JUNE 2019
One Economic Health Indicator
The size of newly constructed homes may be a sign of how well the economy is doing, according to Robert Dietz, chief economist for the National Association of Home Builders. "Typical new-home size falls prior to and during a recession as home buyers tighten budgets, and then sizes rise as high-end home buyers, who face fewer credit constraints, return to the housing market in relatively greater proportions." So, how are home sizes doing now? Overall sizes have been falling since mid-2015 due to cost constraints on labor and available lots.
Home Sellers by Metropolitan Statistical Area
The American Community Survey releases the Public Use Microdata Sample files every year, which include population and housing unit records with individual response information. According to the NAR's Home Buyers and Sellers Survey, the average tenure of homeowners was nine years in 2017. Focusing on homeowners who moved into their home in the last five to nine years (as being categorized from the U.S. Census), NAR was able to identify the characteristics of the home sellers and their homes at local level.
The National Association of Realtors (NAR) calculated the share of owners who bought their home five to nine years ago for 382 metropolitan areas. Based on the NAR's Home Buyers and Sellers Survey, a typical home seller buyer was 55 years old and earned nearly $99,000 in 2017.The following large metropolitan areas are expected to see an uptick of the existing home sales because of the high concentration of owners who are reaching nine years of tenure:
Las Vegas, Henderson, Paradise, NV (21.1%)
Austin, Round Rock, TX (19.6%)
Phoenix, Mesa, Scottsdale, AZ (19.4%)
McAllen, Edinburg, Mission, TX (19.3%)
Cape Coral, Fort Myers, FL (18.9%)
Riverside, San Bernardino, Ontario, CA (18.8%)
Des Moines, West Des Moines, IA (18.8%)
Tulsa, OK (18.5%)
Houston, The Woodlands, Sugar Land, TX (18.4%)
Durham, Chapel Hill, NC (18.4%)
Newly Listed Homes Get 3 to 4 Times More Online Views Than Those with a Price Drop
Price your home right from the start to maximize the homebuyer interest it will get on day one. If you are thinking about testing the waters with a high price and then lowering it a few weeks later to drive more interest, think twice.
Fair or not, buyers judge a home by how many days it has been on the market. A home that has been on for more than a few weeks has a scarlet letter on it and buyers will wonder why no one else wanted to buy it. Dropping the price can help get your home onto the radar of some buyers who are searching for home priced just below the original price, but you likely won't be able to regain the appeal of a newly listed home.
It is critical to put your absolute best foot forward the moment your home hits the market. Price it right, include the best quality photos, and make sure all the details are just right. You'll never be able to replicate the surge of attention your listing gets on its first day on the market.
Online views of home listings drop off steeply after the first day, with half as many visits on day two and a quarter as many after a week on the market. As home sellers this spring adjust to a market that is less favorable than it has been in years, it is increasingly important to make your home as appealing as possible to the most serious buyers whose phones will alert them when your home is first listed.
Finally, some think the global trends will change the real estate landscape considerably over the coming years and beyond. While many of the trends are already evident, there is a natural tendency to underestimate how much the real estate world will change. This could have major implications for real estate investment and development.
Some predictions include a huge expansion in opportunity, especially in emerging economies; fast-growing cities presenting a wider range of risk and return opportunities; technology innovation and sustainability as key drivers for value. What do you think? Let me know.