Viewing The Shift

Economic Update

Keller Williams Realty Staff Economist Ruben Gonzales talks about spotting a market shift.

If you have been in the real estate industry for very long, you probably know that the housing market goes through cycles. During the growth portion of the cycle, prices are going up and inventory levels are typically low but growing. After the market shifts, prices begin to decline as inventory levels reach a peak and then start to decline.

The cycle that real estate agents are most familiar with is the basic seasonal cycle that exists in the market. In the spring, as the weather warms up and summer is on the horizon, listings and sales start  to pick up. When summer arrives and kids are out of school in most locations and weather is at its warmest, sales peak. The fall brings the start of the slowdown as listings start to dwindle and demand decreases. The market typically bottoms in January when weather is coldest.

Then there are longer cycles that dictate where these peaks and troughs move from year to year. These cycles can last a few years or more than a decade, depending on the underlying factors that are driving them. They are very difficult to predict in advance.

In any market, there are two sides to the coin driving the cycles: supply and demand. On the demand side, you have demographic cycles which dictate how many people exist in an area who are able to buy houses, and economic cycles which dictate if those people are in a financial situation that’s  conducive to purchasing a home. On the supply side, you have availability of space for new construction, the number of existing structures and the costs of labor and materials.

You may have observed that over the last few years the market has made substantial gains as it recovered from the huge downturn that started in 2006. The markets started coming back in 2012, and looking at the country as a whole, they have been up since.

So now the question is, “When will the market go in the other direction, and how do I know it’s happening?” The short answer is that we don’t know and that we won’t know until it has already happened.

It’s really difficult to predict the timing of market cycles because there are so many factors at play, and often the thing that causes a shift wasn’t even on the radar. However, there are some things you can watch to know when you are potentially getting close so that you can start shift-proofing your  business while you still have the resources available.

Look first for a persistent loosening in lending behavior by banks. As the most qualified buyers start to dwindle because demand is slacking, banks will look to loosen standards to stir some demand from the bottom of the credit barrel. Inventory will eventually start to rise, and prices will flatten  out, as demand begins to dwindle faster than supply can adjust. Sales will start to decline   year-over-year as the market begins to settle into a downward trend.

The things that might cause this on a local level could be caused by a dip in the local economy or  overbuilding spurred in the aftermath of a long spurt of population growth in an area. It’s important  to watch patterns in the local economy as well as the housing market in your area. If unemployment in an area begins to trend up or the population begins to trend down, chances are that the housing market has already shifted or will soon follow suit.

With the market at its healthiest in nearly a decade, now is the time to start shift-proofing your business. Remember, shifts are going to happen, but you can minimize your vulnerability by taking  actions now that will help you thrive, not merely survive, when the next one occurs.

Keller Williams is Home to Real Estate Industry Most Productive Teams

America’s Top Real Estate Agents

Keller Williams, the world’s largest real estate franchise by agent count, has more agent teams ranked by closed transactions and sales volume than any other franchise in the 2016 REAL Trends’  “The Thousand,” an annual list of North America’s most successful real estate professionals. Overall, Keller Williams has 118 agent teams on the list of top producers.REAL_Trends_the_thousand_list.png

“As a company, we’re committed to helping our associates build careers worth having, businesses worth owning, and lives worth living,” said John Davis, president, Keller Williams. “That’s why we’re focusing our training on boosting agent production – so we can help our people create opportunities for their families.”

The REAL Trends “The Thousand” features 82 Keller Williams agent teams in its Top 250 ranking of real estate teams by transaction sides. Collectively, those Keller Williams teams helped buyers and sellers close 33,357 transactions last year. The 2016 report also features 36 Keller Williams agent teams in its Top 250 list of teams by sales volume. These teams helped clients close more than $5.5 billion in sales.

“Our agents’ extraordinary performance on this year’s ‘The Thousand’ is further evidence of why so many elite agents are choosing Keller Williams,” CEO Chris Heller said. “By teaching proven models and systems and investing in innovation and technology, we’re providing top producers with the resources and tools to grow and expand their businesses exponentially.”

For more information and a complete list of agents on the 2016 REAL Trends “The Thousand”, visit http://realtrends.com/rankings/rt1000.

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Bringing The Indoors To The Outdoors

Longer days and warmer weather make May the perfect time to celebrate National Barbecue Month.

As the weather warms up, so does the housing market, and real estate agents might find their buyers spending just as much time evaluating the outside of the house as they do the inside. They might also be working with sellers who want to make some improvements to the home that will deliver the most return.

The National Gardening Association reported that homeowners in the United States spent close to $40 billion last year on all garden and outdoor-related services and products. And, according to real estate experts, these were wise expenses. It is estimated that for every dollar invested in landscaping projects, homeowners can see up to a $2 return on investment.

Fifty-one percent of buyers surveyed by Realtor.com earlier this year said that outdoor living space was the most attractive quality of a home – even more so than open floor plans and curb appeal. To that end, more than half of homeowners surveyed told Houzz.com they would be improving their home’s outdoor footprint this summer. What are they going to improve? A whopping 98 percent want to add or upgrade patios, terraces and decks.

Outdoor areas add living space without having to include walls and a roof.
According to the American Society of Landscape Architects, 95 percent of people want a complete outdoor living space with an outdoor kitchen and outdoor living area.

The most popular features wanted in outdoor living spaces are:

 

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Grills & cooktops

Fire pits

Outdoor fireplaces

Seating areas

Lighting

 

Outdoor Living Area Tips to Share with Your Clients

The key elements to improving an outdoor living space and adding to your home’s value are:

  1. Build an outdoor area. Patios and decks are very desirable for homeowners; however, they come with a hefty price tag. You can affordably improve your outdoor footprint with a stone or cement patio.
  2. Purchase Outdoor Furniture. Bring your “indoor” comforts outside. Advances in all-weather materials, furniture and accessories are now available in so many sizes and styles that you can decorate much the same way that you would any room inside.
  3. Splurge on a Good Grill. Depending on your preference, gas or charcoal, grills are the “hottest” commodity in your outdoor space. A built-in cooktop is a popular feature and makes outdoor entertaining fun.
  4. Include a Fire Element. Whether you decide on a built-in stone hearth fireplace, a firepit or a chiminea, a fire element adds ambience and warmth to an outdoor space that can be used year-round.

 

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  1. Consider Entertainment. Be it an elaborate outdoor entertainment system, a wireless player or a portable stereo, music adds atmosphere and entertainment to the area.
  2. Grow Your Food. A garden is a great addition to your outdoor area. Vegetables, fruits and herbs are not only an added visual attraction, they are economical and handy.
  3. Lay Ground Cover and Stonework. Lawn maintenance is a major consumption of time. It can be reduced by adding stonework and ground covering to areas around your outdoor living space. Additionally, stone makes for safer grilling areas, fewer bugs and easy cleanup.

When Renovations and Major Improvements Are Out of the Budget HiRes.jpg

When making permanent additions and renovations to the backyard are not options, homeowners can still spruce things up and make their backyard an enjoyable part of their home by following these simple steps:

Step 1 – Clean. Clear away debris, toss out dead plants and plant flowers or herbs in unused pots.

Step 2 – Refresh. Outdoor furniture grows old and tired from sitting outside. A fresh coat of paint and new cushions add an instant facelift. The same applies for wood decks. If you have a deck, a strip and stain will make it look as good as new.

Step 3 – Enhance. Solar lighting can used be in lieu of expensive electrical lighting.

Expanding the indoor living space to the outdoor living space not only adds value to a home, but also enjoyment.

 

Growing Value – Tips For Curb Appeal

Spring rains have saturated most of the U.S. this April and now is the time for homeowners to get outside and enhance their lawn, flowers and gardens, especially if planning to sell a home this summer.

Landscaping curb appeal is a known added value for home sellers, serving as a first impression of a home. Agents and buyers agree that a lush lawn and tidy landscape add to a home’s value and reflects positively on the overall care and condition of the property.

The four most common areas of landscaping that have the biggest impact on buyers are:

Lawn and landscaping 

Outdoor lighting

Fencing

                                     Front entrance including the driveway and walkway

Home owners don’t have to take on a massive landscape transformation to benefit from a curb appeal spruce up. To instantly add curb appeal without making a large investment, homeowners should:

  1. Keep a trim and healthy lawn with weekly mowing and line trimming. Clean up outdoor light fixtures from dust, cobwebs and dirt.
  2. Add solar lights along walkways and in flowerbeds to add nighttime appeal and effect. If the home has a wood fence, paint the ‘showing’ side and repair loose boards, holes and worn areas.
  3. Weed and clean the driveway area and walkway.
  4. The front entry is a home’s welcome sign. A freshly painted front door, a potted plant, a rocking chair and a welcome mat go a long way to a great looking entry.

LAWN CARE

Know your lawns
Before throwing down any seed or sod, homeowners should know what lawns do best in their location. Grass types are classified as “Warm Season” grass or “Cool Season” grass. This is determined by the grasses’ active growth period. For example, areas in the middle of the country are known as the transition zone. Mixtures of cool- and warm-season grasses are often necessary there, but cool-season varieties are the most successful.
Test your soil
Existing soil needs to have the proper pH value and nutrients to support a healthy lawn. Soil can be tested at any time. However, if you test in the fall or early spring, you have time to make adjustments before you start planting and tending to your lawn.
Fertilize
Different types of grass require different fertilizers. As previously mentioned, know what type of grass your have in your yard and fertilize appropriately and at the right time. If you have pets or children, be sure to purchase a fertilizer that is safe for them.

Mowing a Lawn 101

Stick to the 1/3 rule try not to remove more than 1/3 of the grass blade length in a mowing.

Mow when the grass is dry. This is when grass blades are upright, and less clumping.

Mow in the morning or night. Mowing in the heat of the day stresses the grass.

Aim mower clippings (unless you bag them) towards the area you have already cut.

Leave clippings (unless you bag them, or their clumped) as it returns nutrients and nitrogen to the lawn.

If you bag your clippings, consider composting them.

Pruning
Prune away winter damage once plants have lost their leaves. Cut limbs back to live wood.

Mulching
If you’re mulching a large area, use a cheaper hardwood mulch for the ‘filler’ then top-dress it with your mulch of choice. You can also top-dress old mulch by just adding a 1-inch layer on top.  It’ll look brand new, and you’re not paying for something you don’t see.

Planting Annuals
Annuals are plants that live for only one season. Late spring is the best time to plant annuals such as Petunias, marigolds, salvia, and impatiens. Make sure roots are not too matted so they can expand into the soil.
Gardens
Flower gardens make a yard look beautiful and welcoming. Vegetable gardens give the added bonus of providing fresh vegetables to eat.

One of the best gardening tools is a monthly landscaping calendar. To download one for your area, visit The National Gardening Association’s website. Plug in your zip code and you get a specific plan for your area.

Plants, flowers and shrubbery are great ways to add allure and definition to a home’s landscape. Flowering plants are a wonderful addition, but homeowners should consider the appeal when the plants are not in season and flowering.

Planted herbs are easy to plant and maintain. They also do great in pots for entryways and backyard patios.

By investing a little time and money into the yard this spring, homeowners can increase their home’s valuable first impression and “wow” factor.

Spring Cleaning Will Increase Property Value

How to Boost Property Values This Spring

Spring cleaning is the perfect opportunity for home owners to de-clutter and organize their home. It is an especially important task for home owners who currently have their home listed or plan to list in the near future. Taking the time to spruce up the home can help increase value and make a good impression on potential buyers.

Here are a few simple projects that can have a big impact on a home.

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Real estate agents can share these tips with clients to help them prepare their home for sale. To download this graphic click here.

By taking the time to deep clean and reorganize this spring, home owners can increase their resale value over the short term.

It is important to note that not all spring cleaning projects are created equal. Some projects may have a nice temporary appearance, but they don’t hold up in the long run. When time is an issue, the priority should be cleaning overgrown landscaping, painting the interior and exterior, cleaning all baseboards and clearing gutters of debris which causes pest and paint problems when left untreated.

Time permitting, power wash patios and decks to remove mold and dirt to make the area appear clean and newer. And, don’t forget the attic. As buyers are not house guests, expect them to look in closets and attics. Take time to really organize and clean.

Tips For Navigating The Home Inspections Process

Getting the listing is just the first step.

As a listing agent, there are ways you can help your client prepare their home for sale.  And as the buyer agent, you might be asked by your client to addend the home inspection. But should you? Read these real estate agent tips for navigating the home inspection process with their clients.

How Listing Agents Help Sellers Prepare for the Home Inspection

Most sellers understand that there are at least a few things that need to be done to prepare their home to go on the market. Staging and cosmetic improvements may be some of the issues that come to mind first, but in order for the selling process to go smoothly, sellers should also consider preparing their homes for the inspection.

The inspection can play a pivotal role, with buyers taking the opportunity to use issues that arise as leverage to negotiate for a lower price. In some cases, the deal may fall apart because of the results of the home inspection.

As the listing agent, you can help mitigate the need for these negotiations by helping your seller properly prepare for the home inspection. One way to make this easier for your client is to provide guidance for preparing the home for inspection as well as a list of repairs that must or should be completed prior to the inspection.

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Preparation

-Ensure inspector has easy access to all areas of the home, including attics, basements and crawlspaces.

-Create a clear path to mechanical items, such as the furnace, electrical panel and water heater.

-Move furniture away from exterior walls so they can be assessed for cracks.

-Clear closet clutter so all walls inside a closet can be seen and examined.

Must-Fix

-Remove all ceiling stains. Regardless of origin, ceiling stains make people think of water damage, whether or not the source of the issue has been taken care of.

-Check the attic for mold. Improper venting for bath or exhaust fans can create a breeding ground in the attic if not properly vented to the outside.

Should-Fix

-If the seller has done any electrical work on their own, hire an electrician to ensure all electrical work is up to code and includes the appropriate GFI outlets in the kitchen and bathrooms while eliminating hazards such as double-tapped electrical breakers.

-Repair leaky faucets, slow drains and running toilets.

-Locate, repair and paint any rotting exterior wood. Even if it isn’t a structural defect, it may give the appearance of one.

 

Agents Attending Inspections

If you are the buyer agent, you might be asked by your client to addend the home inspection. Should you?

All involved in the real estate industry agree that the home inspection checks in as a crucial step in the home-buying and selling process.

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What many can’t agree on is which parties should attend the inspection. Between the inspector, the buyer, the buyer agent, the seller and the listing agent, that can make up for quite the full house during the inspection. Who should be there?

So is it best for everyone involved to let the inspector handle the inspection alone—so the job at hand commands full attention—or should the real estate agent be present to advocate for their clients? In each case, it comes down to the comfort level of the parties involved, but in order to make an educated decision, check out the list below where we discuss the pros and cons of the agent attending the home inspection.

Pros

-The agent can act as an intermediary between the inspector and the buyer by asking for clarifications on issues that arise.

-The agent may be more aware of home inspection red flags than the buyer and can point those out to the buyer.

-The agent can see the things the inspector mentions in the report firsthand so they are better able to discuss them with the buyer later.

-By attending more inspections, the agent add to their overall knowledge base and can better answer questions from future clients when issues arise. Eventually, the agent may also be able to distinguish which inspection issues are more common in specific areas and neighborhoods.

Cons

-The home inspector may feel the agent gets in the way during the inspection.

-The agent inadvertently may influence clients for or against an issue that comes up during the inspection, when ultimately, the call should come down to the buyer and what they are comfortable taking on or dealing with.

-Inspections are often completed more quickly when the agent does not attend.

-If the buyer attends the inspection without the agent, it gives them an opportunity to hear about issues straight from the home inspector, whereas adding the opinion of another person (the agent) to the mix may confuse things.

 

 

Which Rooms Are The Most Influential In A Home?

A few small changes to these two rooms creates a big impact!  

According to today’s buyers, the kitchen and the master bathroom are most critiqued rooms in a home. What does this mean for sellers? They should look to improve these two influential rooms first. Whether undertaking a major remodel or making small improvements, these are the two most lived in rooms in the home and they draw the most attention.

Show Off The Improvements

During a tour, most buyers will notice and appreciate a new vanity or countertops more than new gutters. They also notice and appreciate fresh paint and carpets. But it can be overwhelming for homeowners to consider all the potential upgrades when preparing a home for sale. However, there are two rooms that should not be ignored. If sellers are tight on budget and time, they should turn their focus to these two rooms first.

  • Create a chef’s kitchen buyers can see themselves cooking in
  • Turn a basic bathroom into a spa-like oasis where buyers want to escape

While the kitchen and master bathroom are the most expensive areas of the home in terms of remodeling, there are some budget-friendly ways to make improvements buyers will notice.


Turn up the Heat in the Kitchen

Kitchens are the heart of a home and so sellers should pay attention to detail when planning improvements.

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Here are some of the most popular kitchen projects with the highest return on investment:

1. Install all real wood cabinets. Buyers are rarely impressed with flimsy shelves and composite materials. If attaching hardware, keep it neutral in style.

2. Buy commercial appliances, or go for the look of commercial. Upscale cooktops and ranges create real impact in the kitchen.

3. Seek to use natural wood, dark laminate wood or stone floors that clean easily. Spills can happen anywhere, but they are very common in the kitchen. Avoid light floor colors and grout as they show dirt and stains easier.

4. Install stone or granite countertops. Tile countertops are difficult to keep clean for the same reason tile floors are – the grout stains easily. Single material countertops, which are clean and easy to wipe down, are a favorite of most home chefs. They look beautiful too.

5. Update the lighting fixtures. Sellers will be amazed at the return they get from simply upgrading the kitchen lighting. Whenever remodeling to sell, keep in mind style varies, so keep items as neutral as possible.

Bonus Tip: When showing the home, declutter and organize the kitchen counters. Hide the coffee maker and toaster. Remove all clutter and magnets from the fridge. You’ll be surprised at how much larger your kitchen looks without the clutter.

Create a Spa-Like Oasis in the Master Bathroom

Sellers don’t have to do a lot to make a big improvement in the master bathroom. A new tub liner, or “shell,” can make a marred tub look like new and save the seller from having to replace it.

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If not replacing the vanity, a new faucet, new lights, fresh caulking around the tub, a new towel rack and a new mirror can make a tired bathroom come alive.

Spa-Like Bathroom Upgrades Buyers Love Include:

  • Walk-in showers
  • Dual Vanity
  • Stone or natural wood flooring
  • Modern and bright lighting fixtures
  • Ample storage space for towels and personal care products

Bonus Tip: For bathrooms, always display a sparkling clean bathtub and commode. There should be no dirty clothes or even hampers visible. The bathroom should be clean and smell fresh.

A kitchen or bath upgrade can be as simple as a weekend-long, low-budget brush-up. With the right planning, some of the most noticeable repairs do not require much. A fresh facelift will go a long way in the buyer’s mind.

And, as for the other areas of the house, don’t skip a fresh coat of paint and replace the carpets. These details add value and make the home more attractive to buyers.