The Dog Days of Summer
August 15 is supposed to be right in the middle of the dog days of August. But we learned recently that the phrase “dog days of August” relates to the period that Sirius, a star known as the “Dog Star,” rises at the same time as the sun. This period is typically in late July until early August. Thus, the phrase is also known more generally as the “dog days of summer.”
What does the dog days of summer mean for the markets? Not only are families taking vacations, so are institutions. The Federal Reserve Board’s Open Market Committee does not meet in August. Congress is in recess and the President is on a long working vacation. Even equity traders and market analysts are on vacation, which typically results in lower trading volume for stocks, bonds and more. Thus, everyone should be taking a long-deserved break during August.
Does that mean that the month will be completely quiet? We can’t really predict a complete time of rest for the markets. Traditionally, during times of lower trading volume, any type of major event could produce more volatility than usual. And, though it seems that everyone in D.C. is on vacation, the world does not go to sleep. Nor does the weather. For our part, we do hope that everyone has a restful remainder of the summer and that the quiet enables those economic sleeping dog days to lie about as well.
Sixty-two percent of listing agents say professional staging decreases the amount of time a home spends on the market, while 40 percent of buyer’s agents say their clients are more willing to walk through a home that has been staged, according to the National Association of Realtors®’ 2017 Profile of Home Staging. “Realtors® know how important it is for buyers to be able to picture themselves living in a home, and staging a home makes that process much easier for potential buyers,” says NAR President William E. Brown. “While all real estate is local and many factors play into what a home is worth and how much buyers are willing to pay for it, staging can be the extra step sellers take to help sell their home more quickly and for a higher dollar value.” Thirty-one percent of respondents to NAR’s survey say staging increased the dollar value of a home they sold by 1 percent to 5 percent; 13 percent of respondents say it increased a home’s dollar value by 6 percent to 10 percent. Agents on both the buying and selling side agree that the living room is the most important part of a home to stage, followed by the master bedroom, the kitchen, and outdoor space. Thirty-eight percent of listing agents say they stage every one of their sellers’ homes before listing them. Fourteen percent say they will only stage homes that are difficult to sell, while 7 percent say they only stage homes in higher price brackets. However, 37 percent of listing agents say they do not stage homes at all before listing them. Instead, they say they make recommendations to sellers to declutter their homes and fix any issues. Source: NARThe National Association of Realtors released a report that said foreign buyers and recent immigrants spent an estimated $153 billion on American properties in the year ending March 2017. That was a 49% increase over the previous year and the highest level since record-keeping began in 2009. The purchases accounted for 10% of the total value of existing home sales in the U.S. The report did not include new homes. America’s neighbors to the north were one big factor behind the surge. Canadian real estate investors nearly doubled their purchases of American homes over the period because of the relative affordability of properties in the States. Many Canadians have been squeezed out of property markets in cities like Toronto and Vancouver that have experienced rapid price gains. Canadians were the second biggest foreign purchasers of homes after the Chinese. Buyers from China shelled out nearly $32 billion over the period, while Canadians spent $19 billion. Foreign buyers had to brush off U.S. political turmoil in order to make their purchases. “The political and economic uncertainty both here and abroad did not deter foreigners from exponentially ramping up their purchases of U.S. property over the past year,” said Lawrence Yun, chief economist at the National Association of Realtors. Source: CNN/Money
Competition is heating up among millennials and baby boomers for smaller, more affordable homes — but builders have been slow to meet demand. That may be showing signs of changing. Home sizes are beginning to shrink, which may also help prices edge down, too. “We are starting to see [smaller] starter homes come back,” says Rick Palacios Jr., director of research at John Burns Real Estate Consulting. The uptick started slightly in mid-2016 as employment and wages rose. More buyers are “now in that life stage of their early 30s [where] they’ve got a good job now, they’re getting married, they’re having kids,” Palacios says. Some builders are heading farther from cities, where land is cheaper, or they may construct more homes on smaller lots or build a line of attached townhouses. “A builder can’t pay through the nose for land and then build a starter home on that land,” Palacios says. “It just doesn’t pencil out for them. [We’ve] started to see more builders gaining confidence in building lower-priced, smaller homes.” Nearly 29 percent of the homes built between 2010 and 2015 were 3,000 square feet or more—hardly small by any standards. More builders focused on the high end of the market following the recession and built fewer smaller homes. Census data shows that 14.72 percent of new homes in the 1990s were between 1,000 and 1,499 square feet. Between 2010 to 2015, that percentage shrunk to 9.75 percent. Source: Realtor.com