Residential Marketing Solutions

Market Outlook 2020

Market Outlook 2020

So far, 2019 has been an excellent year for both homebuyers and real-estate investors in the U.S. Throughout the year, home prices have risen steadily and mortgage rates have fallen to unexpected lows. The nation’s strong economy and robust job market have made it possible for an increasing number of individuals and families to purchase new homes and investment properties this year. This has left many wondering whether the 2020 housing market will continue to see rising home prices and an increasing number of sales.

Home Prices Expected to Rise at a Slower Rate in 2020

Home prices have risen dramatically over the past few years. The fact that rising home prices have exceeded wage growth in the U.S. has created an affordability problem for homebuyers. Leading housing analysts agree that 2020 will continue to see rising home prices, but at a much slower rate. It is believed that this will give wage growth the opportunity to catch up, easing several of the problems potential homebuyers have experienced over recent years. This is excellent news for sellers, buyers, investors, and the economy as a whole.

It’s important to note that these predictions refer to the entire U.S. housing market. Of course, housing market predictions can vary significantly by region. While some areas of the country will continue to see home prices rise through much of 2020, others will experience slowed or flat pricing.

Southern California Home Prices Slow While Rental Prices Rise

In Orange County, Zillow predicts that home prices will only rise about $1000 by next summer. However, despite lower mortgage rates and steady home prices, it’s estimated that Southern California rental prices will rise again next year. This makes 2020 an excellent time for savvy buyers to purchase investment properties. Another consideration if for renters; owning  a home fixes your monthly payment, with rents increasing, 2020 may be the best time to consider purchasing a home.

In San Diego, price growth has slowed and inventory of available homes has increased, suggesting the market is shifting in favor of buyers. Zillow predicts that home prices will continue to level off in San Diego throughout 2020.

Although no one can accurately predict the future of the U.S. housing market, it is possible to make predictions based on intensive research and a thorough understanding of the real estate market. Please keep in mind that these predictions are simply educated guesses based on current market trends and conditions, which can change over time.

Professional Real Estate Sales and Marketing Services

Strategic Sales and Marketing offers real estate sales and marketing services. Our team has years of experience working with the real estate industry and understands the steps required to identify and connect with potential buyers. Please contact us for more information about our services.

New vs. Used Home – Which is Better?

New vs. Used Home – Which is Better?

Purchasing a home is one of the biggest decisions of your life. While location and size are both important factors to consider, it’s also important to think about what type of home is better for your lifestyle.  Here are some factors to consider:

Advantages of Purchasing a New Home

  1. New Construction:

New homes are built to today’s stringent construction standards, which have changed dramatically over the past 15 years.  They are clean, move-in ready, making them the ideal choice if you want to begin enjoying your move right away or leave your current home quickly.

  1. Warranty and Maintenance costs:

In every case, a new home comes with a one year fit & finish warranty and a 10-year structural warranty.  This protects homebuyers from faulty workmanship, but it also translates into less cost and maintenance. For example, a new heating and air systems on a used home averages $20,000 depending on square footage.  This would be an out of pocket expense for a used home owner.

  1. Modern design and technology:

Built with the needs of how people live today, new homes have minimal wasted space, like huge entry ways (where no one spends time) and state-of-the-art technology.  New homes are wired for today’s internet users and smart appliances, security systems and video doorbells.  In real estate, dead spots for internet can hurt a resale home value or the owner will need to invest in updated wiring to make it compatible with technology.

  1. Lower utility bills:

In addition, new homes have higher efficiency appliances and include more green features. In addition to simplifying temperature and lighting control, green technology reduces utility costs, makes homes more energy-efficient, and provides valuable tax incentives.

Purchasing a Used Home

  1. Lower Price:

Occasionally, a used home can be less in price than purchasing a new home. However, there might be existing problems that aren’t easily spotted at the time of purchase. It’s important to consider this factor when deciding on your purchase.

 

  1. Higher Utility Costs and Maintenance:

Depending on the age of the home, it’s unlikely that used homes will have the same features or amenities as a newer home. Most used homes do not have smart technology or energy-efficient features. These homes can end up costing homeowners a lot of extra money on utility bills and security. Although the used home may come with a privately purchased one year warranty, the fine print proves that collecting on those warranties is very difficult, there are many exclusions and there is a high deductible to be met. So, repair costs are many times out of pocket for you as the new owner.

  1. Financing

Many homebuyers run into problems when trying to finance an existing home due to low appraisals or unpermitted improvements. Unfortunately, many home owners cut corners or don’t realize that they must obtain the proper permits and follow certain rules to complete tasks and upgrades. This can cause a major headache for future buyers.

Real Estate Sales and Marketing Services

Strategic Sales and Marketing offers a variety of real estate sales and marketing services. Our team has years of experience working with the real estate industry and understands the steps required to identify and connect with potential buyers. Please contact us for more information about our services.

Southern California Home Prices Drop for the First Time in Nine Years

Southern California Home Prices Drop for the First Time in Nine Years

Over the past few years, the combination of supply and demand issues have had a significant impact on home prices throughout Southern California.  In fact, the median home price has risen steadily since 2012. This may change in coming months according to a CoreLogic report released in April.

CoreLogic’s data found the median home price in Southern California dropped 0.1% in March 2019 from the previous year. Southern California home prices currently sit $18,500 less than what they were during the last June’s peak. While this doesn’t sound like much, this price dip may indicate a sustained decline in coming months.

But it is important to note that the recent decrease doesn’t apply to all areas of Southern California. Although gains were smaller than in the past, home prices in Los Angeles County, San Diego County, and the Inland Empire grew over the past year. The median home price only dropped in Orange County, which has some of the highest home prices in Southern California.  While Orange County home prices might continue to dip slightly over the next few months, it isn’t likely this trend will last.

Healthy Housing Market in Southern California

Low mortgage rates and a solid economy have made buying a home or investment property more attainable for potential home buyers. As a result, we are still experiencing steady sales.

Although luxury homes are sitting longer on the market, homes under $750,000 are selling fast. To attract buyers, some sellers have begun adjusted prices or increased concessions to make a sale. According to Zillow, 15.5% of listings in Los Angeles and Orange County experienced price cuts in March. Only 11.6% of available Orange County homes experienced price cuts in March of last year. In the Inland Empire, 15.9% of sellers reduced their asking prices in March, compared to 13.6% last year.

This is the trend we are watching closely.

Strategic Sales and Marketing offers a variety of real estate sales and marketing services. Our team has years of experience working with the real estate industry and understands the steps required to identify and connect with potential buyers. Please contact us for more information about our services.

Smart Homes – Understanding Your Options

Smart Homes – Understanding Your Options

Technology is changing daily.  From cell phones, vacuums to watches, an increasing number of devices are connecting to the Internet. In our homes, “smart” devices are used to increase comfort and security while simplifying maintenance and control.

Homebuyers today have several options to consider when it comes to smart technology. While these options may seem confusing, their availability isn’t likely to change and more products will be added to increase smart technology.  In fact, current statistics show the smart home market will reach 40 billion USD in the U.S. by the year 2020.

Although the list of potential options continues to grow, there are a few things homebuyers should look for when shopping for a new home.

Smart Lighting

One of the older technologies, smart lighting systems have been shown to increase safety and security, improve mood, and save homeowners a significant amount of money on electric bills. Smart lighting systems are easy to use and provide instant benefits. A lighting control system is a direct retrofit, meaning no additional wiring is required.

Smart Thermostat

Heating and cooling account for almost half of a home’s total energy costs. Smart thermostats make it possible for homeowners to control the temperature of their home from any device that connects to the Internet. Smart thermostats reduce energy costs and increase the overall comfort of the home.

Security Systems

Traditional security systems react to issues detected in and around the home. Smart security systems alert homeowners of potential problems before they occur, allowing issues to be addressed before they escalate. In addition to detecting possible intruders, a smart security system can send an alert directly to a smartphone or other device if children attempt to leave the home. This increases peace of mind and ensures the safety and security of people and property.

Considerations

While several options exist, these features are only as good as the network behind them. Home buyers should consider builders that install a commercial grade of wiring, such as CAT6 or CAT7 or fiber optic cables.  Many older homes only have consumer grade cable or insufficient wiring to convert to a smart home.  These are questions that should be asked before purchasing a home.

Strategic Sales and Marketing offers a variety of real estate sales and marketing services. Our team has years of experience working with the real estate industry and understands the steps required to identify and connect with potential buyers. Please contact us for more information about our services.

 

 

2019 Home Buying Trends

2019 Home Buying Trends

Purchasing a home is one of the most important decisions a person can make. While location remains the top deciding factor when searching for a home, it’s the home’s unique features that convert shoppers into buyers.

Size

Ten years ago, everything in planning was larger homes. That trend has now reversed and today there is more focus on developing affordable options for middle-income homebuyers. According to data from the National Association of Home Builders (NAHB), the average new home size fell in 2018 for the third straight year.  Homebuyers today are choosing paired homes/duplexes, courtyard apartments, bungalow courts, and multiplexes over larger, more expensive homes.

Open Floor Plan

Open floor plans have been in high demand for quite some time. By removing walls, homeowners can communicate freely with friends and family in areas that might have otherwise been closed off. An open concept design adds to the functional square footage of a home, making it the ideal choice for smaller spaces.

Flexible Living Space

As needs change and families grow, flexible living space becomes more important. Homeowners today want a space they can repurpose later.

Energy Efficiency

Everyone wants to save money. This might be part of the reason why homebuyers find energy efficient features so appealing. Whether its Energy-Star-rated windows, or low-flow toilets, Zillow’s recent Housing Trend Report found that nearly half of all homebuyers find energy efficiency desirable.

Storage

No one likes to see clutter. Homebuyers today are making sure they have enough room to stash their belongings. In addition to closets, homebuyers want storage space in the laundry room and garage as well. We are seeing more builders find a way to utilize the space under the stairs for more storage too!

Smart Home Features

As technology becomes more prevalent in everything we do, homebuyers want more smart features in their home. This is especially true for younger buyers who expect lighting, temperature, and security system smartphone control.

Kitchen Islands

A kitchen island adds surface area and storage while creating a space for family and friends to gather. Kitchen islands work well in every kitchen, even smaller spaces. While it might not be possible to fit a larger island with seating in a small kitchen, a smaller island provides the perfect space to prep and stage food when entertaining.

Amenities

Prospective buyers are looking for amenities that promote recreation and socialization. Top choices include Wifi-friendly lounges and public spaces, community pools, community gardens, hiking trails, and gyms.

Strategic Sales and Marketing offers a variety of real estate sales and marketing services. Our team has years of experience working with the real estate industry and understands the steps required to identify trends in what buyers want and how our clients can deliver homes to today’s potential buyers. Please contact us for more information about our services.

 

Making Sense of Conflicting California Housing Market Predictions

Making Sense of Conflicting California Housing Market Predictions

There’s a lot of conflicting information regarding the current state of the housing market in California. While some believe that trouble is on the horizon, research suggests that home sales around the state are about to pick up.

Over the past year, we’ve all heard talk of possible housing market crashes and recessions. However, a crash has not occurred and with interest rates hovering around 4%, homes continue to sell in California. Increasing wages throughout the state and seller’s willing to negotiate may also be a contributing factor. However, many potential buyers are still waiting for home prices to drop.

Lack of available housing and the growing population continues to drive home prices up throughout much of California. Whil e new construction of multi-family units has picked-up in several cities, there is still some opposition from neighboring residents which will slow development.

Millennial Home Buyers Increase as Baby Boomers Sell

According to a 2016 Pew Research Center survey, 72% of all renters say they would like to own a home one day. Unfortunately, some millennials – those born between the early 1980s and early 2000s – face an exorbitant amount of student debt. A large portion of this generation also entered the workforce in the shadow of the Great Recession. Despite these challenges, we’re seeing an increasing number of millennials buying as baby boomers sell, many times they will forgo an expensive wedding for a down payment or use GoFundMe for their down payments.

Encouraged by this increase, mortgage lenders are beginning to experiment with new ways to streamline the application process and verify creditworthiness. For example, the new FICO system will enable potential buyers with lower credit scores to improve their score by responsibly managing their checking and savings accounts. These new practices, combined with stabilized interest rates, provide the perfect opportunity for millennials to make the switch from renting to owning.

Quality of Traffic Improves in California

While less people are out looking, those that are out are serious buyers. Homes are selling in California despite the fact that traffic numbers have dropped, in some communities we are experiencing less than 9:1 traffic to sale conversion. The buyers are not interested in fixer uppers either; they’re buying new construction homes worth upwards of $1 million. This is extremely good news for sellers in California. Renters waiting for home prices to drop might change their mind if presented with the right opportunity. This is why knowing the front line experience along with specific market research is so important.  Strategic Sales and Marketing offers a variety of real estate sales and marketing services. Our team has years of experience working with the real estate industry and understand the steps required to identify and connect with potential buyers. Please contact us for more information about how we can help your community outperform the market.