Blog - Stovall Team, Fountain Valley, CA, Real Estate

What Every Seller Needs To Know About Renovating This Year

By Tarah Stovall | Published: February 17, 2022

If you’re planning to sell this year, you’re probably thinking about what you’ll need to do to get your house ready to appeal to the most buyers. It’s crucial to work with Stovall Team to get your home ready to sell. There are a few things you should consider when deciding what to renovate and update before listing this season. Call Stovall Team 714.343.9294 for our full list and in the meantime here are three things to keep top of mind as you’re making your list of projects to tackle this year.

1. The Number of Homes for Sale Is Very Low

Our local Housing Inventory sits far below what is normally considered a balanced market. In fact, according to the National Association of Realtors (NAR), the latest data indicates inventory is hitting an all-time low. Because there’s such a limited supply of homes available for sale, you’re in a unique position when you sell your house to benefit from multiple offers and a quick process.

But you want to do so while buyers are still scooping homes up as fast as they’re being listed. Spending time and money on renovations before you sell could mean you’ll miss your key window of opportunity. Of course, certain repairs may be important or even necessary. The best way to determine where to spend your time – and your money – is to work with Stovall Team to confirm which improvements are truly needed and which ones aren’t likely to be deal-breakers for buyers.

2. Buyers May Be Willing To Take on Projects When They Purchase Your House

Today, many buyers are more willing to take on home improvement projects themselves to get the house they’re after, even if it means putting in a little extra work. A recent survey from Freddie Mac finds that:

“. . . nearly two-in-five potential homebuyers would consider purchasing a home requiring renovations.”

If more buyers are willing to tackle repairs on their own, it may be wise to let the future homeowners remodel the bathroom or the kitchen to make design decisions that are best for their specific taste and lifestyle. Depending on the structural condition of your house, your efforts may be better spent working on small cosmetic updates. Instead of over-investing in upgrades, the buyer may change anyway, work with Micah Stovall at Stovall Team to determine the key projects to tackle that will give you the greatest return on your investment.

3. Stovall Team Will Help You Spotlight the Upgrades You’ve Made

Over the past year, many people made a significant number of updates to their homes. The most recent State of Home Spending report finds:

“Home improvement spending rose 25% year-over-year to $10,341. Homeowners who invested in home improvement did an average of 3.7 projects, up from 2.7 in 2020, . . .”

With more homeowners taking on more projects in the past 12 months, there’s a good chance you’ve already made updates to your home that could appeal to buyers. If that’s the case, we will work to highlight those upgrades in your listing.

The same is true for any projects you invest in moving forward. No matter what, before you renovate, call Stovall Team for expert advice on what work needs to be done and how to make it as appealing as possible to future buyers. Every home is different, so a conversation with Micah Stovall t is mission-critical to make sure you make the right moves when selling this season.

Bottom Line

In today’s sellers’ market, it’s important to spend your time and money wisely when you’re getting ready to move. Work with Stovall Team 714.343.9294 to find out where to target your efforts before you list.

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The Top Indicator if You Want To Know Where Mortgage Rates Are Heading

By Micah Stovall | Published: February 1, 2022

Forecasting mortgage rates is very difficult. As Mark Fleming, Chief Economist at First American, once said:

“You know, the fallacy of economic forecasting is don’t ever try and forecast interest rates and or, more specifically, if you’re a real estate economist mortgage rates, because you will always invariably be wrong.”

However, if you’re either a first-time homebuyer or a current homeowner thinking of moving into a home that better fits your changing needs, understanding what’s happening with the 10-year treasury yield and mortgage rates can help you make an informed decision on the timing of your purchase. Mortgage rates have increased significantly since the beginning of the year. Each Thursday, Freddie Mac releases its Primary Mortgage Market Survey. According to the latest survey, the average 30-year fixed-rate mortgage has risen from 3.22% at the start of the year to 3.55% as of last week. This is important to note because any increase in mortgage rates changes what a purchaser can afford. To give you an idea of how rising mortgage rates impact your purchasing power, see the table below:

The Top Indicator if You Want To Know Where Mortgage Rates Are Heading | Keeping Current Matters

How Can You Know Where Mortgage Rates Are Headed?

While it’s always difficult to know exactly where mortgage rates will go, a great indicator of where they may head is by looking at the 50-year history of the 10-year treasury yield, and then following its path. Understanding the mechanics of the treasury yield isn’t as important as knowing that there’s a correlation between how it moves and how mortgage rates follow. Here’s a graph showing that relationship over the last 50 years:

This correlation has continued into the new year. The treasury yield has started to climb, and that’s driven rates up. As of last Thursday, the treasury yield was 1.81%. That’s 1.74% below the mortgage rate reported the same day (3.55%) and is very close to the average spread we see between the two numbers (average spread is 1.7).

Where Will the Treasury Yield Head in the Future?

With this information in mind, a 10-year treasury-yield forecast would be a good indicator of where mortgage rates may be headed. The Wall Street Journal just surveyed a panel of over 75 academic, business, and financial economists asking them to forecast the treasury yield over the next few years. The consensus was that experts project the treasury yield will climb to 2.84% by the end of 2024. Based on the 50-year history of following this yield, that would likely put mortgage rates at about 4.5% in three years.

While the correlation between the 30-year fixed mortgage rate and the 10-year treasury yield is clear in the data shown above for the past 50 years, it shouldn’t be used as an exact indicator. They’re both hard to forecast, especially in this unprecedented economic time driven by a global pandemic. Yet understanding the relationship can help you get an idea of where rates may be going. It appears, based on the information we have now, that mortgage rates will continue to rise over the next few years. If that’s the case, your best bet may be to purchase a home sooner rather than later, if you’re able.

Forecasting mortgage rates is very difficult. As Mark Fleming, Chief Economist at First American, once said:

“You know, the fallacy of economic forecasting is don’t ever try and forecast interest rates and or, more specifically, if you’re a real estate economist mortgage rates, because you will always invariably be wrong.”

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Buyers Want To Know: Why Is Housing Supply Still So Low?

By Micah Stovall | Published: January 20, 2022

One key question that’s top of mind for homebuyers this year is: why is it so hard to find a house to buy? The truth is, we’re in the ultimate sellers’ market, so real estate is ultra-competitive for buyers right now. The number of buyers searching for a home greatly outweighs how many homes are available for sale.

While low inventory in the housing market isn’t new, it’s a challenge that continues to grow over time. Here’s a look at two reasons why today’s housing supply is low and what that means for you.

1. New Home Construction Fell Behind for Several Years

The graph below shows new home construction for single-family homes over the past five decades, including the long-term average for housing units completed. Builders exceeded that average during the housing bubble (shown in red on the graph). The result was an oversupply of homes on the market, so home values declined. That was one of the factors that led to the housing crash back in 2008.

Since then, the level of new home construction has fallen off. For the last 13 straight years, builders haven’t been able to construct enough homes to meet the historical average (as illustrated in green on the graph). That underbuilding left us with a multi-year inventory deficit going into the pandemic.

Buyers Want To Know: Why Is Housing Supply Still So Low? | Keeping Current Matters

2. The Pandemic’s Impact on the Housing Market

Then, when the pandemic hit, it fueled a renewed appreciation and focus on the meaning of home. Having a safe space to live, work, school, and exercise became even more important for Americans throughout the country. So, as mortgage rates dropped to at or below 3%, buyers eagerly entered the market looking to capitalize on those low rates to secure a home that would fulfill their changing needs. At the same time, sellers hesitated to put their houses on the market as concerns about the pandemic mounted.

The result? The number of homes available for sale dropped even further. A recent article from realtor.com explains:

“Last month, the number of home listings dropped 26.8% compared with the same time a year earlier. This meant there were about 177,000 fewer homes listed in what’s already typically a slower month due to the holidays and
colder weather. . . .”

What Does All of This Mean for You?

For a buyer, low inventory can be a challenge. You want to find the home of your dreams, and you don’t want to settle. But what if there just aren’t that many homes to choose from?

There is some good news. Experts are projecting more homes will soon become available thanks to sellers re-entering the market. Danielle Hale, Chief Economist at realtor.com, shares this hope, but offers perspective:

“We expect that we’ll start to see a turnaround and inventory will stabilize and start to go up a little bit in 2022. . . . But that means we’re looking at inventory levels of roughly half of what we saw before the pandemic. For buyers, the market is likely to continue to move fast. If you see a home you like, you want to jump on it right away.”

Basically, inventory is still low, even though more homes are coming. But you shouldn’t put your plans on hold because you’re waiting for those additional houses to hit the market. Instead, stick with your search and persevere through today’s low inventory. You can find your next home if you’re patient and focused.

Remember your goals and why finding a home is so important. Those things should be the driving force behind your search. Share them with your agent and be clear about your priorities. Your trusted advisor is your greatest support as you navigate today’s low housing supply to find the home of your dreams.

Bottom Line

If you’re planning to buy this year know that, even if inventory improves, it’s still lower than the norm. Contact Stovall Team at 714.343.9294 to learn more about what’s happening in your area, what homes are available, and why it’s still worthwhile to prioritize your home search today.

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It’s a Good Time To Sell

By Micah Stovall | Published: January 15, 2022

Call Stovall Team today at 714.343.9294 to learn more about our local market. I understand this shifting real estate market and can expertly guide you on the journey to reach your housing goals. If you have been debating whether or not to sell your home and are curious about market conditions in our area, it’s time to talk with Stovall Team. I can help you decide the best time to list your home for sale. With the inventory of houses for sale so low today pushing home prices in an upward direction, it’s no wonder consumers think it’s a good time to sell.

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Why Stovall Team?

By Micah Stovall | Published: January 2, 2022

There are many benefits to working with Stovall Team when buying and selling your house.

During challenging times, like what we face today, it becomes even more important to have an expert you trust to help guide you through the process.

Your Safety Is a Priority Your safety always comes first, and that’s more crucial than ever given the current health situation in our world. Stovall Team has the proper protocols in place to protect not only your belongings but your health and well-being too.

Powerful Online Strategy Is a Must to Attract a Qualified Buyer. Recent studies from NAR have shown that, even before COVID-19, the first step 43% of all buyers took when looking for a home was to search online. Throughout the process, that number jumps to 97%. Today, those numbers have grown exponentially. Stovall Team has developed a strong Internet and social media strategy to promote the sale of your house.

You Get More Money When Using Stovall Team One of the main reasons for the price difference is effective exposure, superb marketing, and intimate knowledge of your neighborhood.

If you’re considering making a move, this may be your moment, especially with today’s low mortgage rates and limited inventory. Reach out to me at 714.343.9294 stovallteam.com

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Sellers: Don’t Wait Until Spring To Make Your Move

By Tarah Stovall | Published: December 26, 2021

As you plan out your goals for the year, moving up to your dream home may top the list. But, how do you know when to make your move? You want to time it just right so you can get the most out of the sale of your current house. You also want to know you’re making a good investment when you buy your new home. What you may not realize is, that opportunity to get the best of both worlds is already here.

You don’t want to wait until spring to spring into action. The current market conditions make late winter an ideal time to move. Here’s why.

1. The Number of Homes on the Market Is Still Low

Today’s limited supply of houses for sale is putting sellers in the driver’s seat. There are far more buyers in the market than there are homes available, and that means buyers are eagerly waiting for your house. As a seller, that means when it’s priced correctly, you can expect it to sell quickly and get multiple strong qualified offers this season. Just remember, experts project increased inventory will come to market as we move through the winter months. The realtor.com 2022 forecast says this:

“After years of declining, the inventory of homes for sale is finally expected to rebound from all-time lows.”

Selling now may help you maximize the return on your investment before your house has to face more competition from other sellers.

2. Your Equity Is Growing in Record Amounts

Current homeowners are sitting on record amounts of equity thanks to today’s home price appreciation. According to the latest report from CoreLogic, the average homeowner gained $56,700 in equity over the past 12 months.

That much equity can open doors for you to make a move. If you’ve been holding off on selling because you’re worried about how rising prices will impact your own home search, rest assured your equity can help fuel your next move. It may be just what you need to cover a large portion – if not all – of the down payment on your next purchase.

3. While Rising, Mortgage Rates Are Still Historically Low

In January of last year, mortgage rates hit the lowest point ever recorded. Today, rates are starting to rise, but that doesn’t mean you’ve missed out on locking in a low rate. Current mortgage rates are still far below what they’ve been in recent decades:

In the 2000s, the average mortgage rate was 6.27%
In the 1990s, the average rate was 8.12%

Even with mortgage rates rising above 3%, they’re still worth taking advantage of. You just want to do so sooner rather than later. Experts are projecting rates will continue to rise throughout this year, and when they do, it’ll cost you more to purchase your next home.

4. Home Prices Are Going To Keep Rising with Time

According to industry leaders home prices will also continue appreciating this year. While experts are forecasting more moderate home price growth than last year, it’s important to note prices will still be moving in an upward direction throughout 2022.

What does that mean for you? If you’re selling so you can move into a bigger home or downsize to the home of your dreams, you want to consider moving now before rates and prices rise further. If you’re ready, you have an opportunity to get ahead of the curve by purchasing your next home before rates and prices climb higher.

Bottom Line

If you’re considering selling to move up or downsize, this may be your moment, especially with today’s low mortgage rates and limited inventory. Reach out to me at Stovall Team today to get set up for homebuying success this year.

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