Economist Says Summer May Be the Hottest Season to Buy and Sell
While spring is traditionally the busiest time for real estate
sales, this summer could prove to be the hottest time for buying or
selling a home, according to a real estate economist at Florida Atlantic
University.
“From a buyer’s perspective you have more choice, but you’re also
competing against far more buyers,” says Ken Johnson, Ph.D., a professor
of finance and associate dean at FAU’s College of Business, who also
has sold hundreds of homes as a real estate broker. “Sellers are also
looking to sell over the summer, particularly if they have children and
want to get a deal done before school starts again.”
U.S. new home sales posted their strongest month in more than eight
years in April, while existing home sales rose for the second straight
month, spurred by steady job growth and historically low interest rates.
Johnson doesn’t see the strong demand for housing slowing anytime soon.
“In some cities, especially in the Midwest, prices have plenty of room
to go up,” says Johnson, co-author of the quarterly Beracha, Hardin
& Johnson Buy vs. Rent Index. “Real estate is still a really good
buy in places like Cincinnati, Chicago and Cleveland.”
While he has some concern about some cities such as Dallas, Denver and
Houston, where the real estate market has been particularly hot, Johnson
doesn’t foresee a dramatic downturn in prices for most of the country.
In South Florida, where Johnson lives, fundamental factors supporting
the housing market such as rising personal incomes, appear to be strong.
However, prices are probably too high for those looking to buy real
estate as an investment right now, especially in certain markets, said
Johnson, noting the difficulty buyers will have in finding a good deal
right now.
“In markets like South Florida, Seattle and Portland, you may find
you’re going to start to see lower probabilities that you’ll be able to
successfully market your property,” he says. “But while you may see
extended marketing time and prices going flat, there’s no reason to
believe there’s going to be a big dent in prices in these cities.”
Johnson urges buyers to get prequalified for a mortgage before they
start shopping. He also discourages buyers from making the purchase
contingent on the sale of their own home or asking to take possession of
the home before closing. That’s a prescription for disaster, he said.
“Be up front. Disclose pertinent information,” he says. “Do not ask the
seller to take on risk that might seem trivial to you. You have to think
about the other party.”
Sellers should make themselves and their home available to be shown by
real estate agents and make sure it’s as pristine as possible, Johnson
said. Make necessary improvements such as new paint, fixtures and
flooring. But don’t go too far, Johnson warned.
“Be careful,” he says. “What you think is a nice improvement is another man’s gold shag carpeting.”
For more information, visit www.fau.edu.For more information, please contact me at Announcements@mycbpp.com or toll free at 800.505.8111. Coldwell Banker Platinum Partners Real Estate Service in Georgia and South Carolina.
