May 2018 Newsletter

The Pittsburgh real estate market has managed to carry over a lot of momentum from the end of last year. In fact, experts suggest that Pittsburgh real estate is firing on all cylinders. Home sales are up in nearly every region, dollar volume is up, and homebuilders are expressing a lot of confidence as their businesses grow in relation to the economy. For all intents and purposes, The Steel City is on a healthy trajectory.

The median sales price in the Pittsburgh real estate market is $114,000. That is a far cry from the national average, and down slightly from the same time last year. The median list price, on the other hand, is $128,450. Over the course of a year, the listing price has dropped 1.12 percent, or about $1,450. Pittsburgh didn’t have the wild swings in home prices that led to the foreclosure crisis, and has fewer distressed properties.

If you’re a seller, you’re in luck! The 2018 real estate market has been forecasted to be a seller’s market.

With this being said, the homes on the market right now are of much higher quality and in need of less upgrades than in the past. So as a buyer, you may pay a little more, but you are getting more as well.

Now, with this type of market, it’s easy to make a mistake and lose a house in a bidding war, or worse, to expect a buyer’s market and need a home in two weeks, only to be stuck without a home for several months as all of the available houses sell within hours of hitting the market.

The following are just a few mistakes to watch out for as a buyer in a seller’s market:

Ignoring that it is a seller’s market. Although “ignorance is bliss,” what you don’t know can hurt your chances of getting a home. When you’re ready to buy a home, be sure to do some research and figure out whether it’s a buyer’s or seller’s market, and then develop a real estate plan accordingly.
Being unprepared and unreachable. In a seller’s market, houses go within the blink of an eye. Your real estate agent may know about a home that’s perfect for you and is minutes away from being listed, which starts the timer on making an offer. If they try to contact you and you’re not available, that house could be gone before you even get to make an offer. Always be ready.
Not getting pre-approved. Pre-qualified means that you’ve gotten an official quote on how much you could obtain in a loan and, therefore, how much you could spend, but pre-approval is the most important thing in a seller’s market. If you’re pre-approved, then a lender is ready to give you the loan now, meaning that you can close the deal on a house more quickly. In a seller’s market, being pre-approved or not could be the difference between winning or losing a bidding war.
Waiting too long to make an offer. Perhaps worse than being unprepared and unreachable, waiting to make an offer in a seller’s market is a guaranteed loss. Some people even make offers before they’ve seen the home in person. Although that seems bananas, it’s actually a rather solid tactic: just because you’ve made the offer doesn’t mean the purchase is set in stone, you still have the chance to visit the home.
Not making the best offer you can. Your instinct may be to make a low-ball offer in order to avoid overpaying and to have more wiggle room to negotiate, but in a seller’s market, the sellers can wait (and not long either, given that multiple offers can come in at once) to see an offer with the price they want. If you really want the house, be prepared to make your best offer up front.
Overpaying. That said, it’s easy to get frustrated in a seller’s market with how many times your offer has been overlooked, or to be paranoid about that happening with your first home. Even so, always stay within your budget. Talk to your real estate agent about ways to ensure that you don’t overspend, and be sure to check out comparable houses so you can familiarize yourself with the typical features a home in your price range.
Being unprepared for a bidding war or negotiations. Bidding wars are never pleasant, but they’re especially likely to occur during a seller’s market. One way to ensure you don’t go over budget in an unexpected bidding war is to search for houses that are below your max budget. That way, you have wiggle room to spare. Talk with your real estate agent about more ways to prepare for a bidding war, and ways to avoid them, too.
Choosing an inexperienced real estate agent. Your best ally in a seller’s market is your real estate agent. Having an agent that’s familiar with the ways to navigate both seller’s and buyer’s markets is crucial to your home search. A good real estate agent will not only save you time and stress, but money as well.
Giving up. Yes, it’s more challenging to find the perfect home in a seller’s market. Yes, you will likely experience a few setbacks. When you’ve heard that your best offer as been rejected, it can be really frustrating, but giving up won’t help. Instead, talk with your real estate agent to figure out what went wrong and how you can improve, then implement a new plan of action and go after the next house. Remember that the real estate market is forever changing, so in the worst-case scenario, you can always wait until it’s a buyer’s market again.

And if you’re thinking of listing your home, there’s no better time than during a seller’s market. Receive a free home estimate at. http://www.pghhomes4sale.com. and get started on listing your home today!

If you are in the need of an experienced, full time agent, then give me a call to discuss your real estate needs.

Eric Bengel
Howard Hanna Real Estate
Direct Phone: (412) 889-6661
Office: (412)-963-6300
email: ericbengel@howardhanna.com
Website: EricBengel.howardhanna.com

The 2018 real estate market has been forecasted to be a seller’s market. What does a “seller’s market” mean, exactly?

In short, a seller’s market is when the demand for homes exceeds the current supply, giving the seller the upper hand. With homes in low supply, a seller could expect multiple people interested in a property and a possible bidding war. Properties can sell in a matter of days or even hours after hitting the market.

A seller’s market can come about in numerous ways, such as a drop in interest rates, allowing more people to qualify for purchasing properties, or increased employment opportunities bringing more people into the market.

Sellers can take advantage of the market by working with an experienced and knowledgeable real estate agent. The agent can properly price your home and help you sift through offers to find the ones to follow up on. Don’t always jump on the first offer you receive, however. You might receive a better one.

So here is the important question.....What is my home worth? By doing a comparative market analysis, touring your home, having seen dozens of houses this spring and having made several deals during 2018, I can help guide you to pricing your home correctly. This can be done in as little as 20 minutes.

In order to fully comprehend the value of a home versus its assessment, there are a few concepts to consider…

When talking about appraised value, this refers to what a property is actually
worth. In general, the appraised value is what it is that a buyer is willing to pay for a property when it is sold.

The assessed value, however, is nothing other than a municipality’s best guess at a property’s value – but only as it relates to how much they can increase the municipal tax coffers. In general, most people assume that there is a 1:1 correlation between the appraised value and the assessed value of a home.

Unfortunately, the assessed value of a home is often imprecise for any number of reasons.

For starters, (assuming that you’re not married to one) have you ever even seen a tax assessor? Most homeowners would readily acknowledge that they’ve never actually had one walk through their property. A town official would, therefore, have no idea whether or not the kitchen is new or reminiscent of a time when your grandmother growing up.

Also, savvy homeowners will often challenge the assessment by going before the Board of Assessment Review. In doing so, they hope to drive down the assessed value of the property and, by extension, drive down the annual total of their tax levy. This, however, does not necessarily mean that the house is worth less to a prospective buyer.

Conversely, elderly homeowners often times have inflated assessed values. Why? As a result of having resided in their home for 20+ years, the assessed value is continually driven upward while. At the same time, the homeowner may have limited ability or understanding of the opportunity to challenge the town’s valuation.

So, if the assessed value isn’t a great indication of the actual (or appraised) value of a property, then what is the significance that one can derive by looking at a property’s assessment?

The assessed value of a property is very important for prospective buyers to understand. If a property is being sold for $200,000 but has an assessed value of $170,000, prospective owners need to be aware that their tax levy will, more likely than not, increase within a year and half of transfer of title.

Looking at it another way, if a property is assessed for $230,000 but is being sold for $200,000, it would be beneficial for the new homeowners to challenge the assessment in order to drive down their tax bill and save a few extra bucks in their pocket.

That being said, I’m sure you won’t be surprised to hear that the town assessor’s office will not simply reduce the assessed value in accord with the sale price of a given property. Instead, a challenge needs to be made. For example, in New York State, the law mandates that the assessed value of a property, if challenged, needs to equal the sale price of a property made as a result of an arm’s length transaction.

So, if you’re thinking that you’ll purchase your mother’s $200,000 home for $50,000, I’m sorry to say that your taxes will not go down, as that is not considered an arm’s length transaction.

Guest Blogger, Mark Siwiec, is an agent with over 28 years of experience. His team of thirteen are responsible for over $63M in annual residential real estate sales. For more information about their services visit www.marksiwiec.com