Sales of higher-priced homes continue to outpace the lower tier, according to April figures. Check out our tips for buyers, sellers and owners.
If you’re trying to sell a home priced above $500,000, you’re in luck. Demand for those upscale homes keeps humming along, at least for now, according to National Association of Realtor figures for April.
Sales in the lowest price tier fell by 12% while sales in higher-priced categories were up by 0 to 5% from a year ago, wrote Danielle Hale, NAR’s director of housing statistics, on the association’s economists blog. The share of home sales above $500,000 or more rose from 10.8% to 11.6%.
Here is how sales changed year-over-year in April by price tier:
Part of the reason for the disparity is that there are fewer lower-priced homes on the market. Investors and first-time buyers already have snapped up most of those properties; price gains have pushed homes into upper tiers as well.
Hale noted that the trend is slowing. In April of last year, for example, sales then of homes in the $500,000-$750,000 tier were up 33.6% from April 2012. This year, the gain was just 0.3%.
For now, generally the higher-priced homes within a town are selling better. How you’ll know if your home is in the top tier: Check Zillow’s Local Info page for your town. There you’ll find the median home values for the low, middle, and top price tiers in your market. Then, gauge the strength of your specific tier by asking your agent for the inventory and days-on-market stats for homes in your range.
Trying to sell an upscale home? Or buy one? Check out these tips:
Time it right. Want a more expensive home? Buy now before prices climb. However, if you live in a pricey house but are looking to downsize to something less expensive, it may be worth waiting for your current home to appreciate.
Look at jumbos. Will you need a large mortgage (typically more than $417,000)? The premium over what you’d pay for a smaller loan, which grew as wide as two full percentage points during the bust, has shrunk to next to nothing. Big banks often offer the best rates and options on these types of loans, says Keith Gumbinger of mortgage publisher HSH.com.
Don’t dismiss ARMs. While rising rates are a very real risk, ARMs at least deserve a look if you’re taking a big loan, says Gumbinger.
Buy for the future. Nearly 25% of owners regret the size of the home they picked, according to a Trulia study. With prices expected to climb, high-end homes are likely to be more affordable than they will be in the future, so think about how much space you’ll need in the coming years and buy appropriately.
Don’t go it alone. A recent study found that buyers of homes priced at more than $300,000 are more likely to try to negotiate the deal themselves than buyers of more moderately priced properties, says co-author Bennie Waller, professor of finance and real estate at Longwood University. It doesn’t end well: The DIYers end up paying an average of 9% more than those who use their own agent.
Price carefully. With sales of higher-end properties picking up, homes are increasingly “stigmatized if they stay on the market too long,” says Judson Henderson, a broker in Princeton, N.J.
Overprice, and your place could be the one with the black mark. If you’re unsure, pay the $500 or so for an appraisal. Also, if your home is older than 20 years, get an inspection to make sure your structure is sound, and your HVAC, plumbing, and electrical systems function smoothly. Fix whatever’s on the fritz. “You don’t want people feeling like the house is a project,” says Henderson.
Make your listing tech-friendly. Most shoppers, and particularly those in the market for upscale houses, will be looking at your home on phones and tablets, says Amy Bohutinsky, chief marketing officer at Zillow. Photos on these gadgets need a higher resolution than what’s required by a desktop. Check your listing on a mobile device to make sure it looks great. Some buyers may look at photos of your home on Google, so you should do the same (type your address into the map search, then click on the Street View tab). If the photo is outdated or taken in winter, note that in your listing.
Highlight the right features. According to a study by the National Association of Home Builders, buyers who expect to pay at least $500,000 today put warming drawers, wine fridges, and outdoor kitchens high on their wish lists. If your home has these or other unique selling points, mention them in your listing.
Renovate sooner, not later. Don’t let dated features drag down the value of your home. Owners thinking about remodeling have good reason to act now. Quality contractors, already busier than they have been in recent years, are likely to get even tougher to snag. Then there’s the issue of rising rates, which would push up the cost of new home-equity loans and most lines of credit.