Home seller behavior in modern times
According to a study performed by real estate search company Zillow.com, home sellers who bought their home after the housing bubble burst in 2007 overprice their homes an average of 14.1% as opposed to people who bought before the bubble (prior to 2002) and those who purchased during the bubble (2002-2006).
Home sellers who bought prior to 2002 price their homes an average of 11.6% over market value and those who bought during the bubble are the most conservative at 9.3% over market value. The bottom line here is also that listings are still roughly 10% or over market value when listed, regardless of home values struggling across the nation and sales remaining anemic.
New sales price based on the original purchase price
Most interesting to us is that the study reveals post-bubble buyers were the most likely to base their asking price on the original purchase price of their home than home sellers who bought before or during the bubble. Zillow notes that despite home values have been dropping since 2006 and are at 2003 levels, post-bubble buyers are sticking to their guns on pricing and going to market with the original price they paid rather than the current state of the market. Zillow sums up by saying, “buyers who bought during bubble years more likely to price realistically.”
Why post-bubble buyers think differently
Zillow Chief Economist Dr. Stan Humphries points to a litany of reasons. “Post-bubble buyers seem to believe they escaped the worst of the housing recession, as evidenced by how they price their homes today. But 2006 was just the beginning of the housing recession, and it is continuing in earnest to this day. That means that even people who bought after the bubble burst need to break out the pencil and paper and do serious research into what has happened in their market since they first bought their home, whether it was four years ago or six months ago.”
Zillow studied current listings but set out to do some forecasting. They surveyed homeowners who indicated they plan on selling their homes in the next four years and found that of those that purchased their home prior to the bubble, 17% noted purchase price would be the primary factor in pricing their home to sell in the next four years. Of those who purchase prior to the bubble, only 4% indicated they would use the original purchase price as the primary factor and 9% of owners that purchased during the bubble would. Homeowners who purchased after the bubble burst are four times more likely to use the original purchase price of their home to price it now or within the next four years.
Realtors struggling with sellers to be realistic
It is unclear the impact of having a Realtor versus not having a Realtor makes on this equation and although it gives a bit of predictability to seller mentality over the next few years, it presents a challenge to Realtors struggling to get homeowners to understand market conditions.
Realtors should understand the three types of home sellers as studied by Zillow- those that bought before, during and after the bubble, and take the year of purchase into account as an indicator of seller mentality.
Austin tops the list of best places to buy a home
When looking to buy a home, taking the long view is important before making such a huge investment – where are the best places to make that commitment?
Looking at the bigger picture
(REALUOSO.COM) – Let us first express that although we are completely biased about Texas (we’re headquartered here, I personally grew up here), the data is not – Texas is the best. That’s a scientific fact. There’s a running joke in Austin that if there is a list of “best places to [anything],” we’re on it, and the joke causes eye rolls instead of humility (we’re sore winners and sore losers in this town).
That said, SelfStorage.com dug into the data and determined that the top 12 places to buy a home are currently Texas and North Carolina (and Portland, I guess you’re okay too or whatever).
They examined the nerdiest of numbers from the compound annual growth rate in inflation-adjusted GDP to cost premium, affordability, taxes, job growth, and housing availability.
“Buying a house is a big decision and a big commitment,” the company notes. “Although U.S. home prices have risen in the long term, the last decade has shown that path is sometimes full of twists, turns, dizzying heights and steep, abrupt falls. Today, home prices are stabilizing and increasing in most areas of the U.S.”
Average age of houses on the rise, so is it now better or worse to buy new?
With aging housing in America, are first-time buyers better off buying new or existing homes? The average age of a home is rising, as is the price of new housing, so a shift could be upon us.
The average home age is higher than ever
(REALUOSO.COM) – In a survey from the Department of Housing and Urban Development American Housing Survey (AHS), the median age of homes in the United States was 35 years old. In Texas, homes are a bit younger with the median age between 19 – 29 years. The northeast has the oldest homes, with the median age between 50 – 61 years. In 1985, the median age of a home was only 23 years.
With more houses around 40 years old, the National Association of Realtors asserts that homeowners will have to undertake remodeling and renovation projects before selling unless the home is sold as-is, in which case the buyer will be responsible to update their new residence. Even homeowners who aren’t selling will need to consider remodeling for structural and aesthetic reasons.
Prices of new homes on the rise
Newer homes cost more than they used to. The price differential between new homes and older homes has increased from 10 percent traditionally to around 37 percent in 2014. This is due to rising construction costs, scarcity of lots, and a low inventory of new homes that doesn’t meet the demand.
Are Realtors the real loser in the fight between Zillow Group and Move, Inc.?
The last year has been one of dramatic and rapid change in the real estate tech sector, but Realtors are vulnerable, and we’re worried.
Why Realtors are vulnerable to these rapid changes
(REALUOSO.COM) – Corporate warfare demands headlines in every industry, but in the real estate tech sector, a storm has been brewing for years, which in the last year has come to a head. Zillow Group and Move, Inc. (which is owned by News Corp. and operates ListHub, Realtor.com, TopProducer, and other brands) have been competing for a decade now, and the race has appeared to be an aggressive yet polite boxing match. Last year, the gloves came off, and now, they’ve drawn swords and appear to want blood.
Note: We’ll let you decide which company plays which role in the image above.
So how then, does any of this make Realtors the victims of this sword fight? Let’s get everyone up to speed, and then we’ll discuss.
1. Zillow poaches top talent, Move/NAR sues
It all started last year when the gloves came off – Move’s Chief Strategy Officer (who was also Realtor.com’s President), Errol Samuelson jumped ship and joined Zillow on the same day he phoned in his resignation without notice. He left under questionable circumstances, which has led to a lengthy legal battle (wherein Move and NAR have sued Zillow and Samuelson over allegations of breach of contract, breach of fiduciary duty, and misappropriation of trade secrets), with the most recent motion being for contempt, which a judge granted to Move/NAR after the mysterious “Samuelson Memo” surfaced.
Salt was added to the wound when Move awarded Samuelson’s job to Move veteran, Curt Beardsley, who days after Samuelson left, also defected to Zillow. This too led to a lawsuit, with allegations including breach of contract, violation of corporations code, illegal dumping of stocks, and Move has sought restitution. These charges are extremely serious, but demanded slightly less attention than the ongoing lawsuit against Samuelson.
2. Two major media brands emerge
Opinion Editorials2 weeks ago
America has an addiction to being busy, here’s what we need to do about it
Business News2 weeks ago
Email remains the top communication tool for businesses – here’s why
Business Marketing2 weeks ago
News flash: Your coworkers are not your family
Business News6 days ago
10 ways retailers track repeat customers that you can implement now
Business Marketing6 days ago
Use nostalgia as a marketing niche for your business today
Business News1 week ago
5 reasons why you need a mentor, stat!
Opinion Editorials2 weeks ago
The one easy job interview question that often trips up applicants
Business Entrepreneur2 weeks ago
4 tips for success for acquiring a business, and how and why to do it