ILHM Luxury Housing Weekly Report

As of Monday June 27, 2016

THIS WEEK

The ILHM National Report this week looked at 25721 luxury homes on the market. The ILHM Luxury Composite Price this week is $1,558,935. These homes have been on the market for an average of 146 days. 

The Market Action Index measures available supply relative to the current level of demand. Index value above 30 indicates conditions favor the seller. See the section below for full details.

PRICE 

Luxury home prices across the ILHM National sample have stayed relatively stable in recent weeks. This week median price is $1,558,935. 

PRICE PER SQUARE FOOT

Price per square foot gives us a view to changes in how luxury homes are valued as well as how they're being constructed. Currently median price per square foot in the luxury homes is $400. 

SUPPLY AND DEMAND 

Residential prices are a function of supply and demand, and market conditions can be characterized by analyzing those factors. Watch this index for sustained trends and an early view on coming price changes. 

The ILHM National market is currently slightly in the Seller's Market zone (greater than 30). The Market Action Index stands at 30 which indicates that luxury demand is relatively strong but the available supply of new listings doesn't get acquired immediately

The Market Action Index (MAI) illustrates the balance between supply and demand using a statistical function of the current rate of sale versus current inventory. An MAI value greater than 30 typically indicates a “Seller's Market” (a.k.a. "Hot Market") because demand is high enough to quickly consume available supply. A hot market will typically cause prices to rise. MAI values below 30 indicate a "Buyer's Market" (a.k.a. "Cold Market") where the inventory of already-listed homes is sufficient to last several months at the current rate of sales. A cold market will typically cause prices to fall. 

INVENTORY 

This chart illustrates the total number of homes in the ILHM sample each week. These are homes on the market for at least $500,000 in the top 10 zip codes for 31 major metro markets around the county. 

DAYS ON MARKET (DOM) 

The properties have been on the market for an average of 152 days.

LUXURY BY REGION 

A look at the local luxury markets around the country. 

What’s Happening in the Real Estate Market?

This is a pretty common question that a potential home buyer or seller may be asking themselves. Leading economists in real estate converged in New Orleans this past week as they presented their answer to this question at the 50th Annual Real Estate Journalism Conference for the National Association of Real Estate Editors.

Here are the top takeaways from the week of presentations:

Many of the conversations at the conference came back to the impact that Millennials and first-time home buyers will have on the market in the future. Jonathan Smoke,Chief Economist for realtor.com had this to say: 

“At any given time in our history, demographics would explain 60-80% of what’s happening [in the market], and we are in a period of time where Millennials make up a largest demographic group according to the Census, at 84 million.”

According to the National Association of Realtors (NAR), the median first-time home buyer age is 30 and many millennials are entering a prime age to drive the housing market into the future.

Lawrence Yun, Chief Economist for NAR shared that myths and affordability may be holding back potential buyers:

“84% of current renters have the desire to own. While 36% believe they cannot afford a home and 60% of renters believe it would be ‘difficult’ to qualify for a mortgage.

Ellie Mae’s Vice President, Jonas Moe encouraged buyers to know their options before assuming that they do not qualify for a mortgage: 

“Many potential home buyers are 'disqualifying' themselves. You don't need a 750 FICO Score and a 20% down payment to buy.”

The National Multifamily Housing Council (NMHC) revealed that Millennials and Baby Boomers are often competing for the same housing inventory, causing a challenge as these two groups are the largest generations by population.

Both groups are looking for affordable, convenient homes close to city centers and ‘what’s happening.’

Bottom Line

The experts agree that homeownership is still desirable across all demographic groups, with Millennials and Baby Boomers having a great impact on available supply. If your dreams include owning your own home, let’s get together and evaluate your ability to buy now!

Single Women Make Up 2nd Largest Home Buying Group

According to the National Association of Realtors’ (NAR) 2015 Profile of Home Buyers and Sellers, single women made up 18% of all first-time homebuyers last year, second only to married couples who made up 54% of total buyers.

Whether they are young, single and no longer want to rent, or newly divorced, the amount of single women becoming homeowners greatly outnumbers single males (11%). A survey of recent home buyers revealed some interesting trends about this rapidly growing group:

• Average Age: 32 years old
• Average Income: $49,400
• Single women are more likely to become preapproved for a mortgage in order to know their budget at the beginning of the home buying process and to be able to make a move if they find their dream home.
• Many female homebuyers think long-term when considering buying a home, often considering what amenities they may need in the near future.

“So what do women like best about homeownership? They believe that they are investing in their future by building equity and financial security. They are also very happy to no longer be paying their landlord’s mortgage payment. Being independent and having control over their environment is a key factor.”

It appears that it is not marriage before mortgage any longer, for either gender. As we reported yesterday, unmarried couples make up 13% of buyers, while single males account for 11%.

Bottom Line

If owning a home of your own has always been your dream, let’s get together to determine if your dream could become a reality sooner than you think.

ILHM Luxury Housing Weekly Report

As of Monday June 6, 2016

THIS WEEK

The ILHM National Report this week looked at 25582 luxury homes on the market. The ILHM Luxury Composite Price this week is $1,563,559. These homes have been on the market for an average of 151 days.

The Market Action Index measures available supply relative to the current level of demand. Index value above 30 indicates conditions favor the seller. See the section below for full details.

PRICE 

Luxury home prices across the ILHM National sample have stayed relatively stable in recent weeks. This week median price is $1,563,559.

PRICE PER SQUARE FOOT 

Price per square foot gives us a view to changes in how luxury homes are valued as well as how they're being constructed. Currently median price per square foot in the luxury homes is $401. 

SUPPLY AND DEMAND

Residential prices are a function of supply and demand, and market conditions can be characterized by analyzing those factors. Watch this index for sustained trends and an early view on coming price changes. 

The ILHM National market is currently in the Buyer's Market zone (below 30), though not strongly so. The Market Action Index stands this week at 29 so luxury buyers should expect to find reasonable levels of selection. 

INVENTORY 

This chart illustrates the total number of homes in the ILHM sample each week. These are homes on the market for at least $500,000 in the top 10 zip codes for 31 major metro markets around the county

DAYS ON MARKET (DOM)

The properties have been on the market for an average of 155 days.

LUXURY BY REGION

A look at the local luxury markets around the country.

Unparalleled Trust Necessary Before Listing Your House

You and your family have decided to sell your house. It is now time to choose a real estate professional to help with the process. One of the major attributes this agent must possess is trustworthiness. To what degree do you need to trust them?

You must have enough trust in them that you feel comfortable they will accomplish all four things below: 

1. Sell possibly the largest asset your family owns

In many cases, a home is the largest asset a family has. Studies have shown that the equity many families have in their home is the largest percentage of that family’s overall wealth. 

2. Set the correct market value on that asset

Pricing is crucial even in the best of markets. You want to get the best price for your home without putting your house at a value that buyers will have little interest in.

3. Set the time schedule for the liquidation of that asset

Your family probably has a certain timetable for the sale of your house and the move into your next home. Coordinating the home selling process to meet certain schedules can be tricky.

4. Set a fair fee for the services required to liquidate that asset

You will need to pay a commission to an agent for selling the home and coordinating all elements of the selling transaction, including possible future negotiations (ex. with a home inspector or appraiser).

That’s a lot of trust. Make sure you pick a true professional to help with the sale of your home.