Myth: If I price my home higher than market value, I’m leaving room for negotiations.
Truth: Buyers have no idea you’re employing this strategy and won’t understand why your price is too high. Many won’t even view your home, much less put in an offer. When your home is priced improperly, it’s more likely to sit on the market, making potential buyers think there’s something wrong it. When that happens, you’ll probably wind up with lower offers than if you had priced the home fairly at the start.
Home sellers in the Austin area are in maybe the hottest seller’s market we’ve ever seen. However, REALITY CHECK: A seller’s market doesn’t mean a stupid market! What’s really interesting about our current market is that buyers have also never been more savvy than they are now. Prospective home buyers have access to more information at their fingertips than at any other point in human history. Many buyers in the modern era know- even without the help of a Realtor- if a home is overpriced.
Even in this crazy seller’s market, overpricing is by far the most costly mistake you can make when selling your home.
Wow! It’s been a wild and crazy start to the year! I’ve been focusing (apart from normal business activities) a lot on trying to get all of my blog posts cleaned up and reformatted- starting with the oldest. After moving brokerages back in October, I also changed blogging platforms and moved all of my YouTube videos over to my personal YouTube account. Sounds easy, right? HAH! So, apologies for the scarcity in new blog posts as of late- but they’re coming!
In light of that, what better way to come back than with a 2016 year-end wrap-up! Unless you’ve been living under an enchanted rock, you know that 2016 was a nutty year in Austin real estate. You’re either feeling squeezed by rising rental rates or rising property taxes.
It’s a catch-22 really. I mean, we love Austin because it’s an amazing city to live in. Almost no one can deny that. However, because it’s such an amazing city, the number of people wanting/willing to relocate here is ever-increasing. For those of you feeling the financial squeeze of housing costs, I hate to tell you- but I think the pressure will continue for a while. The good news: I don’t think the acceleration of the intensity will be quite like it has been the past few years.
Check out the video below where I break down Austin’s most recent market numbers for the month of January. Additionally, I go over the stats for 2016 as a whole and attempt to take stock of where the heck we’re at with the housing market in this sweet town. (If the video doesn’t show up below, check it out HERE on my YouTube channel!)
The Austin Board of Realtors recently released the Austin area market stats for the month of November. Check out the video at the bottom of this post for a rundown of the numbers!
I know, I know…it’s almost January! So, why are we just now seeing the numbers for November?! Well, if you think about it- these stats experts are crunching a crapload of numbers each month. Not only that- they are analyzing, interpreting, and synthesizing these numbers so that we can make sense of them. And that takes a lonnnnnng time! Therefore, we will always have about a 3-4 week lag in terms of getting our hands on the most recent real estate market statistics.
In light of that, enjoy the video! My next market update will be the 2016 year end wrap-up! I can hardly wait! (I’m not kidding…) (If you don’t see the video below, check it out HERE on my YouTube channel!)
The Austin Board of Realtors recently released the market statistics for the month of October. Check out the video at the bottom of this post for an update!
This month is a very basic stats update focusing solely on the city of Austin (proper). If you were to ask almost any Austin real estate agent What’s the market doing right now?, they will tell you that change is in the air. I’m not saying we need to brace ourselves for a market crash or anything- but something is changing. I’ve spoken with several listing agents in recent weeks who say things like, “We’re getting lots of showings but no offers.” or “We can’t get anyone through the dang door!” or “I’m dreading talking to my seller about a price reduction…but that’s definitely going to have to happen.”
I recently had the following exchange with an agent-friend of mine:
Agent: My listing has been on the market for months. This market is declining!
Me: I think you’re just overpriced.
Agent: But my seller thinks we’re priced correctly.
Me: Your seller is crazy. (or just delusional)
Agent: But there are lots of homes that are not selling right now.
Me: Lots of sellers are crazy.
Seriously, though, I don’t think the Austin market is in decline. We still have the same problem we’ve had for years: Significantly more people want to move here than those who want to move away. Regarding my friend’s predicament- I’m sure that if they were to reduce the price gradually each week by $10,000, they would end up selling it at a price that is about 8% more than they could have sold it for at this time last year. Instead, they are likely trying to sell the property for 25% more than they could have sold it for last year, which is insane. Our market can support moderate appreciation; it cannot support insanity.
Keep up with the blog for future market updates! (If you don’t see the video below, check it out HERE on my YouTube channel!)
If my Facebook feed is any indication, the outcome of this year’s presidential election was an absolute shock to almost everyone paying attention- even to those who voted for The Donald! Hardly anyone in mainstream media thought there was any chance Donald Trump would walk away with victory over Hillary Clinton after all was said and done.
A quick preface: The purpose of this post is not to give my opinion of whether or not I think Trump will be a good president. Additionally, I understand that there are going to be some reading this who have real concerns about some of the implications of a Trump presidency. I do not mean, at all, to trivialize these fears or concerns. It’s just…that’s not the purpose of this post. Lastly, this is not a nuanced or technical economic research paper. I’m just going to give a few simple and digestible points as I feel led. OK, onward!
What do we know?
So, what affect will a President Donald Trump have on the U.S. housing market? In short, (SPOILER ALERT!), I don’t know. I think we may only know the answer to this question in hindsight. However, I do think we have some clues. For instance, here are a few simple facts about Trump that I think are pertinent to this topic:
Donald Trump is a (newly reformed) republican.
Donald Trump is a businessman.
Donald Trump made his billions in- you guessed it- real estate.
Republicans, in general, are in favor of less government intervention in the marketplace. Democrats, on the other hand, are generally in favor of more regulation. Check out the 2016 Republican Platform (specifically pages 3-4) for an indication of where the party as a whole stands on the housing market. Many republicans blame our most recent housing crisis on federal manipulation of interest rates and other interventions. Therefore, it’s logical to assume Donald Trump will advocate for policies that repeal lots of the regulations on financial markets. What would the result be? Well, that depends on who you ask. Ask a republican and they’ll tell you this might cause a correction in the market and long-term stability. Ask a democrat and they’ll tell you this will cause more corporate greed and predatory lending, which could cause yet another economic collapse. Who’s right? I guess we’ll see!
After last Tuesdays election, mortgage interest rates spiked sharply. “I don’t know that it was specifically Trump…but I’ve seen interest rates rise a full point in the past week. We were in the low 3%s and now we’re in the low 4%s.” says Randy Atkinson of Movement Mortgage. This shouldn’t be a huge shock. After all, mortgage interest rates are tied to demand for mortgaged-back securities (MBSs)- that is, investors. Of course, there are several other factors but the primary one is MBS demand.
When looking at this past election more broadly, Hillary Clinton represented the “status-quo” candidate. (I don’t necessarily mean that in the pejorative sense at all.) I mean, for all intents and purposes, a Clinton administration probably wouldn’t have interacted with the economy in much different a way than the Obama administration. Investors- even if they disagree with Obama’s approach- know how that game works at this point. If Hillary had won, investors would have perceived less risk in putting their money in housing-based investments.
On the other hand, Donald Trump represented the “change” candidate. (Again, I don’t necessarily mean that in a pejorative sense.) Unlike Clinton, Trump ran his campaign on the idea of a complete overhaul of Washington’s involvement in market affairs and a total deconstruction of what Obama has built over the past eight years. Investors- even if they agree with this approach- do not know exactly how that game might work. Therefore, these investors perceive more risk in housing-based investments.
My point is this: The fact that interest rates spiked immediately following the election is not a sign that the sky is falling or that Trump’s policies are bad for the economy. I’m not saying his policies will be good for the economy- we can’t know that yet. But with respect to an interest rate hike; that’s the way it always would have been. The same thing happened with financial markets all over the world after Brexit became imminent. It was merely the prospect of change that leads to short-term volatility in the marketplace. A week after Brexit and things were virtually “business as usual”.
Now, let’s consider the possible long-term effects of a Trump Presidency. On this topic, there are lots of people way smarter than me who have diametrically opposed opinions. What makes this even more challenging to comment on is the fact that Donald Trump was largely silent on the subject of the housing market on the campaign trail. So, nobody really knows what his plans are…at least nobody who’s talking! I do believe, however, that there are two policy changes that are probable during a Trump presidency that could affect the housing market: 1) tax cuts and 2) deregulation of financial markets in general.
Donald Trump has promised to cut taxes. Many before him have made similar promises without delivering- but he talks the talk nonetheless. Cutting taxes would, in theory, leave taxpayers with…well…less taxes to pay! (See my logic there?) This could allow potential homebuyers to spend that money on a new home. Americans do have a saving problem. So, a Trump tax cut could provide a helpful nudge for some of those buyers who need him just a little more cash for the downpayment.
Donald Trump has also promised to either cut or drastically reform regulatory agencies and programs like the CFPB and Dodd-Frank. There are also proposals to ease restrictions on home builders, which could make building new homes less costly thereby making them more affordable for buyers. As mentioned above, many republicans view this deregulation as a beacon of hope; many democrats see it as a sign of impending doom and an enabling of predatory lending and corporate thievery.
My two cents…
Who’s right? I guess we’ll see in four years! Check back then for an update. 🙂
So, how will Donald Trump’s presidency affect the housing market? My guess: Not much. If history has taught us anything about presidents in the modern era, it’s this: Most of them, in practice, are a lot more “status-quo” than they claim to be on the campaign trail. I mean, this is politics after all, right? Only time will tell if Donald Trump is truly the renegade outsider he has claimed to be. For those hoping he is the next American savior- I think you might be sorely disappointed. For those announcing the arrival of the antichrist- I think you might have to wait another four years.
I have some monumental (some might even say “YUGE!”) news!
After a few amazing years at GoodLife Realty, my first ever real estate brokerage, I recently made the decision to “Make the Move” over to Realty Austin. This was certainly not an easy decision to make as I have so much love in my heart for my people at GoodLife. It’s where I started this career I love so much and the mentorship and guidance I received there will serve me well until I stop selling real estate…which will probably be when I’m 89.
That said, the resources and tools I have at my disposal with Realty Austin are going to allow me to serve my clients, customers, and friends in a way I never really thought was possible. (More on that later…) But let me tell you- changing real estate companies is a BEASTLY undertaking! As part of my transition, I wanted to kind of “tighten things up” with regards to my blog, calendar, daily activities, database, etc. I’m nowhere near complete but as part of these efforts I have switched my blog site (still barrettraven.com) over from Blogger to WordPress. So, you might- if you’re a regular visitor to this here real estate blog- notice a few changes.
Still, the heart and purpose of this blog remains the same: To be an educational resource for you with regards to home-buying and selling and to share my real estate adventure with you. I’m still in the process of transferring all of my old YouTube videos over to my personal YouTube account and reentering all of the info on each one. But you can still check all of them out HERE!
A few other quick resources:
Search the MLS! Austin’s Multiple Listing Service (MLS) is where almost every house is listed that is currently being sold in Austin as well as the surrounding areas. Visit the Realty Austin website and start browsing away!
My bio page. There are many of you who visit this blog to get helpful tips with real estate…but you don’t really know me! Well, my bio on the Realty Austin is basically a blog post on its own! 🙂
My personal newsletter! Shoot me your email address (firstname.lastname@example.org) and I’ll add you to my personal friends and family newsletter that I send out about every six weeks. Realty Austin distributes their own automated monthly newsletter on my behalf and- don’t get me wrong- there is some great stuff in their created by some great researchers. However, you can be sure the stuff you get from me directly will be hand-crafted by yours truly and is a little bit deeper of a dive into my personal life and business.
OK, that’s enough for now! With the brokerage move, which included extensive orientation and training, as well as a few other major personal events (mostly good!), my blogging has become a little inconsistent. But Raven is back in town and I couldn’t be more excited about what the future holds! As always, do not hesitate to reach out if you have any questions at all about Austin, home-buying, home-selling, or…well…just about anything! See you soon!
The Austin Board of Realtors just released the newest round of stats for the month of August. Check out the video below where I break down (what I think are) the most important take-aways! Everyone knows this market is a bit nutty. But how nutty is it, you ask? Watch the video and judge for yourself!