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Price Hikes in 87% of Markets; New Record Set

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Price Hikes in 87% of Markets; New Record Set
National Association of REALTORS® article by Daily Real Estate News | August 16, 2017

House 1015Median home prices in the second quarter eclipsed a record high set in 2016, jumping 6.2 percent year over year as the inventory crunch continues to push property values higher, according to the National Association of REALTORS®.

The national median price for an existing single-family home was $255,600, up from $240,700—the previous high—in the second quarter of 2016, NAR reported Wednesday. Prices for single-family homes rose in 87 percent of U.S. housing markets; 23 metros saw double-digit increases.

“The 2.2 million net new jobs created over the past year generated significant interest in purchasing a home in what was an extremely competitive spring buying season,” says NAR chief economist Lawrence Yun. “Listings typically flew off the market in under a month—and even quicker in the affordable price ranges—in several parts of the country. With new supply not even coming close to keeping pace, price appreciation remained swift in most markets.”

Yun continues to urge for more new-home construction to meet the demand in the housing market. “An increasing share of would-be buyers are being priced out of the market and are unable to experience the wealth-building benefits of homeownership,” he says.

Total existing-home sales, which includes single-family homes and condos, dropped 0.9 percent to a seasonally adjusted annual rate of 5.57 million in the second quarter, NAR reports. Sales are still 1.6 percent higher than a year ago.

But at the end of the second quarter, 1.96 million existing homes were available on the market, a 7.1 percent drop from a year ago. The average supply in the second quarter was at 4.2 months.

“Mortgage rates have subsided in recent months, which has only somewhat helped take away some of the sting prospective buyers are experiencing with the deteriorating affordability conditions in many areas,” Yun says. “Household incomes may be rising and giving consumers assurance that now is a good time to buy, but these severe inventory shortages will likely continue to be a drag on sales potential in the second half of the year.”

The five priciest housing markets in the second quarter were: San Jose, Calif., metro area, where the median existing single-family price was $1,183,400; San Francisco, $950,000; Anaheim-Santa Ana, Calif., $788,000; urban Honolulu, $760,600; and San Diego, $605,000.

Meanwhile, the five lowest-cost metros in the second quarter were: Youngstown-Warren-Boardman, Ohio, $87,000; Cumberland, Maryland, $98,200; Decatur, Illinois, $107,400; Binghamton, New York, $109,000; and Elmira, New York, $111,600.

Source: National Association of REALTORS®; REALTOR® Magazine Online, Daily Real Estate News 081617

Kenneth Bargers REALTOR® License 318311  |  Pilkerton Realtors License 257352
(615) 512-9836 cellular  •  (615) 915-5901 facsimile  •  kb@bargers-solutions.com email
bargers-solutions.com web  •  kennethbargers.com blog  •  Search Properties
(615) 371-2474 office  •  (615) 371-2475 facsimile  •  2 Cadillac Drive, Brentwood TN 37027 address
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What Really Makes a Property Appreciate

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What Really Makes a Property Appreciate
realtor.com | April 18, 2017

Patio 500wA home’s value generally appreciates 3 percent to 4 percent every year, which is attributed mostly to population growth and inflation. However in 2016, homeowners saw appreciation jump to an average of 6.3 percent.

Realtor.com®’s research team sought to find out what would boost a home’s value even more and what home features buyers may be willing to pay more for. Researchers analyzed millions of listings on realtor.com® from 2011 to 2016 to calculate the annual price growth rate of homes with certain features.

Here are some of the clear winners in housing appreciation:

Publication1Small homes: Homes smaller than 1,200 square feet appreciated by an average rate of 7.5 percent a year for the past five years. On the other hand, larger homes of 2,400 square feet or more rose by 3.8 percent a year. The smaller-home demand is being driven by millennials wanting to enter the market with a more affordable starter home and baby boomers who are looking to downsize, realtor.com® notes. Further, smaller homes are in shorter supply, which is prompting prices to increase more due to the high demand, says Jonathan Miller, president of Miller Samuel, a real estate appraisal firm.

Two-bedroom homes: Homes with two bedrooms appreciate at a rate of 6.6 percent a year, compared to homes with five bedrooms that appreciate at 4.3 percent a year, realtor.com®’s research team found.

Open floor plans: Homes with open floor plans appreciate 7.4 percent a year. It’s the hottest appreciating home feature that realtor.com® studied (see side for full list). As for features like stainless steel and granite, Miller says those amenities don’t really add any value to a home. “Those are what I call ‘have-to-have’ features,” Miller says. “A home needs to have them in a competitive market. But they don’t add long-term value. … Ten years from now, when you update your kitchen, they’ll be replaced.”

Modern and contemporary homes: Modern and contemporary architectural styles have the highest potential for appreciation, increasing at about 7.7 percent annually. This style of home is known for simple, geometric shapes, and large windows. Newly constructed modern homes also tend to be energy efficient. Bungalows and Traditional are the next highest appreciating styles at 6.5 percent and 5.6 percent, respectively. Meanwhile, niche styles like Craftsman bungalows and Victorians are among the lowest appreciating architectural styles, at 3.7 percent and 2.2 percent, respectively. Researchers speculate that may be due to some of the maintenance responsibilities in staying true to the home’s historical architecture that is often connected to these styles of homes.

Green space views: Homes with a park view appreciate at 7.9 percent a year, realtor.com®’s research team found. “[They] hold value over a longer period of time, and they recover quickly from a downturn,” says Michael Minson, a real estate pro in San Francisco at Keller Williams. “Buyers appreciate the tranquility and outdoor activities. They like being close to nature.” Indeed, homes with mountain views appreciated on average by 5.1 percent, and homes with a lake view at 4.9 percent. Ocean views appreciated the least of the “home views” studied, at just 3.6 percent a year. Recent storms may have spooked buyers from oceanfront properties as well as the fact that the highest-cost homes tend to be along the ocean, realtor.com®’s research team notes.

Source: “Appreciation Sensation: The Real Factors That Boost Your Home’s Bottom Line,” realtor.com® (April 17, 2017); REALTOR® Magazine Online, Daily Real Estate News 041817

KENNETH BARGERS REALTOR® License 318311 | Pilkerton Realtors License 257352
(615) 512-9836 cellular • (615) 915-5901 facsimilekb@bargers-solutions.com email
bargers-solutions.com webkennethbargers.com blogSearch Properties
(615) 371-2474 office • (615) 371-2475 facsimile • 2 Cadillac Drive, Brentwood TN 37027 address

Home Prices Are Soaring to New Highs

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Home Prices Are Soaring to New Highs
Article by Daily Real Estate News | February 10, 2017

Home price appreciation picked up speed in the final three months of 2016, prompting the majority of metro areas to soar to new record highs with home prices, the National Association of REALTORS®’ latest quarterly report reveals. Of the 150 markets NAR has tracked since 2005, 52 percent – or 78 – now have a median sales price that is at or above its previous all-time high.

The fourth quarter of 2016 proved to be a strong one for home price appreciation. The median existing single-family home price rose in 89 percent of the measured markets. Thirty-one metro areas out of 178 saw double-digit gains.

“Buyer interest stayed elevated in most areas thanks to mortgage rates under 4 percent for most of the year and the creation of 1.7 million new jobs edging the job market closer to full employment,” says Lawrence Yun, NAR’s chief economist. “At the same time, the inability for supply to catch up with this demand drove prices higher and continued to put a tight affordability squeeze on those trying to reach the market.”

5priciestleastmarketsIn the fourth quarter, the national median existing single-family home price was $235,000 – up 5.7 percent from the fourth quarter of 2015 ($222,3000).

Inventories of homes for-sale remain tight. At the end of the fourth quarter, 1.65 million existing homes were available for sale, which is 6.3 percent below year ago levels and the lowest level since NAR began tracking the supply of all housing types in 1999.

“Depressed new and existing inventory conditions led to several of the largest metro areas seeing near or above double-digit appreciation, which has pushed home values to record highs in a slight majority of markets,” Yun says. “The exception for the most part is in the Northeast, where price growth is flatter because of healthier supply conditions.”

Nationwide, a boost in home prices and mortgage rates at the end of the year slightly weakened affordability compared to a year ago. That came despite a solid uptick in the national family median income.

To buy a single-family home at the national median price, a buyer making a 5 percent down payment would need an income of $51,017; they would need an income of $48,332 for a 10 percent down payment; and they would need an income of $42,962 for a 20 percent down payment, according to NAR.

“Even a pick-up in wage growth may be insufficient to compensate the impact of higher mortgage rates and home prices,” Yun says. “Increased homebuilding will be crucial to alleviate supply shortages and stave off the affordability hit.”

Source: National Association of REALTORS®; REALTOR® Magazine Online, Daily Real Estate News 021017

KENNETH BARGERS REALTOR® License 318311 | Pilkerton Realtors License 257352
(615) 512-9836 cellular • (615) 915-5901 facsimilekb@bargers-solutions.com email
bargers-solutions.com webkennethbargers.com blogSearch Properties
(615) 371-2474 office • (615) 371-2475 facsimile • 2 Cadillac Drive, Brentwood TN 37027 address

Are Higher Home Prices Spooking Buyers?

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Are Higher Home Prices Spooking Buyers?
Article by Daily Real Estate News | September 29, 2015

HouseForSaleContracts to buy homes dropped nationwide in August, as home prices continued to inch upward, the National Association of REALTORS® reports. Modest increases in pending home sales in the West were offset by declines in all other regions last month.

NAR’s Pending Home Sales Index – a forward-looking indicator based on contract signings – retreated 1.4 percent in August to a 109.4 reading. Despite the drop, pending home sales remain 6.1 percent above August 2014 levels.

PendingSalesAug2015Buyer demand is continuing to outpace the housing supply and it’s also prompting home prices to increase in many markets across the country, says Lawrence Yun, NAR’s chief economist.

“Pending sales have leveled off since mid-summer, with buyers being bounded by rising prices and few available and affordable properties within their budget,” Yun says. “Even with existing-housing supply barely budging all summer and no relief coming from new construction, contract activity is still higher than earlier this year and a year ago.”

Yun predicts that sales will maintain their current pace in the months ahead. But, he cautions, there are several headwinds that could impact housing.

“The possibility of a government shutdown and any ongoing instability in the equity markets could cause some households to put off buying for the time being,” Yun says. “Furthermore, adapting to the changes being implemented next month in the mortgage closing process could delay some sales.”

Still, NAR says the national median existing-home price will likely rise 5.8 percent this year, reaching $220,300. Also, existing-home sales likely will rise 7 percent to around 5.28 million – 25 percent below the prior peak set in 2005.

Source: National Association of REALTORS®; REALTOR® Magazine Online, Daily Real Estate News 092915

Kenneth Bargers, REALTOR® | Pilkerton Realtors
(615) 512-9836 cellular (615) 371-2474 office kb@bargers-solutions.com email
www.bargers-solutions.com web kennethbargers.com blog
2 Cadillac Drive, Brentwood Tennessee address

Need a home? visit Search for Properties
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Yun: ‘Prices Are Rising Just Too Fast’

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Yun: ‘Prices Are Rising Just Too Fast’
Article by Daily Real Estate News | August 11, 2015

Treed-Home-LotThe tight supply of available homes is prompting more house hunters to bid up home prices, housing analysts say.

“Prices are rising just too fast,” says Lawrence Yun, chief economist with the National Association of REALTORS®. “And certainly far ahead of people’s income.”

NAR recently reported that the limited number of homes for sale was pushing the national median sales price above its 2006 peak. In its latest existing-home sales report, NAR noted that the median home price for all housing types reached $236,400 in June – 6.5 percent above year ago levels and surpassing the peak median sales price set in July 2006 at $230,400.

Housing’s inventory problem is occurring across housing types. Condos made up just 5.5 percent of all multifamily building in the first quarter of this year, the lowest on record for the Commerce Department, which has been tracking such information for more than four decades. Single-family construction is also about half of what it should be, according to Bob Denk, senior economist at the National Association of Home Builders.

As for what’s hindering the new-home supply, Denk points to a skilled labor shortage in the building industry as well as a shortage in the number of lots to build on.

“We are having these supply chain headwinds,” Denk says. “It’s hard to just double overnight. But the other part of that is we have produced at this level before, so it’s not impossible.”

Source: “A Lack of Supply Drives Up Housing Prices,” MarketPlace (Aug. 10, 2015); REALTOR® Magazine Online, Daily Real Estate News 081115

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Pending Home Sales Cool Off Slightly

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Pending Home Sales Cool Off Slightly
Article by Daily Real Estate News | July 30, 2015

NAR LogoAfter five consecutive months of increases, pending home sales reversed course and dropped in June, a slight ease to what has been a red-hot housing market, according to the National Association of REALTORS®’ Pending Home Sales Index, a forward-looking indicator based on contract signings.

June’s pending home sales, however, remained near May’s level, which was the highest in more than nine years. Pending home sales showed slight gains in the Northeast and West, but were offset by larger declines in the Midwest and South, NAR reports.

RegionalSnap-June2015NAR’s Pending Home Sales index nationwide dropped 1.8 percent to 110.3 in June; it is still 8.2 percent above year ago levels.

Lawrence Yun, NAR’s chief economist, says that despite the dip in pending sales in June the overall trend has been a solid pace of home sales this summer.

“Competition for existing houses on the market remained stiff last month, as low inventories in many markets reduced choices and pushed prices above some buyers’ comfort level,” Yun says. “The demand is there for more sales, but the determining factor will be whether or not some of these buyers decide to hold off even longer until supply improves and price growth slows.”

The national median existing-home price for all housing types in 2015 is expected to rise about 6.5 percent to $221,900 — which would match the record high set in 2006, NAR reports. A boost in existing-home sales is coming from pent-up sellers who are now realizing equity gains, Yun adds.

“Strong price appreciation and an improving economy is finally giving some home owners the incentive and financial capability to sell and trade up or down,” says Yun. “Unfortunately, because nearly all of these sellers are likely buying another home, there isn’t a net increase in inventory. A combination of homebuilders ramping up construction and even more home owners listing their properties on the market is needed to tame price growth and give all buyers more options.”

Source: National Association of REALTORS®; REALTOR® Magazine Online, Daily Real Estate News 073015

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Home Prices Reach an All-Time High

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Home Prices Reach an All-Time High
Article by Daily Real Estate News | July 23, 2015

The rise in buyer demand combined with a limited number of homes for sale pushed the national median sales price above its 2006 peak and to a record high, according to the National Association of REALTORS®.

The median existing-home price for all housing types reached $236,400 in June – 6.5 percent above year ago levels and surpassing the peak median sales price set in July 2006 at $230,400.

jul15_fb_regional_ehs_juneAlong with a boost in home prices last month, existing-home sales also reached the highest pace in more than eight years. Lawrence Yun, NAR’s chief economist, calls this year’s spring buying season the strongest since the downturn.

“Buyers have come back in force, leading to the strongest past two months in sales since early 2007,” Yun says. “This wave of demand is being fueled by a year-plus of steady job growth and an improving economy that’s giving more households the financial wherewithal and incentive to buy.”

Yun says that June’s sales also likely got a boost by the spring’s initial phase of rising mortgage rates. That “usually prods some prospective buyers to buy now rather than wait until later when borrowing costs could be higher,” Yun says.

Total sales of completed single-family, townhome, condo, and co-op transactions ticked up 3.2 percent last month to a seasonally adjusted annual rate of 5.49 million and are nearly 10 percent above year ago levels. Sales also are the highest pace since February 2007. All major regions of the U.S. saw sales move higher in June.

The number of homes for-sale across the country remains low, as housing inventories only saw a 0.9 percent increase in June to 2.30 million existing homes for-sale. Inventories are 0.4 percent higher than a year ago. Unsold inventory is at a 5-month supply at the current sales pace.

“Limited inventory amidst strong demand continues to push home prices higher, leading to declining affordability for prospective buyers,” says Yun. “Local officials in recent years have rightly authorized permits for new apartment construction, but more needs to be done for condominiums and single-family homes.”

But with inventories still low, properties are selling faster. Forty-seven percent of homes sold in less than a month in June, according to NAR. Properties typically stayed on the market for 34 days in June, the shortest number of days since NAR began tracking in May 2011. Short sales had the longest days on the market with a median of 129 days, while foreclosures sold in 39 days. Non-distressed homes were on the market for 33 days.

Chris Polychron, NAR’s president, says that real estate professionals are reporting drastic imbalances of supply compared to buyer demand in several metro areas, most notably in the West.

“The demand for buying has really heated up this summer, leading to multiple bidders and homes selling at or above the asking price,” Polychron says. “Furthermore, tight inventory conditions are being exacerbated by the fact that some home owners are hesitant to sell because they’re not optimistic they’ll have adequate time to find an affordable property to move into.”

Source: National Association of REALTORS®; REALTOR® Magazine Online, Daily Real Estate News 072315

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