What is going on with the real estate market in Westfield, MA?
I am here to share a one month real estate market report for Westfield, MA for the month of July 2022.
Here is a video explaining the highlights and below is a written report with full details.
Lesley Lambert, Westfield REALTOR with Park Square Realty. 413-575-3611
As you pull up to this home you will be instantly “wow’ed” by the lush and gorgeous landscaping. Walking to the door you can already sense that this is a beautifully maintained home and upon entering, this thought is confirmed. A large family room with a gas fireplace greets you and is open to the updated eat-in kitchen. Do you want to host family dinners? If yes, then this home has the dining room for you! Continuing on the first floor you are met with a lovely half bath, den/office (or maybe first floor bedroom?) and a lovely formal living room with bay window and wood burning fireplace. The second floor brings you the primary bedroom with walk in closet, three more bedrooms and an updated full bath. Additional bonuses: 2 car garage, patio, shed AND a backyard that rivals the most sumptuous of parks. This home will be the setting for many happy years for you and yours!
Top Producing REALTOR
Lesley Lambert, REALTOR
413-575-3611
Licensed In: MA
License #: 115441
7 Costly Mistakes Western MA Home Sellers Make (And How to Avoid Them)
No matter what’s going on in the housing market, the process of selling a home can be challenging. Some sellers have a hard time saying goodbye to a treasured family residence. Others want to skip ahead to the fun of decorating and settling into a new place. Almost all sellers want to make the most money possible.
Whatever your circumstances, the road to the closing table can be riddled with obstacles — from issues with showings and negotiations to inspection surprises. But many of these complications are avoidable when you have a skilled and knowledgeable real estate agent by your side.
For example, here are seven common mistakes that many home sellers make. These can cause anxiety, cost you time, and shrink your financial proceeds. Fortunately, I can help you avert these missteps and set you up for a successful and low-stress selling experience.
MISTAKE #1: Setting an Unrealistic Price
Many sellers believe that pricing their homes high and waiting for the “right buyers” to come along will net them the most money. However, overpriced homes often sit on the market with little activity, which can be the kiss of death in real estate — and result in an inevitable price drop.1
Alternatively, if you price your home at (or sometimes slightly below) market value, it can be among the nicest that buyers see within their budgets. This can increase your likelihood of receiving multiple offers.2
To help you set a realistic price from the start, I will do a comparative market analysis, or CMA. This integral piece of research will help us determine an ideal listing price based on the amount that similar properties have recently sold for in your area.
Without this data, you risk pricing your home too high (and getting no offers) or too low (and leaving money on the table). I can help you find that sweet spot that will draw in buyers without undercutting your profits.
MISTAKE #2: Trying to Time the Market
You’ve probably heard the old saying, “Buy low and sell high.” But when it comes to real estate, that’s easier said than done.
Delaying your home sale until prices have hit their peak may sound like a great idea. But sellers should keep these factors in mind:
Instead of trying to time the market, choose your ideal sales time-line. This may be based on factors like your personal financial situation, shifting family dynamics, or the seasonal patterns in your neighborhood. I can help you figure out the best time to sell given your individual circumstances.
MISTAKE #3: Failing to Address Needed Repairs
Many sellers hope that buyers won’t notice their leaky faucet or broken shutters during home showings. But minor issues like these can leave buyers worrying about more serious — and costly — problems lurking out of sight.
Even if you do receive an offer, there’s a high likelihood that the buyer will hire a professional home inspector, who will flag any defects in their report. Neglecting to address a major issue could lead buyers to ask for costly repairs, money back, or worse yet, walk away from the purchase altogether.
To avoid these types of disruptions, it’s important to make necessary renovations before your home hits the market. I can help you decide which repairs and updates are worth your time and investment. In some cases, I may recommend a professional pre-listing inspection.
This extra time and attention can help you avoid potential surprises down the road and identify any major structural, system, or cosmetic faults that could impact a future sale.3
MISTAKE #4: Neglecting to Stage Your Home
Staging is the act of preparing your home for potential buyers. The goal is to “set the stage” to help buyers envision themselves living in your home. Some sellers opt to skip this step, but that mistake can cost them time and money in the long run. A 2021 survey by the Real Estate Staging Association found that, on average, staged homes sold nine days faster and for $40,000 over list price.4
Indoors, staging could include everything from redecorating, painting, or rearranging your furniture pieces to removing personal items, de-cluttering, and deep cleaning. Outdoors, you might focus on power washing, planting flowers, or hanging a wreath on the front door.
You may not need to do all these tasks, but almost every home can benefit from some form of staging. Before your home hits the market, I can refer you to a professional stager or offer our insights and suggestions if you prefer the do-it-yourself route.
MISTAKE #5: Evaluating Offers on Price Alone
When reviewing offers, most sellers focus on one thing: the offer price. While dollar value is certainly important, a high-priced offer is worthless if the deal never reaches the closing table. That’s why it’s important to consider other factors in addition to the offer price, such as:
Depending on your circumstances, some of these factors may or may not be important to you. For example, if you’re still shopping for your next home, you might place a high premium on an offer that allows for a flexible closing date or leaseback option.
Buyers and their agents are focused on crafting deals that work well for them. I can help you assess your needs and goals to select an offer that works best for you.
MISTAKE #6: Acting on Emotion Instead of Reason
It’s only natural to grow emotionally attached to your home. That’s why so many sellers end up feeling hurt or offended at some point during the selling process. Low offers can feel like insults. Repair requests can feel like judgments. And whatever you do — don’t listen in on showings through your security monitoring system. Chances are, some buyers won’t like your decor choices, either!
However, it’s a huge mistake to ruin a great selling opportunity because you refuse to counter a low offer or negotiate minor repairs. Instead, try to keep a cool head and be willing to adjust reasonably to make the sale. I can help you weigh your decisions and provide rational advice with your best interests in mind.
MISTAKE #7: Not Hiring an Agent
There’s a good reason 90% of homeowners choose to sell with the help of a real estate agent. Homes listed by agents sold for 22% more than the average for-sale-by-owner home, according to a recent study by the National Association of Realtors.5
Selling a home on your own may seem like an easy way to save money. But in reality, there is a steep learning curve. And a listing agent can:
If you choose to work with a listing agent, you’ll save significant time and effort while minimizing your personal risk and liability. And the increased profits realized through a more effective marketing and negotiation strategy could more than make up for the cost of your agent’s commission.
I can navigate the ins and outs of the housing market for you and make your selling process as stress-free as possible. You may even end up with an offer for your home that’s better than you expected.
BYPASS THE PITFALLS WITH A KNOWLEDGEABLE GUIDE
Your home selling journey doesn’t have to be hard. When you hire me as your listing agent, we’ll develop a customized sales plan to help you get top dollar for your home without any undue risk, stress, or aggravation. If you’re thinking of buying or selling a home, reach out today to schedule a free consultation and home value assessment.
Lesley Lambert, Western MA REALTOR with Park Square Realty 413-575-3611
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Higher Rates and Short Supply: The State of Western Massachusetts Real Estate in 2022
The last two years caught many of us off guard—and not just because of the pandemic. They also ushered in the hottest housing market on record, with home prices rising nationally by nearly 19% in 2021, driven primarily by low mortgage rates and a major supply shortage.1
But while some had hoped 2022 would bring a return to normalcy, the U.S. real estate market continues to boom, despite rising interest rates and decreasing affordability.
So what’s driving this persistent demand? And is there an end in sight?
Here are three factors impacting the real estate market right now. Find out how they could affect you if you’re a current homeowner or plan to buy or sell a home this year.
MORTGAGE RATES ARE RISING FASTER THAN EXPECTED
Over the past couple of years, homebuyers have faced intense competition for new homes—in part due to historically low mortgage rates that were a result of the Federal Reserve’s efforts to keep the economy afloat during the COVID-19 pandemic.
However, in response to a concerning level of inflation, the Fed is now reversing those efforts by raising the federal funds rate. And as a result, mortgage rates are rising, as well. Few experts predicted, though, that mortgage rates would go up as quickly as they have.
In January 2022, the Mortgage Bankers Association projected that rates would reach 4% by the end of this year.2 By mid-April, however, the average 30-year fixed mortgage rate had already hit 5%, up from around 3% just one year prior.3 On a $400,000 mortgage, that 2% difference could translate into an additional $461 per monthly payment.
Since then, mortgage rates have continued on an upward trend. So what impact are these rising rates having on demand? While many buyers had hoped for a cooling effect, experts warn that may not be the case.
Ali Wolf, chief economist at housing market research firm Zanda, told Fortune magazine, “Rising mortgage rates are having a counterintuitive effect on the housing market. Home shoppers are actually sprung into action in an attempt to buy a home before mortgage rates rise any higher.”4
Since inventory remains low, the resulting “race” has kept the homebuying market highly competitive–at least for now.
What does it mean for you?
While current 30-year fixed mortgage rates represent an increase over previous months, they remain well below the historical average of 8%.5 As inflation across the economy continues, the Fed is likely to raise rates further this year. Buyers should act fast to secure a good mortgage rate. I’d be happy to refer you to a lender who can help.
For sellers, speed is also of the essence. The pool of potential buyers may shrink as mortgages become more expensive. And if you plan to finance your next home, you’ll want to act quickly to secure a favorable rate for yourself. Contact me today to discuss your options.
HOME PRICES KEEP CLIMBING
History shows that higher interest rates don’t necessarily translate to lower home prices. In fact, home prices rose 5% between 1980 and 1982, a period of significantly higher mortgage rates and inflation.5
Forecasters expect that home prices will continue to go up throughout 2022, though likely at a slower pace than the 18.8% increase of the last 12 months.4 Bank of America predicts that prices will be up approximately 10% by the end of this year, while Fannie Mae estimates 11.2%.6,7
In addition to limited supply and a race to beat rising mortgage rates, home values are also climbing because of positive economic indicators, like low unemployment.8 Plus, rents are soaring–up 17% from a year ago–which is prompting more first-time homebuyers to enter the market.9 Add to that the continued popularity of remote work, and it’s easy to see why property prices continue to surge.
However, it’s not all bad news for prospective homebuyers. Economists expect that as mortgage rates rise, the rate of appreciation will continue to taper, though the effect may be gradual.
“Eventually mortgage rates will slow down home prices,” according to Ken Johnson, an economist at Florida Atlantic University interviewed by Marketwatch.10 “We should not see rapid upticks in prices as mortgage rates rise.” Forecasters agree—Fannie Mae expects price increases to slow to 4.2% in 2023.7
What does it mean for you?
While the pace of appreciation is likely to decrease next year, home prices show no signs of going down. However, current labor shortages are leading to higher salaries and better job opportunities for many workers. You may find that your income growth outpaces home prices, making homeownership more affordable for you in the future.
For homeowners, the outlook’s even brighter. You could find yourself sitting on a nice pile of equity. Contact us for a free home value assessment to find out.
INVENTORY REMAINS EXTREMELY LOW
As noted, one of the largest hurdles to homeownership is a lack of inventory. According to a February 2022 report by Realtor.com, there’s an expanding gap between household formation and home construction, which has resulted in a nationwide shortage of 5.8 million housing units.11
The origins of this shortage date back to the 2008 housing crisis, during which crashing home values led contractors to stop building new properties—a trend that has not been fully reversed.12
That decline in home construction also resulted in a decrease in the number of home building professionals, a trend that was exacerbated by job losses during the COVID-19 pandemic. Now, many builders are limited by their ability to find qualified labor.
Another major challenge is a staggering increase in the cost of materials. Pandemic-related supply chain shortages have been a significant driver, with home building material costs rising on average 20% on a year-over-year basis. The price of framing lumber alone has tripled since August 2021.13
These trends add tens of thousands of dollars to the cost of a typical home. Factors like a lack of buildable land in many areas, restrictive zoning, and a shortage of developers are also contributing to the issue.14
Most homebuying experts agree that the lack of inventory is the primary factor driving rising housing prices and unprecedented competition for homes. With available housing units near four-decade lows, the end of the current housing boom is not yet in sight.15
What does it mean for you?
Prospective buyers should be prepared to compete for a home, since low inventory can lead to multiple offers. You may also need to expand your search parameters. If you’re ready to look, we’re ready to help.
For sellers, the picture is rosier. In this strong market, your home may be worth more than you realize. Contact us to find out how much your home could sell for in today’s market.
I AM HERE TO GUIDE YOU
While national real estate trends can provide a “big picture” outlook, real estate is local. And as local market experts, we can guide you through the ins and outs of our market and the local issues that are likely to drive home values in your particular neighborhood.
If you’re considering buying or selling a home, contact me now to schedule a free consultation. I can help you assess your options and make the most of this unique real estate landscape.
Sources:
Fortune –
https://fortune.com/2022/03/14/housing-market-key-metric-inventory-zillow-bad-for-buyers/
5 Ways to Write a Winning Offer in Today’s Real Estate Market in Western Massachusetts
Our nation is in the midst of a serious housing crunch. Last year, a lack of inventory and soaring prices left many would-be homebuyers feeling pinched. But now, with interest rates climbing, many of them are also feeling desperate to lock in a mortgage—which has only added fuel to the fire.1
Fortunately, if you’re a buyer struggling to find a home in Western Massachusetts, I have some good news. While it’s true that higher mortgage rates can decrease your purchasing budget, there are additional ways to compete in a hot market.
Yes, a high offer price gets attention. But most sellers consider a variety of factors when evaluating an offer. With that in mind, here are five tactics you can utilize to sweeten your proposal and outshine your competition.
I can help you weigh the risks and benefits of each tactic and craft a compelling offer designed to get you your dream home—without giving away the farm.
The reality is, no one gets paid if a home sale falls through. That’s why sellers (and their listing agents) favor offers with a high probability of closing.
Sellers particularly love all-cash offers because there’s no chance of financing issues cropping up at the last moment. But don’t despair if you can’t pay cash for your home. According to the National Association of Realtors, only about 1 in 4 home purchases are all-cash deals, which means the vast majority are financed with a mortgage.2
If sellers are assured that financing will come through, buying with a mortgage doesn’t have to be a big disadvantage. The most important step you can take as a buyer is to get preapproved before you start looking for homes. A preapproval letter shows sellers that you are serious about buying and that you will be able to make good on your offer.
It’s also important to consider the reputation of your lender. While sellers may not know or care about a lender’s reputation, their agents often do. Some lenders are much easier to work with than others, especially if you are pursuing certain types of mortgages like FHA or VA loans.3 If so, you’ll want a lender who specializes in these types of mortgages. If you’re unsure who to choose, I am happy to refer you to reputable lenders known for their ease of doing business.
Buyers can show sellers that they’re serious about their offer and have “skin in the game” by putting down a large earnest money deposit.
Earnest money is a deposit held in escrow by a title company or the seller’s broker or lawyer. If the purchase goes through, it is applied to the down payment and closing costs—if the sale falls through, the buyer may lose some or all of that deposit.
While an earnest money deposit is typically around 1-2% of the sale price, offering a higher deposit can help demonstrate to the buyer that you are serious about the property.4 However, this strategy can also be risky. I can help you determine an appropriate deposit to offer based on your specific circumstances.
Most real estate offers include contingencies, which are clauses that allow one or both parties to back out of the agreement if certain conditions are not met. These contingencies appear in the purchase agreement and must be accepted by both the buyer and seller to be legally binding.5
Common contingencies include:
Since contingencies reduce the likelihood that a sale will go through, they generally make an offer less desirable to the seller. The more contingencies that are included, the weaker the offer becomes. Therefore, buyers in a competitive market often volunteer to waive certain contingencies.
However, it’s very important to make this decision carefully and recognize the risks of doing so. For example, a buyer who chooses to waive a home inspection contingency may find out too late that the home requires extensive renovations, and a buyer who waives the appraisal may risk their mortgage falling through. If you back out of a home purchase without the protection of a contingency, you could lose your earnest money deposit.6 I can help you assess the risks and benefits involved.
When it comes to selling a house, money isn’t everything. People sell their homes for a wide variety of reasons, and flexible terms that work with their personal situations can sometimes make all the difference. For example, if a seller is in the process of planning a significant move, they may prefer a longer closing timeline that gives them time to find housing in their new location.
Similarly, short-term leaseback options, in which the sale is completed but the seller retains the right to rent the home for a specified period of time, can be compelling.7 These arrangements enable the seller to use the money from the sale of their home to purchase their next house. A leaseback agreement also makes it possible for them to avoid moving twice when their next home is not yet ready to occupy.
Flexible closing dates and leaseback options can provide a powerful advantage for first-time homebuyers. If you have a month-to-month or easily transferable lease, for example, you may be able to offer a more flexible timeline than a buyer who is simultaneously selling their existing home.
Of course, the value of these terms depends on the seller’s situation. I can reach out to the listing agent to find out the seller’s preferred terms, and then collaborate with you to write a compelling offer that works for both parties.
In this ultra-competitive real estate market, one of the greatest advantages you can give yourself is to work with a skilled and trustworthy real estate professional. I will make sure you fully understand the process and help you submit an appealing offer without taking on too much risk.
Plus, I know how to write offers that are designed to win over both the seller and their listing agent. The truth is, listing agents play a huge role in helping sellers evaluate offers, and they want to work with skilled buyer’s agents who are professional, communicative, and courteous.
Once your offer is accepted, we’ll also handle any further negotiations and coordinate all the paperwork and other details involved in your home purchase. The best part is, you’ll have a knowledgeable, licensed advocate on your side who is watching out for your best interests every step of the way.
In many cases, a competitive offer doesn’t need to be all-cash, contingency-free, or significantly above asking price. But if you’re serious about buying a home in today’s market in Western Massachusetts, it’s important to consider what you can do to sweeten the deal.
If you’re a buyer, I can help you compete in today’s market without getting steamrolled. And if you’re a seller, I can help you evaluate offers by taking all the relevant factors into account. Contact me today to schedule a free consultation.
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