If you’ve been putting off selling your house, now may be the sweet spot to make your move

An important factor shaping today’s market is the number of homes for sale. And, if you’re considering whether or not to list your house, that’s one of the biggest advantages you have right now. When housing inventory is this low, your house will stand out, especially if it’s priced right.

But there are some early signs that more listings are coming. According to the latest data, new listings (homeowners who just put their house up for sale) are trending up. Here’s a look at why this is noteworthy and what it may mean for you.

It’s well known that the busiest time in the housing market each year is the spring buying season. That’s why there’s a predictable increase in the volume of newly listed homes throughout the first half of the year. Sellers are anticipating this and ramping up for the months when buyers are most active. But, as the school year kicks off and as the holidays approach, the market cools. It’s what’s expected.

But here’s what’s surprising. Based on the latest data from Realtor.com, there’s an increase in the number of sellers listing their houses later this year than usual. A peak this late in the year isn’t typical. It’s still too early to say for sure if this trend will continue, but it’s something you’ll want to stay ahead of if it does.

But, even with more homes coming onto the market, the market is still well below normal supply levels. And, that inventory deficit isn’t going to be reversed overnight.



Pricing Your Home Right Still Matters

While this isn’t the frenzied market we saw during the ‘unicorn’ years, homes that are priced right are still selling quickly and seeing multiple offers right now. That’s because the number of homes for sale is still so low. Data from the National Association of Realtors (NAR) shows 76% of homes sold within a month and the average saw 3.5 offers in June.

The price you set for your house sends a message to potential buyers.

Price it too low and you might raise questions about your home’s condition or lead buyers to assume something is wrong with it. Not to mention, if you undervalue your house, you could leave money on the table, which decreases your future buying power.

On the other hand, price it too high and you run the risk of deterring buyers from ever touring it in the first place. When that happens, you may have to do a price drop to try to re-ignite interest in your house when it sits on the market for a while. But be aware that a price drop can be seen as a red flag for some buyers who will wonder why the price was reduced and what that means about the home.

A recent article from NerdWallet sums it up like this:

“Your house’s market debut is your first chance to attract a buyer and it’s important to get the pricing right. If your home is overpriced, you run the risk of buyers not seeing the listing . . . But price your house too low and you could end up leaving some serious money on the table. A bargain-basement price could also turn some buyers away, as they may wonder if there are any underlying problems with the house.”

Think of pricing your home as a target. Your goal is to aim directly for the center – not too high, not too low, but right at market value.

Pricing your house fairly based on market conditions increases the chance you’ll have more buyers who are interested in purchasing it. That makes it more likely you’ll see multiple offers too. Plus, when homes are priced right, they still tend to sell quickly.



FOR SALE: 8829 Ashcroft Avenue

Aahcroft

LISTED FOR SALE BY NELA HOMES, INC: 8829 Ashcroft Avenue, West Hollywood CA 90048

OFFERED AT $2,800,00

Welcome to 8829 Ashcroft Ave. A timeless "Golden Age of Hollywood" French Tutor in the heart of West Hollywood. On one of the most coveted streets in the city, sits this sun filled 3 Bedroom, 2 Bath Gem, reimagined to Its original splendor and era. Pause at the front door, and take in the dramatic lines of the homes roof lines and red brick skirting splashed along Its base. Step through and soak in the high ceilings and period windows of an open living space. Take the journey down the hall where you will find 2 Bdr's, a hall bath, a laundry closet, a den and finally, an incredible Master w/ private en suite bath and walk in closet. Both Master and Den offer direct access to the backyard through beautiful wood French doors. A wood deck from the house leads you to a limestone landing in the back yard with tree's. An entertainers dream. A long driveway guide's you down to a garage at the end of the property next to the yard. Designed with the most meticulous eye, this is Truly a beautiful place to call home.



Equity Gains for Today's Homeowners

Today’s homeowners are sitting on significant equity, even as home price appreciation has eased recently. If you’re a homeowner, your net worth got a boost over the past few years thanks to rising home prices. Here’s what it means for you, even as the market moderates.

How Equity Has Grown in Recent Years 

Because of the imbalance between how many homes were for sale and the number of homebuyers in the market over the past few years, home prices appreciated substantially.

And while price appreciation has slowed this year, that doesn’t mean you’ve lost all the equity in your home. In fact, the latest Homeowner Equity Insights report from CoreLogic finds the average homeowner’s equity has grown by $34,300 over the past year alone.

And if you’ve been in your home longer than that, chances are you have even more equity than you realize.



FOR SALE: 930 S. Mansfield

930 S Mansfield

LISTED FOR SALE BY NELA HOMES, INC: 930 S Mansfield Ave, Los Angeles CA 90036 

OFFERED AT $3,498,000

Miracle Mile "game-changer"! Incredible opportunity to acquire a fabulous, vacant lot with RTI plans for a 19-unit residential apartment in one of the most desirable and sought-after communities in Los Angles. Once the RTI is issued, your developer client can "hit the ground running". Fantastic Miracle Mile/Mid-Wilshire location where little new construction is being offered. If you're a developer looking for you next project, this one is a winner.



Downsizing can be an option

Being in a strong financial position is one of the most important parts of retirement, and downsizing can make a big difference.

“Many downsizers expect to improve their retirement income stream if their new home costs less than what their old house sells for. Lower utility costs, insurance and property taxes — as well as investment returns on the proceeds — can also improve the bottom line.” -New York Times (NYT)

A key part of why downsizing is still cost effective today, even when mortgage rates are higher than they were a year ago, is the record-high level of equity homeowners have. Leveraging your equity when you downsize can lower or maybe even eliminate the mortgage payment on your next home.

So, not only is the upkeep of a smaller home likely more affordable, but leveraging your home equity could make a big difference too. Your local real estate advisor is the best resource to help you understand how much equity you may have in your current home and what options it can provide for your next move.



“U.S. house prices were largely unchanged in the last four months

U.S. house prices were largely unchanged in the last four months and remained near the peak levels reached over the summer of 2022. While higher mortgage rates have suppressed demand, low inventories of homes for sale have helped maintain relatively flat house prices.”

The data also shows that price depreciation peaked around August. Since then, any depreciation has been even milder. In other words, today’s home prices aren’t in a freefall.



Lower Mortgage Rates Ahead?

As mortgage rates rose last year, activity in the housing market slowed down. And as a result, homes started seeing fewer offers and stayed on the market longer. That meant some homeowners decided to press pause on selling.

Now, however, rates are beginning to come down—and buyers are starting to reenter the market. In fact, the latest data from the Mortgage Bankers Association (MBA) shows mortgage applications increased last week by 7% compared to the week before.

So, if you’ve been planning to sell your house but you’re unsure if there will be anyone to buy it, this shift in the market could be your chance. Here’s what experts are saying about buyers returning to the market as we approach spring.

Mike Fratantoni, SVP and Chief Economist, MBA:

Mortgage rates are now at their lowest level since September 2022, and about a percentage point below the peak mortgage rate last fall. As we enter the beginning of the spring buying season, lower mortgage rates and more homes on the market will help affordability for first-time homebuyers.”

Lawrence Yun, Chief Economist, National Association of Realtors (NAR):

The upcoming months should see a return of buyers, as mortgage rates appear to have already peaked and have been coming down since mid-November.”

Thomas LaSalvia, Senior Economist, Moody’s Analytics:

“We expect the labor market to remain robust, wages to continue to rise—maybe not at the pace that they did during the pandemic, but that will open up some opportunity for folks to enter homeownership as interest rates stabilize a bit.”



A Recession Doesn’t Necessarily Mean Falling Home Prices

To show that home prices don’t fall every time there’s a recession, it helps to turn to historical data. As the graph below illustrates, looking at recessions going all the way back to 1980, home prices appreciated in four of the last six of them. So historically, when the economy slows down, it doesn’t mean home values will always fall.

Most people remember the housing crisis in 2008 (the larger of the two red bars in the graph above) and think another recession would be a repeat of what happened to housing then. But today’s housing market isn’t about to crash because the fundamentals of the market are different than they were in 2008. According to experts, home prices will vary by market and may go up or down depending on the local area. But the average of their 2023 forecasts shows prices will net neutral nationwide, not fall drastically like they did in 2008.



National Association of Realtors 2023 Forecast

The 2023 forecast from the National Association of Realtors (NAR) sets an optimist tone:

While 2022 may be remembered as a year of housing volatility, 2023 likely will become a year of long-lost normalcy returning to the market, . . . mortgage rates are expected to stabilize while home sales and prices moderate after recent highs, . . .”



FOR SALE: 6 Vista Real Drive

6 Vista Real_085558

 

LISTED FOR SALE BY NELA HOMES, INC:  6 Vista Real Drive, Rolling HIlls Est 90274 

OFFERED AT $2,098,000

 

Beautiful Rolling Hills Estate, steps away from the prestigious Rolling Hills Country Club. Located on a cul-de-sac that features scenic, charming streets surrounded by huge trees and lavish landscaping. This is a single story, mid-century home, with three bedrooms, three and a half baths, and a magnificent patio space.

 

This gem offers exceptional lighting, two living rooms / lounging areas; a dining area, and a kitchen with a large island that seats 4+ people. This is a perfect home for an entertainer! Located in a beautiful neighborhood, near lots of restaurants, shopping, & entertainment. Come and see why this neighborhood has become such a premium commodity!



Homebuyers: You May Have More Negotiation Power When You Buy a Home Today

Did the frequency and intensity of bidding wars over the past two years make you put your home search on hold? If so, you should know the hyper competitive market has cooled this past year as buyer demand has moderated and housing supply has grown. Those two factors combined mean you may see less competition from other buyers.

And with less competition comes more opportunity. Over the last two years, more buyers were willing to skip important steps in the homebuying process, like the appraisal or the inspection, in hopes of gaining an advantage in a bidding war. But now, things are different.

The latest data from the National Association of Realtors (NAR) shows the percentage of buyers waiving their home inspection or appraisal is down. And a recent article from realtor.com points out more sellers are accepting contingencies:

“A year ago, sellers were calling all the shots and buyers were launching legendary bidding wars, waiving contingencies, and paying for homes in cash. But now, the shoe is on the other foot, and 92% of home sellers are accepting some buyer-friendly terms (frequently related to home inspections, financing, or appraisals), . . .”



FOR SALE: 6221 Mount Angelus Place

6221 Mt

 

LISTED FOR SALE BY NELA HOMES, INC:  6221 Mt. Angelus Place, Los Angeles 90042

OFFERED AT $1,295,000

 

GREAT OPPORTUNITY TO BE PART OF ONE OF THE MOST EXCLUSIVE AND SECLUDED AREAS IN HIGHLAND PARK, Mount Angelus. This hilly and picturesque neighborhood of about 150 charming homes is one of the most sought-after areas in all of Highland Park.

The main house, with its three bedrooms and two bathrooms, master bedroom, walking closet, master bathroom, and indoor washer and dryer hookups, sits on a single level above the one-car garage and a small studio with a separate street entrance. This studio features a bathroom and a comfortable walking closet. The house is PERFECT FOR A MID-CENTURY MODERN RENOVATION. Have some guests over to stay in the second studio/in-law-quarter/JR ADU in the back of the house, this back studio features one bedroom and one bathroom with a small kitchenette and a large closet area. The one-car garage is deep with enough space for a small to medium size car, PLUS it has many built-in cabinets perfect for a shop or studio.

The large lot crosses from street to street with two separate entrances. The terrace-like garden is perfect for the gardener enthusiast. If you need more storage space, the house has a spacious storage structure.



What to Expect from the Housing Market in 2023

The 2022 housing market has been defined by two key things: inflation and rapidly rising mortgage rates. And in many ways, it's put the market into a reset position.

As the Federal Reserve (the Fed) made moves this year to try to lower inflation, mortgage rates more than doubled – something that’s never happened before in a calendar year. This had a cascading impact on buyer activity, the balance between supply and demand, and ultimately home prices. And as all those things changed, some buyers and sellers put their plans on hold and decided to wait until the market felt a bit more predictable.

But what does that mean for next year? What everyone really wants is more stability in the market in 2023. For that to happen we’ll need to see the Fed bring inflation down even more and keep it there. Here’s what housing market experts say we can expect next year.

What’s Ahead for Mortgage Rates in 2023?

Moving forward, experts agree it’s still going to be all about inflation. If inflation is high, mortgage rates will be as well. But if inflation continues to fall, mortgage rates will likely respond. While there may be early signs inflation is easing as we round out this year, we’re not out of the woods just yet. Inflation is still something to watch in 2023.

Right now, experts are factoring all of this into their mortgage rate forecasts for next year. And if we average those forecasts together, experts say we can expect rates to stabilize a bit more in 2023. Whether that’s between 5.5% and 6.5%, it’s hard for experts to say exactly where they’ll land. But based on the average of their projections, a more predictable rate is likely ahead (see chart below):

That means, we’ll start the year out about where we are right now. But we could see rates tick down if inflation continues to drop. As Greg McBride, Chief Financial Analyst at Bankrate, explains:

“. . . mortgage rates could pull back meaningfully next year if inflation pressures ease.”

In the meantime, expect some volatility as rates will likely fluctuate in the weeks ahead. If we see inflation come back under control, that would be good news for the housing market.



Homeowners Still Have Positive Equity Gains

If you’re a homeowner, your net worth got a big boost over the past few years thanks to rapidly rising home prices. Here’s how it happened and what it means for you, even as the market moderates.

Equity is the current value of your home minus what you owe on the loan.

Because there was a significant imbalance between the number of homes available for sale and the number of buyers looking to make a purchase over the past few years, home prices appreciated substantially.

And while home price appreciation has moderated this year, and even depreciated slightly in some overheated markets, that doesn’t mean you’ve lost equity you gained during the pandemic frenzy.

Homeowners have very high levels of tappable home equity today, providing a cushion to withstand potential price declines, but also preventing housing distress from turning into a foreclosure.

Despite the headlines, the average homeowner still gained positive equity over the last year in just about every market. While the gains aren’t as dramatic as they were in the previous quarter due to home price moderation, they’re still significant. And if you’ve been in your home for longer than a year, chances are you have even more equity than you realize.