The upside of this trend is consumers have the ample opportunity to find out about national trends in the market. The downside is that “scanning” doesn’t make you an expert and can create some seriously twisted misconceptions about what’s happening both nationally and locally.

Here are four of the 2014 myths that may have your buyer and seller clients in the wrong (or slightly skewed) mindset about today’s market.

Myth 1: You Have to Sell to Move On

Talks of inventory shortages, price increases, and a more normal housing market are conjuring thoughts of selling among many property owners. Why? They want to profit off of their investmentand move up to something bigger or better.

Unfortunately, the most common debate—to sell or not to sell—leaves out a great option in today’s market; becoming a landlord. Your seller prospects who show up wanting to list to get in to their next property may need a reality check.

Use resources like the rent vs. buy calculator and Trulia rental search results to show what they could be making in rental income. This may open up a new opportunity to profit and land you an instant buyer client who is primed and ready to move.

Myth 2: Buying Today Has Less Short-Term Risk

Prices are up, interest rates are down, buying must be “safe” again, right? Wrong.

During market upturns many buyers think that the “worst” in terms of market change is behind them.

Karl “Chip” Case, economist and co-creator of Case-Shiller Index was recently quoted saying, “If you’re not buying it for the long haul, don’t buy because there’s a good chance you’ll have to sit through some down cycles.”

Buying will always have its risks. That’s why choosing the right home for the right reasons is critical.

Download and pass along this helpful handout “4 Big Signs You Should Buy” to help your prospects and clients understand how to make the purchase that will benefit them in the long run.

Myth 3: The Starter-Buyer Pool Is Slim

If you’re selling a starter home or looking to jump in to home ownership for the first time, some of the headlines have been down-right depressing. Most read that Millennials and the market’s potential first timers are held up with 18 roommates or in their parents’ basements.

The real fact is that the true home ownership rate among Millennials has been steadily climbing since late 2011.

According to Chief Economist Jed Kolko, “The official homeownership rate published by the Census gives a misleading picture of homeownership trends. In fact, homeownership among young adults is both on the rise and not too far off from where demographics say it should be.”

Myth 4: It Takes Top-Dollar to Win a Bidding War

While price is one of the biggest factors in any housing deal, it doesn’t stand alone. Many buyers in this market are anxious because of the constant talks of price increases. They may think they can’t afford to compete for the home they really want.

This is where a little agent education can go a long way. In super-competitive markets and multiple offer situations, there are other motivators buyers can use to win the deal including:

• Committing a quick closing dates
• Limited or no concessions
• Accepting responsibilities for some needed repairs
• Heart-felt letters that share why buying this particular home is important

At the end of the day, there are humans on both sides of the tables with multiple priorities. Appealing to the other, less black-and-white needs of the seller can give your buyer clients the ammunition to close in this market.

Written By:  Jovan Hackly

WASHINGTON (January 28, 2013) – Pending home sales declined in December but have stayed above year-ago levels for 20 consecutive months, according to the National Association of Realtors^®.

The Pending Home Sales Index,^* a forward-looking indicator based on contract signings, fell 4.3 percent to 101.7 in December from 106.3 in November but is 6.9 percent higher than December 2011 when it was 95.1. The data reflect contracts but not closings.

Lawrence Yun , NAR chief economist, said there is an uneven uptrend. “The supply limitation appears to be the main factor holding back contract signings in the past month. Still, contract activity has risen for 20 straight months on a year-over-year basis,” he said. “Buyer interest remains solid, as evidenced by a separate Realtor^® survey which shows that buyer foot traffic is easily outpacing seller traffic.”

Yun said shortages of available inventory are limiting sales in some areas. “Supplies of homes costing less than $100,000 are tight in much of the country, especially in the West, so first-time buyers have fewer options,” he said. “We expect a seasonal rise of inventory in the spring to help, but a seller’s market may be developing. Much of the West is already a seller’s market for homes priced under a million dollars, but conditions are much more balanced in the Northeast.”

Even with tighter inventory, a pent-up demand and favorable affordability conditions bode well for the market. Yun expects existing-home sales to increase another 9 percent in 2013, following a 9 percent rise in 2012.

The PHSI in the Northeast fell 5.4 percent to 78.8 in December but is 8.4 percent higher than December 2011. In the Midwest the index rose 0.9 percent to 104.8 in December and is 14.4 percent above a year ago. Pending home sales in the South declined 4.5 percent to an index of 111.5 in December but are 10.1 percent higher December 2011. In the West the index fell 8.2 percent in December to 101.0 and is 5.3 percent below a year ago.

The National Association of Realtors^®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.

# # #

Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.

The index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity parallels the level of closed existing-home sales in the following two months.

An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined. By coincidence, the volume of existing-home sales in 2001 fell within the range of 5.0 to 5.5 million, which is considered normal for the current U.S. population.

NOTE: Fourth quarter metro area home prices will be published February 11, existing-home sales for January will be reported February 21 and the next Pending Home Sales Index will be on February 27; release times are 10:00 a.m. EST.

Mortgage rates continue to fall, with fixed-rate mortgage rates reaching new record lows last week for the second consecutive week, Freddie Mac reports in its weekly mortgage market survey.

“Fixed mortgage rates continued to ease somewhat this week to record lows and should help the ongoing housing recovery,” said Frank Nothaft, Freddie Mac’s chief economist.

Here’s a closer look at mortgage averages for the week ending early due to the holiday on Nov. 21:

• 30-year fixed-rate mortgages averaged a new low of 3.31 percent, with an average 0.7 point, dropping from last week’s 3.34 percent average. A year ago, 30-year rates averaged 3.98 percent.
• 15-year fixed-rate mortgages averaged a new record low of 2.63 percent, with an average 0.7 point, dropping from last week’s 2.65 percent average. Last year at this time, 15-year rates averaged 3.30 percent.
• 5-year adjustable-rate mortgages averaged 2.74 percent, with an average 0.6 point, holding the same as last week’s average. Last year at this time, 5-year ARMs averaged 2.91 percent.
• 1-year ARMs averaged 2.56 percent, with an average 0.5 point, rising slightly from last week’s 2.55 percent average. A year ago, 1-year ARMs averaged 2.79 percent.

Source: Freddie Mac

The street name of a neighborhood can affect the asking price on a home, at least according to a new survey by Trulia.

Trulia analyzed the median asking price per square foot among various types of address suffixes, like “Lane” and “Park.”

Street addresses with the words “Boulevard,” “Place,” and “Road” were found to have higher average asking prices than homes with addresses ending in “Avenue,” “Drive,” or “Street,” according to the Trulia study.

For example, homes that were located on streets with the word “Boulevard” in the address sold on average about $117 per square foot compared to properties located on addresses with “Lane,” which would sell on average for $101 per square feet, or “Street,” which sold for about $86 per square foot.

Homes that had “Boulevard” in the address had the highest asking prices of all the street-names Trulia studied.

Source: “Is it Better to Live on Park Boulevard or Park Lane?” HousingWire (Sept. 26, 2012)