Experts Startled by Early U.S. New House Sales Increase

Monrovia house sales do usually respond in the seasonal pattern that is familiar in most other areas. Spring and summer lead the way for weather-related, financial, school scheduling and other family-related reasons. From now into well past July (and sometimes even August), house sales activity can be counted on to peak. Those are the normal expectations.

But when any segment of U.S. house sales numbers quadruple expectations even before spring bulbs see daylight, that’s worthy of special attention. That was the case last Thursday when the Commerce Department reported that in February, purchases of newly built homes rose by more than 6%. Since The Wall Street Journal’s panel of experts had forecast 1.4%, it drew headlines.

 In fact, this was the second month in a row for sharp rises in U.S. new home sales—and what could be a bright sign for Monrovia’s own prospects as the spring selling season begins. Press reports were, to put it mildly, enthusiastic:

• MartketWatch: “New-home sales roar to a 7-month high”
• Reuters: “…strength in housing should underpin economic growth”
• ABC News: “Americans…snapping up new homes at the fastest pace since July”
• Bloomberg: “U.S. New-Home Sales Climbed to a Seven-Month High”
• CNBC: “[Sales] were the highest since July of last year—and that was the best number since January of 2008”

Bloomberg’s Michelle Jamrisko deduced from the house sales rise that the impact from the recent rise in borrowing costs was, at most, “modest.” That sentiment was echoed by the Realtor, which quoted the National Association of Housing’s chief economist. “The uptick in mortgage interest rates,” he said, “is having a minimal effect.”

We’ll have to wait and see whether that is true vis-à-vis the impact of mortgage interest rates on Monrovia’s own house sales. They might be either “modest” or “minimal”—or the prospect of continuing hikes might induce more Monrovia prospects to get busy sooner rather than later. If “sooner” describes your own inclination, I hope you’ll decide to put thought into action by giving me a call!

April Can Be a Timely Entry Point for Monrovia Listings

It’s April—a time of year when area homeowners who haven’t yet added their homes to the Monrovia listings for sale may have a legitimate question about whether it’s too late to benefit from the spring selling season. This year, they may also be concerned that the rise in mortgage interest rates could discourage prospective buyers.

The answer to the first question is a qualified not—not too late! The only qualification has to do with the condition of the property itself. If it can be put into sound showable condition within a month or so, this is an excellent time to jump into the Monrovia listings—for a number of reasons.

We won’t know the actual foot traffic numbers for Monrovia until after the dust has settled at the end of summer, but we do know for certain that the law of supply and demand points to this year being a standout for sellers. In large part, because the economic outlook has been building optimism for months, early signs point to strengthening buying interest. Realtors^® across the nation report that last month’s buyer traffic was either strong or moderate. The index number for December through February was all the way up to 70 (that’s at the top of the chart)—up from 57 just a few months back. At the same time, the volume of new listings remained weak in most areas: down to 41 from 48. That would negate the most common argument for delaying entry into Monrovia’s listings—that is, the fear of getting lost in the shuffle as the real estate season peaks. If the number of listings continues to lag, that worry disappears. When demand is up and supply down, everyone from high school economics teachers to Warren Buffet agree there’s no better time to jump into the market.

As for the other concern—the Fed’s having raised borrowing rates—so far it hasn’t seemed to discourage buyers. The analysts at Housingwire offer three reasons why that might be happening. First, most potential homebuyers believe rates will rise further, prompting them to act sooner rather than later. Second, any slackening in mortgage applications will prompt lenders to relax the tight lending standards that have tended to depress the market. Lastly (this is a good one!), lenders had already factored in last month’s rate hike—so actual home loan rates aren’t likely to rise further for a while.

 The long and the short of it is that for anyone hesitating to add their home to this spring’s Monrovia listings, it’s not only not too late—it’s also an excellent idea. Another excellent idea is to give me a call ASAP: the Monrovia listings await!

For Monrovia Homeowners 55 and Up: a Practical Issue

While much attention is directed at the phalanx of youthful first-time homebuyers, the  Millennials and GenXers aren’t the only groups who are having a substantial influence on the direction of Monrovia’s real estate market. Whether they are tagged “mature,” “aging,” or downright “elderly,” the over 55-crowd comprise an increasingly influential part of the marketplace. They are also facing some challenges when it comes to housing—and where there are challenges, people with solutions stand to profit.

Last month, Freddie Mac—the quasi-governmental entity that studies changing directions in the nation’s real estate market—published an eye-opening look at what’s been going on with our older homeowners. They conducted a survey that queried a representative sample of 4,886 homeowners aged 55 and older.

One finding that everyone in Monrovia would probably expect was that the majority (about 2/3) of respondents hope to stay in their current homes. That proportion of the population hasn’t changed much over time. Another finding that no one in Monrovia would be awfully surprised to hear was that a similar number—the same two-thirds—admitted that their present residences aren’t accessible to anyone with arthritis or limited mobility (not to mention the wheelchair-bound).

 In other words, the wish and the reality are, at least for the moment, not entirely in sync. The real estate solution boils down to the issue of retrofitting. Eighteen percent said they had never given retrofitting a thought, but most of the others who have considered it are weighing how they will finance what can cost thousands of dollars. A third said they will rely on savings to create a home where they will be able to “age in place;” 26% plan to use HELOCs or bank loans; and a smaller percentages will rely on cash-out refi’s, reverse mortgages, or family loans.

            Freddie Mac didn’t provide a prescriptive commentary on the likely real estate repercussions of this aging in place phenomenon, but it seems as if  Monrovia contractors and sub-contractors will find themselves with a developing remodel category as the ranks of Monrovia’s retirement-aged continue to grow. As far as Monrovia’s real estate market is concerned, homes that are easily retrofitted should attract more of the 55+ crowd—as will single-level and ranch-style residences. Styles like multi-story Victorians which are generally associated with Gramma and Grandpop…well, perhaps not so much.

            Aging in place is something to which even youthful homeowners should give some thought—particularly if the greater plan is to live and work in Monrovia for the long haul. Whenever real estate plans are under consideration, I hope you’ll give me a call to discuss how I can help!