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Real Estate Wholesaling: Wells Fargo Reports Highest Real Estate Confidence In 12 Months

Written by Posted On Friday, 10 February 2017 18:32

The newest housing market index shows experts are more bullish on the real estate outlook than ever…

The numbers are up! What does it mean for real estate wholesaling, and the market?

Some of the newest 2017 real estate statistics show the highest levels of confidence in the US housing market we’ve seen in a long time. That is in contrast to some of the numbers other channels were putting out at the end of last year. So, what could these new figures and a turnaround in 2017 mean for home buyers, sellers, renters, and investors?

New Data, New Optimism

The December/ January 2017 release of the National Association of Home Builders and Wells Fargo National Housing Market Index shows several positive trends.

The seasonally adjusted survey results shows a level of sentiment not seen since 2005. The last time numbers were that high prior to 2003 were around 1999.

A deeper breakdown of responses to the survey shows strong confidence in current single family home sales levels, the highest levels of prospective home buyer traffic seen in over 12 months, and even great expectations from sales for the next 6 months.

New Home Building Spree

Although we’ve already been experiencing a strong building surge over the last couple of years, this news could mean even more ahead. When home builders are experiencing strong sales, are gaining lots of leads and traffic, and are confident in the outlook, they are more bullish in plowing ahead.

Expect that to mean the acquisition of new lots and land, new designs being created, and new communities and buildings being marketed.

In cities like Miami, FL experts have been a little concerned that too much new construction is coming online at the same time. Yet, the National Association of Realtors has noted that a lack of inventory and new building has been hurting sales volumes, affordability, and access to housing for millennials.

Home Prices

While more housing inventory can put more negotiating power in the hands of home buyers, it can also have a positive effect on housing prices. More sales transactions help to fuel statistics, tax revenues, jobs, and local economies. New construction also tends to be priced at levels which are constantly pushing new highs. That suggests home prices are only going up for the foreseeable future. At least until we see an extreme glut of properties on the market, which aren’t selling. However, this is likely to be mitigated this year by president Trump’s plans to ease lending, provide tax breaks, and fuel more home buying. More tenants may also make the leap to owning in the next few months ahead of rising interest rates, and due to tough landlords and rocketing rental rates.

The New Landscape for House Flippers and Wholesalers

The latest housing market sentiment index is at almost 70. That compares to a low of around 9 back in 2008. The majority of today’s real estate investors have only been in the game since 2008, or later. They have been spoiled with endless inventory, motivated sellers, distressed deals, and cheap real estate. Those dynamics have been changing, a lot. Some aren’t sure how to handle it.

Those few investors who have been in the game since before the 2005 peak will tell you that a strong upward market with lots of confident and qualified buyers is just as good, if not better. This is especially true for flipping and wholesaling houses. In this environment houses can be flipped fast, and can appreciate quickly, creating even greater spreads and profits. After all; deep discounts may not mean much, unless there are buyers to take the deals from you, and convert them into cash.

2017 for Home Sellers

Even though we may be in a new phase of the market, regular home sellers need to be cautious not to become too overly optimistic. We’ve already been seeing a widening spread between listing prices and actual sales prices in many major markets. Just because builders and investors are out there buying doesn’t mean they will over pay. They are still looking for value and profit potential. Listing too high may cause sellers to miss out on the best buyers and opportunities. Especially as inventory and interest rates increase.

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Kent Clothier

I am the founder and CEO of Real Estate Worldwide, where I lead an amazing team of individuals that are focused on building disruptive systems that push the entrepreneur dream and the real estate industry forward.

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