John Yoder Team Blog

August 2021 Showed High Home Price Gains Again!

The S&P CoreLogic Case-Schiller Indices show that home prices increased 19.8% nationally, year over year for the month of August. While this rate makes August another consecutive, record-breaking month, it does indicated a deceleration in month over month rates.

So what does that mean for your home's value?

Well, it's important to understand that deceleration is not the same as decline. Home prices are still increasing, they just appear to be increasing at a lower rate. And keep in mind that 19.8% is a remarkable gain in value!

Inventory is still low in Knox County as well. The Mount Vernon News recently reported that the county has about 8 week's worth of listing inventory currently. Demand is still high, and we are still seeing competitive buying situations, especially with move-in-ready properties. So it is still a great time to consider selling a property in order to leverage the profit opportunity that this market offers homeowners.

It's difficult to project what will happen in coming months. If you're looking to purchase a home right now, I would really consider how long you plan to own that property. There is absolutely nothing indicating that this market is a bubble that's about to burst, but there also isn't anything indicating that these rates are sustainable. So if you're looking to purchase a home with a plan to stay for 3-5 years or more, your investment is likely going to be solid because home prices are still increasing.

On the other hand, I would caution buyers who (like myself) have used real estate in the past five years as a way to make quick cash; that might not be the best plan closing out 2021, as I'm not sure that the gains experienced this year will replicate themselves next year in the same way.

Until next time,
Cassie Johnson
Key Realty - John Yoder Team

If you'd like to look at the data for yourself, visit: https://press.spglobal.com/2021-10-26-Annual-Home-Price-Gains-Remained-High-In-August-According-To-S-P-CoreLogic-Case-Shiller-Index

To read the article from the Mount Vernon News, visit: https://mountvernonnews.com/stories/610376665-knox-land-bank-to-sell-cooper-guest-house-on-north-main-in-mount-vernon

Assessment Value vs. Market Value & Why Understanding The Difference Matters

We have been receiving questions about assessment value on properties, particularly as homes are selling for higher and higher values. It can certainly be confusing, but there is a difference between market value and assessment value, and we're here to help clear it up!

First, let's define assessment value and market value. Assessment value is the amount that a home is assigned for property tax purposes. We reached out to the Knox County Auditor's office to learn more about the process of assigning this value to a property, and they were very helpful! Every three years in Knox County, a property's assessment value is evaluated and updated. But what does that look like?

Well, every six years, properties are evaluated and updated on an individual basis. Every three years, the market itself is evaluated, and values are updated. So, the assessment value of a property gets updated every three years.

It's important to understand that an auditor does not enter the property being evaluated. They rely on MLS data that has been published in the past, including published photos. This information is especially helpful for them to get an idea of added finished living space— think finishing a basement or an attic, as that would certainly add value to the home.

Per Ohio revised code, the assessment value cannot exceed 90% of its actual market value. With market conditions as they are currently, the Knox County Auditor's office believes that percentage looks more like 70% in the county, and there is a lot variation between individual properties.

You're probably getting the idea by now that assessment value and market value are not the same thing. In fact, assessment value doesn't really matter much in the market, it really only matters for property tax purposes. Market value, however, matters a great deal because it is what an individual is willing to pay for the property. For this reason, when you're evaluating a listing, market value of comparable listings is much more relevant data than assessment value. So, why is there confusion?

The assessment value of a property is public knowledge— it can be found on the Auditor's website. For some buyers, this can feel like helpful information when evaluating whether or not they would like to pursue an offer on a property, as well as how much to offer for it. And it is helpful information, just not in the way you might think. It's helpful because it gives you the ability to forecast your future tax payment, it's not helpful as evidence that a property is over-priced. The reality is that this market is still competitive, and buyers are willing to pay much more than the assessment value for a property (and remember, that value is often only up to 90% of the property's actual market value).

Might other buyers be overpaying for properties? Possibly. If they are, though, it's for an entirely different reason than the fact that the assessment value and the asking price don't match up.

So when you see the assessment value of a property you might be interested in, remember that this value might be somewhere around 70-80% of the market value (if you're in Knox County). If you're questioning the value of the property, the best way to find clarity is to ask your agent to perform a Comparitive Market Analysis (CMA) to see what other individuals are paying for similar homes in the area.

I hope you find this information helpful! We would love to hear from you, so don't hesitate to reach out with any questions you may be having about the current market!

Until next time,
Cassie Johnson
Key Realty - John Yoder Team

My Three Go-To Breakfasts in Mount Vernon

Are you new to Mount Vernon? Living there for ten years, I was able to see local business explode! Our little town now offers big ideas when it comes to locally sourced and produced goods, and it's hard to beat the food in town. Being away for a month now has me missing breakfast in particular, and Mount Vernon is not short on fantastic morning options!

So here are my three, never fail, go-to breakfasts in Mount Vernon.

1. Best on-the-go breakfast: Half Baked Cafe. Honestly, I have not had a pastry here that I didn't like. My favorite Saturday morning routine was to stop at Half Baked Cafe for a quiche before heading to the Farmer's Market. All of the quiches are delightful and buttery, but there are usually some out-of-the-box flavor combinations from the mind of Chef Navin that you won't regret trying. I also grab some macarons or their baklava because, in my opinion, dessert can be breakfast (and I'll fight on this).
   Located: 3 W High Street, Mount Vernon, OH 43050
   Hours: Wednesday-Saturday, 8:00 AM-2:00 PM
2. Best Traditional Breakfast: North Main Cafe. This cafe is so cozy, and their food is so good! Drawing on amish recipes and traditions, their breakfast options are delicious, filling, and budget-friendly. The baked oatmeal is highly lauded in the community for good reason, and the gold rush bowl deserves an honorable mention. It gets busy on weekends, so I recommend showing up early to get a table in their beautiful dining area!
   Located: 108 N Main Street, Mount Vernon, OH 43050
   Hours: Tuesday-Saturday, 7:30 AM-2:00 PM
3. Best Breakfast Overall: Stein Brewing Company. Have you ever dreamt of a meal? I dream about Stein's short rib hash often— it's that good. Stein serves brunch on the weekends, and whenever we have friends or family visiting, this is where we take them. The food is high quality, and what is brunch really without a mimosa? Another tip I have here is to get a beermosa. They're not on the menu, but any wheat beer like a Hefeweizen is great with orange juice! Just tell them half beer, half juice, and you'll be set for a hearty and unique brunch.
   Located: 109 S Main Street, Mount Vernon, OH 43050
   Hours: Sunday-Wednesday, 11:00 AM-8:00 PM, Thursday-Friday, 11:00 AM-9:00 PM

Did I miss your favorite breakfast in Mount Vernon? I would love to hear from you! There are always new residents and visitors who are looking for the best spots, so comment your suggestions below!

Until next time,
Cassie Johnson
Key Realty - John Yoder Team.

What to do if Your Appraisal is Short!

We have seen this happen more often than we'd like: Buyers are competing for a listing, and the contract price escalated only for the appraisal to come in low half way through the process. This can be a complex and stressful event for both buyers and sellers, and we have tips that can save the deal!

1. Home appreciation rates are vastly different from month to month. Last week, we showed the data from S&P's CoreLogic Case-Schiller Indices for May, June, and June. Consecutively, rates have been record-breaking each month from 14.8% in May, to 16.4 in June, and potentially 17.2% in July. Because of this, data that is even a month old can be out of date.
2. More and more homes are being sold off market. This means that there is additional data that would be considered relevant sales comparison data that likely gets missed because it's not listing in the Multiple Listing Service, where appraisers access information. So it's difficult to get the full picture in neighborhoods where homes are being sold by owner.

So what can be done if an appraisal comes in short? Well, there is an appeal process, during which your agent can find comparable sales data that the appraiser did not have while writing the initial report. It's fairly easy to find sales prices and residential data for homes that transferred off market from your county auditor's website. The key to this process is to find new and helpful data that justifies a higher valuation for the subject property.

If the appeal process fails (or fails to close the full gap between the appraisal value and the purchase price), there are three options: price renegotiation, gap coverage by the buyer in cash at closing, or contract termination.

Sounds like added stress during an already stressful situation, right? For sure. That's why we really recommend finding strong data and comparable sales (including off market sales!) prior to listing. It's critical that the data inform the asking price of a property. Further, if you have all of those comps prior to listing, you can leave them on the counter for the appraiser to review at the time of their inspection. Some appraisers will reference those, and some won't, but it's worth a shot!

If you're a buyer who is considering making an offer on a hot listing, we recommend considering appraisal gap coverage in your offer. Just be sure to only offer what you're willing to pay over appraisal, and be aware that it might not be enough once the appraisal comes back (in other words, you might have to bring additional cash to close the deal).

We hope you found this information helpful! It's crucial to the buying and selling experience that you hire an agent who is savvy and informed. To discuss your real estate goals with us, fill out a contact form at johnyoderteam.com/contact today!

Until next time,
Cassie Johnson
Key Realty - John Yoder Team

Is the Hot Market Starting to Cool Off?

The short answer? Possibly!

In Knox County, specifically, we are experiencing a slight cooling off compared to the chaos of the spring market. In the second quarter (April-June, 2021), home buyers were paying 2% over asking price on average. That's a significant jump from 0.4% that we saw in the first quarter of 2021.

In the third quarter, however, that number has dropped to .06%. The quarter is not over, but that drop is a huge relief for the buyers who are competing for listings currently.

So what is contributing to this decrease? Well, we think there are 3 big factors:

1. Buyer fatigue after the spring market caused a lot of buyers to call it quits on their home search. Many would-be buyers wrote on multiple properties without securing their next home. Without an inventory shift, many have decided to wait until the market is less competitive.
2. Buyers went on vacation. A lot of Americans vacationed in July, after being pent up in their homes for 18 months. This means less showings, less offers, less bidding wars, etc.
3. School is starting. It is very normal to see seasonality in the real estate market. With the chaos of the back-to-school weeks, many families are not prioritizing their home search as highly as they were in spring or early summer.

You might be asking, does this drop affect home values? The answer is no. Homes are still appreciating. According to the S&P CoreLogic Case-Schiller Indices, appreciation rates skyrocketed this spring, and the data shows that home value appreciation hit a record high in both April (14.8%) and in June (16.4%). Further, the nation is on track for a third, consecutive record-breaking month in July with an appreciation rate of 17.2%.

So what we're potentially seeing in this early third quarter is not a decrease in home values, but likely appreciation at a slower rate.

What's the bottom line here? Well, for buyers, it's important to remember that you will still likely need to pay over asking price to compete. While you may not experience the extraordinary bidding wars that we grew accustomed to in the spring, any positive rate is an indicator of bidding wars.

For sellers, if you're still wanting higher profits, it's time to shift perspective. Because the market is cooling off a bit, presentation is really going to matter. In order to protect your position to receive multiple, strong offers, you will want to make sure your home is one that many buyers have to have. A few months back, a sign in the yard was all it took to get multiple offers. But now, you really want to focus on things like staging.

Of course, the most important advice we can give is that you find an agent who is in tune with what is happening in your local market!

If you have any questions, please feel free to reach out to our team at johnyoderteam@gmail.com.

Until next time,
Cassie Johnson
Key Realty - John Yoder Team