Posts made in December 2015

From Offer to Closing in 49 Days

With the recent introduction of the RESPA-TILA Know Before You Owe regs, courtesy of the federal government, real estate closings are now averaging 49 days.  As in 7 weeks.  So plan accordingly.

Many realtors write offers with 30 days closings in mind, and then attempt to force everyone to get ‘er done in that timeframe.  They rarely happen in that time, and everyone usually has to adjust and readjust, and readjust some more.

As the housing industry adjusts to the new regs, and gets better with them, the average timeline from accepted offer to closing will likely come down a few days.  Note I said a few days and not a few weeks.  So, when buying and selling, plan accordingly.

Inventory of homes continues to tighten

The November sales numbers for Central Indiana have been tallied, and the verdict is the inventory of homes available is tightening as we head into the winter months.

 

Sales were up in November, 4% over last November and 9% for the most recent 12 months over the previous.  (That’s good news.)  But… new listings have not kept pace, leaving just a 4.4 month supply of homes available for every sale taking place. That number is down 12% from a year ago, reflecting the smaller number of homes available for each buyer to choose from.   Those trends have combined to force the median average sales price up to $145,000 (up 6% from last November).  That’s all good news for those thinking about selling.

Meanwhile, mortgage rates are near 4%, a number unheard of for all but the last several years of Federal Reserve tampering.  And those 4% interest rates make for monthly payments almost half of what they would’ve been during most of the second half of the 20th Century (for the same amount borrowed).

Want to see how all those numbers add up for your personal situation?  Ez, call me.

More people renting, landlords making more money

More people over 40 years of age are renting.  In fact, the US Census Bureau reports that 51% of households headed by 40+ers now rent.  This number is up from 43% twenty years ago.  I don’t think most of that is by choice.  The financial crisis uprooted about that many homeowners, and with a stumbling economy of part-time and low paying jobs, many people have not found their footing enough to once again become homeowners.

Thanks to the Fed, those homes taken from former lower and middle income homeowners wound up in the hands of Wall Street hedge funds, who made rentals out of them.  That play has not suited the former homeowners very well.  Between 2001 and 2014, while the national average income has fallen by 9%, rents have increased 7%.  Call that a double whammy that makes buying a home look like a great deal.