Tag Archives: price

Tom Ferry Discusses Real Estate Pricing Strategy and Price Reduction Conversations

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What do you do when your listing isn’t getting any attention? According to Tom there’s only one reason: It’s not priced correctly. The homeowners want answers. But the market has spoken.

What now? How do you get those homeowners to see the writing on the wall? In this edition of the Tom Ferry Show Tom answers this question and gives you the exact script to get that much-needed price reduction. He also shows you how to avoid the situation in the future by getting the home priced correctly from the start.

Central Air Conditioning Commands $5,500 Premium

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Buyers are more likely to say air conditioning is essential in their new home than outdoor features like a patio or deck

Seattle, WA – July 3, 2018 (PRNewswire) Buyers are willing to spend more for the comforts of a cooler home. A new Zillow® analysis(i) finds that homes with air conditioning sold for 2.5 percent more than homes without it, which is a premium of nearly $5,500 for the typical U.S. home.

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The premium for air conditioning is highest in San Antonio, where homes with air conditioning sold for a 5.8 percent premium. Cincinnati is close behind, with a 5.7 percent premium for homes with air conditioning. Homes with air conditioning also sold for a five percent premium in Detroit, Indianapolis and Las Vegas.

Buyers put a higher value on air conditioning than outdoor home features like a patio or deck. Air conditioning was listed as a required feature by 62 percent of buyers, while a private outdoor space was deemed essential by 48 percent of buyers, according to the 2017 Zillow Group Consumer Housing Trends Report(ii).

Unusually hot summer days have become more common over the past few decades, according to the Environmental Protection Agency(iii), which may help explain why air conditioning is becoming more of a necessity in many markets. Across the country, 66.1 percent of homes that sold in the past year have air conditioning. In markets with some of the hottest climates, air conditioning was in nearly every single home that sold in the past year. It was in 99.1 percent of homes sold in Las Vegas, and 97.9 percent of homes sold in Phoenix.

“With summer temperatures hitting record highs across the country, today’s home buyer places a premium on the once-upon-a-time luxury amenity of air conditioning,” said Zillow Senior Economist Aaron Terrazas. “Individual design preferences or decorating styles might deter buyers from certain homes, but there is a strong consensus in favor of air conditioning, although in the nation’s fastest-moving markets, AC may weigh relatively low for buyers eager to find any home they can. In historically more temperate climates, some homes – especially older ones – aren’t as likely to have air conditioning. But in places where temperatures regularly reach triple digits, it’s hard to find a home without air conditioning.”

Renters put a slightly higher premium on air conditioning. The typical U.S. rental on Zillow in the last year with central air conditioning rented for 2.8 percent more than rentals in the same market that don’t have air conditioning, or about $40 per month.

This may be because renters are more limited than homeowners when it comes to adding air conditioning. They likely can’t install a central air or HVAC system for example, and window units may not be as effective at cooling an entire home.

The New York, Las Vegas and Phoenix metros – all markets with sweltering summers – had the highest rent premiums for air conditioning. While central air conditioning is prevalent throughout Las Vegas and Phoenix, it is fairly rare in the New York metro, which includes northern New Jersey and Long Island. Just 17.2 percent of New York metro rental listings advertise air conditioning, compared with 54.7 percent of on-market rentals overall.

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Zillow

Zillow is the leading real estate and rental marketplace dedicated to empowering consumers with data, inspiration and knowledge around the place they call home, and connecting them with great real estate professionals. In addition, Zillow operates an industry-leading economics and analytics bureau led by Zillow Group’s Chief Economist Dr. Svenja Gudell. Dr. Gudell and her team of economists and data analysts produce extensive housing data and research covering more than 450 markets at Zillow Real Estate Research. Zillow also sponsors the quarterly Zillow Home Price Expectations Survey, which asks more than 100 leading economists, real estate experts and investment and market strategists to predict the path of the Zillow Home Value Index over the next five years. Launched in 2006, Zillow is owned and operated by Zillow Group, Inc. (NASDAQ:Z and ZG), and headquartered in Seattle.

Zillow is a registered trademark of Zillow, Inc.

(i) This analysis looked at homes with and without central air conditioning that were sold or listed for rent between June 1, 2017 and May 31, 2018 in the 35 largest metro areas. It controlled for variables that can affect the value of a home, including the number of bedrooms and bathrooms, square footage, age of the home and its location.

(ii) https://www.zillow.com/report/2017/buyers/wants-needs/

(iii) https://www.epa.gov/climate-indicators/climate-change-indicators-high-and-low-temperatures

Affordability Moves Hot Markets Eastward from the West Coast

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Midland, Texas retains hottest housing market title; possible Amazon HQ2 contenders take No. 2 and No. 3 spots

Santa Clara, CA – July 5, 2018 (PRNewswire) The nation’s hottest markets are increasingly scattered throughout the country instead of dotted along its pricey western edge as more affordable markets move up the ranks, according to realtor.com®’s list of June’s hottest housing markets. On average, markets in the top 20 hottest markets that have prices lower than realtor.com®’s national median list price of $299,000 jumped 12 ranking spots year-over-year. At the same time, California ended its historic streak of dominating the hotness list, dropping out of the top five rankings for the first time in six years.

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Midland, Texas, took the top spot for the second month in a row, followed by Columbus, Ohio and Boston — which were both on the list of headquarters contenders announced by Amazon. In the hottest markets, homes continue to sell quickly. Age of inventory in the top 20 markets averaged only 34 days, faster than last June (36 days) with the typical age of inventory registering 40 days or less in each of the top 20 markets.

Amid the most competitive home-buying season in history, buyers are increasingly gravitating toward less-expensive locales. According to realtor.com®’s June data, eight of the 20 hottest markets featured list prices that fell below June’s median list price of $299,000. These markets saw the biggest upward movement on the list, while higher price markets did not see significant upward movement.

“As the record pace of sales continues to challenge would-be homebuyers, the hottest market rankings show that buyers are looking for markets that offer relative affordability,” said Danielle Hale, chief economist at realtor.com®. “In the three cities that were on Amazon’s list of possible HQ2 contenders – Columbus, Ohio, Boston and Dallas – affordability isn’t taking as big a hit as in other hot markets despite properties selling faster than just about everywhere else. This would change if Amazon were to come to town.”

In Columbus, prices stayed consistent year-over-year and, at $250,000, still remain below the typical U.S. median. Although Boston is pricey – the typical listing runs $529,000 – prices increased only 6 percent annually, compared to 9 percent for the U.S. as a whole. Finally, in Dallas, where listing prices are above the typical U.S. median at $356,000, the change in prices was also more manageable at just a 1 percent increase from last year.

According to realtor.com®’s June housing data, the nation’s inventory of active home listings decreased 4 percent on an annual basis, a slower rate than the 8 percent average decrease in the previous 12 months. Coupled with 547,000 new listings hitting the market in June, a 2 percent increase year-over-year, there is some relief to tight inventory conditions. But, with a record low of 54 days on market and a record high median listing price, the U.S. housing market will continue to be a challenge for buyers for the foreseeable future.

Realtor.com® Hotness Index

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**Realtor.com® reviewed listing views by market as an indicator of demand and median days on market as an indicator of supply. This analysis led to the identification of the 20 hottest medium-sized to large markets in the country.

About realtor.com®

Realtor.com®, The Home of Home SearchSM, offers the most comprehensive source of for-sale MLS-listed properties, among competing national sites, and access to information, tools and professional expertise to help people move confidently through every step of their home journey. It pioneered the world of digital real estate 20 years ago, and today is the trusted resource for home buyers, sellers and dreamers by making all things home simple, efficient and enjoyable. Realtor.com® is operated by News Corp [NASDAQ: NWS, NWSA] [ASX: NWS, NWSLV] subsidiary Move, Inc. under a perpetual license from the National Association of REALTORS®. For more information, visit realtor.com®.

Contact:

Tammy Lee
tammy.lee@realtor.com