December 2015 - Fortune Tellers

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O R I G I NAT I O N S E R V I C I N G A NA LY T I C S S E C O N DA R Y M A R K E T ANALYTICS 54 | TH E M R EP O RT "This month's new-home sales report is consistent with other government data and rising builder confidence that indicate a continual recovery of the housing market." — David Crowe, NAHB chief economist THE LATEST Home Sellers' Optimism Beats Urgency in Q3 Sellers are much more confident that the market is in their favor compared to last year, Redfin reported. A s a sign that the hous- ing market is returning to normal, sellers are more likely to be sell- ing their homes due to life-cycle motivators like upgrading or downsizing rather than securing a home before interest rates are adjusted by the Federal Reserve. A Redfin survey of 730 current and potential sellers showed that last year, 59 percent of sellers said that they are buying a home before interest rates or prices rise as the top reason to sell. This year, in October, that num - ber was only 16 percent, revealing that historically low interest rates are not a top concern for buyers, the survey showed. Other worries consisted of wanting a larger or nicer home (29 percent), relocating to a new city (27 percent) and wanting a smaller home (21 percent). "This is a big change in senti - ment from our October 2014 seller survey, when concern that mortgage rates and home prices would soon rise was home-sellers' most common motivation," Redfin explained. "Seller optimism is flying high right now," said Nela Richardson, Redfin Chief Economist. "But buyers are more grounded now and pricing a home too high is risky. More sellers are having to drop their initial asking price this fall than a year ago." The survey also found that after the life-cycle reasons listed by consumers, one in five of respondents said that their reason for selling is to pull out the profit they have made on their home. Sellers are much more confident that the market is in their favor compared to last year, Redfin reported. Of those surveyed, 60 percent indicated that they have the power in the housing market, up from 46 percent last year. In terms of home prices, 63 percent forecast that they will go up in 2016. Meanwhile, among respon - dents that are waiting to sell, 27 percent are holding off on listing their home for sale because they expect prices to go up. "Many sellers are coming to the market with an expectation that their home will sell for the same amount their neighbor's did three months ago, but that's no longer an accurate reflection of the market," said Scott Driscoll, Boston Redfin agent. "Even more than normal for this time of year, I'm frequently reining in seller's expectations, advising them to consider the very latest data on nearby sales and homebuyer demand." Sellers also had concerns about housing market conditions, with 32 percent of those surveyed indicat- ing that general economic condi- tions might discourage buyers, and 28 percent said that they might not find another home they want and prices may fall before they sell. Homeowner & Appraiser Value Gap Improves in October October's report showed that appraiser values were 2 percent higher than homeowner opinions. T he gap between home- owner and appraisal val- ues of homes narrowed slightly again in October, as appraisers' values were 1.98 per- cent under homeowner opinions. October marks the second consecutive month that the percep- tion gap has shrunk, and the ninth consecutive month where home- owner estimates exceeded appraisal estimates, according to Quicken Loans' Home Price Perception Index (HPPI) released last month. September's report showed that appraiser values were 2 percent higher than homeowner opinions. "It's too early to call it a trend, but it is encouraging to see the gap between the estimates home - owners provide and the appraised values starting to narrow," said Bob Walters, Quicken Loans Chief Economist. "The more homeowners are in line with ap - praisers, the easier it will be to re- finance their mortgage and easier for those looking to buy a home. If the two are aligned, it elimi- nates one of the top stumbling blocks in the mortgage process." Quicken Loans also reported that home values rose 1.07 percent in October, after two months of mostly flat home value changes, according to the company's Home Value Index. Year-over-year, home values have risen 4.01 percent. Quicken Loans observed home value increases among all four regions. The Northeast had the highest home appreciation, with a 1.94 percent increase. Meanwhile, the Midwest, South and West regions all had value growth of less than 1 percent. San Jose, California's ap - praiser opinions were 5.10 percent higher than homeowner values in October, the report showed. Denver, Colorado and San Francisco, California followed this same trend with appraiser values 4.35 percent and 4.22 percent higher than homeowners, respectively. "Home values continue to make steady, healthy, growth," said Walters. "Equity gains increase homeowner faith and en - thusiasm in the housing market. There are still many Americans underwater, but with every bump in equity more homeowners who have been waiting to list their home are able to sell or more easily refinance—which takes pressure off of those homeowners and provides housing inventory for first time homebuyers."

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