The year is coming to an end and we have now seen the second cut in rates in 2019. The Federal Reserve announced that there will be a reduction in the key, short-term federal funds rate by 25 basis points to a top rate of 2%. The cut stems from a set of increases enacted in 2018.

Another big move on the Fed’s part was a reduction in the interest rate it pays on bank reserves. This move came in hopes to improve the ability of the Fed to target the federal funds rate in markets.

Concerns in the future economy has the Fed’s leadership in disagreement and their hold on the interest rate it pays on bank reserves in a weaker state. Fed regional presidents, members of the FOMC, had a disagreement that was the highest number since the year 2014. Three of the Fed regional presidents voted no for the change in in the rate. Two opposing it altogether and one urging a 50 basis point reduction.

Even with a few concerns the Fed’s still believe the labor market is strong and the economy is still rising at a “moderate” rate. This fares the same in the home building industry. Household spending is still going strong.

The action of reversing the high cycles of 2018 has been a positive in the decline in rates this year. This has been a net positive for what the future holds for the housing demand and home construction. This comes off the 10-year low for housing affordability that occurred last Fall.

The National Home Builders Association forecast there will be another cut before year end.

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A day ago CNBC.com reported that the Fall housing market will shift to a buyer’s market. Good news for those searching for a home to purchase but not quite what a potential seller of a home wants to hear. According to the website, fewer consumers believe now is a good time to purchase a home. The site reports that appraisals have gotten more stringent and potential buyers are more cautious and are willing to take their time when it comes to purchasing a home.

These factors are contributing to  an increasingly crowded housing market. There is more competition sellers have to face. If you are planning to sell your home in the near future, here are seven tips to follow to help stand out in the crowded market.

Just like the game show title, “The Price Is Right”, price your home out of the market and it will be bypassed by potential buyers. Pricing becomes crucial in a crowded market. It is a fine line for those selling their home who want to get top dollar but want to sell fast. Pricing your home slightly lower (approximately 2% lower) than comps in your area will make your home stand out above similar listed homes in your neighborhood. The slightly lower price will be inciting to buyers when there is an abundance competition.

Always have your home’s “game face” on. If someone comes knocking at your door unexpectedly and wants to see your home, they should be welcomed into a show-ready home. It is always good to deep clean and de-clutter before you list your home. Remember, to always maintain a tidy house throughout your listing. Sellers need to be able to showcase their home at a drop of a hat.

Remember the saying “try to see it through someone else’s eyes”? This also holds true when it comes to selling your home. Homeowners get used to the clutter or how their home looks after they have lived there for a long time. The cramped closet or clutter in the corner becomes a part of your home that you really do not notice anymore. Walk into your home looking at it from a buyer’s point of view. What should be fixed or de-cluttered? You want to put extra emphasis on features that buyers would like to have in their home.

Now days many buyers look through photos via their Realtor or the internet. The same floorplan can look very different when presented in a photo. It is crucially important to have professional photographs done of your home. A professional photographer knows how to stage and photograph a home to give it an edge over the other homes listed for sale in your neighborhood.

Again the age old saying “keep your friends close and your enemies closer” can come in handy when you and a good many of your neighbors are selling your home at the same time. Do not look at your neighbors as competition, rather look at them as teammates. Get together and work on selling you neighborhood as a great place to live. A great way to do this would be to hold a joint open house.

Highlight your homes best assets. If you renovated or made any upgrades, show them off. Make sure your home’s listing features a list of upgrades or renovations that sets your home apart from the other listings.

Last and most importantly work with a Realtor. Choose a Realtor who has a lot of inside knowledge on your neighborhood. A Realtor is trained to look at real estate trends to determine how best to sell your home and give it a leg up on the competition.

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Many potential home owners have many different preferences when it comes to buying a home. According to the NAHB Economics team, millennials show an increase in interest in new homes built for sale and offered by a builder.

Statistics show that between 2007 and 2018, millennials who desired to purchase a new home, went from 28% to 41%. Existing homes stayed around 40% in the 11-year time span and custom-built homes fell from 37% to 18% during the same time span.

The data shows that millennials, at 41%, are the first in the running when it comes to wanting a brand new home offered by a builder.  The next generation for this preference was seniors coming in at 31%. The bottom two were baby boomers at 29% and gen x at 28%.

Several factors play into the desire for new homes for millennials. They want to live in the central city, which is opposite for the majority that still want to live in the suburbs. Millennials want a set of amenities that are not necessarily custom such as trash compactors, wet bars, built-in kitchen seating and an exercise room. Millennials are okay with smaller homes on smaller lots if they are able to get what they want in amenities and finishes.

Other data that was reported in the study looked at existing homes and custom homes built on owned lots. When it came to existing homes, baby boomers were the highest at 48%, gen x at 47%, seniors at 43% and millennials came in last at 41%. Those that desired a home custom built on an owned lot all hovered between 18% to 27%.

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New home sales are on the rise but the existing home sales are keeping up. According to the National Association of Realtors (NAR) total existing home sales reported a seasonally adjusted annual rate of 5.42 million.

The NAR reported that on a year-over-year basis, existing home sales were 0.6% up than a year ago which included single-family homes, townhomes, condominiums and co-ops. This is the first year-over-year gain in almost a year and a half.

Homes stayed on the market 29 days in July 2019 with 51% of homes on the market selling in less than a month. All-cash sales composed 19% of transactions up from June 2019. Median sale price of existing homes in July was up 4.3% from a year ago at $280,000 and existing condominium/co-op prices were up 2.5% with a median price of $254,300.

Sales by regions saw an increase, except for the Northeast and West, for existing homes sales in July 2019. Existing home sales in the Midwest grew 0.8% and in the South existing homes rose to 2.7%.

NAR has encouraged the market to add more inventory which is a good sign. The falling mortgage rates, July 2019 at 3.77%, and lower home prices are a big plus.

“We are optimistic that the latter part of this year and the early months of 2020, at least, will see a significant upturn in sales. That, in turn, will boost construction activity in due course,” wrote Ian Shepherdson, founder and chief economist of Pantheon Macroeconomics, in a research note.

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This year the housing industry has been on an uphill victory. According to NAHB Chief Economist Robert Dietz newsletter, Eye on the Economy, there are two main factors that are helping the single-family housing sector.

Job growth has been on a positive path in 2019. It is reported that there is a historically low unemployment rate at 3.7%. In June 2019 there were 224,000 jobs added to the country’s workforce. The first six month of the year saw an average of 172,000 new jobs per month.

In the residential construction industry alone the increase was 21,000 jobs in June. The average for the first six month of the year in residential construction stands at 5,800 per month. Since the recession, there have been a total of 923,800 positions added in residential construction.

Also to aid in the booming housing industry is lower mortgage rates. Freddie Mac reports that the averaging 30-year fixed-rate is 3.8%. This is the fifth straight month that mortgage rates have fallen making this one of the best times to finance a home.

A recent industry survey shows that the mortgage loan applications for both purchase and refinance surged in the first week of June 2019.

In the most recent survey put out by the Freddie Mac’s research team it states that this “will help sustain the momentum in the housing market in 2019.”

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La Provence was one of north shore’s dining landmarks until it closed in 2018. What was once a French restaurant, will now open as a hotel and events venue. The spot is perfect for this as it has been compared in the past to a classic French country inn.

Cayman and Danny Sinclair, brothers and local entrepreneurs, purchased the property which they plan to turn into the small hotel and events venue naming it the Inn at La Provence.

“I feel like there’s so much value in that name, it’s so recognized; it means a lot to people. It would be a shame to lose that,” said Cayman Sinclair.

The single-story building currently has several dining rooms and a “lodge-like lounge” with a fireplace. La Provence, which was built and opened by Chris Kerageorgiou in 1972, became one of the north shore’s most respected restaurants. Well known for Kerageorgiou’s quail gumbo and braised rabbit, his lamb a la Grecque and the little pots of chicken liver pâté set down with the bread, La Provence gave residents a great place to create fond memories.

“My family would stay for hours, sitting around that fire in the front room,” he said. “It was a classic place. We’re really excited to be able to revitalize it.”

The brothers plan will be to reconfigure the existing building for the events venue and build small bungalow-style structures on the two-acre property. The 28 room hotel and events venue would be a perfect place for weddings, corporate meetings and retreats.

“We can host the event, they can stay on the property, and from here they can go to other restaurants for rehearsal dinners or their night out,” he said.

Set to open in Fall of 2019, the Inn at La Provence will also open to the public for brunch on Sundays.

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Liz’s Where Y’ at Diner in Mandeville was tragically burned in a fire June 11, 2019. The closing of this landmark at 2500 Florida Street was sad for everyone. Liz is not letting the fire detour her business. She plans to reopen.

Tuesday morning, June 11, 2019, a fire broke out during a busy morning rush. The fire began in the dry goods storage area and spread from there causing major damage to the building. The restaurant’s 10 year anniversary is today and will be celebrated when the restoration is complete.

Liz praised the community for their love and support, “The love we’re getting … the wonderful things people are saying and doing for us. The free meals (from neighboring restaurants). It’s amazing. It’s truly amazing.

“I’ll tell you: It’s overwhelming.”

Liz Munson opened “the laid-back diner” ten years ago in Mandeville on Florida Street. This had been her dream after waitressing for fifteen years. The New Orleans native wanted to celebrate the New Orleans’ classic Creole food in the tranquil setting of the Northshore.        

The fire hasn’t stopped her from working nor her employees. She will keep paying her employees even though the restaurant is closed. Liz has created a make shift office out of a picnic table next door. She and her 33 employees are working on getting the restaurant restored and reopened.

Luckily the damage was mostly in the kitchen area, however everything will have to be replaced. Munson explains that, “The smoke (damage) is everywhere. Little things like the pencils and the pens. Every sheet of paper. Everything smells like smoke.”

Patrons will still enjoy the same food, and same atmosphere as before. Liz shoots for a Labor Day reopening. There is a GoFundMe page that has been set up to help cover cost.

Click here to contribute to the GoFundMe account for Liz’s Where Y’ at Diner.

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Baby Boomers have been a big target in the housing market but the future will see a shift in who the future housing market will capture. According to Morgan Stanley, Millennials and Gen Z will slowly take over.

In 2019, it is reported that Millenials (those born between 1981 and 1996) will become the largest generation in the nation. If all follows as planned, Gen Z (those born between 1997 and 2012) will take over in 2034. What does these mean for the housing market? This “youth boom” which is the merging of these two generations will heighten the economy and encourage a drive for demand in housing.

“We’re going to see strong demand for housing, both multifamily and single family, over the medium to long term,“ says Richard Hill, who leads Morgan Stanley’s U.S. REIT Equity and Commercial Real Estate Debt research teams.

We can already see the effects in the housing market in many U.S. regions. Areas report bidding wars as the Millennials a forming households. Home prices across the country continue to rise due to the lack in inventory. There are a reported 22 million people between the ages of 20 and 24 across the United States that will be adding 3.6 million new households within the next five years.

“Our findings show that household formation will increase 1.7 times annually over the next five years, compared with the prior eight years,” says James Egan, a strategist on the firm’s Securitized Products Strategy team.

The areas with the change in the trend market are definitely effected in different ways. The West and Southwest are seeing a rapid change because the Millenials outnumber the Baby Boomers. This is the exact opposite for New England and the Rust Belt which have the least Millenial population.

With a new generation comes a new way of buying, iBuyers. An iBuyer is a company that uses a web-based questionnaire and home-value algorithms to purchase homes. Basically they use technology to make an offer on your home instantly. iBuyers will account for 3% of the U.S. existing home sales by 2030.

“3% might seem small in percentage terms,” says Brian Nowak, Head of U.S. Internet Research, “But given the large size of the residential market, which is around six million transactions a year and $1.8 trillion in transaction value, it means iBuyers would purchase roughly 175,000 homes in 2030.”

The U.S. housing market will see a massive change in both target market and purchasing tools within the next decade. This is great news for both single-family homes and multi-family homes.

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Spring is not the only thing warming up this year, the National Association of Realtors (NAR) just reported that the pending home-sales rose 3.8% in March 2019 (April 2019 will be released May 30, 2019.)

“There is a pent-up demand in the market, and we should see a better performing market in the coming quarters and years,” said Lawrence Yun, NAR’s chief economist.

The Pending Home Sales Index reported its findings based on a forward-looking indicator of the contract signings which rose to 105.8 in March from 101.9 in February. Yun notes that the increase has been influenced by the influx of mortgage applications and favorable mortgage rates.

The break down by region is contrasting. In the Northeast there has been a decline in pending sales of 1.7% in March to 90.5. In the Midwest however, pending home sales grew 2.3% to 95.3 in March. The two regions with the biggest jump in March were the South which rose to 127.2 (a 4.4% jump) and in the West to 95.1 an 8.7% rise.

So far spring is looking up for the housing market and only time will tell if the selling season will remain a hot market.

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