Single Income Households Rising

More than a third (34 percent) of those who moved during the pandemic live in a home where only one adult has a full-time job, according to a recent Redfin report based on an August survey. Before the pandemic, 29 percent lived in a single-family household.

More than half (58 percent) of recent movers surveyed by Redfin live in a home with two adults working full time, down from 62 percent pre-pandemic.

“While some people chose to move down to a single-income household, others had no choice,” Redfin Deputy Chief Economist Taylor Marr said in a release. “Thousands of Americans lost their jobs during the pandemic, and scores of parents had to leave the workforce when daycares and schools shut down. Most workers are rethinking where their careers fall on life’s priority list.”

Remote work also enabled many families to relocate to more affordable places, where it’s more feasible to live in a home with just one income, according to Redfin. In the third quarter, 30 percent of Redfin.com users were looking to move to a new metro area, up from 26 percent before the pandemic.

“A lot of the families that were able to move down to one income during the pandemic were high earners,” Marr said. “High earners tend to have the flexibility to work remotely, which means it’s easier for them to relocate to a more affordable place where only one adult needs to work full time. Lower-wage workers who are still required to show up in person, such as restaurant and grocery staff, are less likely to have the opportunity to move.”

A retirement boom may have also contributed to the increase in single-income households. The pandemic drove more than 3 million baby boomers into early retirement, according to a study by the Federal Reserve Bank of St. Louis.

More than three-quarters (83 percent) of respondents said they are at least a little happier after moving. Only 7 percent reported being less happy, and 11 percent said their happiness is about the same.

“Most people who move relocate to somewhere less expensive,” Marr said. “Moving tends to make people happier because it means they’re getting more bang for their buck—frequently in the form of additional space, better weather and schools, or a shorter commute to their workplace.”

Fast Home Sales Increasing This Fall

According to a recent Redfin report, 44 percent more homes are pending sale than a year ago, but only 3 percent more homes recently hit the market. The imbalance between the number of homes for sale and the number of buyers means the market pace is picking up at a time when it typically slows, Redfin said.

A third of homes are finding buyers within a week of hitting the market, up from 30.8 percent at the end of the summer.

According to Redfin’s analysis of the four-week period ending Oct. 17, the median home-sale price increased 13 percent year-over-year to $355,875 and increased 29 percent from the same period in 2019.

“Comparing today’s sales and new listings numbers to the 2019 levels helps to reveal the stark shortage of supply we are facing,” Redfin Deputy Chief Economist Taylor Marr said in a release. “The boost of housing supply that came on the market during the summer has already faded away, even as demand tapers off as we expected it to in the fall. Relative to the last ‘typical’ fall of 2019, demand remains steady and strong thanks to the increased urgency many buyers have as mortgage rates inch up. Rising rates also make buyers more price sensitive, so homes that are priced right are increasingly likely to receive offers right away.”

Asking prices of newly listed homes were up 12 percent year-over-year and up 26 percent from 2019 to a median of $362,335, down 1 percent from the all-time high set during the four-week period ending Oct. 3. Asking prices typically increase in September and then begin to decline in October through the end of the year, according to Redfin.

Pending home sales were up 3 percent year-over-year and up 47 percent compared with the same period in 2019. New listings of homes for sale were down 8 percent year-over-year and up 5 percent from 2019. Active listings fell 22 percent from 2020 and were down 40 percent from 2019.

According to Redfin, 46 percent of homes that went under contract had an accepted offer within the first two weeks on the market, up from 42 percent a year earlier and 31 percent in 2019, and 33 percent had an accepted offer within one week, up from 30 percent a year earlier and 20 percent in 2019.

Almost half (45 percent) of homes sold above list price, up from 34 percent a year earlier and 22 percent in 2019.

A Slowing Market With Increased Inventory

The modest calming of the housing market that began in late summer has continued into early fall, according to a recent market report from Zillow. Buyers are finding slightly more selection, price cuts and more time to evaluate a home before it goes under contract. 

“The housing market continued its gradual return to some semblance of normalcy in September, helped by the typical seasonal cooldown in shopping conditions that we expect to see every fall,” Zillow Senior Economist Jeff Tucker said in a release. “Homes are still selling quickly, and prices have not receded, but it’s not quite as extreme a sellers’ market as we saw back in the spring and summer. Buyers today will benefit from a little more time to pick the right home and a few more listings to choose from.”

The Zillow Home Value Index rose to $308,220 in September, up 1.6 percent from August. Monthly home value appreciation slowed from August in 44 of the 50 largest U.S. metros. Monthly growth ranged from .4 percent appreciation in San Jose, Calif., to 3 percent in Raleigh, N.C.

Despite the modest cooling, September marked the fourth-fastest monthly pace of appreciation and a record pace of yearly appreciation in Zillow data dating back to 2000. The typical home was worth 18.4 percent more year-over-year, surpassing August’s then-record of 17.5 percent year-over-year appreciation.

Annual appreciation was in the double digits across all 50 major markets, ranging from 44.9 percent in Austin,Texas, to 13.2 percent in New Orleans.

The inventory shortage remains acute in much of the country, down 19.9 percent year-over-year and 37.7 percent below 2019 levels. However, there has been slow, incremental growth in inventory after it hit an all-time low in April.

For-sale inventory in September crept up by 0.4 percent from August, a smaller gain than the previous four monthly increases but roughly matching pre-pandemic seasonal patterns. It was the first month in which the year-over-year inventory deficit was smaller than 20 percent since July 2020.

Market velocity is also slowing. Homes took one day longer to sell in September than in August, with listings going into the pending stage in a median of nine days.

As homes are staying on the market longer, a higher percentage of them are seeing price cuts. The share of homes listed on Zillow that saw a price cut before going under contract rose to 14.7 percent in September, up from 7.9 percent in April. Looking forward, Zillow economists predict 13.6 percent home value growth through September 2022. This is a stronger 12-month forecast than August, supported by a slower inventory recovery and heightened sales and mortgage application activity. Existing home sales are expected to reach 6.04 million in 2021, up 7 percent from 2020. 

Market Data
Wednesday, October 27, 2021

Buying a home?

A real estate transaction has a lot of moving parts. After negotiating, coming to an agreement and entering into a contract, there are several things that should be completed to ensure a seamless closing!

  1. Contingencies

More often than not, most real estate contracts come with contingencies. In other words, there are things that the buyers must accomplish prior to closing on their new home. A home inspection is one that cannot be overlooked. A Home inspection will reveal issues with the home that you “the buyer” can request be fixed prior to closing.  Typically, you will have a grace period to get the inspection completed and review the results. The average cost for a home inspection in Florida ranges from $300 to $500.

You will also need to get the appraisal completed. Your mortgage company will use a third-party vendor to conduct the appraisal. The appraiser will evaluate your home and determine a fair market value. If the appraised value is less than the sale price, you have the opportunity to bring cash to the table to make up the difference, or back out of the deal all together.

One of the biggest contingencies is financing. This is simple, yet complex at the same time. You cannot buy anything without money. The mortgage process can be tedious but worth it when you walk in the front door to your new home for the first time. Real Estate contracts will provide a deadline to obtain financing for the home. During that time period, you must be able to obtain a loan that will cover the purchase price of the home.

2.) Title Process

To legally own a home in Florida, the buyer must be able to obtain title to the property to legally own the property. As part of the closing process, your mortgage lender will require a title search, and you’ll need to purchase title insurance to protect you from legal claims to the house. For more information on the title and closing process, check out our blog “The Closing Process”.

3.) Final Mortgage Approval

After you made your earnest money deposit and all contingencies have been met, your loan package is sent to underwriting. Underwriters are similar to detectives. It is their duty to make sure you’ve represented yourself and your finances truthfully, and that you haven’t made any false or misleading claims on your loan application. Lying on a mortgage application carries severe penalties. The underwriter will check your credit score, review the homes appraisal, and ensure you financial situation hasn’t changed. This is not the time to buy a new car or take out new loans. Doing so could prevent the purchase of the home.

4.) Walk through the home

 Traditionally, you are allowed to walk through the home prior to closing. During the walk through you are ensuring that the previous owner has vacated and that the home is in the agreed upon condition per terms of the contract.  If your home inspection revealed problems that the sellers had agreed to fix, you’ll want to make sure those repairs were made.

5.) Show up to your closing

We will reach out to you throughout this entire process asking for documents pertinent to the legal transfer of ownership. When you show up for the closing, please bring all required documents. Here is a brief list of what you may have to bring:

  • Proof of homeowners insurance
  • A copy of your contract with the seller
  • Your home inspection reports
  • Any paperwork the bank required to approve your loan
  • A government-issued photo ID (Note to newlyweds who just changed their name: The ID needs to match the name that will appear on the property’s title and mortgage.)

The Closing Process

The closing process begins when both the buyers and sellers enter into a fully executed contract with one another. Once the contract is signed or “executed”, it can be uploaded through our website under the “Schedule A Closing” tab. Once the page loads, a form will populate. The form requires basic information and allows you (the realtor) to upload the executed contract. Our team will review the contract and schedule the closing with all involved parties.

After the contract is submitted and has been reviewed, the buyer of the contracted property is required to deposit their earnest money (deposit) into an escrow account. Fortunately, Select Title Agency is proud to serve as an escrow agent to allow for a secure and easy way to deposit the funds. Our firm will also send a verification of the earnest deposit to the agents involved in the transaction.

Aside from being required by the lender, a title search is crucial! A title search will verify that the chain of ownership of the property. Not only does our firm conduct a thorough title examination, but we will also draft your title insurance policy with the intent of protecting you from underlying/pre-existing issues.

The next step is for our firm to order a survey. A survey is imperative for confirming the suitability and representation of the property and is often required by lenders. A professional surveyor will provide confirmation of the property lines (boundaries) and confirm that the real estate boundaries of the property conform to what is stated in the publicly recorded legal description. They will also report on crucial details such as whether there is a major encroachment that may adversely affect your property.

Our will team will then order any payoffs to ensure no debt is outstanding. We will also verify commission amounts or if there are any transaction fees or if any brokerage requires a wire transfer. We also verify if customers will be here in person for the closing or if they will be mail-aways and schedule the closing with all parties involved in the transaction. Then we compile all information and prepare the Settlement Statement. Once the settlement statement is prepared, we get it approved by the lender and by our agents. Once approved by all applicable parties, it gets released to the buyer and seller for review. Once we receive the go-ahead, the closing documents are prepared.

Once all documents are signed and all monies have been released, we record the Warranty Deed and the Mortgage. We then contact seller to let them know the funds have been released. Our staff will then email the Final Settlement Statement/Alta/CD/HUD to the Agents, Buyer and Seller to let them know it is completed. (If they are NOT present at closing) Once Recorded, we prepare the Title Policy for the Lender and buyers. All documentation is then mailed out to all parties.

Should you have any questions regarding the closing process or you want to schedule a closing with our firm, contact us today! If you need help listing your home contact RE/MAX Select Professionals, our preferred partner, to assist in the listing of your home!