With Terry Story, 28-year veteran Real Estate Agent with Coldwell Banker in Boca Raton, FL
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Home Sales And Prices Spring Forward In March 2017
Today’s talk with Terry Story begins with good news for the housing market, especially for sellers: home sales jumped 4.4% in March 2017 to a 10-year high. This figure is all the more remarkable because inventories are still low and sellers relatively scarce; it’s difficult to find a home to buy right now. As for median home prices, they’re up nearly 7% year-over-year, an equally impressive gain, particularly given how long the market has been rising. Steve mentions a report he recently read suggesting a strong demographic trend behind this growth as a result of millennials leaving home, forming families, and looking for homes. The breadth and depth of this trend could be auspicious for continued gains in housing prices. Terry agrees, noting that millennials accounted for 32% of all sales in March, a very strong showing. An even more eye-popping data point that Terry cites is that 48% of homes sold in March were only on the market for less than one month. She opines that the only reason the other 52% didn’t sell was not a lack of demand but that sellers priced their homes unrealistically or failed to market them properly.
Pricing A Home To Boost Offers
Terry’s sales strategy is to price a home “properly” or, to be more specific, don’t overprice it. The right price will generate buzz and phone calls, but you could go further and list a home below what you might expect to get and then wait a few days for the offers to roll in, ultimately choosing the best one which will likely be well above your initial ask. Would-be buyers are getting creative and going beyond just a high bid to stand out by offering to increase their down payment, shorten the inspection process, and even writing letters explaining why they deserve to buy the property, trotting out loads of references, etc. Watch the major urban markets for signs of where millennials will take this trend next.
Ranch Homes And Nice Kitchens In, Guest Houses And Man Caves Out
Steve asks what home features are most in demand at the moment, and Terry responds that the style of the home is most important with the ranch style currently at the top of the list in Terry’s experience. New kitchens and big backyards are also highly sought after. It’s no longer about big and bold, but more about one-level homes with a nice kitchen and yard. The housing market in Florida, where Steve and Terry live and work, has always been overwhelmingly single floor, perhaps in part due to the large number of retirees who don’t want to traipse up and down staircases. Another factor might be an increase in multi-generation families living in the same home. This aspect has a strong regional variability to it, with far more two-story homes as you head north.
As for features that are less desirable right now, Terry references a report showing that guest houses, mother-in-law suites, solar panels, and man caves are all falling out of favor. Of course, this is a generalization and, as with the number of floors, probably has a strong regional bias. Solar panels are booming in many parts of the country, but Florida may not participate in that trend because of the relatively low electricity costs and the potential for hurricane damage.
Disclosure: The opinions expressed are those of the interviewee and not necessarily United Capital. Interviewee is not a representative of United Capital. Investing involves risk and investors should carefully consider their own investment objectives and never rely on any single chart, graph or marketing piece to make decisions. Content provided is intended for informational purposes only, is not a recommendation to buy or sell any securities, and should not be considered tax, legal, investment advice. Please contact your tax, legal, financial professional with questions about your specific needs and circumstances. The information contained herein was obtained from sources believed to be reliable, however their accuracy and completeness cannot be guaranteed. All data are driven from publicly available information and has not been independently verified by United Capital.
Steve Pomeranz: It’s time for Real Estate Roundup, this is the time every single week we get together with noted real estate agent, Terry Story. Terry is a 28-year veteran with Coldwell Banker located in Boca Raton, Florida. Welcome back to the show, Terry.
Terry Story: Thanks for having me, Steve.
Steve Pomeranz: So, things are jumping in the housing market, sales are up, prices are up, what’s going on?
Terry Story: Well, we actually hit a ten-year high. Home sales jumped 4.4%, that’s huge.
Steve Pomeranz: That’s huge.
Terry Story: The US existing home sales took off in the month of March and actually hit the highest pace in over ten years, and we’re still dealing with severe supply shortage-
Steve Pomeranz: So, that’s the reason, even though sales are jumping and higher, they’re still being controlled to a degree by the fact that few people are selling, it’s very difficult to find a home to buy.
Terry Story: That’s right.
Steve Pomeranz: Okay, what about housing prices, have they adjusted as well?
Terry Story: You know, the median existing home price for all home types in March was $236,000. That’s actually up about close to 7% from last year, March of last year. So, we’ve seen an uptick of about 7% in the median home prices all across the board.
Steve Pomeranz: Wow, especially this late in the cycle for us to still be seeing 7% year over year increases is pretty amazing. But I think what’s happening here, I read an article that the millennials are starting to buy, which was something that had been predicted for a long time, as millennials grow older and they’ve got to get out of the house and start their life. And they’re forming families and so on, and they want their own place and they want their own house. I think we’re starting to see millennials move into the marketplace. So, it’s a demographic effect that’s going on in the marketplace and that’s good for housing.
Terry Story: Absolutely, they actually represent right now about 32% of all the sales in March. So, that’s a huge number. So, that’s all good.
Steve Pomeranz: Yeah, so in terms of when you’re listing a property, how long is it taking for the average property to get sold?
Terry Story: Listen to this craziness, 48% of all the homes that sold in the month of March, sold in less than a month.
Steve Pomeranz: They were on the market for less than a month?
Terry Story: Yes.
Steve Pomeranz: So, half of all of the homes sold in America were on the market for less than a month, wow.
Terry Story: And the only reason the other half didn’t sell is because those sellers just aren’t realistic. They’re overpriced, or they’re not being properly marketed. The demand is there.
Steve Pomeranz: I think the reason is they don’t have you as a realtor.
Terry Story: That’s just it, if they had me, and listened to me and listened to our show, they would know how to get their homes sold.
Steve Pomeranz: Yeah, so the other 50%, I can’t imagine that it would even be that much longer because under a month is kind of an insane number if you think about it.
Terry Story: It is, and I know it’s for real, I see it all the time. I put homes up for sale and get multiple offers in one day, and it sold in a day. And I never like to tell sellers that your house, I might sell it in a day, but the reality is that it’s really happening. In my market area, I see it all the time, homes sold under a week.
Steve Pomeranz: I know you’re still telling people to price, you had a certain way of pricing. You didn’t want to overprice or over list.
Terry Story: Yeah, you don’t want to overprice. Really, what you want to do is put the right number where the phone will ring, what will excite people. And any time you have more than one buyer, you’re going to get your highest and best offer.
Steve Pomeranz: That’s the beautiful thing.
Terry Story: You don’t want to underprice it; I mean, that’s a strategy, you can do that. Actually, I’m going to show a property this afternoon that I know is underpriced, and it said very clearly they’re going to be accepting offers for 15 days. So, all they’re doing is they’re creating such a strong demand by having this beautiful home underpriced. They’re going to have countless numbers of offers, and then they’re going to have to sift through them and figure out which one’s really the best.
Steve Pomeranz: I really love that it’s really like treating this as a business and thinking smart. Instead of just listing it up there, trying to put it up the high price, and then starting the negotiation. The buyer comes in, he bids low, and then you get some kind of average. This is actually a little bit smarter, especially when it’s a seller’s market like it is today.
Terry Story: Exactly, and then by doing so you’ll see a lot of creative things that buyers will do to try to make their offer that more attractive.
Steve Pomeranz: Like what?
Terry Story: Well, they’ll put more money down, they’ll shorten their inspection period. They’ll come up with different things. They’ll write letters saying why they’re most deserving. References, I mean they’ll go way above and beyond themselves to make them look the best amongst the rest of them. It’s almost like trying to apply for a college.
Steve Pomeranz: [LAUGH] Yeah, why should you let me in.
Terry Story: Why should you take my child where all these other kids are just as smart and have achieved so many goals.
Steve Pomeranz: Maybe you should do what, what’s her name, Elle did in Legally Blonde, you know, make a video. [LAUGH]
Terry Story: Exactly [LAUGH].
Steve Pomeranz: What kind of home features are people looking for today, what’s the most desirable feature in a home?
Terry Story: Right now it’s the style of home. And the style of a home, the one that’s resonating the highest, is the ranch style house, with the large backyard. Updated kitchens are always real top sellers. So, the ranch house seems to be the best. It’s not so much anymore being the biggest house, the big, bold house, it’s just space. One level with nice kitchens and a yard.
Steve Pomeranz: I know in our area there’s a lot of older people. Not old people but older people, [LAUGH] and a lot of them don’t want two floors anymore, two stories. They want a ranch style house, do you think that’s influencing this?
Terry Story: Yes, absolutely, and also people like me, who never had a two-story house. Because if you’re a native to Florida, we just didn’t have two-story homes. The thought of having to run upstairs to go get a pair of socks because I forgot them, that seems, I don’t know.
Steve Pomeranz: Not attractive.
Terry Story: Not attractive.
Steve Pomeranz: What are the least searched features, what do people not want these days?
Terry Story: It’s interesting, according to this list, it’s guest house, mother-in-law suite, solar panels, and a man cave. Which I think is funny because I just took some clients out this past week and they specifically were looking for a guest house.
Steve Pomeranz: They were looking for a guest house with solar panels and a man cave. [LAUGH]
Terry Story: For their mother-in-law.
Steve Pomeranz: Yeah, I know, I’m kidding.
Terry Story: So, it might also be where you’re from. I mean, the South Florida area, we do have a lot of older people. And we do see a lot of families being merged together.
Steve Pomeranz: Well, you know in the West, solar panels are the big rage, everybody is getting them and got them. I was just out in Boulder, Colorado, and we knew people that had just purchased a house here and it came with solar roofing from Solar City, which is an Elon Musk company, and it’s the whole thing out here. You’d think in South Florida people would also have [CROSSTALK]
Terry Story: Yeah, we don’t see much solar panels, I don’t know why.
Steve Pomeranz: Yeah, maybe because electricity is just not that expensive.
Terry Story: Well, I was just about to say that, our electricity is really not that expensive.
Steve Pomeranz: And it ain’t cheap to put solar panels on as well.
Terry Story: No, and it puts holes in your roof.
Steve Pomeranz: Yeah, got issues.
Terry Story: There’s some issues. They blow with hurricanes.
Steve Pomeranz: My guest, as always, is Terry Story. Terry is a 28-year veteran with Coldwell Banker and she can be found at terrystory.com.
Terry Story: Thanks for having me, Steve.