Each week I round-up the best real estate articles and break them down for you in an easy to digest format. Here are the articles I’ve found most interesting over the last couple weeks:
The Article: National Association of Realtors: Instant Reaction: Jobs
The Highlights: Interest rates have ticked about 6% again this week in reaction to the jobs report. The fed can be a little more aggressive on inflation now that it’s not negatively impacting unemployment. We know real estate markets do benefit from strong job growth so this is good news in the long run, but it might temporarily keep rates in the 6% range.
My Take: Even with rates above 6% again for a 30-year fixed rate, I still think it’s important for buyers to understand the current landscape. It could be a unique opportunity for first time homebuyers (or buyers with a lower down payment) who sat on the sidelines last year when things were uber competitive. The spring frenzy hasn’t quite hit yet, and since real estate is a long game, and there’s really no *bad* time jump in if you plan to hold real estate for a long period of time
The Article: WSJ: Steepest Home Price Declines in the Fourth Quarter were in the West
The Highlights: Even despite a cooling housing market last fall as interest rates soared above 7%, U.S. home prices rose on a year-over-year basis during the fourth quarter, but fell on a monthly basis since July of last year.
The area hit the hardest by declining home price sales was the West Coast—specifically San Francisco posting a 6.1% median single-family existing-home sales price decline compared to a year earlier. What’s more, prices in the Bay Area are down about 15% to 20% from their peak in the first quarter of 2022.
My Take: Price decreases have hit the hardest in areas that were most sought after and/or most expensive during Covid. Cities like Boise and Phoenix, nicknamed “Zoomtowns”, saw an influx of remote workers who escaped larger cities to areas with desirable lifestyle options and inexpensive housing.
Now, with interest rates nearly doubled and Covid restrictions becoming a thing of the past, homeowners in these cities have no choice but to slash housing prices in order to sell. In fact, 61% of listings in Boise took a price cut before selling last June—the highest of any other area in the country.
I think we’ll see continued cooling in areas like these as long as interest rates remain high. Thankfully, for those of you in my neck of the woods (Midwest/Chicagoland), we have a much more stable market. We didn’t see the wild swings during Covid, and as a result, homeowners who purchased in 2020 won’t be upside down if they want to sell soon.
The Article: Redfin: Home Staging Secrets by City
The Highlights: People live differently in different areas of the country. Things like climate, lifestyle, landscape, values, and home size all impact how people live, and consequently, impacts how they buy homes!
For example, in Hawaii you want to incorporate coastal themes into the décor since the climate and terrain is a highlight of living in Hawaii. In Chicago (and larger cities in general) people want to see spaces that are multi-functional (office + guest room, living room + play space) since people are often living in smaller city dwellings.
My Take: First, it’s a big YES to staging to sell. A recent survey from the International Association of Home Staging Professionals shows that staging helps sell homes more than 3x faster than the nonstaged competition and can increase the sale price by up to 20% on average.
Additionally, I think it’s always appropriate to consider who the customer is when staging a home. If you’re selling a condo in the city, you’d think about that space differently than you would a single-family home in the suburbs.
This article gets very specific, but I think generally every home needs decluttering, depersonalization, fresh pillows and linens, plants, and a few special moments in important areas like the kitchen, primary bedroom, and living room.