Real Estate reports that don't feature outstanding price gains are usually viewed as bad news. However, Money Magazine's “Make More in 2014” Real Estate outlook is an exception. Economists estimate that home price gains will be about 6.8 percent — half of what we saw in 2013. Here's why that's actually pretty good.
The report explains, “For a sustainable recovery you want to see more balance between buyers and sellers.” The pendulum is swinging back in favor of the seller. Inventories are still lower than normal. The number of homes on the market in September was 15 percent below average. With fewer homes on the market, buyers are competing. This makes it a seller's market and an advantageous atmosphere for agents. Additionally, as the market balances, fewer foreclosures and distressed homes will be listed. As a result, investors are driven away, leaving room for individual buyers willing to pay more for a home. This combination means more properties will sell.
While 2014 is being called a seller’s market, agents and Realtors can offer helpful advice to both sellers and buyers. First, encourage buyers to make realistic offers. The “low-balling” of the last few years is over. While everyone wants a great deal, clients may miss out if they make a ridiculous offer. It's not uncommon for sellers to not even counter an offer if they have multiple buyers. An experienced agent will research the correlation between current asking prices and final sales prices, and make appropriate recommendations. Lastly, buyers have lost the homes they wanted due to lenders missing deadlines. Agents can recommend reliable lenders. Typically, local lenders with ties to appraisers work faster.
To assist sellers, use trends to help them know the right time to list, as well as the right price to ask. Pricing way above comparables and thinking that buyers will offer lower bids is a poor strategy in today's market. It's also a good idea to tell sellers to be present when appraisers visit. Appraisals seem to be all over the place after the market’s ups and downs the last few years. A low appraisal can really sour the deal; maybe ending it all together. Recommend that sellers make a list of all upgrades and walk the appraiser through the home.