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An Improving Economy is Key to an Improving Housing Market

by Joanne Hiller

The economy is on the path to recovery. Consumer confidence has reached its pre-recession levels and the unemployment rate is expected to fall from 6.7 percent in 2014's first quarter to 6.2 percent in 2015's fourth quarter. What's more, big ticket items like motor vehicles and home furnishings are selling at a faster pace than in years past. If the high prices of these big ticket items are not scaring consumers away, then neither should the prices of real estate.

Supply and Demand
Young buyers who rented or lived with friends during the down-turn are now in better positions to apply for mortgages. But buyers should move quickly. Prices are expected to continue to climb throughout 2015. Inventory is in short supply in many parts of the country, and with fewer homes on the market, competition among buyers is high. That competition is also driving home prices up. The national median existing-home price will rise between six to seven percent by the end of the year, according to the National Association of Realtors' economists.

New Home Construction
The shortage of new inventory could be eased by new home construction. And according to the National Association of Home Builders, the industry is on the rebound. Early 2009 saw housing production nationwide drop to 27 percent of normal. By the first quarter of this year, production rose to 45 percent. Single-family housing starts will climb to 70 percent of normal by the end of this year and 93 percent of normal by the end of next year; housing starts should total 1.15 million this year and 1.35 million next year. However, NAHB economists believe that rising material costs and a lack of both available lots and workers will put downward pressure on the housing market, as will tight consumer credit.

Pending Contracts
The Pending Home Sales Index (PHSI) climbed to 97.4 in March. While the index rose 3.4 percent from February, it was down 7.9 percent year-over-year. In the Northeast, the PHSI rose 1.4 percent; yet despite the rise, the index was still 5.9 percent lower than March 2013. The index also saw a month-over-month increase in both the South and the West of 5.6 percent and 5.7 percent, respectively. The South dropped 5.3 percent below March 2013, and the West declined 11.1 percent from a year ago. The Midwest was the only region of the country that saw the index drop from February to March; the index slipped 0.8 percent to 94.5, a drop of 10.1 percent from March 2013.

Pay More Interest
Mortgage interest rates are expected to reach five percent by the end of 2014. And by December 2015, rates should top out at six percent. Despite the rise, five and six percent are still considered low by historical standards.

Does Brand Matter When Picking a Real Estate Agent?

by Joanne Hiller

DOES BRAND MATTER WHEN PICKING A REAL ESTATE AGENT?

You know the names, Coldwell Banker, Prudential, Re/Max, and Century 21. The list goes on and so do the ads, because national real estate brands blast away at consumers with marketing programs from TV spots and local signs to search engines and social media. But if you’re a buyer or a seller, does the brand name really matter?

Of factors that go into picking a real estate agent, some evidence suggests that brand name isn’t important. This according to the National Association of Realtors, only 3% of buyers and 4% of sellers report considering an agent’s association with a particular firm to be an important factor.  Clients just want to know that they are getting the same exposure as the national brands, and they are.  What they really care about is service, not the name on the door.  And smaller firms provide great service because the environment is less corporate.

Let me give you some real shocking Real Estate news. If we all were to assume that the Big names in Real Estate do most of the business (that’s because they are big) we would be totally wrong. Here are a few examples…let’s take New York City, the real estate capital of the world. The big guys are far behind, you see the names like Brown Harris Stevens, Douglas Elliman, Bellmarc Realty, Corcoran Wexler just to name a few. Now let’s go to Los Angles Stanford Raffles Realty, Westside Estate Agency, Jade Mills Estates and Peter Lorimer Group. When these agency’s started out they never lost sight of what made them Big.  SERVICE, SERVICE AND SERVICE.  The TV Brands as we call them are about one thing more corporate mentality.

Where is the playing field now? It is equal. In the past it was perceived that the TV Brands were getting a large portion of the business but now thanks to the internet, we are seeing that 95% of people search for their homes on line.  It really comes down to the Multiple Listing Service which dominates throughout the country.  The name or brand of the company is not as important anymore, and what matters most is the specific agent’s reputation, regardless of where the agents works.

Having said that,  where does Island Estates Realty fit into this scenario?  Since 1969 located on Island Estates * Consistently the Island’s Top Producing Office * Reputation Above The Rest * Performance Above the Level of the Corporate Brands *  Marketing Beyond Your Expectations - Professional Photography , Videos, Brochures, Glossy Postcards, New Interactive Floor Plan * Powerful Internet Presence  * New Cutting Edge Web Site with Hundreds of Links and International MLS

Should I Buy a Home Now?

by Joanne Hiller

I'm often asked if this is a good time to buy a home. Some clients are concerned that home prices may fall down the road, while others are convinced that home prices will go up.

Home prices are one factor in determining your cost of ownership, but so are interest rates and financing availability. Even though interest rates have fluctuated, they are still near historic lows. Since your monthly mortgage payment is a combination of paying down your principal and paying the interest owed, a one point rise in interest rates could cost tens of thousands of dollars over the life of your mortgage!

While a home is a major investment, it is also the center of your personal life. It's important to live in a home that reflects your taste and values, yet is within your financial "comfort zone." To that end, it may be more important to lock in today's relatively low interest rates while they are still available.

Please give me a call if I can be of any assistance in determining how much home you can afford in today's market.

Displaying blog entries 1-3 of 3

Contact Information

Joanne Hiller
Coldwell Banker Residential Real Estate
110 Island Way
Clearwater FL 33767
(727)460-5721
Fax: (727)446-2691