Category Archives: Highlands, NC Real Estate

Home Sales in Highlands Get Mixed (or Mixed-Up) Signals

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As we enter the spring selling season, it’s only natural to look for clues about what to expect for Highlands home sales. Normally, one of the principal barometers comes from the National Association of Realtors®. Their Pending Home Sales Index is a national compendium of hard data that can be useful for predicting home sales in Highlands. It is both “forward-looking” (an indicator of future activity) and part of a long-standing and continuous sample-gathering procedure.

When you take a wide sample of the same data for the better part of a decade (the PHSI has been recorded monthly for nine years now), you can chart the results, note when similar patterns repeat or diverge, and infer meaningful results. Further, when an acknowledged authority like NAR’s Chief Economist Dr. Lawrence Yun provides commentary in plain English that any Highlands homeowner can easily understand, the monthly published reports comprise perhaps the best basis there is to project how our own local market is likely to fare.

Last week’s release of the Pending Home Sales Index and commentary was every bit as authoritative as we have come to expect—backed up by the same rigorously collected data from across the country. As a tool for projecting how upcoming Highlands home sales are likely to fare, however, it’s fair to say its usefulness is…uh…less than usual.

It’s fair to say that because it is possible to read the entire 700-word document and emerge without a clue as to what you just read. It is, in a word, confusing. But in case it’s just me who is confused—and you are a typical Highlands homeowner who would appreciate information about how active our market is likely to be in the next few months—I think I should share a boiled-down version of the report’s key takeaways.

The Report’s headline is “Pending Home Sales Cool Down in January” (January’s data is the most recent). From this, we can gather that home sales activity is trending downward. Then, from the first paragraph: “…pending home sales…remained slightly higher than a year ago.” From this, we can gather that home sales activity is trending upward.

There follows an explanation about the first idea (home sales trending lower): it was partly to blame because of bad weather in January. A little later, there is a buoyant observation about the second idea (home sales trending higher): “Sales are now 11.0% higher than a year ago—the largest year-over-year gain since July 2013!” (exclamation point added by me, which seems appropriate, given that this is such good news).

More good news for Highlands homeowners readying to sell their homes dealt with prices: “Last month’s price increase was the largest since April and marks the 47th consecutive month of year-over-year gains!!” (I added the two exclamation points). This, however, was also miserable news: “Home prices ascending…aren’t healthy” because household incomes didn’t rise as fast. But good news would make that much less of a factor, because fixed-rate mortgage rates were really wonderful: “declining to 3.87%, the lowest since October 2015!!!” (exclamation points—oh, you know).

Because sales cooled down in January for the highest year-over-year gain in years, I think the report tells Highlands homeowners that they might well expect a hot-cold/falling-rising market! Or perhaps prudent homeowners should just forget about this report, get their homes ready to list, and call me…I promise not to share what’s in next month’s report!

Property Hunters in Highlands Keep an Eye Out for Water

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It’s one thing when you see the word “water” figuring prominently in descriptions of Highlands properties. Any time that word comes into play, it’s a cinch that the property in question is more valuable than any waterless neighbors. Everyone knows that a shorefront or beachfront property is likely to be worth more than an identical inland place. In areas like Florida, condos with docks (or even access to a dock) are highly prized. Wherever a lake, river or stream is noted in a listing’s description, it’s likely to add significantly to the asking price—even if it’s only because of a distant view.

The conclusion anyone would draw from the foregoing is that, as a general principal, “water” is a desirable feature when it comes to real estate—and Highlands real estate would be no exception.

But that’s only for good water.

Bad water is something else again. Bad water is the kind of water you can’t do anything useful with. If it’s not there for recreation, or even for scenic enjoyment—then you are dealing with “bad” water! It includes an entire catalogue of water that is unwelcome. The only thing you can do with this kind of water is to get rid of it.

Whenever you are taking a look at property in Highlands, water should be near the top of the list of things to be watching out for (that is, if it isn’t mentioned in the listing). Later on, your property inspector will check for the wrong kind of water; but if you keep your eyes open, you can do some preliminary detective work yourself. And it does take detective work, because bad water has usually already made its getaway before you arrive. But it can’t help but leave a few clues. Here are some common ones:

Foundation clues. A single inch of rain creates 600 gallons of runoff—and if that water isn’t properly directed away from the foundation, nothing good will come of it. Piles of silt or landscaping gullies where they don’t belong are two clues.

Gutter clues. Accomplices that can cause foundation issues reveal themselves in the guise of gutters that aren’t doing their job. A visual reconnoitering of the overhead gutters and downspouts is usually sufficient to spot these perps.

Stain clues. Standing water will usually leave forensic evidence, long after it has fled the scene. Pavement, flooring, or even ceiling stains are clues; and walls can show efflorescence (the minerals left after water has evaporated).

Olfactory clues. Moisture in walls and in attic spaces can be hard to see, but easy to sniff. If it gives rise to mildew on the underside of the roof, work needs to be done!

Even if you aren’t planning to put your Highlands property on the market any time soon, getting an early preventative bead on drainage problems can ultimately become a true dollar-saver. Of course, when it’s time to sell—I hope you’ll give me a call!

Top 10 Listing Phrases Might Not Attract Highlands Home Hunters

4-7-16-listingphrasesIt’s small wonder that with this spring’s selling season underway, Highlands’s house hunters can afford to be a discriminating bunch—they have the luxury of picking and choosing from a crop of truly inviting offerings. And it doesn’t hurt that today’s low mortgage interest rates have enabled more Highlands properties to fit within more family budgets.

For those of us who get to translate those home offerings into words for the Highlands listings, the job is to find phrases that draw attention to each given property’s uniquely attractive features.

But there’s another dimension that complicates things. English is a rich and powerful language, but when it comes to marketing lingo, it’s also true that these days everyone is being deluged 24/7 by vivid advertising claims. We’ve all developed callouses when it comes to the ballyhooing we get from every quarter.

Today’s house hunters have developed sales resistance. Times 10!

So what’s the answer for cooking up language that helps a property jump out from among the others? One way is to find out Highlands’s Top 10 listing phrases—and avoid overusing them! Same ‘ol, same ‘ol isn’t what works when the object is to attract Highlands prospects. True, some truly accurate descriptors can’t be totally avoided—but emphasizing them isn’t likely to fire many house hunters’ imaginations, either.

Here are a group of most frequently appearing Top 10 listing words and phrases—with some alternatives more likely to spark more attention from Highlands house hunters:

1. Beautiful (‘gorgeous’ ‘spectacular’ or ‘captivating’ bring more energy)
2. Hardwood floors (what kind of wood—and what hue?)
3. Stainless steel (at the very least, add ‘gleaming’ or ‘lustrous’)
4. Updated (‘renovated’ ‘remodeled’ ‘renewed’…or maybe even ‘reimagined’)
5. Private (this one is actually okay as-is…it may be a cliché, but it’s a desirable one!)
6. Spacious (puh-lese! How about ‘cavernous’ ‘commodious’ or ‘enormous’?)
7. Landscaped (another okay one, but in need of a boost—like ‘lusciously’ ‘stunningly’ or ‘exquisitely’)
8. Custom (‘tailor made’ ‘individualized’ ‘unique’ ‘personalized’ or ‘specially crafted’)
9. Clean (this is close to Top 10 listing phrase malpractice: if it’s clean, it’s surely also ‘spotless’ ‘flawless’ or ‘immaculate’)
10. Brand new (could be ‘state of the art’ ‘untouched’ ‘mint’ or ‘just completed’)

Even after a bit of polishing, those Top 10 listing phrases and words need to have a credibility boost via listing photography that illustrates what’s being promised. Putting the whole package together is just one part of the service you can count on when you give me a call!

Highlands Luxury Real Estate Escapes April Fool’s Day Worries

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It looked like another chuckle-worthy April Fool’s Day dispatch: CNBC’s webcast “Is NYC luxury real estate about to go bust?” It was barely 7 in the morning on April 1—but only the most bleary-eyed Highlands web watchers were likely to have been caught off-guard.

Pranksters had already made mincemeat of the credibility Friday news dispatches normally deserve. Web parodists had started early (against all common decency, the day before). Late on Thursday, Gizmodo had announced the sale of the “Moon Watch”—its $27,500 price tag justified by a housing made from genuine moon rock brought back to earth by the Soviet’s 1974 Luna probe. Sure.

Even before the sun came up, Google Express made its first sky-enabled delivery. Not by drone: the first delivery was an axe, dropped by parachute.

Duolongo advertised a miraculous new product—a pillow that uses Morse code to teach you a language while you sleep (“I went to bed speaking only English, but woke up bilingual. Buenos dias a todos!”).

So CNBC’s projection of doomsday for Manhattan luxury real estate—for April-Fools-wary Highlands readers, at least—would not have been taken very seriously. The problem was, it actually was authentic. Sort of.

The webcast was a segment lifted from the CNBC Squawkbox show, presumably aired that morning. The blurb promised, “CNBC’s Robert Frank takes the wraps off a new report that shows the luxury real estate market in NYC is about to crumble.” And it did have a promising setup for what (to anyone living outside The City, possibly including a few Highlands residents) might take to be breathtakingly unsustainable price levels. Some of the new records posted:

Average apartment sales prices top $2 million (for the first time)
Price Per Sq/Foot = $1,713
Number of sales = 2,877 (a jump of 8%)

But…so where is the promised luxury real estate “bust”? It didn’t seem readily at hand—especially after we were shown a 5-bedroom Central Park coop. It had been bought in 2003 for a pittance ($12 million). Now it had sold quickly. By regular Highlands standards, at least, that didn’t seem to evidence much luxury real estate crumbling, since the selling price had been $35 million. Frank explained that the owners had done “some renovating”—so we were momentarily left wondering if the crumbling was because they’d had to go to so much trouble…

No! The reason put forth was that many of the record sales resulted from contracts signed as much as 18 months earlier. So maybe it was possible that these high prices and sales volumes might not be sustainable. There was no evidence beyond nervousness about China and the stock market tumble (which had just reversed, oddly enough).

That the report on NYC luxury real estate was not an April Fool’s joke was a sort of April Fool’s joke in itself. Here in Highlands, those kinds of worries were less widespread. China seemed a bit remote—and the stock market had already come roaring back—but neither seemed to be key to Town’s luxury real estate. If you would like some authentically real-world market info, do give me a call!

Notes on the Ins and Outs of Highlands Short Sale Listings

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Any dedicated bargain hunter who scours the Highlands listings is not surprised to find among the most deeply discounted entries one of two notations: foreclosure or short sale.

Everyone knows what the “foreclosure” designation means—it’s been repossessed by the bank. It’s an REO (real estate owned). By discounting the asking price, the lending entity invites buyers to take the property off its books. It is here that the economists’ favorite acronym, “TANSTAAFL” (There Ain’t No Such Thing As A Free Lunch), comes into play. Foreclosed properties have frequently been neglected by their previous owners, who are not happy campers. So the cost of rehabilitation must be factored in before any offer is made. Still, foreclosures can represent real opportunities for buyers with patience and determination.

Slightly different are foreclosures’ first cousins: Highlands’s short sale listings. There are any number of unforeseen circumstances that can cause an owner to fall into financial distress, but when their home has to be repossessed, the impact on the borrower’s credit is immediate and drastic. It can make finding a new place to live difficult, and can even make future employers hesitate to hire someone whose record includes that kind of hefty unpaid debt.

Highlands properties which fall in the “short sale” category are those in which the borrower has been unable to keep up with the mortgage payments, but who is arranging for the lender to agree to accept a payoff that’s less than the full amount owed. When a short sale is finalized, the result is still some damage to the original borrower’s credit, but less than had a foreclosure proceeded. The buyer will benefit from what should be a substantially lower price than a comparable Highlands property would bring—and a home that is usually in better condition. An eager lender can also sometimes offer favorable financing terms, too.

But remembering what the economists say about TANSTAAFL, there are also these points to keep in mind:

Short sales involve extra bureaucratic red tape. The fine print includes items such as the lender having to approve details of the sale—and that can result in nerve-racking delays.
Although the owner is usually trying to keep a short sale property in good shape to facilitate the deal, banks won’t allow a short sale until the borrower has seriously fallen behind in payments. That can mean an inability to keep up with the expense of proper maintenance. As in a foreclosure, canny short sale buyers make certain they know the cost of rehabilitation.
The possibility of sticky legal issues needs to be recognized. For instance, if the seller has filed for bankruptcy, it could squelch the whole deal. Negotiating a short sale can be considered a “collection activity”—and those aren’t allowed in most bankruptcy courts.

If one of Highlands’s foreclosure or short sale-denoted listings has grabbed your attention, I can help. It will require attending to some technical issues attached to the specific property—but I’ll be pleased to help you navigate the process from beginning to end!

Predicting Home Sales: More Quandary Than Certainty

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Even the least vigilant of Highlands’s market-watchers had their antennae out last week, the traditional time of month when real estate statistics are released from the most authoritative sources. National trends in home sales frequently provide clues to the direction the Highlands market is likely to take—and with the spring selling season already under way, this is the time of year when movements can be more volatile than usual.

Last week’s data was less exciting than has been the case in recent years—and what movement there was seemed to leave opinion-makers perplexed. The Associated Press writers put it this way:

“The housing market enters the traditional spring buying season facing a quandary.”

When you are interested in clues to how home sales are likely to fare, words like “quandary” don’t help. It was in fact glass-half-full/glass-half-empty kind of news. You could see what you wanted to see.

If you were a pessimistic type, your predisposition might have been bolstered by The New York Times Headline, “Existing Home Sales Drop More Than Expected.” There it was! Confirmation of a downturn in activity. Though you could have admitted that the trend might not extend to every corner of the country, the possibility that Highlands home sales might now head south couldn’t be denied. The New York Times said so!

On the other hand, if you were among Highlands’s more numerous optimistic observers, reading the same news left you thinking that the very same headline was actually slightly misleading. It was based on the National Association of Realtors® report that talked about home sales prices continuing to rise. The “home sales drop” was only (as the headline actually read) against what had been “expected.” Sales levels had been sizzling for months, so expectations had been high (not among the pessimists, certainly). But the numbers showed that existing home sales were actually 2.2% higher than a year earlier!

Reading the entire NAR report could explain why The New York Times emerged with a quandary. In it, readers learned that U.S. job growth “continues to hum along at a robust pace” which could explain why “overall demand for buying is still solid entering the busy spring season.” But then they learned that “anxiety about the health of the economy is holding back a segment of would-be buyers.” On one hand, there was the 48th consecutive month of “steadfast price growth;” on the other, “unshakably low supply levels.” The share of first time home buyers fell 30%; yet the share of first time home buyers “is up 29% from a year ago.”

The Times’ quandary was certainly understandable. But although not much light may have been shed on the prognosis for home sales in Highlands, a couple of factors could have been deduced. In the coming months, home sales certainly won’t “be affected by the large East Coast blizzard” that had impacted February numbers.

What is likely to affect sales is the continuation of tantalizingly low 30-year, conventional fixed-rate mortgage rates, “the lowest since April 2015.” If that kind of encouragement has you interested in checking out the current crop of great Highlands home offerings, I hope you’ll forego the quandary altogether—just give me a call!

Highlands Real Estate Benefits from Events…and Non-Events!

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A couple of recent developments made the news recently that promised to impact Highlands’s real estate scene either now or in the future. The one that got most of the attention last Wednesday came from a familiar source: Federal Reserve Chair Janet Yellen. Her news conference’s less-than-stirring pronouncement (“Caution is appropriate”) made headlines nonetheless because of the accompanying action (actually, inaction): no increase in interest rates.

Highlands real estate watchers will remember that when the Fed increased their Fed Funds target rate by a quarter of a point last December, they nudged it upward from zero to .25%. It was the first move in nine years, and was accompanied by a statement that they anticipated making three or four similar small increases throughout 2016. Thus it was expected that another quarter of a percentage point would be announced by now, so the news marked a mildly surprising turn—one that will be welcome to anyone contemplating buying or selling real estate in Highlands. The continuation of a miniscule Fed Funds rate translates into significant savings for everyone, particularly when measured against the historical norm of 2%-5%.

Soooo: as for the first development, ring the bell: good news!

The other development had come earlier. It was one that might turn out to benefit real estate activity—but it could conceivably have the opposite effect. It, too, dealt with government and finance, this time in the realm of real estate taxation: a bill introduced in Congress. H.R. 4494, the Renters Fairness and Equality Act, would amend the IRS Code to give renters a federal tax break. It would put renters on a footing similar to that which allows Highlands homeowners to deduct mortgage interest and property taxes.

As in all things Washingtonian, the proposed details are complicated. The total amount of rent paid would become federally deductible, but only for some (tenants in very expensive areas wouldn’t qualify). The way such proposals become law, the final rules could differ—and in any case, there is faint likelihood of swift enactment. The legislation had been introduced by a lone Democrat, and was now sitting in the Republican-led House Committee on Ways and Means, where it was predicted to evoke continuous and profound inactivity.

But even if that turns out to be its fate, H.R. 4494’s introduction was an interesting development—an idea that might someday catch on. Around here, it raised the question about whether this would be good news for Highlands home values. The federal tax break is a major inducement prompting renters to buy, so a number of prospective buyers might go missing. On the other hand, many renters who have been priced out of the market because they’ve been unable to save for a down payment would get meaningful relief. Additionally, the prospects for Highlands investment real estate could benefit greatly if consumer demand for rental accommodations were to expand—as groups promoting affordable housing projected.

The promise that mortgage rates will continue to provide a welcoming backdrop for this spring’s selling season comes as unambiguously exhilarating news for Town’s real estate market. To investigate further, do give me a call!

Do Highlands House Hunters Prefer New Homes? Yes…and No…

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Several different surveys confirm that if you ask American consumers which they prefer, close to twice as many say they would choose to move into a brand new home rather than an existing one. But—and there are several important ‘buts’—when it comes to today’s typical Highlands house hunter, that answer can be a little misleading.

For one thing, house hunters who don’t even check out Highlands’s pre-owned house listings are few and far between. In actuality, when someone begins to think seriously about buying their next home, it’s highly unlikely they will be able to resist taking at least a cursory look at the Highlands listings. The previously-owned homes that are now for sale aren’t just easy to find—they’re manifestly hovering a single click away on every computer and mobile device. Given the current state of intelligent search engines—which seem to be watching us more closely than we are watching them—at the first inkling that we could be interested in finding a home, alluring Highlands listing pictures start popping up onscreen all by themselves!

That makes a difference because even if the majority of buyers might lean toward buying a new home with brand new construction, as soon as they start seeing the variety of existing homes, most people find at least some that are interesting. And previously owned residences certainly do have some intrinsic advantages, with their established communities, tree-lined older neighborhoods, and frequently, more interesting architectural detail. It’s also true that many new homes in Highlands tend to be built on smaller lots than the older ones—which touches on another central issue: the matter of cost.

Forbes claims that the acknowledged rule of thumb is that brand new homes often cost “up to 20% more than a similar existing home”—that is, one with the same number of rooms, square footage, acreage, etc. That having been said, there are the undeniable advantages that go with Highlands’s new homes. They meet today’s construction standards and design preferences, often with walk-in closets, open floor plans, and expansive master baths. Who wouldn’t favor a new kitchen outfitted with energy-saving built-in appliances, sparkling new bathrooms, brand new flooring and carpeting?

For many, a new home that holds the promise of no visits from the repairman for at least a few years makes for a low-stress situation that’s worth the budget premium. And even that tradeoff can prove less costly than it might seem, given the prospect of reduced maintenance outlays for a number of years.

Like so many other aspects of buying a home, the choice between one acquired from a previous owner or a new home winds up being strictly a matter of personal preference—and it’s also a fact that those can change in surprising ways once you get out and explore today’s offerings in person. Best way to get started: call me!

Highlands Observers See Rise in U.S. House Flipping Activity

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When you think about it, it was to be expected: the pace of house flipping activity in communities all over the country almost had to quicken. The market made it all but inevitable—in places where prices are on the rise while inventories remain tight, the conditions are right.

A “house flip” in Highlands is what you call any Highlands house that’s sold within a year of being purchased. House flipping happens when something unforeseen occurs that prompts a buyer to change residences more quickly than anticipated, or (much more often) when the purchase is made in the first place because the buyer sees an opportunity to make a profit.

House flipping became all the rage for a while during the housing bubble of the mid-2000s, hitting a peak in 2005. Half a dozen TV series were launched that popularized the adventures of itinerant flippers, tracing their footsteps as they acquired, fixed up, then sold properties for enticingly large premiums. The best of them depicted not simply the money to be made, but also the hard work (and occasional disappointment) that accompanied the house flipping phenomenon.

Then came the bursting of the ‘bubble’ and the consequential drop in enthusiasm for house flipping. RealtyTrac, the authority on U.S. housing data, also keeps tabs on the flipping statistics. This month they reported a new trend in action: an increase in the share of homes and condos flipped in 2015: 179,778, which is more than 1 in 20, and “the first annual increase in the share of homes flipped following four consecutive years of decreases.”

That total means that the total number of investors who completed at least one flip in 2015 was at the highest level since 2007. According to RealtyTrac, the homes flipped last year yielded a national average gross profit of $55,000: “the highest for flips nationally since 2005.” Moreover, they found that the return on investment was more than 45% (up from 35% in 2005).

For us locally, the question is what that might signify for Highlands real estate. On the one hand, there are those observers who tend to take the view that whenever house flipping takes off in earnest, it indicates that a real estate market is becoming overheated—that prices are rising too quickly. That is definitely something Highlands could do without. But a slightly more convincing reading was put forward earlier this month by commentator Diana Olick on CNBC. She found that, unlike many of the earlier house flipping participants, “data indicate that flippers in 2015 continued to operate within relatively conservative margins.” That means that they typically bought homes that were not wildly underpriced, then sold them at price points close to their estimated market values. They were also not usually buying with the perilously small financial cushions that typified earlier flippers. That had also been a hallmark in the mid-2000s, when the ready availability of cheap credit encouraged the practice. That’s no longer the case.

All in all, it seems as if the national house flipping trend is not at all reminiscent of previous overheated (and over-hyped) conditions. Instead, Highlands’s real estate market looks to be more welcoming to anyone who recognizes the sustained value of the house they are looking to buy or sell. I take a great deal of pride in helping them make it happen!

Highlands Housing Market Shares Some Welcome Trends

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This spring’s Highlands housing market continues to reflect most of the trends that have held sway across much of the nation. There is good news, not-so-good news, and (happy to report) no really bad news at all. In fact, it’s the absence of threatening factors that makes our housing market a welcoming one for those looking to buy or sell in Highlands this spring or summer. Here’s the brief run-down:

Prices: look as if they will continue to trend higher, but more slowly than they have for the past couple of years. The consensus of expert opinion calls national average residential prices to climb 4%+, which is about 1%-2% more slowly than in 2015. Of course, every Highlands property (and neighborhood, for that matter) fares slightly differently, so those generalities are only helpful in the context of the actual Highlands “comps” (the comparables).

Rents: where Highlands rentals sustain the kind of vacancy rates that are being seen just about everywhere in the U.S., rates have nowhere to go but up. Property managers are reporting that they’ve raised rents in 88% of localities, which has had a push-pull effect on housing markets. On one hand, every increase nudges renters to more seriously consider the not-so-abstract monetary advantage home ownership produces. When owning is actually cheaper than renting in monthly cash flow terms (not even counting the long-term investment aspect), every month’s rent check is a new spur to investigate that option. That’s the push. The pull is that those expensive rental dollars spent make it that much harder to save for even a nominal down payment.

Mortgages. No news here: mortgage interest rates just don’t seem to want to rise—no matter how certain the financial experts are that they have to do so. Actual recent history has chastened those forecasts, though, so at this point, most Highlands borrowers probably expect that rates will stay below the 5% mark throughout 2016. Still, with many quotes for last week’s 30-year fixed hovering in the high 3%s, the incentive to take advantage of today’s rates remains a strong point.

Inventories. With few exceptions, the reason why all those incentives to buy have not created an explosion of real estate activity is the shortage of homes on the market—the inventories. That is an additional incentive for Highlands owners to list, since it means limited competition channels more potential buyers to their own property.

As the spring selling season gets going in earnest, we’ll see if Highlands’s housing market behaves the same way the broader national real estate trends indicate. For an immediate micro-update, just give me a call anytime!