April is Fair Housing Month, a time to celebrate the strides made in fair housing over the years and recommit to the goal of ensuring everyone has equal access to housing.
What is Fair Housing Month, and why is it important?
Fair Housing Month is observed annually to commemorate the passage of the Fair Housing Act, which was signed into law by President Lyndon B. Johnson on April 11, 1968.
The Fair Housing Act prohibits discrimination in the sale, rental, or financing of housing based on race, color, religion, national origin, sex, disability, and familial status.
The U.S. Department of Housing and Urban Development (HUD) enforces the Fair Housing Act and investigates complaints of housing discrimination.
Fair Housing Month serves as a reminder that everyone has the right to access safe, decent, and affordable housing regardless of their race, ethnicity, gender, religion, or any other protected characteristic, and that it is the responsibility of real estate professionals to ensure that this right is upheld.
As REALTORS, we play a crucial role in promoting fair housing practices in the community. These are some examples of how REALTORS promote Fair Housing Month:
Educate themselves and their clients: REALTORS can attend training sessions, seminars, and webinars on fair housing laws to stay up-to-date on the latest developments in the industry. They can also educate their clients about fair housing laws and their rights as homebuyers and renters.
Use inclusive language in their marketing: REALTORS can use inclusive language in their marketing materials to ensure they’re not inadvertently discriminating against any group. For example, they can avoid using words like “young couple” or “elderly” that could be seen as discriminatory.
Display the Fair Housing logo: REALTORS can display the Fair Housing logo on their websites, marketing materials, and office to show their commitment to fair housing practices.
Participate in community events: REALTORS can participate in local community events that promote fair housing and educate the public on fair housing laws.
Support fair housing organizations: REALTORS can donate to fair housing organizations or volunteer their time to support their mission of promoting fair housing practices.
Advocate for fair housing policies: REALTORS can advocate for fair housing policies at the local, state, and federal levels to ensure that everyone has equal access to housing.
There are a few important points for the general public to be aware of as well:
The Fair Housing Act requires any property owner or organization to make reasonable accommodations for any disability.
Equal access is to be provided by all properties when working with REALTORS, regardless of background.
Be mindful of language and advertising that suggests a preference to ward certain groups – this is against the law!
Report discrimination. If you encounter discrimination in the real estate industry, make sure to report it. The National Fair Housing Alliance has a hotline where you can report discrimination, and the Department of Housing and Urban Development (HUD) also accepts complaints.
Everyone has a role to play when it comes to fair housing. By staying informed, working with REALTORS, and providing education we can all work together to make fair housing a reality for everyone.
Days on the market has increased significantly in the last 90 days.
Sales prices have pulled back slightly to start the year.
High demand price ranges are still low on inventory, but improved from most of 2022.
Still a Seller’s Market
While things are much calmer than they were 6-9 months ago, it’s still a seller’s market.
Seller’s are still have to adjust their expectations as multiple offers become less common.
The number and frequency of price reductions has been much higher the last 90 days as the market has adjusted.
Overpricing your property is still one the worst mistakes you can make when preparing to list your home, listen to the advice of your REALTOR!
Homes that are updated between the $200,000-$350,000 price range have a greatly reduced time on the market compared to the overall statistics above.
With the increased marketing time and more calm market having a marketing plan and paid advertising run is more important than it was for most of 2022.
Don’t let your home just be listed, make sure the REALTOR you work with is going to market it!
Interest Rates and Buyers
Interest rates are expected to fluctuate around the 6.5% median for the next several months.
Interest rates are projected to fall below 6% by the end of the year.
The slight pull-back in prices is most likely temporary.
Overall home prices are projected to increase by 2-4% by the end of the year.
Due to price increases these small rate changes are not going to have any significant impact in the near future.
Don’t be afraid to buy the home you like now, and refinance in a few years if interest rates go down.
Our team of specialized experts is standing by! If you have any questions about the market, interest rates, or other questions call us at (325) 695-8000. We will have a specialist in your residential or commercial market interest ready to help you and guide you every step of the way.
Pending sales are in a much better place looking at February
Prices have stayed in the $230,000-$250,000 median range since April of 2022
Mortgage Rates
Mortgage rates are expected to remain in the low 6% range for most of the year. There is a pullback anticipated to occur in the back half of 2023 where we might see rates closer to 5.5%. However buyers should not expect any significant changes up or down. Take a look at the quick thoughts below from one of our National Association of REALTORS economists.
There is plenty of opportunity in the market, it’s just a normal market. Sellers have to reign in their expectations and buyers have to embrace slightly higher mortgage rates while getting to enjoy a balanced market. Mortgage rates are still some of the lowest they’ve been in the past 20 years.
With property rental rates being at an all time high there are many paths to home ownership! Give us a call at (325) 695-8000 to be connected with one of our residential specialists to discuss the various options to get you in a home. It’s a great start to building wealth, and to avoid paying 100% interest on your rental!
Getting mortgage approval is inevitable for most homebuyers unless you pay cash. A mortgage pre-approval letter is a powerful way to get an edge in a bidding war. Plus, mortgage pre-qualification lets buyers know how much house they can afford. Discover how to get through a successful mortgage approval, one of the most crucial steps in the homebuying process.
Consult with a Mortgage Lender First
Eager homebuyers may feel tempted to attend open houses before obtaining a mortgage. However, most sellers expect qualified buyers to receive a lender pre-approval letter. Therefore, the first step to housing success is meeting with a mortgage lender. Your real estate agent can often refer you to reliable resources based on your unique circumstances. Always be honest, so you have the groundwork for turning your situation into approval.
Pre-Qualification vs. Pre-Approval
Often buyers use online loan calculators to see how much money can borrow. While these are helpful tools, they are meant to provide information rather than approval. Usually, a soft credit check is required for pre-qualification, while a hard credit check is necessary for pre-approval. Many factors, such as your current credit score and time at employment, play a role in the approval process. Only a formal letter from your lender stating the mortgage approval amount proves you’re a qualified buyer.
Time to Shop Around
Once you understand the differences between pre-qualification and pre-approval, it’s time to shop around for the best lender. Some lenders may offer better rates and terms than others, depending on your creditworthiness and resources. If you don’t get immediate approval or the rates are high, work with your real estate agent and financial advisor to find a viable lender who works with buyers in your circumstances. Additionally, some borrowers get pre-approval with conditions that must be met before qualifying for a mortgage loan.
Start With a Budget
While mortgage qualification and approval indicate how much house you can afford, budgeting is crucial to maintaining this asset. A home is often the most significant investment of a lifetime. Though you may qualify to buy a house up to a specific amount, consider expenses such as taxes, homeowners’ insurance, mortgage insurance, and home maintenance. Then think about your monthly budget and how much you want to pay for a monthly mortgage. Some buyers decide to get a lower-priced home to ensure they can afford it. Ideally, your housing payment should be about 25 percent of your monthly income.
What Should I Expect for Mortgage Pre-Approval?
A mortgage pre-approval requires a hard credit check, and borrowers often must provide documentation to prove certain financial information. For example, lenders typically look at your credit history, income, employment history, and FICO score. Also, lenders consider your debt-to-income (DTI) ratio and the loan-to-value (LTV) ratio on a potential home for sale. As a result, an appraisal is ordered on the house you want to buy to ensure you don’t pay more for the home than it is worth. Finally, the lender also considers the home’s condition and works with a title company to confirm ownership of the house and verify there are no claims or liens against it before issuing a formal mortgage pre-approval letter.
How Do I Get Mortgage Pre-Approval?
Lenders will look at your finances and expect the documentation to prove the numbers, such as:
Employment verification
Personal identification
Proof of income, including child support, disability, and other payments
Credit history, often a score of 600 or higher is required, with some exceptions
Proof of assets, including bank accounts, property, and vehicle
Debt-to-income ratio (DTI) to show you have the income to cover all financial obligations
Bank statements for the past sixty days
Recent pay stubs
W-2 statements
Social security number
Tax returns and Schedule K-1 (Form 1065) for the previous two years, especially for those who are self-employed, who may also need to supply a profit and loss statement
Divorce papers, if applicable
Death certificate, if applicable, such as a widowed spouse applying for a VA mortgage
A gift letter, if all or part of the downpayment is a gift
Once you submit this evidence to the lender, it takes up to three business days to get your loan estimate and determine whether you are pre-approved for a mortgage. Depending on the mortgage loan, the downpayment may be between zero and twenty percent of the property price. Usually, a pre-approval lasts for one to six months, which gives you enough time to find your dream home. Always check the expiration date to avoid going through this process again.
What if I Don’t Get Pre-Approval?
Some borrowers may be declined by several lenders. Instead of getting frustrated, use the process to determine if financial areas need improvement. For example, paying down debt and saving for a larger down payment could mean the difference between mortgage approval and denial. Determined buyers often change their circumstances within months or a year to get into the right situation to purchase a house.
What is the Difference Between Pre-Approval and Final Mortgage Approval?
A pre-approval letter proves to sellers you are a qualified buyer. A pre-approval can put you ahead of other buyers making an offer in a hectic housing market. Once you make an offer on a home, the formal mortgage approval process begins. First, a home inspection is scheduled to ensure the house is in the proper condition to qualify for a mortgage loan. An appraisal is also done to verify that the house is worth your price. Then the underwriting process begins when your lender verifies your income, debts, and assets to qualify for a loan. If the lender contacts you for more information or documents, respond quickly to ensure you close the deal. Once the formal mortgage approval is issued, you’re ready to schedule a closing.
The homebuying process starts with a dream and mortgage approval. Knowing how much house you can afford makes it easier to shop around and make an offer. With some financial planning, you’ll soon enjoy the advantages of homeownership!
The market is changing, and the wild ride of the past two years is over.
Quick Thoughts
The closed sales decline should be taken with a grain of salt. A slowing market happened right as the holidays began which are a historically slower time.
Annually closed home sales for Abilene are down just over 8% which is a better metric to work with.
Inventory has increased drastically in the last half of 2022.
Prices have remained mostly flat since April, and are expected to remain so for most of 2023.
Seller Expectations
The sweet ride for sellers is over. An important aspect of the rising inventory is also how many new construction homes that are on the market. Your home value is always competing against what buyers can acquire in the new construction market, and they’ve got a lot of options. As of the time of me writing this there are 95 new construction homes sitting active on the market! The lower end price of these options is still in the $225,000-235,000 range.
As a seller you need to take your REALTOR’s advice to heart. You need to be hyper aware of what your pre-existing home offers when a buyer could go buy a brand new everything home for $230,000.
Buyers overwhelmingly show they prefer homes that need little to no work. Why is that? Remodeling is expensive, stressful, and can be difficult. Like many other things in the world supplies are more expensive, schedules are longer, and labor is more expensive. You can spend $20,000 updating a home much quicker these days than you could a few years ago. That is a crucial aspect of pricing your home against new construction when you consider the cost, and hassle, it would take to complete those updates.
It’s a different market, and you need a REALTOR who can give you the good data and advice. Seller concessions can play a crucial role in this, and having a REALTOR who can help you navigate which concessions are the most effective is equally important.
Buyers Get Relief, but Affordability Issues Remain
Getting qualified for a loan can still be a huge barrier for buyers. Rising interest rates, increased cost of living, and tighter lending requirements all play a factor here. The affordability of housing is becoming increasingly more of a problem combined with the price increases of homes the past two years.
Buyers, in most cases, no longer have to worry about trying to see a home the first hour it hits the market to put an offer in. Home buyers are not often having to submit prices significantly above asking price and/or waiving their due diligence items.
For the buyers that can get qualified for a mortgage the market is a much less stressful one. There are still areas with inventory shortage, but it’s much less than it has been.
Looking to 2023
Interest rates are expected to remain in the low 6 range for most of the year.
Prices are expected to remain mostly flat.
Number of sales is expected to slightly decline, which we’ve already seen begin.
Sellers have to adjust their expectations.
Buyers need to be diligent in managing debt and not buying more than they can really afford.
Set two company records for most under contract sales in a single month
Highest company sold volume in 20 years at 66.2 million in closed sales!
Celebrated 65 years of being a locally owned and operated Abilene business
Over 30 non-profits and events supported in 2022
Quality over quantity with outstanding numbers in the image above
Commercial Real Estate Success
31 closed and funded commercial real estate transactions in 2022
1031 Exchange and NNN Investors successfully represented
Retail, Office, and Medical were a majority of transactions
See some of the highlights in our video below:
It’s been a crazy market, and even crazier when you realize there are now more than 730 licensed REALTORS in Abilene. I work hard to make sure they have the best support system in real estate, but none of that matters without their dedication and expertise they bring to clients.
2023 will not be without challenges, but I couldn’t ask for a better team to face it with. So long 2022, but it was a pretty good way to celebrate our 65th year in business here in Abilene.
Happy 2023 and give us a call if we can help you with any of your commercial or residential real estate in Abilene and The Big Country!
November is historically a slower month, and overall home sales were very low
The lower median sales price is largely a factor of the limited volume
Interest rates peaked during November which impacted buyer activity
Moving Forward
Interest rates have pulled back, and are expected to stay closer to 6% moving forward
Prices are expected to remain mostly flat in 2023
Total number of sales is expected to decline
Interest Rate Buy Downs
This is a powerful tool for buyers. Seller concessions are becoming increasingly common again as the housing market returns to a more balanced position. An interest rate buy down is an option you should discuss with your REALTOR and lender when writing your offers. This is the absolute best way to reduce your monthly mortgage payment. A typical concession cost can result in $300-500 reduction in your monthly payment. This is looking at average and slightly above average home prices in Abilene, TX.
There are additional options that can be more short term. The benefits of this would be looking at refinancing in a few years, or even if you might move in a shorter period of time.
With interest rates being so low for several years before this recent rise this tool hasn’t been used in a while. We believe it is highly effective and our team of Abilene REALTORS are here to answer your questions and guide you through the process.
Happy Holidays!
The Better Homes and Gardens Real Estate Senter, REALTORS team is thankful this holiday season. We’re thankful for our amazing team, our wonderful clients, and to have called Abilene home for over 65 years now. The donations and support we’ve been able to give back over this holiday season are only possible because you choose to trust us with your business.
There’s never been a more important time to have an experienced expert on your side. Give us a call if you have any questions about homes or commercial real estate in Abilene, TX!
Prices are expected to remain mostly flat through 2023. With a potential to rise ~3%. There is also potential for prices to drop 5%.
There is no data to remotely support any kind of “crash” occurring.
Interest rates are expected to remain in the current 6.5-7% range for several months if not most of 2023.
We’re still looking for the 3 months inventory level that is considered a healthy market.
Moving Forward
We’ve spoken at length about adjusting expectations in the past several months blog posts. I won’t rehash that today. The market has returned to a more balanced and normal state. It’s going to take a little longer for most homes to sell now. They aren’t going to be selling much above asking price. Buyers can look at a few homes before making an offer. It’s the market we worked in for a long time before the past two years. It’s still a good time to buy or sell property in Abilene, TX. Life continues on, and the market is stable. You aren’t going to miss a big upswing in prices if you are trying to sell. You aren’t going to miss any big downswing as a buyer.
By working with a local expert who is studying the data, knows Abilene, and has experience through these kinds of market changes you can make good transactions. You can be confident in the investment of this large asset. Our team at BHGRE Senter, REALTORS brings our 65 years of experience serving the Abilene residential and commercial real estate markets to bear to help our clients make informed and confident decisions. Contact Us to get connected with a professional today.
Industry Thoughts
Several large public real estate companies reported earnings recently, and there were a lot of losses. There is no doubt that there are challenges ahead for REALTORS and the companies in the real estate sector. My big takeaway here is to be cautious of companies you never heard of before the past 2-3 years. The state of the market allowed things to take place that aren’t sustainable, and business models to exist that won’t function moving forward. When you work with that REALTOR you need to ask yourself are they going to be here in a few years when I need them again? 65 years of Senter, REALTORS. 100 years of Better Homes and Gardens. That’s the legacy we bring to the table. Tested, established, and trusted. We’ve served your families and businesses for generations and will continue to do so. In a real estate market that is ever changing let us be the constant you can count on!
Until next time!
Shay Senter – President & Owner, BHGRE Senter, REALTORS
The market is changing. Having professional, local, and full-time guidance to guide your real estate decisions is more important than ever. Interest rates have risen more than expected, and positive inflation news remains aloof. The inventory recovery continues to be strong as we get closer to returning to three months of available inventory. Home prices have remained flat since April of 2022.
Seller Reality Check
For a vast majority of sellers the market is in a mostly balanced state. Still slightly favoring sellers, but it’s changed dramatically from what we’ve all been experiencing for the past year. In the Abilene market we’ve seen approximately 15 price reductions come through the MLS every day. If you aren’t adjusting to the new normal and discussing your price with your REALTOR, you need to be! As cost of living continues to rise, higher interest rates increase mortgage payments, and continuing to work with record high housing prices has cooled the insane demand that fueled most of 2022.
Sellers need to expect to make a few more concessions. Some common examples are offering to pay for that home warranty or pay some buyer closing costs. Updates throughout the home have only become more important as the buyer demand has dwindled and buyers continue to show a very strong trend in preferring move-in ready homes. Contractor and general employment shortages continue to pose challenges to the remodel market, and for those buyers who are willing to take on a “fixer upper”. The hot market has left us, for now, and until things change with interest rates and cost of living you can expect the market to remain cool.
I would remind anyone reading this that BHGRE Senter, REALTORS offers upfront, no fees, funding for various home remodel projects when you list your home with us. Several thousands of dollars of funding, a project coordinator, and you just pay at closing! It’s one of the many benefits we offer our clients to get the most profit for your home. Contact us to learn more about this program.
Buyer Relief
For both agents and buyers life is easier. The amount of multiple offer situations has declined drastically. Buyers aren’t having to make offers sight unseen or waiving all of their due diligence items. It’s simply a normal market. This is not to say buyers are without unique challenges of their own. With inflation and interest rates the way they are many buyers are finding themselves unable to afford a home they could have afforded a few months ago. The average mortgage payment has increased by approximately $700 per month since last year due to rising prices and interest rates. That’s a large expense increase for most families!
The Bottom Line
It’s still a good time to be in the market to buy or sell. For buyers, if you know you’re going to live in that home for at least 3-4 years then becoming a home owner to start that path of equity and wealth is still a solid plan. Rent prices have seen similar levels of increase, and interest rates are expected to go down eventually. Whenever that occurs you can refinance your home to take advantage of those lower rates in the long term. Date the rate, and find a home you can enjoy. If you are going to be a short term buyer there is a very strong case to just keep renting as the costs associated with selling your home make it a difficult case to be in your favor.
Sellers still get to enjoy unprecedented amounts of equity in most cases. While homes are sitting on the market a little longer than they used to you will walk away from the closing table with a lot of profit to pursue your next dream. Taking the few extra steps to perform a few high impact updates, and making sure house shows well can make a big difference in this new market.
The market is changing, and data has to be accounted for every week! It’s never been more important to have a full-time and local expert to offer you guidance and advice on your real estate goals. Trust in our 65 years of experience, our local expertise, and high producing REALTORS to get the most out of your real estate transactions. Reach out to the office, or your favorite BHGRE Senter agent, for a free consultation on your current needs.
The market is changing. The heavy seller’s market we experienced for a good 15 months is no more. It is still a seller’s market, but not drastically so. Demand has dropped significantly due to inflation, rising cost of living, and mortgage interest rates continuing to rise. The median sales price remains largely unchanged since late March. I wanted to share some insight from NAR chief economist Lawrence Yun that provides a good viewpoint on these issues and how they are impacting the housing market and overall economy.
Still A Good Time to Buy
While housing affordability has become a significant issue if you can afford to buy it’s still a good time to do so. It’s important we remember there is essentially no data to suggest a pullback in housing prices. In fact, all data points to housing prices continuing to rise at much more normal rates of 3-5% annually. Interest rates are expected to increase in the short term, but with very little volatility. The odds are good that if you tried to wait for a slightly better interest rate the increase in housing prices over the course of several months would eliminate any potential gain. I encourage buyers to buy now if they are able and find a home they love. If interest rates change significantly in a few years you can always refinance.
Seller Expectations
The amount of equity in a vast majority of homes has never been higher. You will still get the highest price for your property in history. However, it can take a little bit longer to sell. While homes can still sell quickly I would encourage sellers to begin to plan for 2-3 months of marketing time in most situations, and still expect a 30-45 day closing period after that. Doing some work upfront to improve the curb appeal, fix minor repairs, and make sure the home shows well have also become more important. Demand has decreased slightly, and there are more homes on the market than there has been in almost two years!
As the number of listings continue to increase you need to ask how is your property standing out? Do you have good photos? What kind of advertising campaigns are being run for your property? Is your agent working to get feedback, and being available to answer questions as buyers get more patient and inquisitive? Factors that have mattered less these last two years are now important again as this market shifts back to something that is mostly normal. Reach out to any of our Roadrunners who you can find here: https://senterrealtors.com/our-agents for a free consultation on your home value, determine your equity, and the market conditions for your neighborhood.
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