Hi. I'm Diane McNelis, Award winning Texas Realtor(R) with Coldwell Banker Southern Homes. Selling and Buying homes in Southeast Texas can be complicated. I'm here to help. When we work together I become your advocate. My goal is to get you the best deal possible and to exceed your service expectations. On my blog, I share tips and strategies for selling and buying homes in Southeast Texas.

Best Time to Sell a Home in Southeast Texas

Yesterday's post showed Beaumont home inventory levels in different price ranges.  Today, let's look at how Southeast Texas homeowners can capitalize on the current situation.

Three Ways Low Inventory Is a Win for Sellers

Three Ways Low Inventory Is a Win for Sellers | MyKCM

The number of houses for sale today is significantly lower than the high buyer activity in the current housing market. According to Lawrence Yun, Chief Economist for the National Association of Realtors (NAR):

"There is no shortage of hopeful, potential buyers, but inventory is historically low."

When the demand for homes is higher than what’s available for sale, it’s a great time for homeowners to sell their house. Here are three ways low inventory can help you win if you’re ready to make a move this fall.

1. Higher Prices

With so many more buyers in the market than homes available for sale, homebuyers are frequently entering into bidding wars for the houses they want to purchase. This buyer competition drives home prices up. As a seller, this can definitely work to your advantage, potentially netting you more for your house when you close the deal.

2. Greater Return on Your Investment

Rising prices mean homes are also gaining value, which drives an increase in the equity you have in your home. In the latest Homeowner Equity Insights ReportCoreLogic explains:

“In the second quarter of 2020, the average homeowner gained approximately $9,800 in equity.”

This year-over-year growth in equity gives you the ability to put that money toward a down payment on your next home or to keep it as extra savings.

3. Better Terms

When we’re in a sellers’ market like we are today, you’re in the driver’s seat if you sell your house. You have the power to sell on your terms, and buyers are more likely to work with you if it means they can finally move into their dream home.

So, is low housing inventory a big deal?

Yes, especially if you want to sell your house at the perfect time. Today’s market gives sellers immense negotiating power. However, it won’t last forever, especially as more sellers return to the housing market next year. If you’re considering selling your house, the best time to do so is now.

Bottom Line

One of the professional services I offer to Beaumont, Lumberton, and Orange home owners with no obligation and no cost is a custom market analysis specifically for your home.  It will show you what the competition has recently sold for and give you a suggested list price and sales price range.  If you’re interested in taking advantage of the current sellers’ market, let’s connect today to determine your best move in the Southeast Texas real estate market. 

Sincerely,

Diane

Diane McNelis, Coldwell Banker Southern Homes


Beaumont Home Sales, Inventory by Price

Beaumont Shortage of Homes For Sale

The definition of a balanced housing market is when there is a six-month supply of homes for sale.  To calculate the months supply of inventory you take the current homes available for sale divided by the number of homes that sold during the past six months and then multiply by six.  

Take a look

Sales by Price Range

Shortage Below $400,000

The lower the price the bigger the shortage of homes available.  Homes less than $200,000 have less than a two month supply available for buyers.  Even in the price range between $200,000-$399,999 there is a shortage of available homes.  The only price range where we see a balanced market is in the $400,000-$600,000 price range.  

Some Final Thoughts

Right now is a challenging time to be a buyer in Beaumont if you are looking for a home priced under $399,999.  Due to the low inventory level and the high demand you have to stay on top of all new listings as soon as they come on the market.  A top, local professional Realtor can help you be the first to see any new homes.  Waiting for Zillow or Realtor.com isn't your best strategy in this market. 

For anyone thinking about selling a home in Beaumont, there is a great opportunity.  Interest rates are giving buyers more buying power.  There is little competition from other sellers.  This could be the best time to list your home for sale.  

If you are planning to make a upsize, downsize or buy your first home in the near future, let's connect and look at all your options.

Sincerely,

Diane 

Diane McNelis, Coldwell Banker Southern Homes


How Much Has Your Home Value Increased in 2020

2020 has been an unusual year

Beaumont, Lumberton and most Southeast Texas homeowners have seen the value of their home increase since January.  You might ask how can that be?  It is a strange side effect of the Covid pandemic.  Two things are leading to home values going up in Southeast Texas.  1. Fewer homes are on the market.  This means there is a limited supply. 2. Buyer demand driven by historically low interest rates.  Buyers have more buying power when rates are lower.  For Southeast Texas homeowners that are considering selling their home this is a great time to have a professional home valuation.  Your home might be worth more than you realize.  That means more home equity.  

Two Important Impacts of Home Equity

Two Important Impacts of Home Equity | MyKCM

Equity continues to rise, helping American homeowners secure a much more stable financial future. According to the most recent data from CoreLogic, the average homeowner gained $9,800 in equity over the past year. In addition, experts project 2020 home prices to continue rising. With prices going up, equity gains will also keep accelerating. Black Knight just reported:

“The annual percent change in the overall median existing single-family-home price has skyrocketed in the past several months, with recent numbers at three to five times higher than rates seen in the past several years.”

Jeff Tucker, Senior Economist at Zillow, just qualified recent price increases as “jaw-dropping” and “within a hair's breadth of double-digit year-over-year appreciation.”

Knowing equity will help enable many homeowners to better survive the economic distress caused by the ongoing pandemic, it’s important to break down two key homeowner benefits of increasing equity.

1. Equity Increases a Homeowner’s Options to Buy a New Home

Aside from the financial damage of the last seven months, there has also been a tremendous emotional toll on many people. Shelter-in-place mandates, quarantine requirements, and virtual schooling have all made us re-evaluate the must-have requirements a home should deliver. Having equity in your current house gives you a better opportunity to move-up or build your perfect home from scratch.

Mark Fleming, Chief Economist at First American, recently explained:

“As homeowners gain equity in their homes, they are more likely to consider using that equity to purchase a larger or more attractive home – the wealth effect of rising equity.”

If you need to make a move, the equity in your current home can help make that possible – right now.

2. Equity Enables Homeowners to Help Future Generations

An increase in home equity grows overall wealth, which can transfer to future generations. The Federal Reserve, in an addendum to their recent Survey of Consumer Finances, explains:

“There are numerous ways families can transmit wealth and resources across generations. Families can directly transfer their wealth to the next generation in the form of a bequest. They can also provide the next generation with inter vivos transfers (gifts), for example, providing down payment support to enable a home purchase or a substantial wedding gift.”

The Federal Reserve also explains another way wealth (including the additional net worth generated by an increase in home equity) can benefit future generations:

“In addition to direct transfers or gifts, families can make investments in their children that indirectly increase their wealth. For example, families can invest in their children's educational success by paying for college or private schools, which can in turn increase their children's ability to accumulate wealth.”

The Takeaway

Equity can help a homeowner grow their confidence in a more stable financial future. It provides near-term move-up options and creates a positive impact for future generations. In many cases, the largest single investment a person has is their home. As that investment appreciates in value, financial options increase too.  

If you are interested in finding out what the value of your home in Lumberton, Beaumont or any part of Southeast Texas is today, let's schedule a consultation.  I'll be glad to show you the most current comparable home sales and give you my professional opinion of what your home will sell for.  There's no cost and no obligation to list your home.  Interested?  I'm here to help with all your real estate needs. 

Sincerely,

Diane

Diane McNelis, Coldwell Banker Southern Homes


Number of Homes for Sale is Down in Lumberton, Beaumont

This infographic is pretty convincing.  If you are thinking about selling a home in Southeast Texas, don't wait.  

The September Housing Report from the Beaumont Board of Realtors shows just how low the inventory of homes for sale is in Southeast Texas.

Active Listings are Down from last September

  • Orange County Down 14.6% 
  • Hardin County Down 38.5% 
  • Beaumont Down 18.7% 
  • Jefferson County Down 25.1% 

Selling Your House Is the Right Move, Right Now [INFOGRAPHIC] | MyKCM

Southeast Texas Neighborhoods with Low Inventory

Where we really have a shortage of homes in Beaumont and Lumberton is in the under $300,000 price range.  Homes in good condition in the Westend of Beaumont particularly in the school zones of Sallie Curtis and Regina Howell are in high demand.  The same in true in Lumberton.  There are available new construction homes and resale homes priced in the $400,000 and up range but most buyers don't want to spend that much on a home.  

Here's a look at some popular Southeast Texas neighborhoods

  • Stonegate, Lumberton 1 home for sale
  • Boykin, Lumberton 0 homes for sale
  • Grace Lake Estates, Lumberton 2 homes for sale
  • Copper Point, Lumberton 5 homes for sale.  All new construction.
  • Barrington Heights, Beaumont 10 homes for sale.  All above $350,000
  • Westchase Village, Beaumont 2 homes for sale
  • Fairfield, Beaumont 1 home for sale
  • The Meadows, Beaumont 4 homes for sale

The Takeaway

People don't always think the fall is a good time to sell a home but due to limited supply, this fall presents a real opportunity for anyone thinking of selling a home in Southeast Texas.  If you would like to find out what your home would sell for in the current market, let's schedule a time to talk.  

Sincerely,

Diane

Diane McNelis, Coldwell Banker Southern Homes


Southeast Texas Home Prices Increasing

2020 brought many uncertainties as businesses grappled with Covid.  One surprise that you might not have expected is that home prices in Southeast Texas continued to rise even though the pandemic was slowing many businesses.  The median home price in Beaumont was up 13.6% in September compared to last September.  The median home price in Lumberton was up 28.7% compared to the same period last year.  Will home prices keeping rising in Southeast Texas? 

Home Values Projected to Keep Rising

Home Values Projected to Keep Rising | MyKCM

As we enter the final months of 2020 and continue to work through the challenges this year has brought, some of us wonder what impact continued economic uncertainty could have on home prices. Looking at the big picture, the rules of supply and demand will give us the clearest idea of what is to come.

Due to the undersupply of homes on the market today, there’s upward pressure on prices. Consider simple economics: when there is high demand for an item and a low supply of it, consumers are willing to pay more for that item. That’s what’s happening in today’s real estate market. The housing supply shortage is also resulting in bidding wars, which will also drive price points higher in the home sale process.

There’s no evidence that buyer demand will wane. As a result, experts project price appreciation will continue over the next twelve months. Here’s a graph of the major forecasts released in the last 60 days:Home Values Projected to Keep Rising | MyKCM

I hear many foreclosures might be coming to the market soon. Won’t that drive prices down?

Some are concerned that homeowners who entered a mortgage forbearance plan might face foreclosure once their plan ends. However, when you analyze the data on those in forbearance, it’s clear the actual level of risk is quite low.

Ivy Zelman, CEO of Zelman & Associates and a highly-regarded expert in housing and housing-related industries, was very firm in a podcast last week:

“The likelihood of us having a foreclosure crisis again is about zero percent.”

With demand high, supply low, and little risk of a foreclosure crisis, home prices will continue to appreciate.

My final thoughts

Originally, many thought home prices would depreciate in 2020 due to the economic slowdown from the coronavirus. Instead, prices appreciated substantially.  I don't predict any price deprecation for next six months in the Southeast Texas housing market.  As long as inventory levels of homes for sale remains low then we can expect prices to continue on the upward trend. 

Sincerely,

Diane

Diane McNelis, Coldwell Banker Southern Homes 


Sellers' Market Continues in Beaumont and Lumberton

If you have read the blog before then you have seen me post about what makes a buyers' market and what makes a sellers' market.  

The Number of Homes For Sale

It all has to do with the number of homes for sale.  Very simply when there are too few homes for sale it is a sellers' market.  Too many homes for sale makes for buyers' market. 

Here in Southeast Texas we are definitely, 100% in an inventory shortage situation.  

This infographic shows the national months inventory of homes for sale over the past several years.  

Kcm-infographic-1603204954

 

How Low Are They? Inventory levels by Area

  1. Orange County 4.3 months supply of homes for sale
  2. Hardin County 2.9 months supply of homes for sale
  3. Beaumont 3.1 months supply of homes for sale
  4. Jefferson County 2.9 months supply of homes for sale

Data is from home sales in September and inventory currently on the market in the Beaumont MLS.  This is an overall statistic for all price ranges.  The data can be broken down even further into price points.  

Final Thoughts

Selling a home in Southeast Texas still requires proven marketing techniques for a seller to earn top dollar.  Buying a home in Southeast Texas still requires research and knowledge about the market to make a successful offer.  Sometimes the information can be overwhelming.

Don’t let the plethora of seemingly conflicting information on the housing market stop you from moving forward with your life. Let’s get together to ensure you get the valuable counsel you need so you can make the right decision for you and your family.

Sincerely,

Diane

Diane McNelis, Coldwell Banker Southern Homes


Ready, Set, Sell! Selling Homes in Southeast Texas. Episode 1

Welcome to my new video series.  I'll be featuring short videos packed with tips on things you can do as a seller to help your home sell for top dollar in the shortest amount of time possible.  In this first episode I give three tips that help with curb appeal.

Thinking about selling a home in Southeast Texas, let's discuss some proven marketing techniques that will make your home stand out.  

Sincerely,

Diane

Diane McNelis, Coldwell Banker Southern Homes


Homes for Sale in Beaumont Near All-Time Low

The number of homes for sale in Beaumont has been low all of 2020.   In February and March Beaumont had just a 3.1 month supply of homes for sale.  In August, Beaumont had a 4.1 months supply of homes for sale.  What does that does relative to a normal market?   A balanced, normal real estate market has a six month supply of homes for sale.  This means there is enough for buyers to choose from but not too much to decrease home values.  Any time there is less than a six month supply of  homes then buyers have less to choose from and prices tend to go up.  

The #1 Reason Not to Wait to List Your House for Sale

The #1 Reason Not to Wait to List Your House for Sale | MyKCM

Many industries have been devastated by the economic shutdown caused by the COVID-19 virus. Real estate is not one of them.

Mark Fleming, Chief Economist for First American, just reported:

“Since hitting a low point during the initial stages of the pandemic, the only major industry to display immunity to the economic impacts of the coronavirus is the housing market. Housing has experienced a strong V-shaped recovery and is now exceeding pre-pandemic levels.”

Buyer demand is still strong heading into the fall. ShowingTime, which tracks the average number of buyer showings on residential properties, just announced that buyer showings are up 61.9% compared to the same time last year. They went on to say:

“Normally, real estate activity begins to slow down in the late summer, but this year it peaked in July, August and into September.”

There Is One Big Challenge

Purchaser demand is so high, the market is running out of available homes for sale. Just last week, realtor.com reported:

“Since the beginning of the COVID pandemic in March, nearly 400,000 fewer homes have been listed compared to last year, leaving a gaping hole in the U.S. housing inventory.”

The National Association of Realtors (NAR) revealed that, while home sales are skyrocketing, the inventory of existing homes for sale is dropping dramatically. Below is a graph of existing inventory (September numbers are not yet available):The #1 Reason Not to Wait to List Your House for Sale | MyKCMHomebuilders are increasing construction, but they cannot keep up with the high demand. Bill McBride, founder of the Calculated Risk blog, in discussing inventory of newly constructed houses, notes:

“The months of supply decreased to 3.3 months...This is the all-time record low months of supply.”

What does this mean for sellers?

Anyone thinking of putting their home on the market should not wait. A seller will always negotiate the best deal when demand is high and supply is limited. That’s exactly the situation in the real estate market today.

Next year, when the pandemic is hopefully behind us, there will be many more properties coming to the market. Don’t wait for that increase in competition in your neighborhood. Now is the time to sell.

Final Thoughts

It used to be said that the spring was the best time to sell a home.  That isn't always true.  When a market has a low inventory of homes for sale that creates an opportunity for sellers.  Let’s connect today to get your house on the market at this optimal time to sell. 

Sincerely,

Diane

Diane McNelis, Coldwell Banker Southern Homes


Down payments on Homes Vary across Southeast Texas

Whether you plan to buy a home in Lumberton, Orangefield, Vidor or Beaumont, the amount of money you need to have saved up varies.   On the lowest amount needed side, there is the 0% down VA and USDA loan.  Only certain people in the case of the VA loan and certain places in the case of the USDA loan qualify for these 0% down loans.  On the highest side some people pay cash for their homes.  

September Home Sales across Southeast Texas

  1. 360 homes closed
  2. Cash =75
  3. VA = 28
  4. USDA = 7

 

Do You Have Enough Money Saved for a Down Payment?

Do You Have Enough Money Saved for a Down Payment? | MyKCM

One of the biggest misconceptions for first-time homebuyers is how much you’ll need to save for a down payment. Contrary to popular belief, you don’t always have to put 20% down to buy a house. Here’s how it breaks down.

A recent survey by Point2Homes mentions that 74% of millennials (ages 25-40) say they’re interested in purchasing a home over the next 12 months. The study notes, “88% say they have significantly less savings than the average national down payment amount, which is $62,600.”

Thankfully, $62,600 is not the amount every buyer needs for a down payment in the United States. There are many different options available, especially for first-time homebuyers (millennial or not). That amount can also be significantly less, depending on the purchase price of the house.

According to the National Association of Realtors (NAR), “The median existing-home price for all housing types in August was $310,600.” (These are the latest numbers available). NAR also indicates that:

“In 2019, the median down payment was 12 percent for all buyers, six percent for first-time buyers, and 16 percent for repeat buyers.” (See graph below):

Do You Have Enough Money Saved for a Down Payment? | MyKCM

That means if a qualified first-time buyer purchases a home at today’s median price, $310,600, with a 6% down payment, in reality, the down payment only amounts to $18,636. That’s nowhere near $62,600.

Knowing there are also programs like FHA where the down payment can be as low as 3.5% of the purchase price for a first-time buyer, that up-front cost could be significantly less – as little as $10,871 for the same home noted above. There are also other programs like USDA and loans for Veterans that waive down payment requirements.

The Point2Homes study also shares how much millennials have indicated they’ve saved for a down payment. As we can see in the graph below, 39% have already saved enough for a down payment on a median-priced home. Another 47% are close to reaching that goal, depending on the purchase price of the home.Do You Have Enough Money Saved for a Down Payment? | MyKCMUnfortunately, the lack of knowledge about the homebuying process is keeping many motivated first-time buyers on the sidelines. That’s why it’s important to contact a local real estate professional to understand the requirements in your local area if you want to buy a home. A trusted agent and your lender can guide you through the process.

My final thoughts

Be careful not to let big myths about home buying keep you and your family out of the housing market. In many cases if you have 3.5% of the purchase price saved up we can structure an offer where the seller will help pay some of your closing costs.  If you are planning to buy a home in Southeast Texas in 2020.  Let’s connect to discuss your options today.


Southeast Texas Homes For Sale By Owner (FSBO)

Is it a wise decision to sell your home yourself?  The process is called FSBO or For Sale by Owner.  In Southeast Texas you can find homes for sale by owner in one of two ways: the first is driving around neighborhoods looking for signs, the second is looking on sites where FSBO's are listed.  Zillow lets owners list their homes for sale by owner.  Most other major real estate websites don't.  As a local professional REALTOR here in Southeast Texas, I have an opinion on the subject.  A homeowner can not effectively reach the number of potential buyers that a top local REALTOR can.  The number of potential buyers that are reached is the key to selling your home for top dollar.   

6 Reasons You’ll Win by Selling with a Real Estate Agent This Fall

6 Reasons You’ll Win by Selling with a Real Estate Agent This Fall | MyKCM

There are many benefits to working with a real estate professional when selling your house. During challenging times, like what we face today, it becomes even more important to have an expert you trust to help guide you through the process. If you’re considering selling on your own, known in the industry as a For Sale by Owner (FSBO), it’s critical to consider the following:

1. Your Safety Is a Priority

Your family’s safety should always come first, and that’s more crucial than ever given the current health situation in our country. When you FSBO, it is incredibly difficult to control entry into your home. A real estate professional will have the proper protocols in place to protect not only your belongings but your family’s health and well-being too. From regulating the number of people in your home at one time to ensuring proper sanitization during and after a showing, and even facilitating virtual tours for buyers, real estate professionals are equipped to follow the latest industry standards recommended by the National Association of Realtors (NAR) to help protect you and your family.

2. A Powerful Online Strategy Is a Must to Attract a Buyer

Recent studies from NAR have shown that, even before COVID-19, the first step 44% of all buyers took when looking for a home was to search online. Throughout the process, that number jumps to 93%. Today, those numbers have grown exponentially. Most real estate agents have developed a strong Internet and social media strategy to promote the sale of your house. Have you?

3. There Are Too Many Negotiations

Here are just a few of the people you’ll need to negotiate with if you decide to FSBO:

  • The buyer, who wants the best deal possible
  • The buyer’s agent, who solely represents the best interest of the buyer
  • The inspection companies, which work for the buyer and will almost always find challenges with the house
  • The appraiser, if there is a question of value

As part of their training, agents are taught how to negotiate every aspect of the real estate transaction and how to mediate the emotions felt by buyers looking to make what is probably the largest purchase of their lives.

4. You Won’t Know if Your Purchaser Is Qualified for a Mortgage

Having a buyer who wants to purchase your house is the first step. Making sure they can afford to buy it is just as important. As a FSBO, it’s almost impossible to be involved in the mortgage process of your buyer. A real estate professional is trained to ask the appropriate questions and, in most cases, will be intimately aware of the progress being made toward a purchaser’s mortgage commitment.

Further complicating the situation is how the current mortgage market is rapidly evolving because of the number of families out of work and in mortgage forbearance. A loan program that was available yesterday could be gone tomorrow. You need someone who is working with lenders every day to guarantee your buyer makes it to the closing table.

5. FSBOing Has Become More Difficult from a Legal Standpoint

The documentation involved in the selling process has increased dramatically as more and more disclosures and regulations have become mandatory. In an increasingly litigious society, the agent acts as a third-party to help the seller avoid legal jeopardy. This is one of the major reasons why the percentage of people FSBOing has dropped from 19% to 8% over the last 20+ years.

6. You Net More Money When Using an Agent

Many homeowners believe they’ll save the real estate commission by selling on their own. Realize that the main reason buyers look at FSBOs is because they also believe they can save the real estate agent’s commission. The seller and buyer can’t both save on the commission.

study by Collateral Analytics revealed that FSBOs don’t actually save anything by forgoing the help of an agent. In some cases, the seller may even net less money from the sale. The study found the difference in price between a FSBO and an agent-listed home was an average of 6%. One of the main reasons for the price difference is effective exposure:

“Properties listed with a broker that is a member of the local MLS will be listed online with all other participating broker websites, marketing the home to a much larger buyer population. And those MLS properties generally offer compensation to agents who represent buyers, incentivizing them to show and sell the property and again potentially enlarging the buyer pool.”

The more buyers that view a home, the greater the chance a bidding war will take place.

Key Takeaway 

Listing on your own leaves you to manage the entire transaction by yourself. Why do that when you can hire an agent and still net the same amount of money? Don't think you can net the same amount of money when you have to pay a 6% commission.  There's an easy way to find out.  Let's go through a market analysis that is prepared specifically for your home.  You can see all the ways I will bring more buyers and maximize your sales price.  Before you decide to take on the challenge of selling your house alone, let’s connect to discuss your options.  

Sincerely,

Diane

Diane McNelis, Coldwell Banker Southern Homes