Month: December 2022

At first glance, the increase in housing supply compared to last year may not sound like good news for prospective sellers, but it actually gives you two key opportunities in today’s housing market.

An article from Calculated Risk helps put the inventory gains the market has seen in 2022 into perspective by comparing it to recent years (see graph below). It shows supply has surpassed 2021 levels by 58%. But the further back you look, the more you’ll understand the bigger picture. And if you go all the way back to 2019, the last normal year in real estate, we’re roughly 35% below the housing supply we had at that time.

Opportunity #1: Take Advantage of More Options for Your Move

If your current house no longer meets your needs or lacks the space and features you want, this inventory growth gives you even more opportunity to sell and move into the home of your dreams. With more houses on the market, you’ll have more to choose from when you search for your next home.

Partnering with a local real estate professional can help you make sure you’re up to date on the homes available in your area. And when you do find the one, a professional can advise you on how to write a winning offer.

Opportunity #2: Sell While Inventory Is Still Low Overall

But again, despite the growth, inventory is still low compared to more normal years, and that isn’t going to change overnight. For you, that means your house should still be in demand among potential buyers if you price it right.

As an article from realtor.com says:

“Today’s shoppers generally have more homes to consider than last year’s shoppers did, but the market is still not back to pre-pandemic inventory levels.”

Bottom Line

If you’re a homeowner looking to sell, you have more homes to choose from and can still sell your house while inventory is low overall. Let’s connect to get started, so you can have the best of both worlds.

If you’re trying to decide whether or not to sell your house, recent headlines about home prices may be top of mind. And if those stories have you wondering what that means for your home’s value, here’s what you really need to know.

What’s Really Happening with Home Prices?

It’s possible you’ve seen news stories mentioning a drop in home values or home price depreciation, but it’s important to remember those headlines are designed to make a big impression in just a few words. But what headlines aren’t always great at is painting the full picture.

While home prices are down slightly month-over-month in some markets, it’s also true that home values are up nationally on a year-over-year basis. The graph below uses the latest data from S&P Case-Shiller to help tell the story of what’s actually happening in the housing market today:

As the graph shows, it’s true home price growth has moderated in recent months (shown in green) as buyer demand has pulled back in response to higher mortgage rates. This is what the headlines are drawing attention to today.

But what’s important to notice is the bigger, longer-term picture. While home price growth is moderating month-over-month, the percent of appreciation year-over-year is still well above the home price change we saw during more normal years in the market.

The bars for January 2019 through mid-2020 show home price appreciation around 3-4% a year was more typical (see bars for January 2019 through mid-2020). But even the latest data for this year shows prices have still climbed by roughly 10% over last year.

What Does This Mean for Your Home’s Equity?

While you may not be able to capitalize on the 20% appreciation we saw in early 2022, in most markets your home’s value, on average, is up 10% over last year – and a 10% gain is still dramatic compared to a more normal level of appreciation (3-4%).

The big takeaway? Don’t let the headlines get in the way of your plans to sell. Over the past two years alone, you’ve likely gained a substantial amount of equity in your home as home prices climbed. Even though home price moderation will vary by market moving forward, you can still use the boost your equity got to help power your move.

As Mark Fleming, Chief Economist at First American, says:

“Potential home sellers gained significant amounts of equity over the pandemic, so even as affordability-constrained buyer demand spurs price declines in some markets, potential sellers are unlikely to lose all that they have gained.”

Bottom Line

If you have questions about home prices or how much equity you have in your current home, let’s connect so you have an expert’s advice.

There are many people thinking about buying a home, but with everything affecting the economy, some are wondering if it’s a smart decision to buy now or if it makes more sense to wait it out. As Bob Broeksmit, President and CEO of the Mortgage Bankers Association (MBA), explains:

“The desire for homeownership is strong. Many prospective buyers are waiting for the volatility in mortgage rates to subside, as well as for a clearer picture of the economic outlook.”

If you’re in that position, remember that it’s important to consider not just what’s happening today but also what benefits you may gain in the long run.

There’s a lot of information out there about how homeownership helps build a homeowner’s net worth over time. But even today, many people think first about things like 401(k)s before they think of owning a home as a wealth-building tool. It’s especially important if you’re a young prospective homebuyer to understand how homeownership is another key way to invest in your future. An article from Bloomberg notes:

“Millennials have higher average 401(k) balances than Generation X did when they were the same age, but they’re not any better off financially. . . . A lot of that has to do with being less likely to own a home.”

To help you understand just how much owning a home can have a positive impact on your life over the years, take a look at what the data shows. The same Bloomberg article helps show the gap in wealth between renters and homeowners who are 65 years and older (see graph below). The difference is substantial, even when incomes are similar.

So, if you want to create wealth to help set you up for success later on, it may be time to prioritize homeownership. That’s because, whether you decide to rent or buy a home, you’ll have a monthly housing expense either way. The question is: are you going to invest in yourself and your future, or will you help someone else (your landlord) increase their wealth?

Bottom Line

Before putting your homeownership plans on hold, let’s connect to go over your options. That way, you’ll have expert advice on how to make the best decision right now and the best investment in your future.

Some Highlights

• If you’re planning to make a move but aren’t sure if now’s the right time, here are a few reasons why you shouldn’t wait to sell your house.
• The supply of homes for sale, while growing, is still low today. Plus, serious buyers are out looking right now, and many are hoping to avoid falling into the rental trap for another year.
• Let’s connect to determine if selling your house before the new year is the right move for you.

There’s no doubt buying a home today is different than it was over the past couple of years, and the shift in the market has led to advantages for buyers today. Right now, there are specific reasons that make this housing market attractive for those who’ve thought about buying but have sidelined their search due to rising mortgage rates.

Buying a home in any market is a personal decision, and the best way to make that decision is to educate yourself on the facts, not following sensationalized headlines in the news today.  The reality is, headlines do more to terrify people thinking about buying a home than they do to clarify what’s actually going on with real estate.

Here are three reasons potential homebuyers should consider buying a home today.

1. More Homes Are for Sale Right Now

According to data from the National Association of Realtors (NAR), this year, the supply of homes for sale has grown significantly compared to where we started the year (see graph below):

This growth has happened for two reasons: homeowners listing their homes for sale and homes staying on the market a bit longer as buyer demand has moderated in response to higher mortgage rates.

The good news for you is that more inventory means more homes to choose from. And when there are more homes on the market, you could also see less competition from other buyers because the peak frenzy of competing over the same home has eased too.

2. Home Prices Are Not Projected To Crash

Experts don’t believe home prices will crash like they did in 2008. Instead, home prices will moderate at various levels depending on the local market and the factors, like supply and demand, at play in that area. That’s why some experts are calling for slight appreciation and others are calling for slight depreciation (see graph below):

If you consider the big picture and average the expert forecasts for 2023 together, the expectation is for relatively flat or neutral price appreciation next year. So, if you’re worried about buying a home because you’re afraid home prices will crash like they did in 2008, rest assured that’s not what expert projections tell us.

3. Mortgage Rates Have Risen, but They Will Come Down

While mortgage rates have risen dramatically this year, the rapid increases we’ve seen have moderated in recent weeks as early signs hint that inflation may be easing slightly. Where they’ll go from here largely depends on what happens next with inflation. If inflation does truly begin to cool, mortgage rates may come down as a result.

When that happens, expect more buyers to jump back into the market. For you, that means you’ll once again face more competition. Buying your house now before more buyers reenter the market could help you get one step ahead. As Lawrence Yun, Chief Economist for NAR, says:

“The upcoming months should see a return of buyers, as mortgage rates appear to have already peaked and have been coming down since mid-November.”

When mortgage rates come down, those waiting on the sidelines will jump back in. Your advantage is getting in before they do.

Bottom Line

If you’re thinking about buying a home, you should seriously consider the advantages today’s market offers. Let’s connect so you can make the dream of homeownership a reality. 

There’s no denying mortgage rates are higher now than they were last year. And if you’re thinking about buying a home, this may be top of mind for you. That’s because those higher rates impact how much it costs to borrow money for your home loan. As you set out to make a purchase this winter, you’ll need to be strategic so you can find a home that meets your needs and budget.

Danielle Hale, Chief Economist at realtor.com, explains:

“The key to making a good decision in this challenging housing market is to be laser focused on what you need now and in the years ahead, . . . Another key point is to avoid stretching your budget, as tempting as it may be given the diminished purchasing power.”

In other words, it’s important to be mindful of what’s a necessity and what’s a nice-to-have when searching for a home. And the best way to understand this is to put together a list of desired features for your home search.

The first step? Get pre-approved for a mortgage. Pre-approval helps you better understand what you can borrow for your home loan, and that plays an important role in how you’ll craft your list. After all, you don’t want to fall in love with a home that’s out of reach. Once you have a good grasp of your budget, you can begin to list (and prioritize) all the features of a home you would like.

Here’s a great way to think about them before you begin:

• Must-Haves – If a house doesn’t have these features, it won’t work for you and your lifestyle (examples: distance from work or loved ones, number of bedrooms/bathrooms, etc.).
• Nice-To-Haves – These are features that you’d love to have but can live without. Nice-To-Haves aren’t dealbreakers, but if you find a home that hits all the must-haves and some of the these, it’s a contender (examples: a second home office, a garage, etc.).
• Dream State – This is where you can really think big. Again, these aren’t features you’ll need, but if you find a home in your budget that has all the must-haves, most of the nice-to-haves, and any of these, it’s a clear winner (examples: farmhouse sink, multiple walk-in closets, etc.).

Finally, once you’ve created your list and categorized it in a way that works for you, discuss it with your real estate advisor. They’ll be able to help you refine the list further, coach you through the best way to stick to it, and find a home in your area that meets your needs.

Bottom Line

Putting together your list of necessary features for your next home might seem like a small task, but it’s a crucial first step on your homebuying journey today. If you’re ready to find a home that fits your needs, let’s connect.

Some Highlights

• As you get ready to sell your house, focus on tasks that make it inviting, show it’s cared for, and boost your curb appeal.
• This list will help you get started, but don’t forget, a real estate professional will provide other helpful tips based on your specific situation.
• Let’s connect so you have advice on what you may want to do to get your house ready to sell this season.

Cooking, caroling, and…closing on a new home? Real estate pros share what buyers can expect from the process – and the current market – when purchasing a new place before 2023.

From traveling to gathering with family to hosting friends at a new home for the very first time, the holiday season can be a whirlwind. But the schedule of celebrations can be even more complicated for someone planning to search for – and purchase – a home this time of year.

2022 has seen shifting trends in the housing market, placing a bit more power back in the hands of buyers. While competition for homes is still high, the days of fierce bidding wars and little-to-no inventory are in the rearview mirror for some areas.

Looking to buy a home before ringing in the New Year? Consider these recommended tips from experienced RE/MAX agents.

Work with qualified professionals

Working with a reputable, full-time real estate agent can help alleviate much of the stress of the homebuying process – in any market or season.

“Talk with an experienced agent who knows the market, knows your price point, and knows what to offer. What is it going to take to win in this specific area?” says Angelica Olmsted, an agent with RE/MAX Professionals in Denver, Colorado. “We still have some nooks throughout Denver that are very competitive. And if your agent doesn’t have their finger on the pulse right now, that could hurt your homebuying process in the long run.”

Because buying a home requires trust and constant communication among everyone involved, it’s wise to find a highly compatible agent.

“Find a REALTOR® you can trust and who understands your goals. You can interview several or get a referral from someone who has gone through the process and had a good experience,” says Cheryl Leatherwood, an agent with RE/MAX First in Baton Rouge, Louisiana. “Let your REALTOR guide you on the steps needed to make your homebuying process as smooth as possible.”

She adds, “Before you shop for your new home, know the price range you’re most comfortable being in, and know what that means in regard to the down payment, closing costs and monthly payments.”

Homebuying and financing often go hand in hand. Olmsted and Leatherwood both recommend contacting a mortgage broker or lender as early as possible to set realistic expectations for the home search.

“Talking to a lender and understanding the fluctuation with interest rates right now is also really important because we are seeing those change day to day,” says Olmsted, adding that having both a reliable agent and lender can be especially helpful in a market like this.

Understand market conditions and annual patterns

In many locales, the years-long seller’s market has begun to balance in recent months. This means current homebuyers and sellers are facing drastically different – and for some, brand new – market conditions. But in addition to overarching market trends, seasonal patterns also pop up annually.

“During the holidays, there’s typically less inventory available. It’s a time where moving is more of a need because of an upcoming life event, like a job change. It’s not as popular of a time to move simply because you want a bigger house – it’s more of a time of necessity,” Olmsted observes.

She points out that the recent rise in interest rates may be preventing some buyers from entering the market, possibly opening up more inventory for those who do intend on buying soon.

“I think with the recent increase in interest rates, fewer buyers can be a good thing, as it means less competition,” she continues. “The interest rates can really work in your favor because fewer people are out there competing for the same home. What’s a con for one person can be a pro for another.”

Leatherwood, too, has seen a tremendous market shift in her locale – and shares how the impacts on sellers are affecting buyers.

“Current market conditions are having a tremendous impact on home sales. Sellers are having to rethink their strategy and their expectations as we have quickly shifted from a complete seller’s market to a more balanced market,” Leatherwood says. “The real estate market will remain strong – but we are in a situation where sellers are offering more concessions to attract buyers.”

Prepare for timeline flexibilities

Most people are busy during the holiday season – and that includes those who work in lending, inspecting, repairing, and moving services, too. When buying a home toward the end of the year, buyers can expect timelines to potentially be rushed or elongated. Either way, national holidays and annual business closures could influence the timing of the purchase and move.

“You have to account for holidays in your deadlines,” Olmsted says. “A process that could have been closed in three weeks can turn into four weeks just because of business closures. Try to be flexible and realistic when it comes to those dates and deadlines.”

During the holiday season, it’s not uncommon for buyers and sellers to push off the closing date or enact an arrangement where the seller rents their house from the new buyer in order to move after the holidays have ended.

“Sellers may want a longer closing date so as not to have to move during the holidays. They are motivated to sell if they have a home on the market at this time of year, however they may want to push off physically moving for a few weeks,” Leatherwood explains. “This is a time for buyer’s agents to have conversations not only with their buyers, but also with listing agents to create an arrangement that works for everyone.”

Plan ahead for the big move

Once buyers have locked down a home, they can take steps right away to prepare for an upcoming move. Once a date is set, contact a moving company ASAP to get on their schedule. If it’s during the holiday season, there may be less flexibility with days – so it’s best to be aware in advance. And if the moving date is right after the holiday season, securing movers is one task off the checklist.

Plus, a benefit to buying a home during the holiday season is the great deals sometimes found on home goods, furniture, appliances, and more.

Ultimately, there can be advantages to buying and selling during any season – including the end-of-year holidays – whether it’s a potential for more inventory, less competition, or motivation to unpack in time to host an upcoming meal with loved ones. For some, reaching the milestone of homeownership may just be at the top of their holiday wish list.

“If someone is motivated to purchase or sell, they are still going to make decisions based on their long-term real estate goals,” Leatherwood says. “They won’t use the holidays as an excuse to not move forward in a life-changing decision.”

Whether you’re looking for a yard for a pet or bigger closets for storage, buying a home could offer more flexibility than renting – and it can be a long-term investment. Are you ready to be a homeowner?

With the housing market balancing in many places, many people are finding that now is a great time to purchase a property of their own. Renters looking to buy are usually in the pursuit of more living space, creative freedom to decorate, and ownership of an asset that can appreciate in value over time.

Renters, are you tired of spending money each month to pay someone else’s mortgage? It may be time to consider buying a home. Here are the signs to look for.

You need more square footage

Upsizing is a common reason renters venture toward homeownership. With more heads under one roof – from children to aging parents to pets and more – an extra bedroom, in-law suite, or garage space can go from being a want to a need. Whether you find a place that has everything you want or a fixer-upper that can be turned into your dream house, owning property offers the potential of adding more space.

You’re looking for outdoor space

Having access to the outdoors – especially for those renting an apartment – has become an increasingly more important factor to prospective homebuyers. This can be especially true if you welcomed a new pet into your life recently.

The options for your outdoor spaces are much greater when you own the property, whether you want to add a fence around the yard for the dog, put in a swimming pool, or lay out a patio for entertaining guests.

You want the flexibility to customize your home

One of the many luxuries of owning a home is having the freedom to do what you please with your space. Oftentimes when renting, tenants are unable to paint walls, drill holes, upgrade aspects of the kitchen, and more. Each household functions differently, so it can be comforting to live in a space custom-tailored to your needs. If you’re handy with DIY projects or can hire professionals, your options for making a new space feel like home are endless.

You’ve saved up for a down payment

Many people start the homebuying process once they have saved up enough money for a down payment. With a budget in mind, check out available financing options (like first-time homebuyer or military housing grants) that may help determine how much you can afford.

The down payment isn’t the only cost associated with buying a home. Don’t forget to save up for additional fees associated with the process, including closing costs, a home inspection and other potential service expenses. When the time comes that you’re ready to put in an offer on a home, you’ll already have these funds set aside.

You’ve saved for maintenance, emergencies and repairs

Owning a home inherently comes with more responsibility than renting. When buying a home, it’s helpful to have money set aside for necessary repairs and unexpected emergencies. Being financially prepared ahead of time will make the inconvenience of a things like a broken appliance or leaky roof more manageable.

You’re looking for an investment (financial and emotional)

If you’re tired of renegotiating terms, paying higher rent, or moving each time your lease expires, then purchasing a home is a great solution. But in addition to peace of mind, owning a home can pose long-term financial benefits, too.

Likely the largest financial transaction a person will make in their lifetime, a home is an investment that may, potentially, help you create generational wealth. Best of all, the money you pay each month to a landlord can be used instead to pay down your own mortgage.

If you’re done with renting and ready to buy a home, call me to help you through the process.

‘Tis the season for snow boots – and the mess they trail inside. Prepare the interior of your home now for wintry days ahead.

Have you checked the forecast? Winter is almost here – and some places have already received their first snowfall of the season!

For homeowners in chillier climates, now’s the time to prepare for the challenges of winter weather. In addition to turning off outdoor waterlines and stocking up on shovels and sand, it’s important to get the interior of the home ready for frosty temps, too.

Consider these checklist items to help prepare the inside of your home to withstand the colder months – and run smoothly throughout them.

1. Stock the entryway with winter gear

If you live in an area that experiences the harsh weather of the season, it’s officially time to remove summer items from the entryway and replace them with more insulated options. Store away warm weather shoes like sandals and bring out the boots and slippers. In bins or on hooks, find convenient space to store coats, mittens, and hats.

Invest in plastic or rubber shoe trays for each entrance to prevent dragging snow into the house. Some people even opt for a boot brush mat outside the door to wipe off shoes before stepping inside.

2. Make sure nothing is touching the heater

Redecorated recently? Whether the answer is yes or no, furniture can scooch around throughout the year with use. To prevent risk of damage or fire, make sure items like furniture, blankets, or drapes aren’t touching the heating system, including baseboards or a radiator.

The same awareness goes for candles. Lighting a candle is a great way to make a room feel cozy on a winter day, but be cautious when placing them throughout the house. Put them in exposed areas situated far from notoriously flammable items like drapes and curtains, holiday decorations, and more.

3. Switch out linens for warmer options

If your house runs cold, try swapping out lighter bedding for toastier options, including flannel sheets or a more insulated comforter. Also consider adding a few throw blankets in common seating areas to make evenings more comfortable.

4. Organize the garage for indoor parking

Home to yard supplies, sports equipment and outdoor recreation gear, the garage can get messy in the warmer months when people tend to park outdoors more frequently. Take time now to organize the garage, sweep the floor, and make room for a parked car. This could save you from the trouble of windshield scraping when overnight frosts and snowstorms arrive.

5. Reverse ceiling fans

Did you know the direction a ceiling fan’s blades spin determines whether it pulls air up or pushes air down? This little fact can help cut costs on energy bills throughout the year.

In the summer months, it’s best to have the fan run counterclockwise, blowing air down to create a cooling effect. And in the winter months, it’s best to have the fan run clockwise, redistributing hot air throughout the room. Figure out which way you currently have it running by turning off the fan, standing underneath (looking upward) and having someone else switch the fan back on. Pay attention to the first few revolutions.

Then, to change the direction of the blades, turn off the fan (wait for a complete stop!) and then flip the switch that is often found on either the motor housing or the base.

6. Clean up the fireplace

Whether you have a wood-burning or gas fireplace, make sure it’s in good shape prior to using it.

For a gas fireplace, ensure you have a sufficient supply of propane and, while the fireplace is off, clean the vent and glass panel of any dust and buildup. For a wood-burning fireplace, have the chimney inspected by a professional chimney inspector and hire a professional chimney sweep. These annual services will help keep your fireplace in pristine condition and safe to use.

Spending the first winter in your new home? Check out tips for preparing the exterior of the property for the snowy season ahead.