What Buyers Focus On Most When Touring A Home, According To Eye-Tracking Software

Turns out, it isn’t all about the stainless steel appliances.

One of the many mantras in the real estate world is the saying “kitchens sell houses,” but until now there has been very little information about exactly what it was in a kitchen that would make buyers pay attention. With the help of a few homebuyers wearing glasses that track eye movements, we are beginning to have some hard facts.

It isn’t the shiny metallic fridge or the latest high-tech dishwasher their eyes go to when they first walk in the kitchen. It’s the oven. Many of the buyers in the study would go so far as to look inside the oven, and some of them would even turn it on to see how well it worked. So if you’re selling your home, make sure the oven is so clean it sparkles inside and out. If it isn’t in working order or has a few bad burners, you don’t necessarily have to get it replaced, but you might consider offering the buyer a credit for a new one.

Bedrooms are one of the next priorities in a house that can make or break a sale and eye-tracking software reveals a buyer’s eyes go straight to the bed when they walk into the room. Most likely buyers are wondering if their bed will fit in the space and if there is enough room to fit the rest of their furniture as well. This means if you’re in triage mode when it comes to decluttering on short notice, make the bedrooms a priority over other rooms in the house.

Outdoor accessibility was another big takeaway from the study. When buyers walked into a room that accessed the backyard their eyes immediately went to the outdoor space and the doors that opened out to it. Make sure the windows and doors (if they have glass) are as clean as can be so they show off the view to the outdoors in the best way possible.

But how about those stainless steel appliances? Are they worth it in the end? This study wasn’t designed to measure whether people’s eyes looked at stainless steel more than other types of finishes, but I’ll pass on the main reason why they have become so much of a trend: They can make a small kitchen look much bigger. The reflective surface acts the same way a mirror does by bouncing light around the room and giving the impression of spaciousness. To continue with the mirror example, a designer once told me hanging a mirror is almost as good as adding a window to a room. Stainless steel can have the same impact within a kitchen so it is still worth keeping it in mind if you are going to buy a new appliances.

~ Amy Dobson, Forbes

Would-Be Sellers Appear Ready to Boost Inventory

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There’s a fresh sign that more inventory may be coming to the market, as homeowners deepen their faith in selling. The percentage of consumers who are “strongly” optimistic that now is a good time to sell hit 46% in the second quarter of this year, a significant increase from the 37% who said the same thing in the first quarter, according to the National Association of REALTORS®’ Housing Opportunities and Market Experience Survey, which was released Wednesday.

Home prices have begun moderating in recent months, which may be prompting homeowners to consider selling sooner in order to cash in before prices go any lower. “With home price appreciation slowing, home sellers understand the days of large price gains from holding an extra year are over,” says NAR Chief Economist Lawrence Yun.

Homeowners have been putting off a move in recent years, reluctant to give up low interest rates on their current loans and fearing the difficulty of finding another home to buy amid an inventory crunch. The inventory problem, though, could be eased if more would-be sellers decide to put their homes up for sale.

Other findings from the HOME Survey include:

Not just seller optimism. More Americans also believe now is a good time to buy. Thirty-eight percent of respondents to NAR’s survey say they “strongly agree” that now is the right time to purchase a home, and 27% “moderately agree.” Thirty-five percent say it’s not a good time to buy, according to the survey.
Confidence in the overall economy. A rosier economic outlook may be generating some of the optimism in the housing market. Fifty-five percent of consumers now say they think the economy is improving, up from 53% in the first quarter of 2019. Consumers who are the most upbeat about the economy tend to earn $100,000 or more and reside in rural areas, the survey shows.
Generation X offers important clues. The most notable change in consumer economic perceptions, Yun says, is among Gen Xers, who have tended to face the most financial pressures in recent years compared to other age groups. Fifty-three percent of Gen Xers say they believe the economy is improving, up from 50% in the first quarter. “Many in the Generation X population find themselves needing to purchase multigenerational homes,” Yun says. “Also, they may be feeling financial stress from caring for aging parents and children of all ages. Nonetheless, they have an optimistic outlook about the future.”
Mortgage rates boost sales. Overall, of the respondents surveyed who don’t currently own a home, 27% say they believe it would be difficult to qualify for a mortgage due to their financial situation; 30% said it would be somewhat difficult to qualify. Mortgage affordability showed some improvement in the second quarter, and the trend likely will continue, Yun says. “Lower mortgage rates, along with job and wage growth, will lead to an increase in sales and thereby contribute positively to economic growth in the upcoming quarters.”

~Realtor Magazine

Like spring, Seattle’s real estate season is just getting started

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A month out from “peak real estate season” in Seattle, and the local market is still not among the hottest in the country.

That is, likely, more than alright for a number of home-buyers, who might’ve been burnt out from last year’s market which seemed to go nowhere but up in median price. But it’s also a bit surprising — and not confined to Seattle, according to a new monthly report from CoreLogic.

According to CoreLogic’s numbers, Washington’s growth in February 2019 for single-family home prices year-over-year was just 4.6%, only marginally more than the national average, 4%. Both those numbers represent something of a cooldown, according to Dr. Frank Nothaft, chief economist for CoreLogic.

“During the first two months of the year, home-price growth continued to decelerate,” Nothaft said in their most recent report. “This is the opposite of what we saw the last two years when price growth accelerated early.”

That doesn’t mean that housing is suddenly cheap, either locally or nationwide; CoreLogic’s report also looked at the top 50 markets based on housing stock. They found 40% were overvalued, 18% were undervalued, and 42% were at value in February 2019.

And according to Nothaft, the peak season is primed for prices to go up even further.

“With the Federal Reserve’s announcement to keep short-term interest rates where they are for the rest of the year, we expect mortgage rates to remain low and be a boost for the spring buying season,” he said in the report. “A strong buying season could lead to a pickup in home-price growth later this year.”

And while Seattle had some other things on its mind in February that might’ve contributed to a cool down, local analysts agree that it’s shaping up to be a good season too.

After all, even with the Snowmageddon, home prices in King, Snohomish and Pierce counties rose significantly, ending the month-over-month declines that started last May. And as CoreLogic notes in their report, Seattle’s market was considered “at value” in February.

“Similar to previous months, prices are moving upwards the most consistently in exurban areas along the Interstate 5 corridor,” James Young, director of the Washington Center for Real Estate Research at the University of Washington, said in the latest Northwest Multiple Listing Service report.

“Look for prices outside the major urban areas to continue rising as the weather improves and the main selling season arrives.”

~Zosha Millman, Seattle P-I

Housing crash a distant memory for Seattle homeowners, Zillow says

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Now may be the best time to sell in Seattle, considering more than 97 percent of homes are worth more now than the peak level before the housing market crashed in 2008, according to a new Zillow study released on Thursday.
The median home value is 29.2 percent above the bubble peak level, with the average home worth $492,700 – an 11.4 percent increase compared to a year ago.
Unfortunately, the same can be said about rent, with a 1.9 percent increase over the past year and a median cost of $2,176.

The rest of the housing market around the country is doing pretty well, too, with half of all U.S. homes more valuable now than before the 2008 recession. The median home value stands at $217,300 — that’s 8.3 percent higher than last year. Home values have risen by 8.4 percent since the height of the housing bubble.

Similarly, six of the 35 largest housing markets – including five cities in Texas (Austin, San Jose, San Antonio, Dallas-Fort Worth, and Houston), and Denver, Colorado – have more than 95 percent of homes worth more now than pre-recession peak. Portland, Oregon comes in close, with 94.8 percent of homes more valuable now.

But, there are many home buyers across major U.S. cities still struggling to recover from the recession. Las Vegas remains one of the worst cities, with only 0.8 percent of homes more valuable than before the crash. Orlando, Florida comes in second, Riverside, California third, and Baltimore, Maryland and Phoenix, Arizona topping the list for the least valuable homes since the recession.

“Despite widespread and consistent home value growth today, the scars of the recession still run deep for millions of longer-term U.S. homeowners, and it may take years of growth for their home to regain the value lost a decade ago,” Zillow Senior Economist Aaron Terrazas said. “And while stabilizing growth in rents is likely a relief for those renters saving to become homeowners, many of those would-be buyers in a number of the nation’s hottest markets will be contending with home prices that are as high as they’ve ever been.”

~Karina Mazhukhina / KOMONews.com

In Seattle real estate market, inventory is finally up

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According to the Northwest Multiple Listing Service (NWMLS) Seattle ended June with more than a month of inventory for the first time since September 2016.

In the Seattle city limits in June 2018, NWMLS saw 1,246 active listings, a 75.5 percent increase from the year before. Seattle ended last month with 1.2 months of inventory—a figure based on number of homes for sale and typical sales time—which is nearly double what the market had the previous year.

While this didn’t translate to a decrease in housing prices, they did rise less than last month or last year. Median closing prices rose 8 percent compared to June of last year—but at that time, home values had risen 17 percent. So although the median closing price for last month in Seattle was a whopping $740,000, or $812,500 for a single-family home, it rose far less quickly than this time last year.

County-wide, the inventory picture also improved, although home prices continue to rise; King County ended the month with 1.3 months of inventory compared to .84 last year. And while home prices are rising less quickly than this time last year, too, it’s not by as much. County-wide, home prices rose 10.2 percent over last year—compared to 15.7 percent over the previous year.

Even if home values are rising less quickly, they’re still already high—and still, according to the Puget Sound Regional Council, going up by about $5 every hour of every day. With renters already cost-burdened at a higher rate than homeowners, there seem to be fewer options for entering into homeownership. For people already priced out, there’s not a lot of good news here.

But it’s decent news for current househunters worried about getting priced out before they can get an offer accepted, agents short on listings, or current homeowners sitting on their properties because they’re worried about their next steps.

Meanwhile, though, there’s not much relief in sight for would-be homebuyers in Tacoma. As the City of Destiny’s rent rises faster than Seattle, closing prices have jumped more than 13 percent in Pierce County. Inventory is down and median sale prices are up across the city proper, with the biggest jump in home price, 34.6 percent, in central Tacoma.

~Sarah Anne Lloyd, Curbed Seattle

How Much it Costs to Buy a House in the Hottest Housing Markets of 2018

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Most areas of the country are in a seller’s market, meaning there’s not enough inventory for all the interested homebuyers. About half of all the homes in the country are worth as much or more than they were in April 2007 — the height of America’s housing boom.

This is all good news if you’re planning to sell your home. It’s less good news if you’re trying to find one. But as with most things when it comes to buying a house, like what kind of hidden fees you can expect during the process, where you live matters. Certain areas of the country are exploding in popularity, which is driving up the cost of homes.

Ahead, check out how much it costs to buy a home in the hottest real estate markets of 2018 according to Zillow’s latest housing report.  Hottest Housing Markets

Why It’s Now An Empty Nesters’ Housing Market

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There’s a mismatch in the housing market. Demand is rising, yet homebuilders don’t have the capacity to create the supply.  They haven’t banked as much land, they haven’t filed the permits and they’ve become increasingly short of labor—one possible byproduct of the Trump administration’s crackdown on illegal immigrants.

In fact, the nation is probably short about 700,000 homes on an annual basis. That explains why new home sales have been somewhat disappointing.

It also explains why sellers in many markets are now in prime position. According to Realtor.com, in December and January the supply of existing homes was 3.6 months, something that hadn’t happened since January 2005. In Seattle, for instance, the average time a house stays on the market is 36 days, compared with the national average of 90 days. In Dallas-Ft. Worth, it’s 42 days, according to Realtor.com.

Combine that with the prospect of higher-priced mortgages thanks to the Federal Reserve’s decision to begin lifting interest rates and it makes buyers a little more motivated. “We’ve seen home sales surge because buyers are beginning to realize there is this expectation that mortgage rates will rebound: you might as well get in now,” says Bernard Baumohl, chief global economist at The Economic Outlook Group. He says prices are rising at twice the rate of inflation and more than two times the rate of average hourly pay. That’s bad news on the affordability front for first-time buyers who are trying to get onto the first rung of the housing ladder.
Click here for more articles from Time Inc.’s Looking Forward series.

But it’s great news for empty nesters and other homeowners looking to downsize. Even better, there’s less of a supply constraint because developers have targeted the boomer market by building high service, luxury condominiums in major markets. And why not, says Peter Wells, a partner at Real Capital Solutions, which is developing a luxury condo tower in suburban Dallas: “When [boomers] sell their big place, they’re cash rich and it becomes all lifestyle driven.” Spring is a traditional time for buying and selling homes, and this season stands to be a busy one.

~Bill Saporito, Time

How Millennials Are Changing the Housing Market

 

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Today, younger Millennials are purchasing their first homes and older ones are already moving on to buying their second. Millennials are known as the generation that will buy a $200 pair of jeans after extensive research and trying on 67 different pairs to find the exact right ones. The way they shop for homes is no different.

This research-driven culture is supported by the internet where everything they could ever possibly want to know is right at their fingertips.

The most surprising thing about the way Millennials buy their homes is that they actually want a realtor to help guide them through the process, but that’s not the only generational shift here.

Millennials Want Everything To Be Just Right
Millennials consider owning their own home as an important part of living the American Dream. Unfortunately, thanks to stagnating wages and a sharp increase in student loan debt, saving for that down payment isn’t going to be easy. As a result, there isn’t much cash left over after closing to make any updates Millennials want, so they instead seek out homes that are fully updated and move in ready to begin with.

At the top of Millennials’ wish lists are updated kitchens and bathrooms, green features like solar panels, an open floor plan, a home office, a good location, and good Internet and cell service. Almost half of Millennials would rather buy a brand new house in order to avoid any maintenance issues that might occur early on. Only 11% of Millennials consider a home to be permanent anyway.

Eventually, Millennials plan to sell their starter home as 68% view it as a stepping stone to the home they really want and making improvements is not part of that plan. The average homeowner keeps their home for ten years, while the average Millennial only keeps their home for six years.

Some Things Remain the Same Regardless of Generation
When it comes to where Millennials want to live, the suburbs still reign supreme. Half of Millennials live in the suburbs and a surprisingly low 25% live in urban areas. Research shows Millennials want to live in a place that is close to work and close to things to do, and urban areas typically provide both of those things.

Four out of five adults between the ages of 18 and 25 live outside of the urban core of a city, which indicates an even stronger shift toward the suburbs. Still, they want to be close to work to save on commute times and travel expenses, and 65% choose the location of their home based on how far it is to work.

Why Should Sellers Cater To Millennial Home Buyers?
Of all first-time home buyers, Millennials make up 66%, and they are 34% of home buyers overall. Over 66% plan to purchase a new home within the next 5 years. That’s a huge generational shift in real estate. Millennials are better informed about their options than probably any other generation before them.

In short, if you aren’t catering to this generation’s enormous buying potential you’re probably going to be missing out on a lot of opportunities. If you are considering selling your home:

Make All Necessary Repairs and Upgrades Before Listing
Consider updating kitchens and baths – these have always sold homes, but now they are more important than ever
Do an energy efficiency audit and make upgrades anywhere you can, including solar panels
Consider upgrading any old appliances
Install smart home features like programmable thermostats
Millennials do hours of online research just to buy a sweater, so they are naturally going to do even more research when it comes to buying a home. More than three-quarters of Millennial home buyers drove by a home because of photos and listings they found online, and over 60% did walkthroughs because of these listings.

Getting the information in front of them is key, and making sure you highlight relevant features is crucial.

Millennials Now Hold Massive Buying Power
Millennials hold a lot of buying power in today’s real estate market, but many are using their parents to close the deal. According to top performing Denver realtor, Denise Fisher, this makes for an interesting family dynamic with clients that she doesn’t see with other generations:

“One thing real estate agents must adapt to when working with Millennials is dealing with two sets of buyers for the same home. The millennial is usually the one that researches the home online but when it comes to the showing and buying, more and more parents are getting involved in the process. Millennials are frequently getting their down payment or the whole mortgage from their parents so when they are looking it’s a family affair. While the Millennial is my main client, I will often be talking to the parents through the transaction and while showing houses I’ll have 2 carloads of a family to walk through a house. They often have different tastes and ideas for the ideal home. This adds a new element to the sale for realtors.”

Millennials are quickly changing the face of real estate. Gone are the days of only seeing what your Realtor wants to show you. Gone are the days of the glorified fixer upper and the weekend warrior. Millennials are busy working their side hustle anyway. New homes and already fixed up homes are the ones that are going to be moving on the real estate market, an ode to the buying power of the Millennial generation.

Learn more about what Millennials want in a new home from this infographic from Nationwide Mortgages. Much like baby boomers changed the real estate market to shape the suburbs, Millennials are just now starting to make their mark.  Millenials in the Real Estate Market

 

~John White, Social Marketing Solutions

2015 State of the Real Estate Market

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The NW Multiple Listing Service recently sent out their annual summary of the year that was in Western Washington real estate. We probably don’t need to tell you that most of those numbers are up, up, up. Especially if you’ve been trying to buy a house all year long. We perused the report, which was chocked full of numbers, and picked out some of the most shocking, revealing and fascinating numbers within.

 

 

2015 saw 88,331 closed sales amongst NWMLS members in 2015, up 14.3 percent from 77,276 in 2014.

The value of every NWMLS member single-family home & condo sale was over $34 billion, up almost 23 percent from 2014.

Both of those numbers are higher than the previous highs of 2007 when the housing market peaked.

Average area-wide supply was 2.4 month, down from the 3.5 months number of 2014. King County was the lowest of all, averaging only 1.3 months of supply. 4-to-6 month supply is considered a balanced housing market.

2,676 single family homes sold at $1 million or more, which was up over 29 percent from 2014. Add 237 condos priced at $1 million and up in as well.

The median price for a 3-BR home was $283,250, about 7.9 percent higher than 2014. Highest median price for 3-BRs came courtesy of San Juan County with $452,500.

Six of every 10 condo sales (61.9 percent) were located in King County.

As well as older sales did, new construction sales did even better. 8,548 newly-built single family homes sold for a median price of $425,000 while 1,018 new condos sold for a median price of $449,950.

The highest-priced single family home sold in 2015 by a NWMLS member? This $13.8 million Mercer Island estate. Topping the chart of high-priced condos was an Escala 3-BR that went for just over $3.1M.

There was a tie atop the list of cities with the most $5M+ home sales. Mercer Island and Bellevue both saw seven, while Clyde Hill (5), Medina (4) and Seattle (4) were close behind.

~ Sean Keeley

Considering Selling? 5 Reasons Not to Sell as Owner

In today’s market, with homes selling quickly and prices rising some homeowners might consider trying to sell their home on their own, known in the industry as a For Sale by Owner (FSBO). There are several reasons this might not be a good idea for the vast majority of sellers.

Here are five reasons:

1. There Are Too Many People to Negotiate With

Here is a list of some of the people with whom you must be prepared to negotiate if you decide to For Sale By Owner:

  • The buyer who wants the best deal possible
  • The buyer’s agent who solely represents the best interest of the buyer
  • The buyer’s attorney (in some parts of the country)
  • The home inspection companies, which work for the buyer and will almost always find some problems with the house.
  • The appraiser if there is a question of value

2. Exposure to Prospective Purchasers

Recent studies have shown that 88% of buyers search online for a home. That is in comparison to only 21% looking at print newspaper ads. Most real estate agents have an internet strategy to promote the sale of your home. Do you?

3. Results Come from the Internet

Where do buyers find the home they actually purchased?

  • 43% on the internet
  • 9% from a yard sign
  • 1% from newspaper

The days of selling your house by just putting up a sign and putting it in the paper are long gone. Having a strong internet strategy is crucial.

4. FSBOing has Become More and More Difficult

The paperwork involved in selling and buying a home has increased dramatically as industry disclosures and regulations have become mandatory. This is one of the reasons that the percentage of people FSBOing has dropped from 19% to 9% over the last 20+ years.

5. You Net More Money when Using an Agent

Many homeowners believe that they will save the real estate commission by selling on their own. Realize that the main reason buyers look at FSBOs is because they also believe they can save the real estate agent’s commission. The seller and buyer can’t both save the commission.

Studies have shown that the typical house sold by the homeowner sells for $208,000 while the typical house sold by an agent sells for $235,000. This doesn’t mean that an agent can get $27,000 more for your home as studies have shown that people are more likely to FSBO in markets with lower price points. However, it does show that selling on your own might not make sense.

Bottom Line

Before you decide to take on the challenges of selling your house on your own, sit with a real estate professional in your marketplace and see what they have to offer.