Inventory Increases, Sales Slide
The ever-unpredictable real estate market tossed agents another curve ball last month.
Existing home sales fell 3.4% in April from March, with sales over 23% lower year-over-year. However, there was a slight, 1% increase in the inventory of homes for sale, which represents a 2.9-month supply.
Sellers of more affordable homes are seeing the most activity. For example, a Las Vegas agent's listing for a $395,000 home saw plenty of interest and received multiple offers, but an open house for a $510,000 property only generated crickets.
While properties' time on the market was around 22 days last month, which was a week longer than March, it was up from just 17 days in April 2022. Most homes sold within a month.
First-time buyers continued to take it on the chin. Historically this group makes up around 40% of existing home sales, but they only managed 29% in April.1
Solar Panels = Brighter ROI
Homeowners have been gradually warming up to solar panels installed on a roof or adjoining land. However, the costs of installing and managing the energy provided may appear difficult to determine when calculating the value of a home's features, although prices of solar panels have plummeted during the past decades.
It's possible that when past seller clients' homes featured solar panels, the appraiser ended up ignoring the feature, simply as there were no comps available. But the reality is that working solar panels will significantly reduce a buyer's monthly utility bills. This should be part of a listing's features, together with a reliably sourced estimate of the savings solar will provide the new owner.
Your mission, should you decide to accept it, is to educate yourself regarding today's solar power and the advantages it provides homeowners. You may even want to prepare a separate flyer or short presentation with details of the panel's system, how it works and a history of savings. When buyers understand the potential long-term savings of solar power, they will also see an opportunity to contribute to a greener environment with clean energy.2
Fixer-uppers Aren't Always Bargains
Chances are you've driven past a once-magnificent, now abandoned home and wondered what happened to the owner.
There are examples of these all over the world, including these two:
Elda Castle, Ossining, New York
This granite cottage was built in the late 1920s by David Abercrombie, one of the founders of the clothing store Abercrombie & Fitch. Its design is a mix of English Cottage and medieval castle complete with arches and vaults. And guess what...it's for sale, together with the surrounding 49 acres, for just under $3 million. The listing politely states that the "castle and barn will need to be renovated."
Whirlwind Mansion, Clinton, Tennessee
This 20,000-square-foot, 40-room mansion was a custom build for banker Jake Butcher. But although he financed the build, he couldn't afford the four-figure utility bills. Butcher was later convicted of bank fraud and jailed. The property was purchased in 2017 for just over half a million by an investor, whose plans are unknown. However, you can view photos of 180 Whirlwind Point Lane online.3
Most Consumers Still Expect a Recession
Although some economists are still holding out on a "soft landing" instead of a recession, most adults don't agree.
According to a recent study, 67% of them are expecting a recession to arrive later this year. However, not all of them are expecting prolonged suffering. Around 1/3 of respondents expect a shorter recession of 12 months or less. Only 19% think it will last more than two years.
The bad news: 33% of respondents see a recession having a fairly big impact on their short- and long-term finances. And no matter what their expected timeframes, most of them are responding to the current uncertainty by adjusting their financial priorities. The top strategies are cost-cutting, building savings, and postponing large expenses. Even high-net-worth individuals are following this strategy.
When asked about plans to purchase a home during 2023, 23% of the youngest respondents - Generation Z'ers aged 21 to 26 - stated they had decided to postpone their purchase. Millennials represented 18% of the respondents postponing home buying plans, while relatively few Generation X'ers and Boomers felt it necessary.4
Get There First with Predictive Analytics Sources: 1cnbc.com,
2realestateagentmagazine.com,
3za.investing.com,
4news.northwesternmutual.com,
5theclose.com
Depending on how well you know your territory, you may have been able to predict a move before it happened. Now you can identify considerably more with predictive analytics. Imagine an app sending you a message that says "Hey, based on our data analysis, there's a 72% chance that Number 4 Privet Drive is going to sell this year."
This intel is provided by companies who specialize in gathering the sort of data you want and creating an app that makes it usable. They sift through millions of data points and use algorithms to make surprisingly accurate predictions of who's planning to move soon...so you can beat the competition to their door.
Predictive analytics companies offer different products so you can choose according to your territory's statistics, personal preference and budget. For example, the app CatalyzeAI supplies information about inherited properties while LikelyAI specializes in distressed properties. Other apps, such as SmartZip and Offrs, supply more leads for a higher cost.5
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