families Equal Higher Taxes?

Photo Credit: Emma Bauso

 

Do More Families Equal Higher Taxes?

By: Donna Forest, Broker Associate


The lack of overall housing in our state is keeping prices higher and buyers on the sidelines, or even worse, leaving our state. We are seeing a significant housing crisis. Unfortunately, new construction is still playing catch up from the years of under building and many towns are reluctant to help address this major economic issue. Why? One of the reasons is a fear that housing for additional families will mean a higher property tax rate is needed to pay for public schools. Is this true? The answer is emphatically “NO”. Adding children to a school district does not equate to higher property taxes. This was proven in a 2019 study by Univ. of NH Professor Emeritus of Economics Robert England “Will More Kids in Town Raise the Local Tax Rate?” This report analyzed enrollment data from all 167 school districts from 2007 to 2017 and then compared the data to property tax figures during the same period. The results showed that changes in tax rates are not related to changes in public school enrollment and shouldn’t be used as a way to oppose new housing. Please bear this in mind as you consider how to keep your community viable and economically sound.

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What is the MLS?



Real Estate Terms: What is the MLS?


The MLS, or Multiple Listing Service, is the database managed and maintained by the local board of REALTORS ®. When your agent lists your property, she inputs all the information into that database. The New Hampshire Association of Realtors ® syndicates that database to only certain providers – like Realtor.com. This is why when you search for property on Zillow and call your agent about it, she may tell you that property is no longer available. Even Realtor.com experiences a delay from the official MLS to what it shows as available or not. For example, if the listing agent marks the property in the MLS as under contract, it could take hours or longer for the syndicated sites to catch up with that update. When you want current listings, contact your agent, or visit her website for active listings. Your agent has direct access to the MLS and her website uses a database feed (called IDX) – she has the updates in real time. Or, if you can’t wait, use Realtor.com as your go-to public database.

And come back to The BHG Milestone Team blog to learn more helpful terms to enhance your real estate adventure!


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Photo by Towfiqu barbhuiya on Unsplash

Is Owning a Home a Good Investment?


Is Owning a Home a Good Investment?


The short answer is YES. According to House Logic and The BHG Milestone experts, owning a home has financial – and emotional – benefits! Consider:

  • Long-term financial growth. Real estate appreciates!
  • Building equity. From your downpayment to your mortgage payments (minus fees and interest), each dime adds to your home’s equity.
  • Income tax advantages. The sale of your primary residence allows you (in most cases) to avoid tax on your profit ($250,000 for an individual; $500,000 for a couple).
  • Additional itemized deductions. If you itemize your taxes, you can deduct property tax, some closing fees (like points), and mortgage interest!
  • Fixed monthly payments. Your rent might (will) increase – but your mortgage payment is fixed.
  • Improved credit score. Pay on time and reap the benefit!
  • Your space – your castle. When you own your home, you can remodel and decorate any way you desire!
  • Your sanctuary. Your home is your private sanctuary. It’s all yours!


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#buyahome #homefinancialbenefits

Decoding Real Estate Terms: Property Value

Photo by Towfiqu barbhuiya on Unsplash


Decoding Real Estate Terms: Property Value

What is your home worth?

 

We’ve been to that yard sale where we offer $5 for the rocking chair and the seller insists it’s an antique worth $50! (Which begs the question: Then why are you selling it out here on the lawn, in the rain?

The same concepts apply to selling and buying real estate – and the industry has so many terms and ways to value a property, it can get confusing. Home value tools you find on the internet muddy the waters – although these tools are interesting, they are simple calculators that do not know the current, local market trends. 

To better understand how to set and evaluate a property price, let’s look at those terms:


Fair Market Value: Arguably the most important valuation term to understand, fair market value is what a willing buyer would pay a willing seller. The definition makes it clear that willingness is inherent in the value: That the parties negotiate the price through an arm’s-length transaction, that the parties are aware of all the facts, that the parties are not pressured in any way. 

For example: Mr. Smith offers Mr. Jones $200,000 for his home, and Mr. Jones counteroffers for $250,000, when Mr. Smith agrees, the fair market value is $250,000. Contrast that transaction with Mr. Smith offering his grandmother $50,000 for her house and she accepts (more akin to a gift than a negotiated sale on the market). Or, compare the first example with a short sale – where the buyer merely pays off the mortgage. That transaction does not reflect the market price at all! Fair market value is determined when the buyer freely makes an offer, and the seller freely accepts.


CMA: A CMA, or comparative market analysis, is the procedure real estate agents use to set the listing price for a home (or help a seller decide whether to sell). To perform the CMA, your agent researches the closing price – the fair market value - of similar, recently sold properties in your area. Read that again. 

First, the listing price of local properties does not mean that is what a willing buyer will pay. And, often, enthusiastic sellers or agents will over-price a property – causing it to either sit on the market for far too long, not appraise for the listing price, or suffer price reduction after price reduction! Fair market value is only established when the deal closes. 

Second, the agent uses properties that have sold recently – not last year! The recency is a good indication of current market conditions. 

Third, the agent carefully selects the geographic area. What a house is worth in Manchester is not what it would be worth on Lake Sunapee! 

Last, the agent will carefully identify properties as similar to your home’s features as possible: Number of bedrooms and bathrooms, square footage, condition, acreage, location to water, special features and characteristics, and so on. Also note, the agent will avoid using short sales, foreclosures, inherited or gifted properties in her analysis because those values do not reflect fair market value.


Appraisal: An appraisal is an authorized valuation of a property – an educated guess for what the fair market value could be. Similar to a CMA, an appraisal is completed by a licensed appraiser who analyzes the property using factors like location, condition, and resent sales of similar properties. Typically, appraisals are used for real estate, collectibles, or businesses to determine market value. 

For example, your insurance company may want your sports cards appraised so it knows how much insurance you need to cover replacing the collection. Or an entrepreneur may need her business appraised so she can sell half to a new partner. 

Often hired by the lender, the appraisal assures the lender it is not loaning too much for the property (that the property is enough collateral). For example, if the home appraises at $500,000, the lender will not want to loan $600,000. 

Buyers also use appraisals to renegotiate contract terms. For example, if a buyer offered $500,000 and the appraiser determines the home is valued at $450,000, the buyer may attempt to reduce her offer. Whether or not she can do so will be clearly outlined in the sale contract. An expert real estate agent will consider the appraisal process when pricing and marketing your home.


Assessment: Assessed value is the value the tax authority uses to calculate property taxes. To determine that value, the tax assessor uses a type of appraisal which considers the fair market value, improvements, and the characteristics of similar properties. 

But realize assessment happens irregularly – maybe every five or ten years. Fair market value can swing over that time. So, although the assessor uses fair market value, the assessment only hints at what fair market value was when the assessment was completed. 

Assessed value is also adjusted for the character of the property – whether it is commercial, residential, the zone, and so on. Also, assessors often do not set the assessment at 100% of the estimated fair market value. And homeowners can appeal the regulator’s assessment – altering the assessed value. So, although buyers should investigate the assessment to determine how much property tax will be owed, the assessment does little to set or reflect the fair market value.


We hope this information helps you appreciate the value of your property. When you are ready to list or shop, contact The Best Team in Town to help you!

And, for more expert advice:

How to Save to Buy a Home Part II


Photo by Alexander Grey on Unsplash   

Part 2 of Our Two-Part Series:


In our April 3rd post, we gave you 5 ways to save for your home purchase down payment. Here are The Milestone Team’s second five tips to get you on the road to home ownership and your own special place in the world:

6.  Make your savings work for you. Invest your down payment nest egg in a high-interest money-market or savings account. Avoid riskier investment (like stocks or crypto) so your principle is safe.

7.  Start a side-hustle. Forbes recommends turning hobbies and passions into a side-business to earn additional income. You can also take a part-time job or…

8.  Ask for a raise at work. The sooner you ask, the sooner you can save more for your new home.

9.  Talk to a mortgage lender. Knowledge is power. Your local lender can offer steps and ideas so you can afford your dream home sooner. And…

10.  Talk to your local real estate expert. Sure, you’re not buying your home today. However, you do not need to wait until you are shopping to engage your real estate agent. The Milestone Team members are experts and have the experience to help you save and shop wisely!


Don't forget for more expert advice to:

Spring Market Update


SPRING MARKET UPDATE


The housing market is not crashing. 

In fact, we are in the strongest real estate economy where 48% of homes are equity rich with at least 50% equity. 63% of mortgages originated are below 4%. 

Of note:

  • Interest rates are fluctuating based on economic factors right now. Rates 6.5% - 7% mean limited buyer demand. Rates 7%-7.5% mean weak buyer demand. Lawrence Yun, chief economist of the Nat’l Assoc. of Realtors (NAR), expects rates to fall to 5.5% by mid-2023. Fannie Mae predicts 6.8% and Freddie Mac is 6.4%.
  • Home prices will vary depending on location. Overheated markets are depreciating; others are appreciating. In NH, prices are up 5% thru Feb. 2023. The Home Price Forecast 2023 shows, for example, Realtor.com projecting +5.4%, CoreLogic +3.1%, NAR -1.6%, Fannie Mae -4.2%. Prices are expected to increase and reach more normal levels of 3%-4% annually starting in 2025.
  • The biggest challenge is low inventory. The number of homes for sale in the US is 47.4% lower than it was before the pandemic. In NH, new listings are down 20.3% in Feb. 2023 vs. 2022. The lack of homes for sale has kept prices from falling. Fourteen years of underbuilding is one of the major reasons for this low supply.

Don’t let false information stop you from buying or selling. Contact me for the straight scoop on the real estate market.



           

Donna Forest  

Listing Broker

Contact me today!

O: 605.526.4116
donna@donnaforest.com
www.donnaforest.com          


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