Connect with us

Real Estate Big Data

What happens in a sellers market when people stop selling?

(REAL ESTATE BIG DATA) People are staying in their homes longer so median tenure is up, but there are plenty of areas of the country with lots of moving, so know your area.

Published

on

median tenure is up

When it comes to buying or selling a home, much of the focus naturally falls on people in the process of moving. Where they want to relocate to, how long it takes them to find a home…etc. But there’s another part of the equation: what happens once someone buys a home? More importantly, how long do they stay put?

In 2018, the National Association of Realtors® (NAR) actually did a study on this and found that the median amount of time individuals own their homes is 13 years. That’s actually a jump since the last decade, when people were more likely to stay for only about 10 years.

Of course, median scores don’t paint an accurate picture of what’s happening in specific locations. For instance, homeowners in the north eastern section of the United States (think states like New York, Massachusetts and Pennsylvania) are more likely to keep their homes for longer periods of time. On the other hand, homeowners in the west – think Utah, Arizona and Colorado, not the Pacific Northwest – are more likely to sell their homes within 8 years.

One good indicator of whether or not someone will keep their homes for longer is average home prices. In general, NAR found that people who lived in areas where housing was expensive, like California, were less likely to sell quickly. High prices also make selling homes difficult: people often don’t want to put their home up for sale when they don’t have anything lined up. This can create a housing shortage, which can drive prices higher, furthering the cycle.

That said, other areas are seeing massive growth: locations like Austin, Texas or Boise, Idaho, tend to have homeowners selling more often.

The good news about places with “low median tenure” (people moving more often) is that there’s more likely to be growth in the housing market. After all, if someone moves out of their starter home into something bigger, it leaves that starter home open for newcomers looking to settle down in the area.

Essentially, while home tenure has risen on a national scale, the diverse landscape of the United States means experience will vary depending on your specific location.

Brittany is a Staff Writer for The American Genius with a Master's in Media Studies under her belt. When she's not writing or analyzing the educational potential of video games, she's probably baking.

Real Estate Big Data

Housing market: Is it a bubble, or not?

(REAL ESTATE BIG DATA) There’s a lot of talk about whether or not the current housing market is a bubble. Let’s unpack both sides of the debate.

Published

on

Woman and man discussing the housing market earnestly, while holding a notebook

The housing market is crazy right now, with some attributing soaring prices to business as usual and others warning that those same prices are indicative of a bubble—one that, some fear, is close to bursting and triggering another recession. Whether you’re looking to buy or you’re simply window-shopping, here are some valid arguments for both sides of the issue.

A common argument for the existence of a housing bubble includes the issue of rising housing costs, with experts pointing to a strong upward trend in house prices as proof of an invariable crisis. On paper, this is an argument that makes sense since it mirrors the events leading up to the crash of 2006.

However, the reason the market crashed in 2006 has less to do with high prices and more to do with an abundance in risky loans and high interest rates—two things that don’t exist in today’s market. Adjustable rates are also virtually nonexistent for mortgages issued in 2021 (according to Bloomberg, only 0.1% of those mortgages allowed for interest adjustments) while around 60% of mortgages awarded in 2006 carried adjustable interest.

Bloomberg also points out that, between the aforementioned price hikes and common demand, most homeowners are situated to sell at a profit these days. This helps prevent the foreclosure issues evident in the crash of 2006.

Combine a high demand for homes and a relatively short supply of them (in comparison to decades past), and the market seems pretty tight for now—certainly not attributes one would expect leading up to a housing crisis.

But that isn’t to say that there isn’t cause for concern; there are a few reasons why the current housing environment could collapse.

Firstly, while it isn’t fair to compare current prices to their 2006 counterparts, it is fair to point out that the market will eventually hit a ceiling—something that often precedes a crash. Markets fluctuate all the time, but real estate tends to do so more slowly and over longer periods of time—and the market has been rising for long enough that a crash seems inevitable. It isn’t entirely out of the realm of feasibility to be worried about that.

Banks are also starting to invest in cryptocurrency, and, as the primary financiers of real estate endeavors, that could bode really poorly for people looking to get loans should the (very real) cryptocurrency bubble burst. Banks like Goldman Sachs have hired crypto investment specialists to avoid such a catastrophe, but the fact remains that cryptocurrency is still a wildcard—and, in a market that craves stability, that’s a problem.

On a different note, Finimize pointed out that JPMorgan reported an anticipatory drop in earnings from trading during the current quarter, which could also be an ill omen: If trading is slowing down, it could preempt another crash.

Frankly, this could go either way and nobody would be terribly surprised. While it does seem like the market is stable enough to prevent a catastrophe of 2006 proportions, you won’t catch anyone making fun of you for preparing for a drop in the near future.

Continue Reading

Real Estate Big Data

Are you selling real estate in a high-cancer-risk area?

(BIG DATA) If you own a brokerage knowing your local ecosystem can be beneficial. Whether it’s a humble brag on your blog, or a letter to a local rep, knowing your environment is always a good idea.

Published

on

Check your housing environment for cancer risk and support your area.

As a realtor or brokerage owner, you know the importance of understanding your community’s ecosystem in order to shape your business strategy.

However, have you considered how environmental and quality may play a role in those decisions?

This study published in Cancer suggests that you should. According to the study, “of every 100,000 Americans, 451 of us will get cancer in a given year.” The study “found a difference of 39 cases (per 100,000) people, between areas with the highest and the lowest environmental quality.

This establishes a significant link between environmental qualities and cancer risks.

The study also showcases a map of the US and the air quality of various regions. Red and orange areas have the worst air quality, while blue and green areas have the best air quality. As you might expect, large metropolitan areas have the worst air quality, and things improve as you move into more rural areas. You do find the most exceptions throughout the southeastern region and a vertical stretch that runs from the tip of Texas to the Dakotas up north.

These kinds of signs can either be a major benefit or a major obstacle to attracting buyers to your real estate market.

According to the most recent Gallup polls, 47% of Americans worry a great deal about the quality of the environment. So, how do you adjust?

If you’re in a blue or green area, make sure to get the word out! People now consider environmental quality as part of the quality of life factor. Don’t let that benefit go unnoticed. Blog about it on your own website. Use your social media to share data like this from other sources, or other information praising the environmental quality and protections of your market.

Integrate it into your marketing materials where possible.

If you’re in a red or orange area, you’ve got a bit more work to do here, and it’s going to get a bit political. There is already plenty of concern about attempts at the federal level to handicap agencies dedicated to protecting the environment. Be wary of such measures at the state and city level, and be a voice for the real estate economy in shaping this policy.

Does going to places of legislative businesses give you the heebie-jeebies? Find local organizations dedicated to improving environmental quality. Sponsor a river or park clean up event. Show your support for events like Earth Day. Don’t have those kinds of events? Harness your entrepreneurial spirit and bring these events to your community. Taking action as a community leader will be massively beneficial for your brand.

Continue Reading

Real Estate Big Data

How a COVID-19 vaccine could upend the housing market (again)

(REAL ESTATE BIG DATA) COVID-19 completely changed the trajectory of the housing market, but the promise of a vaccine could pull it back around in another direction.

Published

on

A house at dusk with lights illuminated, favored by housing market.

According to CNN Business, “the coronavirus pandemic dramatically changed the landscape of the housing market.” In many expensive urban housing markets, such as Manhattan and San Francisco, vacancy rates are high as people are moving to the suburbs; rents are low in these markets because workers are free from their office jobs.

When combined with low interest rates, this is putting a higher demand on homes in less populated markets. Many people are watching the real estate market closely as vaccines on the horizon promise a return to normal. How could the housing market be affected?

Homeowners still want to work from home to enjoy their sanctuary

The coronavirus reminded people how important home life was. Working from home eliminated commutes and gave workers back some of their time. Even with all the complications of working from home, buyers are looking for homes with a big backyard and space for a home office.

In the Dallas market, starter homes are high in demand. In urban markets that are more expensive, second homes in the rural areas are popular.

People should return to urban areas

As the vaccine gives Americans a return to normal, people will return to the big cities. CNN Business reports that the vacancy rate in Manhattan is 6.14%. Median rental prices are down almost 15% over last year.

As the pandemic comes to an end, it may be a renter’s market until the Fortune 500 companies bring people back to work. A vaccine could also lead to non-US buyers returning to the market, which would make the market more stable.

The vaccine could reverse mortgage rates

Some economists believe that the interest rates will continue to decline, but others suggest that a vaccine could switch the trend. Even so, Marketwatch predicts that many homeowners will still refinance as rates go. Homes will still be in demand, leading to a surge in the housing market.

In fact, a vaccine could mean that more homes will go on the market. Homeowners who hunkered down to ride out the pandemic could be more willing to host open houses and make a move themselves. A vaccine could contribute to supply, which will help buyers get better deals.

The Austin market is strong

Residential sales in the Austin area have increased by 31.5% over last year. Prices have also surged. The median price of a home in Austin’s city limits was $435,000 in August. Sales are expected to slow as supply dwindles. Inventory is limited because people are choosing to stay in their homes. Competition for homes on the market is high, driving prices even higher.

A vaccine is promising for the real estate market

A vaccine should even out the market, but without a crystal ball, it’s hard to know what will happen. Record sales in the Texas market certainly weren’t predicted to be an outcome of a pandemic. It will take time for the economy to level out and for people to get back to work in the entertainment and restaurant industry. How the vaccine impacts the market may depend on location, just as it always has.

Continue Reading
Advertisement

Our Partners

Get The Daily Intel
in your inbox

Subscribe and get news and EXCLUSIVE content to your email inbox!

Still Trending

Get The American Genius
in your inbox

subscribe and get news and exclusive content to your email inbox