The Perks of Selling Your House When Inventory Is Low

When it comes to selling your house, you’re probably trying to juggle the current market conditions and your own needs as you plan your move.

One thing that may be working in your favor is how few homes there are for sale right now. Here’s what you need to know about the current inventory situation and what it means for you.

The Supply of Homes for Sale Is Far Below the Norm

When you’re selling something, it helps if what you’re selling is in demand, but is also in low supply. Why? That makes it even more desirable since there’s not enough to go around. That’s exactly what’s happening in the housing market today. There are more buyers looking to buy than there are homes for sale.

To tell the story of just how low inventory is, here’s the latest information on active listings, or homes available for sale. The graph below uses data from Realtor.com to show how many active listings there were in September of this year compared to what’s more typical in the market.

As you can see in the graph, if you look at the last normal years for the market (shown in the blue bars) versus the latest numbers for this year (shown in the red bar), it’s clear inventory is still far lower than the norm.

What That Means for You

Buyers have fewer choices now than they did in more typical years. And that’s why you could still see some great perks if you sell today. Because there aren’t enough homes to go around, homes that are priced right are still selling fast and the average seller is getting multiple offers from eager buyers. Based on the latest data from the Confidence Index from the National Association of Realtors (NAR):

• 69% of homes sold in less than a month.

• 2.6 offers: the average number of offers on recently sold homes.

An article from Realtor.com also explains how the limited number of houses for sale benefits you if you’re selling:

“. . . homes spent two weeks less on the market this past month than they did in the average September from 2017 to 2019 . . . as still-limited supply spurs homebuyers to act quickly . . .”

Bottom Line

Because the supply of homes for sale is so low, buyers desperately want more options – and your house may be just what they’re looking for. Let’s connect to get your house listed at the right price for today’s market. You could still see it sell quickly and potentially get multiple offers.

A Drop in Equity Doesn’t Mean Low Equity

You may see media coverage talking about a drop in homeowner equity. What’s important to understand is that equity is tied closely to home values. So, when home prices appreciate, you can expect equity to grow. And when home prices decline, equity does too. Here’s how this has played out recently. 

Home prices rose rapidly during the ‘unicorn’ years. That gave homeowners a considerable equity boost. But those ‘unicorn’ years couldn’t last forever. The market had to moderate at some point, and that’s what we saw last fall and winter. 

As home prices dropped slightly in the back half of 2022, equity was impacted. Based on the most recent report from CoreLogic, there was a 0.7% dip in homeowner equity over the last year. However, the headlines reporting on that change aren’t painting the whole picture. The reality is, while home price depreciation during the second half of last year caused equity to drop, the data shows homeowners still have near record amounts of equity. 

The graph below helps illustrate this point by looking at the total amount of tappable equity in this country going all the way back to 2005. Tappable equity is the amount of equity available for homeowners to access before hitting a maximum 80% loan-to-value ratio (LTV). As the data shows, there was a significant equity boost during the ‘unicorn’ years as home prices rapidly appreciated (see the pink in the graph below).

But here’s what’s key to realize – even though there’s been a small dip, total homeowner equity is still much higher than it was before the ‘unicorn’ years.

And there’s more good news. Recent home price reports show the worst home price declines are behind us, and prices have started to go up again. As Selma Hepp, Chief Economist at CoreLogic, explains:

“Home equity trends closely follow home price changes. As a result, while the average amount of equity declined from a year ago, it increased from the fourth quarter of 2022, as monthly home prices growth accelerated in early 2023.” 

The last part of that quote is particularly important and is the piece of the puzzle the news is leaving out. To further emphasize the positive turn we’re already seeing, experts say home prices are forecast to appreciate at a more normal rate over the next year. In the same report, Hepp puts it this way:

“The average U.S. homeowner now has more than $274,000 in equity – up significantly from $182,000 before the pandemic. Also, while homeowners in some areas of the country who bought a property last spring have no equity as a result of price losses, forecasted home price appreciation over the next year should help many borrowers regain some of that lost equity.”

And even though Odeta Kushi, Deputy Chief Economist at First American, references a slightly different number, Kushi further validates the fact that homeowners have a lot of equity right now: 

“Homeowners today have an average of $302,000 in equity in their homes.”

That means if you’ve owned your home for a few years, you likely still have way more equity than you did before the ‘unicorn’ years. And if you’ve owned your home for a year or less, the forecast for more typical price appreciation over the next year should mean your equity is already on the way back up.

Bottom Line

Context is everything when looking at headlines. While homeowner equity dropped some from last year, it’s still near all-time highs. Let’s connect so you can get the answers you deserve from an expert who’s here to help as you plan your move this year.

2023 Trending Hues

Homeowners, builders and designers anticipate the annual Color of the Year announcements. In 2023, major paint companies decided on warm peach and natural hues that are projected to inspire home design concepts and furnishings for the year ahead, while the “Global Color Authority,” Pantone, opted for a much more vibrant shade for its pick.

Read along for expert tips on decorating and staging your home with the 2023 Colors of the Year.

The 2023 Colors of the Year

While shades of green were the collective pick in 2022, this year’s theme incorporates many warmer shades of orange and pink. Collectively, the selected paints play with modernized versions of the natural world, speaking to new beginnings with positive futures. Containing both muted and extroverted coral tones – along with more traditional neutrals – the 2023 Colors of the Year offer a little something for everyone.

Now, let’s dive into each color and its individual meaning.

Pantone: Viva Magenta

Nearly vibrating off the screen (or your home’s decor), Viva Magenta is a rich and lively hue dubbed as Pantone’s 2023 Color of the Year. As a dynamic red derivative, Pantone notes that Viva Magenta is “audacious, full of wit and inclusive of all.” This pigmented color encourages strength and makes a bold statement in any room.

Sherwin Williams: Redend Point

Connection and care combine to create Redend Point, the Sherwin Williams 2023 Color of the Year. This warm hue is a remnant of natural textures, like terracotta and earth. Recognized as an inviting hue, Redend Point offers a balance of calming and intriguing energy.

Benjamin Moore: Raspberry Blush

Benjamin Moore declared Raspberry Blush — an animated coral with a hint of pink — as its 2023 Color of the Year. When used in a well-lit room, Raspberry Blush offers a zingy salmon tone; in shaded rooms, it appears as more of a dusky rose.

Better Homes and Gardens: Canyon Ridge

Another coral tone, Canyon Ridge, serves as the Better Homes and Gardens 2023 Color of the Year. This color decidedly “infuses energy and comfort” into any space. The warmth of Canyon Ridge invokes images of glowing sunsets and sunbaked desert landscapes that can be reimagined in any space.

Behr: Blank Canvas

The Behr 2023 Color of the Year, Blank Canvas, is explained as a complex white with taupe undertones. This creamy hue emanates “well-being and relaxation” from any space, fostering fresh starts and restorative vibes.

Decorating and staging your home with the 2023 Colors of the Year

When staging your home for sale, it’s important to create a neutral space that potential buyers could imagine themselves living in. With the neutral backdrop, you can then sparingly add bright colors to create visual interest in interior spaces – especially if they emphasize the standout features of the home.

Of course, if you’re planning to stay in your current home for the foreseeable future, opt to decorate with the colors that bring you the most joy. Perhaps this is the year to add Viva Magenta wallpaper to the main floor powder room?

Are you looking for a pop of color?

Three vibrant hues make up the 2023 Colors of the Year, including:

• Viva Magenta

• Raspberry Blush

• Canyon Ridge

These colors can be incorporated in small doses within your existing space. Consider decorative pillows, throw blankets or small art pieces that match these hues. Viva Magenta, Raspberry Blush or Canyon Ridge can also be used for home upgrades buyers love, like painted cabinets and accent walls.

Do you want to paint an entire room?

The two more subtle Colors of the Year will work well when setting a tone in an entire room:

• Redend Point

• Blank Canvas

Homeowners hoping to incorporate these hues into their space are in luck! Swaths of Redend Point and Blank Canvas can be seamlessly integrated into most existing color schemes. Use area rugs, comforters and large art pieces to showcase these Colors of the Year. If you want to keep that color theme going, other natural design elements will also complement these colors well.

Painting your homeownership journey

Are you moving forward with an improvement project this season? Consider incorporating one of the 2023 Colors of the Year into your home. Whether you’re decorating for your own enjoyment or prepping to stage and sell, a fresh color will bring new life into any space.

From trending colors to market insights, Realtors can help you through every step of your homeownership journey. Reach out for expert advice today, and together we will make a plan!

Is It Still A Good Time To Buy A Home?

The housing market is at a turning point, and if you’re thinking of buying or selling a home, that may leave you wondering: is it still a good time to buy a home? Should I make a move this year? To help answer those questions, let’s turn to the experts for projections on what the second half of the year holds for residential real estate.

Where Mortgage Rates Will Go Depends on Inflation

While one of the big questions on all buyers’ minds is where will mortgage rates go in the months ahead, no one has a crystal ball to know exactly what’ll happen in the future. What housing market experts know for sure is that the record-low mortgage rates during the pandemic were an outlier, not the norm.

This year, rates have climbed over 2% due to the Federal Reserve’s response to rising inflation. If inflation continues to rise, it’s likely that mortgage rates will respond. Greg McBride, Chief Financial Analyst at Bankrate, explains it well:

“Until inflation peaks, mortgage rates won’t either. Without improvement on the inflation front, we don’t know where the interest rate ceiling will be.”

Whether you’re buying your first home or selling your current house to make a move, today’s mortgage rate is an important factor to consider. When rates rise, they impact affordability and your purchasing power. That’s why it’s crucial to work with a team of professionals, so you have expert advice to help you make an informed decision about your best move.

The Supply of Homes for Sale Projected To Continue Increasing

This year, particularly this spring, the number of homes for sale has grown. That’s partly due to more homeowners listing their houses, but also because higher mortgage rates have helped ease the intensity of buyer demand. Moderating buyer demand slows down the pace of home sales, which in turn helps inventory rise.

Experts say that growth will continue. Recently, realtor.com updated their 2022 inventory forecast. In the latest release, they increased their projections for inventory gains dramatically, going from a 0.3% increase at the beginning of the year to a 15.0% jump by the end of 2022 (see graph below):

More homes to choose from is great news if you’re craving more options for your home search – just know that there isn’t a sudden surplus of inventory on the horizon. Housing supply is still low, so you’ll need to partner with an agent to stay on top of what’s available in your market and move fast when you find the one. It’s not going to be easy to find a home, but it certainly won’t be as difficult as it has been over the past two years.

Home Price Forecasts Call for Ongoing Appreciation

Due to the imbalance between the number of homes for sale and the number of buyers looking to make a purchase, the pandemic led to record-breaking increases in home prices. According to CoreLogic, homes appreciated by 15% in 2021, and they’ve continued to rise this year.

Even though housing supply is increasing today, there are still more buyers than there are homes for sale, and that’s maintaining the upward pressure on home prices. That’s why experts are not calling for prices to decline, rather they’re forecasting they’ll continue to climb, just at a more moderate pace this year. On average, homes are projected to appreciate by about 8.5% in 2022 (see graph below):

Selma Hepp, Deputy Chief Economist at CoreLogic, explains why the housing market will see deceleration, but not depreciation, in prices:

“The current home price growth rate is unsustainable, and higher mortgage rates coupled with more inventory will lead to slower home price growth but unlikely declines in home prices.”

For current homeowners looking to sell, know your home’s value isn’t projected to fall, but waiting to make your purchase does mean your next home could cost more as home prices continue to appreciate. That’s why, if you’re thinking about buying your first home or you’re ready to make a move, it may make sense to do so now before prices climb higher. But rest assured, once you buy a home, that price appreciation will help grow the value of your investment.

Bottom Line

Whether you’re a homebuyer or seller, you need to know what’s happening in the housing market, so you can make the most informed decision possible. Let’s connect to discuss your goals and what lies ahead, so you can determine the best plan for your move.

The One Thing Every Homeowner Needs To Know About a Recession

A recession does not equal a housing crisis. That’s the one thing that every homeowner today needs to know. Everywhere you look, experts are warning we could be heading toward a recession, and if true, an economic slowdown doesn’t mean homes will lose value.

The National Bureau of Economic Research (NBER) defines a recession this way:

“A recession is a significant decline in economic activity spread across the economy, normally visible in production, employment, and other indicators. A recession begins when the economy reaches a peak of economic activity and ends when the economy reaches its trough. Between trough and peak, the economy is in an expansion.”

To help show that home prices don’t fall every time there’s a recession, take a look at the historical data. There have been six recessions in this country over the past four decades. As the graph below shows, looking at the recessions going all the way back to the 1980s, home prices appreciated four times and depreciated only two times. So, historically, there’s proof that when the economy slows down, it doesn’t mean home values will fall or depreciate.

The first occasion on the graph when home values depreciated was in the early 1990s when home prices dropped by less than 2%. It happened again during the housing crisis in 2008 when home values declined by almost 20%. Most people vividly remember the housing crisis in 2008 and think if we were to fall into a recession that we’d repeat what happened then. But this housing market isn’t a bubble that’s about to burst. The fundamentals are very different today than they were in 2008. So, we shouldn’t assume we’re heading down the same path.

Bottom Line

We’re not in a recession in this country, but if one is coming, it doesn’t mean homes will lose value. History proves a recession doesn’t equal a housing crisis.

11 Packing & Moving Tips

While it may seem like an enormous task to pack up your entire life, try not to overthink the process of packing and moving. Here are a few tips from moving experts that will ensure your move from one residence to another goes off without a hitch. Plus money-saving tips so you don’t have to pay an extra dime!

From the moving timeline to tips on bubble wrap alternatives, here’s everything to consider when packing and moving.

6 Moving Tips

If possible, prepare for the big move as early as possible. By prepping your family members and space in advance, you’ll set everyone up for success and avoid the potential headaches that could come from a lack of planning.

Plus, keep in mind that getting ready for a move includes more than just packing. For example, garage sales and utility transfers are also important steps. Keep reading as we dive into the top moving hacks and tips.

Have a garage sale

Even before you begin packing your belongings, consider hosting a garage sale where you can flip items that you no longer use. This will help you pare down the amount of stuff that you need to pack and transfer, which ultimately simplifies your moving process.

Here’s how to have a successful pre-move garage sale:

• Advertise your sale around the neighborhood and on social media.

• Offer items sold in bundles.

• Set fair prices to get more sales.

• Prepare plenty of change, or offer online payment options like Venmo or Paypal.

Start packing early

Once you’ve gotten rid of any excess items that won’t be coming along for the move, it’s time to pack up the belongings that will trek from one home to the next. While it’s best to start packing as soon as possible, you’ll want to keep your most-used items out until closer to your move date. Experts agree it’s ideal to start the packing process around six weeks before the move.

Finish packing the day before the big move

While gathering boxes to pack your belongings, remember that you won’t want to pack up your favorite kitchen utensils, daily toiletries, or beloved jackets until much closer to the move. It’s okay to still be packing all the way up until the day before the move, as long as you don’t leave the bulk of the packing to the last minute.

Schedule your utilities

Most utility companies can process a request for new services quickly, but it’s a smart idea to plan your utilities — both a service termination and initiation – a couple of weeks prior to your move. Making the extra call or completing an online application for utilities now will make the transition of moving much smoother later. And, the good news is, this step should only take a few minutes out of your day, but the payoff is substantial. All you have to do is:

• Make a list of all of the utilities you currently use.

• Contact your providers and update them with your change of address.

• Pay off any current balances.

• Schedule your new service to begin a day prior to your move, and your previous service to end a day after your move (so you don’t have a lapse of time without water or electricity at either place).

However, if this sounds like a lot of work, don’t worry! Because of Edina Realty’s partnership with a company called Updater, we can automatically get your address and utilities changed when you move. Reach out today for more information!

Set a moving budget

When moving, some homeowners start to rack up significant bills. It’s a good idea to prepare your finances in advance so you’re ready when the moving day comes. The price of the following tends to add up to a few thousand dollars for most movers:

• Base fee with a moving company

• Extra fee for specialty items (think oversized or extra fragile pieces)

• Renting your own moving truck

• Purchasing moving equipment, including boxes and tape

• Transportation from your sold house to your newly purchased home

• Storage units (especially if you opt for temporary transitional housing)

• Booking a sitter for your pets or children

Eat what’s in your cupboards

Aside from purchasing a light amount of produce and other perishables, try to hold off on grocery shopping before your move. Eating what’s in your cupboards will mean you have fewer items to transport on moving day.

However, if you have a large spice collection or are hoping to move everything in your kitchen and pantry, you still can. Here are some food packing hacks for moving:

• Pack dry food goods in plastic boxes to keep pests out.

• Move refrigerated items only if your new location is less than 2 hours away.

• Donate any food that can’t be taken with you, rather than throwing it out.

5 Packing Tips

Packing can seem daunting. These methods to pack for moving will help simplify your process, while making sure all of your belongings make it to your new property safely.

Label everything

Attach a label to every box you pack. Not only will this help you identify what’s in each box, but it will also help your movers (whether a professional company or helpful friends) know where in your home to organize the boxes.

You can also come up with an easy color-coded system for each room in your new house, then label each box or bag with the correct color. Here are some materials that you likely have around your home already that work well for color-coding boxes:

• Washi tape

• Colored markers

• Pieces of colored paper

• Stickers

The best way to pack clothes for moving

Most of us don’t have enough garment bags to house all the clothing items in our closets, but it’s a waste of time to pack up each button-down shirt, dress and pair of pants into boxes. Instead, the best way to pack clothes for moving is to turn a plastic garbage bag upside down and make a small hole in the middle. Hook a group of 10 hangers into the opening, then seal the “top” of the bag using the bag’s original strings.

Voila! Now you can transport closet items with ease.

Switch peanuts and bubble wrap for clothes

When packing up your dinnerware, picture frames or other breakable items, you’ll want to protect them. And, it’s possible to keep these fragile items safe without spending a fortune on bubble wrap.

If you have unused Styrofoam party plates, layer them between breakables as you pack. Or, consider separating and wrapping fragile items with the following:

• Clothes

• Cloth napkins

• Tablecloths

• Placemats

• Towels

The best way to pack shoes for moving

To maintain the condition of your shoes, you’ll want to follow these moving tips and tricks for shoes:

• Place heavier shoes at the bottom of the box.

• Wrap nicer shoes in a plastic bag, or keep them separated in their own box.

• Tie pairs with laces together.

• Stuff shoes with socks to maintain their shape — and save room.

How to pack a TV for moving

A television is typically a higher-ticket item, so you’ll want to take care when packing it. Ensure the screen doesn’t crack throughout the move by wrapping the TV generously with bubble wrap, packing paper or a blanket. Then, place the TV in the original box if you have it. Otherwise, use both a packing blanket and stretch wrap to secure the device.

Before you dismantle your TVs, computers or other electronics, take pictures of the cords behind them and how they interact with one another. Setup at your new home is a breeze when you have a visual guide for how to best connect your devices.

Ready to get moving?

These moving and packing hacks are bound to make your moving experience flow with ease. But moving is about more than just packing up — you’ll also want the insights and guidance of a local specialist who has your best interests in mind. Reach out today for tailored help from start to finish.

On the Fence of Whether or Not To Move This Spring? Consider This...

If you’re thinking of selling your house, it may be because you’ve heard prices are rising, listings are going fast, and sellers are getting multiple offers on their homes. But why are conditions so good for sellers today? And what can you expect when you move? To help answer both of those questions, let’s turn to the data.

Today, there are far more buyers looking for homes than sellers listing their houses. Here are the maps of the latest buyer and seller traffic from the National Association of Realtors (NAR) to help paint the picture of what this looks like:

Notice how much darker the blues are on the left. This shows buyer traffic is strong today. In contrast, the much lighter blues on the right indicate weak or very weak seller traffic. In a nutshell, the demand for homes is significantly greater than what’s available to purchase.

What That Means for You

You have an incredible advantage when you sell your house under these conditions. Since buyer demand is so high at a time when seller traffic is so low, there’s a good chance buyers will be competing for your house.

According to NAR, in February, the average home sold got 4.8 offers. When buyers have to compete with one another like this, they’ll do everything they can to make their offer stand out. This could play to your favor and mean you’ll see things like waived contingencies, offers over asking price, earnest money deposits, and more. Selling when demand is high and supply is low sets you up for a big win.

If you’re also looking to buy a house, you may be tempted to focus more on just the seller traffic map and wonder if it means you’ll have trouble finding your next home. But remember this: perspective is key. As Danielle Hale, Chief Economist at realtor.com, says:

“The limited number of homes for sale is a lesson in perspective. This same stat that frustrates would-be homebuyers also means that today’s home sellers enjoy more limited competition than last year’s home sellers.”

If you look at the big picture, the opportunity you have as a seller today is unprecedented. Last year was a hot sellers’ market. This year, inventory is even lower, and that means an even bigger opportunity for you. Even though finding your next home in a market with low inventory can be challenging, is that concern worth passing on some of the best conditions sellers have ever seen?

As added peace of mind, remember real estate professionals have been juggling this imbalance of supply and demand for nearly two years, and they know how to help both buyers and sellers find success when they move. A skilled agent can help you capitalize on the great opportunity you have as a seller today and guide you through the buying process until you find the perfect place to call your next home.

Bottom Line

If you’re ready to move, you have an incredible opportunity in front of you today. Trust the experts. Let’s connect so you have expertise on your side that can help you win when you sell and when you buy.

Is it really best to sell your home in the spring?

The pros and cons of selling in each season.

While the last few years of the housing market have been anything but typical, the flurry of year-round sales activity has led many sellers to wonder if there really is a “right” time or best month to sell a house.

Even though spring is still considered a great time to sell a house for many sellers, the truth is that there are advantages and disadvantages to each season. Let’s explore.

Selling your home in spring

It should come as no surprise that spring has a high volume of buyers and sellers. For sellers who desire a more traditional home transaction, spring may be the best time to list. Here are some key tips and considerations to best set yourself up for a spring home sale:

• Buyer activity is high during this season. Prepare for plenty of buyers to set their sights on your property.

• Lakeshore and cabin owners may benefit from a spring sale. This is a great time to showcase the beauty of the home and the nearby lake. Plus, buyers will likely want to be in the property before summer is in full swing.

• If you’re hoping to list without holding many showings or open houses, spring may not be the best option for you. Buyer interest during this time will likely drive up the desire to view the property.

Selling your home in summer

Eager buyers who didn’t find a property in spring will still be around in summer, searching for a home. Sellers should still prepare for significant buyer interest during this time, and remember these summer selling tips:

• For an easy approach to showing your property to potential buyers, plan your listing around a vacation. Clean your home once, then leave town when open houses and showings are scheduled.

• Summer can be a busy time of year for many families involved in sports, camps and other activities. This can make scheduling a move slightly more difficult.

Selling your home in fall

Fall homebuyers tend to be highly motivated, especially in the Midwest — they’ll want to get into their new home before the coldest days of winter. This can make fall an ideal time to sell a home, if you’re hoping for a swift sale but less traffic than in the spring. Here are some quick tips when considering a fall home sale:

• Buyers may want to beat the snow and move before winter hits full swing, or to be in their new house for the holidays. Well-appointed homes should still be in demand.

• Typically, fewer homes are for sale during this season, shifting the balance of buyers and sellers into your favor. Depending on the year, fall can be a great time to sell if you’re looking for a quick sale.

Selling your home in winter

For the most part, people only buy or sell in the winter if they have to — making winter the one season where buyers and sellers tend to hold similar motivations. Keep these winter home sale pros and cons in mind:

• Only the most motivated buyers and sellers will be active during this time. When interest is initiated, it will likely result in a serious offer.

• In the past, buyers may have waited until winter with the hopes of discounted home prices. However, inventory is still imbalanced, and winter buyers understand there won’t be lower prices during the winter until the market balances out. Even in the winter, sellers can expect offers at or above the listing price.

Is it the right time for you to sell your home?

Determining the best time to sell likely requires you to reflect on your home and lifestyle. Certain months may have stronger market activity, but what really signifies if you’re ready to sell are the following personal indicators:

Signs you’re ready

• Your family has expanded, either with little ones or older relatives, and you need extra space for everyone to coexist.

• You know exactly the house or location you’d move to, if the time came to sell.

• Your budget has increased, either because of a new job, increased savings or other factors.

• You’re craving a dedicated home office space, now that you’re officially on a “hybrid” schedule.

• You’re eager to have your own bathroom space to get ready in the morning.

• Signs you’re not ready

• Your budget would be stretched much too thin if you upgraded to your ideal house or location.

• Your work is unstable or you’re unsure if you’ll continue working from home.

• You’re not sure what home features or location you’d want, even if you could move.

Moving forward with Edina Realty to sell your home

All in all, certain months tend to have a livelier market than others, but we recognize that many factors determine the best time for you to sell. Whether you are ready now or want help timing it just right, reach out any time to get in touch with a local selling expert who has your best interests in mind.