Tag Archives: Sellers

7 Tips to Maximize Your Home’s Sale Price

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Over the past few years, a real estate buying frenzy bid up home prices to eye-popping amounts. However, as mortgage rates have risen, buyer demand has cooled. 1 Consequently, home sellers who enter the market today may need to reset their expectations.

The reality is, it’s no longer enough to stick a “for sale” sign in the yard and wait for buyers to bang down the door. If you want to net the most money possible for your property in today’s market, you’ll need an effective game plan and a skilled team of professionals to implement it.

Fortunately, we’ve developed a listing strategy that combines our proven approach to preparation, pricing, and promotion—all designed to help you get top dollar for your home. But you will play an important role in the selling process, as well.

Here are some crucial steps you can take to set yourself up for success as a home seller in this market:

  1. Make Strategic Repairs and Improvements

When you sell something, it’s important to consider what your customer wants to buy. And according to the National Association of Realtors, only 6% of today’s buyers report that they are looking for a DIY fixer-upper.2 The vast majority want a move-in-ready home, which means that any outstanding repairs or dated features can be a major turn-off.

Before your home goes on the market, we’ll conduct a thorough walk-through to identify any problems that could prevent it from selling. In some cases, we may recommend a professional pre-listing inspection. Finding and addressing issues like leaks, rot, and foundation problems up front can pay off in the final sale price. Plus, it prevents sales from falling through because of a red flag on the home inspection, a scenario no seller wants to face.

Beyond repairs, we’ll also help you identify the simple upgrades that offer the highest return on your investment. For example, new paint can give your home a fresh look at a reasonable cost. However, it’s important to choose the right colors. One study found that painting your bathroom light blue could lead to a 1.6% increase in the offer price!3 Similarly, minor landscaping improvements can pay off in a major way. A healthy lawn offers an estimated 256% return on investment.4

  1. Declutter and Depersonalize

When buyers look at a home for sale, they’re trying to envision themselves living there. That’s hard to do if it’s chock-full of the current owner’s family photos, children’s artwork, and souvenir collections. Plus, cluttered homes look smaller, and older items can make them feel dated.

Decluttering before you put your home up for sale will help you in the long run—after all, you’ll need to move all your things to your new home eventually. Now is the time to shred, digitize, or organize old documents, donate old clothes, or move bulky furniture into storage. At a minimum, you’ll want to pack away excess items neatly before potential buyers view the home. Remove personal photos and other trinkets to create a blank slate that viewers can imagine decorating with their own prized possessions.

If you feel overwhelmed by this process, we’d be happy to make recommendations or refer you to a local service provider who can help.

  1. Stage Your Home for Success

Just as you take care to dress professionally for a job interview, you should always ensure your home looks its best for potential buyers. Home shoppers today are used to scrolling through Instagram and Pinterest, and they want to see the same wow factor when touring a home.

The process of making your home look its best and appeal to potential buyers is called staging, and it can be a game changer. According to the International Association of Home Staging Professionals, an average priced staged home sells 5 to 11 times faster than its unstaged counterpart. Even better, the majority of staged homes sell for 4% to 20% over list price!5

Some sellers hire a professional stager, who may bring in furniture and decor to increase the home’s appeal. Others choose to stage their homes themselves. We can help advise you on which route to choose and how much to invest in the process.

It’s also important to consider what buyers in your neighborhood are likely to be looking for in a home. We can help guide your staging choices with our local market insights. For example, in neighborhoods where a large share of residents work from home, it may be effective to stage one room as an office space so potential buyers can envision their day-to-day routine.

  1. Prep for Each Showing

Most of us don’t live picture-perfect lives, and our homes reflect that (sometimes messy) reality. But when your home is on the market, it’s important to ensure that it is always ready for viewers, even on short notice. A missed showing is a missed opportunity to sell your home!

Before your home hits the market, it may be worth hiring professional cleaners to get in all the nooks and crannies. After, try your best to keep things spic and span. Just a few minutes a day wiping down counters, sweeping the floors, and vacuuming can make a big difference.

It’s also worth noting that most buyers will open cabinets, drawers, and closets—so try to make sure everything is as neat and organized as possible. Keep toiletries and small appliances off countertops, and secure valuables and sensitive documents in a safe or off-site.

Want help finding a cleaning service to make your home shine for buyers? Reach out for a referral!

  1. Price Your Home Correctly From the Start

In the past few years, you may have seen homes in your neighborhood sell for shocking amounts and wondered if you could get a similar price for your property. The temptation to list your home on the high side can be strong, but it’s best to be realistic from the start. Even in a hot market, some homes will sit for months. And the longer a property is listed, the more buyers worry that something is wrong with it.6

Of course, you also don’t want to set your price too low and lose out on potential profit. That’s why it’s essential to work with real estate agents (like us!) who know the ins and outs of our local market and what buyers are willing to pay today. In a quickly-evolving market, comparable sales from a few months ago can lag the current market reality.

Fortunately, if you’ve owned your home for several years, chances are good that it’s worth much more today than you paid for it. That means you stand to walk away with a handsome profit. In fact, recent reports show that homeowner equity is at an all-time high.7

  1. Avoid Acting on Emotion

The past few years of over-asking-price offers with few contingencies have set certain expectations for many sellers. It’s only natural to feel hurt or even offended if an offer comes in lower than what you think your home is worth.

However, it’s important to keep in mind that those market conditions were unprecedented, and we are now returning to a more typical market. Home sellers who act rationally, rather than emotionally, are going to get the best results.

Remember: You can always counter a low offer. The same goes for repair requests and contingencies—everything is negotiable. However, it’s important to accept that the market is adjusting and flexibility is key. Keep your expectations reasonable, and remain open-minded. And you can rest assured knowing that we’ll be by your side every step of the way to help you navigate the process and negotiate a great deal.

  1. Work With a Local Market Expert

The economics impacting mortgage rates may be national, but real estate markets are hyperlocal. That’s why working with a professional agent who understands your neighborhood’s dynamics is essential. Through our experience, we’ve gathered insights that can help us position your home for success in this market. Plus, we have the resources to connect with qualified buyers searching for a home like yours.

Working with a knowledgeable agent is also the secret to getting as much money as possible for your home. We have access to extensive data on recent sales in your neighborhood, which we will use to price and promote your property. That’s one reason why homes sold by agents draw much higher prices than those sold by their owners alone. While for-sale-by-owner homes went for a median price of $260,000 in 2020, the median for homes sold by agents was $318,000.8 That’s a difference of $58,000—and money you don’t want to leave on the table.

YOUR AGENT AND ADVOCATE

Selling a home in a fast-changing market can be stressful. You’re likely to hear conflicting advice and opinions from people in your life, and decisions like what color to paint your front door or how much to list your home for can be overwhelming.

That’s where we come in. The market may be adjusting, but it’s still highly advantageous for sellers—and we’re here to help you make the most of it. We’re listing experts in our area, and we know what steps you need to take for a smooth, profitable transaction.

If you’re considering buying or selling a home, we invite you to reach out to schedule a free consultation. We’re happy to talk through your specific situation and goals and help you identify your next steps.

The above references an opinion and is for informational purposes only.  It is not intended to be financial, legal, or tax advice. Consult the appropriate professionals for advice regarding your individual needs.

Sources:

  1. Yahoo! Finance –

https://finance.yahoo.com/news/bidding-war-rate-drops-lowest-120000537.html

  • National Association of Realtors –

https://cdn.nar.realtor/sites/default/files/documents/2022-home-buyers-and-sellers-generational-trends-03-23-2022.pdf

  • Zillow –

https://www.zillowgroup.com/news/paint-colors-that-could-lead-to-higher-offers/

  • Angi –

https://www.angi.com/articles/smart-landscaping-tips-can-increase-home-value.htm

  • International Association of Home Staging Professionals https://pages.iahsp.com/home-staging-statistics/
  • Washington Post –

https://www.washingtonpost.com/business/2019/07/22/just-because-its-sellers-market-doesnt-mean-you-should-overprice-your-home/

10 Pro Tips for a Smooth Home Move

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The process of buying a new home can be both exhilarating and exhausting. But the journey doesn’t stop when you close on your property. On the contrary, you still have quite a bit to do before you can begin the process of settling into your new place.

Fortunately, you don’t have to do everything in a day. You don’t have to do it all alone, either. When you work with us to sell or purchase a home, you’ll have an ally by your side long after your transaction has closed. We’ll continue to be a resource, offering advice and referrals whenever you need them on packing, hiring movers and contractors, and acclimating to your new home and neighborhood.

When it comes to a life event as stressful as moving, it pays to have a professional by your side. Here are some of our favorite pro tips to share with clients as they prepare for an upcoming move.

1. Watch out for moving scams.

Maybe you receive a flyer for a moving company in the mail. Perhaps you find a mover online. Either way, never assume that you’re getting accurate information. According to the Better Business Bureau, moving-related fraud is on the rise. In 2021 alone, individuals and families reported more than $730,000 lost to moving scams, an increase of 216% over the previous year.1

How can you tell if a moving deal is too good to be true? Trust your instincts. If the price appears too low or you can’t pin down the mover’s physical business address, try someone else. The same goes for any moving company representative who dodges questions. Reputable movers should offer transparent pricing, conduct in-home estimates, and provide referrals and copies of their insurance documents upon request.2 For help finding trustworthy movers, reach out. We’d be happy to share our recommendations. 

2. Insure your belongings.

Your moving company promises to take care of your custom piano or your antique furniture. But don’t just take their word for it. Ask to see how much insurance they carry and talk about how the claims process works. That way, you’ll know what is (and isn’t) covered in case of loss or damage.

Of course, some items are priceless because they’re irreplaceable. You might want to move your more sensitive valuables (jewelry, documents, family heirlooms, etc.) in your own vehicle just to be safe. For added peace of mind, call your rental or home insurance provider if you’re moving anything yourself. You might already be protected or be able to purchase extra insurance to cover your move. If those options are unavailable, you could opt for moving insurance from a third-party carrier.3

3. Start packing when you start looking for a new home.

As soon as your house hunting begins in earnest, think about packing away things you won’t need for the next few months. These could include seasonal or holiday decor, clothing, and books. Tackling just one or two boxes a day will give you a head start.

If you’re going to put your current home on the market, you’ll want to declutter anyway. Decluttering will make your home seem larger, and depersonalizing helps buyers envision their own items in the space. Consider selling, donating, or throwing out possessions you no longer need. The things you want to keep can be placed in storage until you officially start moving to a new place.

4. Pack to make unpacking easier.

Have you ever opened a packed box only to find that it’s filled with an assortment of items that don’t belong together? This isn’t efficient and will only make unpacking harder. A better way to pack is to bundle items from a single room in a labeled box. Labels can let movers know (and remind you) where to place each box, whether it’s fragile, and which side needs to be up. Some people like to assign colors to each room in their new home to make distributing color-coded boxes a breeze.

Feel free to unleash your inner organizer with this project. For example, you could create a spreadsheet and assign each box a number. As boxes are packed, simply fill in the spreadsheet with a list of contents. Anyone with access to the spreadsheet can log in and quickly find the desired item.

5. Think outside the box when transporting clothes.

Who wants to worry about boxing up clothes? If you plan on hiring professional movers, ask if you can leave clothing in your dressers. In many cases, they will use plastic to wrap the dresser so the drawers don’t fall out during transport. If keeping your clothes in your furniture makes it too heavy, the movers might be able to wrap and move drawers by themselves.

Another easy transport trick involves turning clean garbage bags into garment bags. Poke a hole in the bottom of a garbage bag, turn the bag upside down, slide it over five to seven garments on hangers, and lay the items flat in the back seat or trunk of your vehicle. The bags will help prevent wrinkling, and your clothes will be ready to hang up when you get to your new home.

6. Document prior to disassembling appliances and furnishings.

Few things are as confusing as looking at a plastic baggie filled with nuts, bolts, and screws from your disassembled dining room table or sorting through a box of electrical wires and cords to see which ones fit your TV.

The best workaround to easier reassembly is to document the disassembly process. Take photos and videos or thorough notes as you go. Whether it’s your headboard or treadmill, be very precise. And just a tip: Construct your beds first when you get to your new home. After a long moving day, the very last thing you want is to be assembling beds into the wee hours of the morning.

7. Prioritize unpacking kids’ rooms.

Children can become very stressed by a big move. To ease their transition, consider prioritizing unpacking their rooms as their “safe zones.”4 You aren’t obligated to unpack everything, certainly. However, set up your children’s rooms to be functional. That way, your kids can hang out in a private oasis away from the chaos while you’re running around and moving everything else.

Depending upon how old your youngsters are, you might want to give them decorating leeway, too. Even if it’s just letting them choose where furniture goes, it gives them a sense of buy-in. This can help ease the blues of leaving a former home they loved.

8. Be a thoughtful pet parent.

Many types of pets can’t handle the commotion of moving day. Knowing this, be considerate and seek ways to give your pets breaks from the action. You might ask a friend to pet sit your pooch or keep your kitty in a quieter room, like a guest bathroom.

Be sure to check in on your pet frequently. Pets like to know that you’re around. Give them treats, food, and water throughout the day. When it’s time to transport your pet, do it calmly. At your new property, give your pet access to just a room or two at first. Pets typically prefer to acclimate themselves slowly to unfamiliar environments.5

9. Plan for your move like you’re planning for an exciting vacation.

When you plan vacations, you probably look up local restaurants, shops, and recreational areas. Who says you can’t do the same thing when moving? Create a list of all the places you want to go and things you want to do around your newly purchased home. Having a to-explore list keeps everyone’s spirits high and gives you starting points to settle into the neighborhood.

And don’t feel that you have to cook that first night. Once the moving trucks are gone, you can always pop over to a local eatery or order DoorDash for major convenience. The first meal in your new home should be a happy, welcoming treat. And if you’re relocating to our neck of the woods, we would love to introduce you to all the hot spots in town and recommend our local favorites.

10. Pack an “Open Me First!” box.

You won’t be able to unpack all your boxes in one day, but you shouldn’t go without your sheets, pillows, or toothbrush. Designate some boxes with “Open Me First!” labels. (Pro tip: Keep a tool kit front and center for all that reassembling.)

Along these lines, use luggage and duffel bags to transport everyone’s personal must-have items and enough clothing for a couple of days. That way, you won’t have to rummage through everything in the middle of your move looking for sneakers or snacks.

When packing your “Open Me First!” boxes, think about which items you’ll need in those first 24 hours. For example, toilet paper and hand soap are musts. A box cutter will make unpacking a lot easier, and paper towels and trash bags are sure to come in handy. Reach out for a complete, printable list of “Open Me First!” box essentials to keep on hand for your next move!

LET’S GET MOVING

Getting the phone call from your real estate agent that your bid was accepted is a thrilling moment. Make sure you keep the positivity flowing during the following weeks by mapping out a streamlined, efficient move. Feel free to get in touch with us today to help make your big move your best move.

Sources:

  1. Better Business Bureau – https://www.bbb.org/article/scams/24198-bbb-scam-alert-avoid-moving-scams-this-national-moving-mont
  2. Move.org –
    https://www.move.org/how-to-tell-moving-company-scam/
  3. Forbes –
    https://www.forbes.com/advisor/homeowners-insurance/moving-insurance/
  4. New York Times –
    https://www.nytimes.com/2020/07/13/parenting/moving-tips-kids.html
  5. ASPCA https://www.aspca.org/pet-care/general-pet-care/moving-your-pet

Seller’s Checklist: A Timeline to Prep Your Home for Sale

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We’re still in a seller’s market, but that doesn’t mean your home is guaranteed to easily sell.1 If you want to maximize your sale price, it’s still important to prepare your home before putting it on the market.

Start by connecting with a real estate agent as soon as possible. Having the eyes and ears of an insightful real estate professional on your side can help you boost your home’s appeal to buyers. What’s more, beginning the preparation process early allows you to tackle repairs and upgrades that can increase your property’s value.

Use the checklist below to figure out what other tasks you should complete in the months leading up to listing your home. While everyone’s situation is unique, these guidelines will help you make sure you’re ready to sell when the time is right. Of course, you can always call us if you’re not sure where to start or what to tackle first. We can help customize a plan that works for you.

AS SOON AS YOU THINK OF SELLING

Some home sellers want to plan their future move far in advance, while others will be required to pack up on very short notice. Whatever your circumstances, these first steps will help assure you’ll be ahead of the listing game.

  • Contact Your Real Estate Agent

We go the extra mile when it comes to servicing our clients, and that includes a series of complimentary, pre-listing consultations to help you prepare your home for the market.

Some sellers make the mistake of waiting until they are ready to list their home to contact a real estate agent. But we’ve found that the earlier we’re brought into the process, the better the result. That often means a faster sale—and more money in your pocket after closing.

We know what buyers want in today’s market, and we can help devise a plan to maximize your property’s appeal. We can also connect you with our trusted network of contractors, vendors, and service professionals, so you’ll be sure to get the VIP treatment. This network of support can alleviate stress and help ensure you get everything done in the weeks or months leading up to listing.

  • Address Major Issues and Upgrades

In most cases, you won’t need to make any major renovations before you list. But if you’re selling an older home, or if you have any doubt about its condition, it’s best to get us involved as soon as possible so we can help you assess any necessary repairs.

In some instances, we may recommend a pre-listing inspection. Although it’s less common in a seller’s market, a pre-listing inspection can help you avoid potential surprises down the road. We can discuss the pros and cons during our initial meeting.

This is the time to address major structural, systems, or cosmetic issues that could hurt the sale of your home down the line. For example, problems with the frame, foundation, or roof are likely to be flagged on an inspection report. Issues with the HVAC system, electrical wiring, or plumbing may cause the home to be unsafe. And sometimes outdated or unpopular design features can limit a home’s sales potential.

Remember, when you’re dealing with major repairs or renovations, it’s best to give yourself as much time as possible. Given rampant labor and material shortages, starting right away can help you avoid costly delays.2 Contact us so we can guide you on the updates that are worth your time and investment.

1 MONTH (OR MORE) BEFORE YOU LIST

Once any large-scale renovations have been addressed, you can turn your attention to the more minor updates that still play a major role in how buyers perceive your home.

  • Make Minor Repairs

Look for any unaddressed maintenance or repair issues, such as water spots, pest activity, and rotten siding. This is the time to take care of those small annoyances like squeaky hinges, sticking doors, and leaky faucets, too.

Many of these issues can be handled by going the DIY route and using a few simple tools. Tackle the ones you can and be sure to call a professional for the ones you’re not comfortable doing yourself. We can refer you to local service providers who can help.

Remember that it’s easy to overlook these small issues because you live with them. When you work with us, you get a fresh set of eyes on your home—so you don’t miss any important repairs that could make a big difference to buyers.

  • Refresh Your Design

This is a great time to think about some simple design updates that can make a significant impression on buyers. For example, a fresh coat of paint is an easy and affordable way to spruce up your home. One survey found that interior paint offered a 107% return on investment.3 For broad appeal, opt for warm, neutral colors.

And never underestimate the importance of good curb appeal. Homes with good curb appeal sell for 7% more, on average, than similar homes with an “uninviting exterior.”4 If weather permits, lay fresh sod where needed, plant colorful flowers, and add some new mulch to your beds.

Even just repositioning your furniture can make a huge difference to buyers. A survey by the Real Estate Staging Association found that staged homes sold faster, and 73% sold over list price.5 We can refer you to a local stager or offer our insights and suggestions if you prefer the DIY route.

  • Declutter and Depersonalize

Doing a little bit of decluttering every day is a lot easier than trying to take care of it all at once right before your home hits the market. A simple strategy is to do this one room at a time, working your way through each space whenever you have a bit of free time.

Start by donating or discarding items that you no longer want or need. Then pack up any seasonal items, family photos, and personal collections you can live without for the next few weeks. Bonus: This will give you a head start on packing for your move!

1 WEEK BEFORE YOU GO TO MARKET

With just one week before your home is available for sale, all major items should be crossed off your to-do list. Now it’s time to focus on the small details that will really make your home shine. Here are a few key areas to focus on during this last week.

  • Check-In With Your Agent

We’ll connect again to make sure we’re aligned on the listing price, marketing plan, and any remaining prep. We will be there every step of the way, ensuring you’re fully prepared to maximize the sale of your home.

  • Tidy Your Exterior

You’ve already done the major landscaping—now it’s time to tackle the last few details. Make sure your lawn is freshly mowed, hedges are trimmed, and flower beds are weeded.

In addition, now is the time to clean your home’s exterior if you haven’t already. Power wash your siding, empty the gutters, and wash all your windows and screens.

  • Deep Clean Your Interior

Your house should be deep cleaned before listing, including a thorough deodorizing of the home’s interior and steam cleaning for all carpets. Consider hiring a professional cleaning company to ensure the space smells and looks as fresh as possible.

In addition to cleaning, take some time to tidy up. Buyers will look inside your closets, pantries, and cabinets, so make sure they are neat and organized. Small appliances and toiletries should be cleared off the countertops.

DAY OF SHOWING

Now you’re all set to go and there are just a few small things you need to handle on the day of showings or open houses. Do a final walk-through and take care of these finishing touches to give potential buyers the best possible impression.

  • Pre-Showing Prep

Happy and comfortable buyers are more likely to submit offers! Make them feel at home by adjusting the thermostat to a comfortable temperature. Open any blinds and curtains throughout the house, and turn on all lights so buyers can see all the potential in your home.

Then tidy up by vacuuming and sweeping floors, emptying (or hiding) trash cans, and wiping down countertops. In the bathrooms, close toilet lids and hang clean hand towels.

Don’t forget to secure firearms, jewelry, sensitive documents, prescription medications, and any other items of value in a safe or store them off-site.

Finally, it’s best to have pets out of the house during showings. If possible, you should also remove evidence of pets (litter box, dog beds, etc.), which can be a turn-off for some buyers.

DON’T WAIT TO PREP YOUR HOME FOR SELLING

If you want to get top dollar for your home, don’t put it on the market before it’s ready. The right preparation can make all the difference when it comes to maximizing the offers you get. The upgrades and changes you need to make will depend upon your home’s condition, so don’t wait to speak with an agent.

Call our team if you’re thinking about selling your home, even if you’re not sure when. It’s never too early to seek the guidance of your real estate agent and start preparing your home to sell.

Sources:

  1. Fortune –
    https://fortune.com/2022/02/08/should-i-buy-house-sellers-market-housing-real-estate-fannie-mae/
  2. Forbes –
    https://www.forbes.com/advisor/home-improvement/labor-materials-shortage-impacts-renovations/
  3. PR Web –
    https://www.prweb.com/releases/2012-homegain/home-improvement-survey/prweb9433460.htm
  4. Realtor Magazine –
    https://magazine.realtor/daily-news/2020/01/27/how-much-does-curb-appeal-affect-home-value
  5. Real Estate Staging Association –
    https://www.realestatestagingassociation.com/content.aspx?page_id=22&club_id=304550&module_id=164548

A Return to ‘Normal’? The State of Real Estate in 2022

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Last year was one for the real estate history books. The pandemic helped usher in a buying frenzy that caused home prices to soar nationwide by a record 19.9% between August 2020 and August 2021.1

However, there were signs in the fourth quarter that the red-hot housing market was beginning to simmer down. In the month of October, only 60.3% of sales involved a bidding war—down from a high of 74.5% in April.2 While this trend could be attributed to seasonality, it could also be a signal that the real estate run-up may have passed its peak.

So what’s ahead for the U.S. housing market in 2022? Here’s where industry experts predict the market is headed in the coming year.

MORTGAGE RATES WILL CREEP UP

Most economists expect to see mortgage rates gradually rise this year after hitting record lows in late 2020 and early 2021.3

Freddie Mac forecasts the 30-year fixed-rate mortgage will average 3.5% in 2022, up from around 3% in 2021.4

The Mortgage Bankers Association predicts that rates will tick up to 4% by the end of the year. “Mortgage lenders and borrowers should expect rising mortgage rates over the next year, as stronger economic growth pushes Treasury yields higher,” said Mike Fratantoni, chief economist for the Mortgage Bankers Association at their 2001 Annual Convention & Expo in October.5

However, it’s important to keep in mind that even a 4% mortgage rate is low when compared to historical standards. According to industry trade blogThe Mortgage Reports, “Between 1971 and December 2020, 30-year mortgage rates averaged 7.89%.”6

What does it mean for you? Low mortgage rates can reduce your monthly payment and make homeownership more affordable. Fortunately, there’s still time to lock in a historically-low rate. Whether you’re hoping to purchase a new home or refinance an existing mortgage, act soon before rates go up any further. We’d be happy to connect you with a trusted lending professional in our network.

THE MARKET WILL BECOME MORE BALANCED

In 2021, we experienced one of the most competitive real estate markets ever. Fears about the virus and a shift to remote work triggered a huge uptick in demand. At the same time, many existing homeowners delayed their plans to sell, and supply and labor shortages hindered new construction.

This led to an extreme market imbalance that benefitted sellers and frustrated buyers. According to George Ratiu, director of economic research at Realtor.com, “Prices and sellers reached for the moon [last] year. It looks like we are now about to move back to earth.”7

Data from Realtor.com released in November showed that listing price reductions had more than doubled since February 2021. And the average days on market (an indicator of how long it takes a home to sell) has been slowly creeping up since June.7

What’s causing this change in market dynamics? The real estate market typically slows down in the fall and winter. But economists also suspect a fundamental shift in supply and demand.

At the National Association of Realtors’ annual conference last November, the group’s chief economist, Lawrence Yun, told attendees that he expects increased supply to come from an uptick in new construction—which is already underway—and an end to the mortgage forbearance program. “With more housing inventory to hit the market, the intense multiple offers will start to ease,” he said.8

Demand is also predicted to wane slightly in the coming year. Rising mortgage rates and record-high prices have made homeownership unaffordable for a growing number of Americans. And in a recent Reuters poll, nearly 80% of property analysts said they expect housing affordability to worsen over the next several years.9

What does it mean for you? If you struggled to buy a home last year, there may be some relief on the horizon. Increased supply and softening demand could make it easier to finally secure the home of your dreams. If you’re a seller, it’s still a great time to cash out your big equity gains! And with more inventory on the market, you’ll have an easier time finding your next home. Reach out for a free consultation so we can discuss your specific needs and goals.

HOME PRICES LIKELY TO KEEP CLIMBING, BUT AT A SLOWER PACE

Nationally, home prices rose an estimated 16.8% in 2021.8 But the average rate of appreciation is expected to slow down in 2022.

Danielle Hale, chief economist at Realtor.com, told Yahoo! News, “Home asking prices have decelerated in the second half of 2021, with median listing price growth slipping from a peak of 17.2% in April to just 8.6% in October.”10

But experts disagree about how much more property values can continue to climb this year. Goldman Sachs predicts that home prices will rise by 13.5%, while Fannie Mae and Freddie Mac are forecasting a 7.9% and 7% rate of appreciation, respectively.2

However, not all analysts are as bullish. The National Association of Realtors predicts a 2.8% rate of appreciation for existing homes and 4.4% for new homes, while the Mortgage Bankers Association expects the average home price to decrease by 2.5% by the end of the year.10,2

According to Hale, “With prices near all-time highs and mortgage rates expected to rise, we expect this slowdown in prices to continue.”10

What does it mean for you? If you’re a buyer who has been waiting on the sidelines for home prices to drop, you may be out of luck. Even if home prices dip slightly (and most economists expect them to rise) any savings are likely to be offset by higher mortgage rates. The good news is that decreased competition means more choice and less likelihood of a bidding war. We can help you get the most for your money in today’s market.

RENTS WILL CONTINUE TO RISE

Along with home, gasoline, and used vehicle prices, rent prices rose dramatically last year. According to CoreLogic, in September, rents for single-family homes were up 10.2% nationally year over year.11 And economists at Realtor.com expect them to climb another 7.1% in 2022.12

“Homes are expensive now…but for most people, the comparison that is most important is how that cost of homeownership is going to compare to the cost of renting,” Zillow Senior Economist Jeff Tucker told CNBC in November.13

Tucker also pointed out that rent is less predictable than a mortgage—and more likely to go up along with inflation.13

Real assets, like real estate, are often used as a hedge against inflation. That’s because property values typically rise with inflation.14 And when a homeowner takes out a mortgage, they lock in a set housing payment for the next 30 years.

In contrast, renters are at the mercy of the market—and they don’t gain any of the benefits of homeownership, like tax deductions, equity, or appreciation.

George Ratiu of Realtor.com told CNBC that he advises buyers to consider their budget and time frame. If they plan to stay in the home for at least three to five years, he believes it often makes sense to buy.13

Fortunately, it’s shaping up to be a better year for buyers. “I think 2022 has the promise of providing less competition, a lot more homes to choose from, and, as a result, a lot more approachable prices,” Ratiu said.13

What does it mean for you? Both property and rent prices are expected to continue rising. But when you purchase a home with a fixed-rate mortgage, you can rest assured knowing that your monthly mortgage payment will never go up. Whether you’re a first-time homebuyer or a real estate investor, we can help you make the most of today’s real estate market.

WE’RE HERE TO GUIDE YOU

While national real estate numbers and predictions can provide a “big picture” outlook for the year, real estate is local. And as local market experts, we can guide you through the ins and outs of our market and the local issues that are likely to drive home values in your particular neighborhood.

If you’re considering buying or selling a home in 2022, contact us now to schedule a free consultation. We’ll work with you to develop an action plan to meet your real estate goals this year.

Sources:

  1. Fortune –
    https://fortune.com/2021/11/04/us-home-prices-real-estate-forecast-2022-outlook/
  2. Fortune –
    https://fortune.com/2021/11/29/housing-market-real-estate-predictions-2022-forecast/
  3. Freddie Mac –
    http://www.freddiemac.com/pmms/pmms30.html
  4. Freddie Mac – https://freddiemac.gcs-web.com/news-releases/news-release-details/freddie-mac-strong-housing-market-will-continue-even-rates-and
  5. Mortgage Bankers Association –
    https://www.mba.org/2021-press-releases/october/mba-annual-forecast-purchase-originations-to-increase-9-percent-to-record-173-trillion-in-2022
  6. The Mortgage Reports –
    https://themortgagereports.com/61853/30-year-mortgage-rates-chart
  7. Realtor.com –
    https://www.realtor.com/news/trends/has-housing-market-peaked/
  8. National Association of Realtors –
    https://www.nar.realtor/newsroom/nars-yun-says-housing-market-doing-well-may-normalize-in-2022
  9. Reuters –
    https://www.reuters.com/world/us/rise-us-house-prices-halve-next-year-affordability-worsen-2021-12-07/
  10. Yahoo! News –
    https://www.yahoo.com/now/where-home-prices-headed-2022-130012748.html
  11. CNBC –
    https://www.cnbc.com/2021/11/16/inflation-rent-for-single-family-homes-surged-10percent-in-september.html
  12. Realtor.com –
    https://www.realtor.com/news/trends/what-to-expect-in-2022-housing-market/
  13. CNBC –
    https://www.cnbc.com/2021/11/23/rising-inflation-hot-housing-market-what-you-need-to-know-about-buying-a-home.html
  14. Money –
    https://money.com/inflation-2021-stocks-bitcoin-gold-reits-commodities/

5 Factors That Reveal Where The Real Estate Market Is Really Headed

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It’s the old supply-and-demand predicament: Home sales in the U.S. continue at a torrid pace, but the availability of listings remains limited. Buoyed by historically low mortgage rates, buyers keep shopping for homes, reducing the available inventory and sparking a rise in home prices across the country.

News website The Atlantic summarized the sizzling home market this way:

“Pick a housing statistic at random, and it’s probably setting an all-time record. Home prices: record high. Inventory: record low. Percentage of homes selling above asking price: record high. Average time on market: record low.”¹

Meanwhile, homebuilders are contending with an increase in material costs and a shortage of labor. These issues come amid an ongoing shortage of housing. A study commissioned by the National Association of Realtors found the U.S. is coping with a deficit of about 2 million single-family homes and about 3.5 million other housing units.²

So what can we expect from U.S. real estate? Here are five factors that illustrate where the housing market is today and is likely heading tomorrow.

ROCK-BOTTOM MORTGAGE RATES TO GRADUALLY RISE

Low interest rates continue to fuel demand from homebuyers. Some experts believe mortgage rates will creep up later this year, but they expect rates to remain near historic lows.3 However, the Federal Reserve signaled in mid-June that it may institute two interest rate hikes as soon as 2023, which could then trigger a more substantial uptick in mortgage rates.4

In June, the Mortgage Bankers Association reported that 2020 closed with the average rate for a 30-year, fixed-rate mortgage sitting at 2.8%. But the association anticipates the average rate climbing to 3.5% at the end of 2021 and 4.2% by the end of 2022.5

“As the economy progresses and inflation remains elevated, we expect that rates will continue to gradually rise in the second half of the year,” said Sam Khater, chief economist at Freddie Mac.6

What does it mean for you?

You’ve likely heard the old saying about “striking while the iron is hot.” Well, that phrase applies to the current environment for mortgage rates. It’s impossible to predict with certainty when mortgage rates will rise or fall. So, when mortgage rates are at or near historic lows (as they are today), you should seriously consider taking advantage of those rates to borrow money for a home purchase or to refinance your existing mortgage.

HOME PRICES EXPECTED TO KEEP CLIMBING

Low mortgage rates are sparking interest among homebuyers, but some are running into affordability issues.

In June, the national median list price for a home reached an all-time high of $385,000, up 12.7% on a year-over-year basis.7 And according to the Home Buying Institute, various reports and forecasts indicate home prices will keep climbing throughout 2021 and into 2022.8

While this may be welcome news for homeowners, high prices are pushing homeownership out of reach for a growing number of first-time buyers. In a recent CoreLogic survey, 82% of respondents listed housing affordability as a key problem.9

“Younger and first-time buyers, including younger millennials, are faced with the challenge of having sufficient savings for a down payment, closing costs and cash reserves,” said Frank Martell, President and CEO of CoreLogic. “As we look to the balance of 2021, we expect price rises to continue which could very well push prospective buyers out of the market in many areas and slow home price growth over the next year.”9

What does it mean for you?

If you’re a buyer waiting on the sidelines for prices to drop, you may want to reconsider. While the pace of appreciation should taper off, home prices are expected to continue climbing. And rising mortgage rates will only make a home purchase more expensive.

SINGLE-FAMILY HOME SALES REMAIN ROBUST

While record-high prices are sidelining some buyers, the impressive pace of single-family home sales marches on.

Single-family home sales are down from their peak in October 2020 yet are still above the overall level last year. In May 2021, 5.8 million existing single-family homes were sold in the U.S. That’s a 45% increase over the 4 million homes sold in May 2020.10

However, home sales saw a 0.9% dip in May 2021 compared with the previous month, the National Association of Realtors says. That was the fourth straight month for a decline in home sales. The number of home sales has slid recently because of rising prices coupled with a shortage of available homes amid intense demand.10

Fannie Mae expects total home sales to tick up slightly in the fourth quarter and finish the year up 3.8% over last year. They also forecast a slight decline of 2.2% in sales volume in 2022.11

What does it mean for you?

The market for single-family home sales remains quite active. As a result, if you’re a homeowner, you may want to ponder whether to sell now, even if you hadn’t necessarily been thinking about doing so. With demand high and inventory low, your home could fetch an eye-popping price.

LACK OF INVENTORY STILL CONSTRAINS THE HOME MARKET

According to the National Association of Realtors, in May there were 1.23 million previously owned homes on the market, down 20.6% from the same time last year.10 This translates to a 2.5-month supply of homes, which is well below the 6 months of inventory typically seen in a balanced market.10,12

According to the Realtors group, this lack of inventory translates into tougher searches for buyers and contributes to a rise in prices.10

“Demand for bigger and more expensive accommodations amid the COVID-19 pandemic, which has left millions of Americans still working from home, is driving a housing market boom. The inventory of previously owned homes is near record lows,” according to Reuters.13

What does it mean for you?

If you’re thinking of selling your home, now may be the right time to do it. Across the country, it’s a seller’s market, meaning demand is outpacing supply. That supply-and-demand imbalance puts sellers in a great position to sell their homes at a premium price. The May 2021 Realtors Confidence Index from the National Association of Realtors found the average home that was sold attracted five offers, and the association says nearly half of homes are selling above list price.14,15

CONSTRUCTION OF SINGLE-FAMILY HOMES SEES SLIGHT UPTICK

Frustrated buyers may soon find some relief, however, from an increase in new construction. Economists forecast that 1.1 million new houses will be started in 2021, compared with a predicted 940,000 units just six months ago, with 1.2 million new starts predicted for 2022 and 2023, according to the Urban Land Institute.16

Amid the rise in home construction, builders are coping with rising costs for materials. In April, the National Association of Home Builders estimated that a surge in lumber prices over the previous year had led to $35,872 being tacked onto the cost of an average new single-family home.17

“Shortages of materials and labor have builders struggling to increase production of new homes, though the demand remains strong,” Robert Frick, corporate economist at Navy Federal Credit Union, told the Reuters news service. “Potential homebuyers should expect tight inventories and rising prices for both new and existing homes for the foreseeable future.”18

Builders (and buyers) did receive some good news in June, though: Lumber prices are coming down—although likely to remain above pre-pandemic levels for the foreseeable future.19

What does it mean for you?

Given the issues affecting the new-home market, it may make sense to widen your home search to include both new and existing homes. Your brand-new dream home may not be available, but you might be able to find an existing home that lives up to your vision. Keep in mind that we can help you find either a new or existing home and can advocate for you to ensure you get the best deal possible.

ARE YOU THINKING OF BUYING OR SELLING?

If you’re in the market for a home, you’re ready to sell your house or you’ve simply been wondering whether you should sell, you definitely could benefit from an expert to help you navigate the sizzling hot real estate market. Let’s set up a free consultation to discuss your situation. We can help you figure out your options and come up with a plan to capitalize on the value of your current property or to find your ideal next home.

Sources:

  1. The Atlantic –
    https://www.theatlantic.com/ideas/archive/2021/05/us-housing-market-records/619029/
  2. Wall Street Journal – https://www.wsj.com/articles/u-s-housing-market-needs-5-5-million-more-units-says-new-report-11623835800
  3. Time –
    https://time.com/nextadvisor/mortgages/mortgage-predictions-2021/
  4. Bankrate –
    https://www.bankrate.com/banking/federal-reserve/fomc-meeting-recap-june-2021/
  5. Mortgage Bankers Association – https://www.mba.org/news-research-and-resources/research-and-economics/forecasts-and-commentary/mortgage-finance-forecast-archives
  6. Associated Press News –
    https://apnews.com/press-release/globe-newswire/mortgages-mortgage-rates-business-0fc0360d0f4af0c988504385fa2794c3
  7. Realtor.com –
    https://www.realtor.com/research/june-2021-data/
  8. Home Buying Institute –
    http://www.homebuyinginstitute.com/news/home-prices-will-keep-rising-through-2021/
  9. DS News –
    https://dsnews.com/daily-dose/07-06-2021/record-high-home-prices-intensify-affordability-challenges
  10. National Association of Realtors –
    https://www.nar.realtor/newsroom/existing-home-sales-experience-slight-skid-of-0-9-in-may
  11. Fannie Mae –
    https://www.fanniemae.com/media/40561/display
  12. Real Estate Center at Texas A&M University –
    https://assets.recenter.tamu.edu/documents/articles/2046-7.pdf
  13. Reuters –
    https://www.reuters.com/world/us/us-housing-starts-rise-less-than-expected-may-building-permits-fall-2021-06-16/
  14. National Association of Realtors – https://www.nar.realtor/research-and-statistics/research-reports/realtors-confidence-index
  15. Realtor magazine –
    https://magazine.realtor/daily-news/2021/05/17/report-half-of-homes-sell-above-list-price
  16. Urban Land Magazine – https://urbanland.uli.org/capital-markets/uli-forecast-sees-increased-improvement-in-outlook-for-u-s-economy-2/
  17. National Association of Home Builders – https://eyeonhousing.org/2021/04/higher-lumber-costs-add-more-than-35k-to-new-home-prices-119-to-monthly-rent/
  18. Reuters – https://www.reuters.com/world/us/us-housing-starts-rise-less-than-expected-may-building-permits-fall-2021-06-16/
  19. NPR – https://www.npr.org/2021/06/21/1008843212/lumber-prices-are-finally-dropping-after-they-soared-during-the-pandemic

Five Design Trends for 2021

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We’ve all spent a lot more time at home over the past year. And for many of us, our homes have become our office, our classroom, our gym—and most importantly, our safe haven during times of uncertainty. So it’s no surprise to see that design trends for 2021 revolve around soothing color palettes, cozy character, and quiet retreats.

Even if you don’t have immediate plans to buy or sell your home, we advise our clients to be mindful of modern design preferences when planning a remodel or even redecorating. Over-personalized or unpopular renovations could lower your property’s value. And selecting out-of-style fixtures and finishes could cause your home to feel dated quickly.

To help inspire your design projects this year, we’ve rounded up five of the hottest trends.  Keep in mind, not all of these will work well in every house. If you plan to buy, list, or renovate your property, give us a call. We can help you realize your vision and maximize the impact of your investment.

1. Uplifting Colors

Colors are gravitating toward warm and happy shades that convey a sense of coziness, comfort, and wellbeing. This year’s palettes draw from earthy hues, warm neutrals, and soothing blues and greens.1

While white and gray are still safe options, expect to see alternative neutrals become increasingly popular choices for walls, cabinets, and furnishings in 2021. For a fresh and sophisticated look, try one of these 2021 paint colors of the year:

  • Aegean Teal (coastal blue) by Benjamin Moore
  • Urbane Bronze (brownish-gray) by Sherwin-Williams
  • Soft Candlelight (muted yellow) by Valspar

On the opposite end of the spectrum, indigo, ruby, sapphire and plum are showing up on everything from fireplace mantels and floating shelves to fabrics and home accessories. These classic, rich hues can help bring warmth, depth, and a touch of luxury to your living space.

To incorporate these colors, designers recommend using the “60-30-10 Rule.” Basically, choose a dominant color to cover 60% of your room. For example, your walls, rugs, and sofa might all be varying shades of beige or gray. Then layer in a secondary color for 30% of the room. This might include draperies and accent furniture. Finally, select an accent color for 10% of your room, which can be showcased through artwork and accessories.2

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2. Curated Collections

After a decade of minimalism, there’s been a shift towards highly-decorative and personalized interiors that incorporate more color, texture, and character. Clearly-defined styles (e.g., mid-century modern, industrial, modern farmhouse) are being replaced by a curated look, with furnishings, fixtures, and accessories that appear to have been collected over time.3

This trend has extended to the kitchen, where atmosphere has become as important as functionality. The ubiquitous all-white kitchen is fading in popularity as homeowners opt for unique touches that help individualize their space. If you’re planning a kitchen remodel, consider mixing in other neutrals—like gray, black, and light wood—for a more custom, pieced-together look. And instead of a subway tile backsplash, check out zellige tile (i.e., handmade, square Moroccan tiles) for a modern alternative with old-world flair.4

3. Reimagined Living Spaces

The pandemic forced many of us to rethink our home design. From multipurpose rooms to converted closets to backyard cottages, we’ve had to find creative ways to manage virtual meetings and school. And designers expect these changes to impact the way we live and work for years to come.

For example, some home builders are predicting the end of open-concept floor plans as we know them.5 Instead, buyers are searching for cozier spaces with more separation and privacy. Cue the addition of alcoves, pocket doors, and sliding partitions that enable homeowners to section off rooms as needed.4

The necessity of a home office space is also here to stay. But what if you don’t have a dedicated room? Alternative workspaces have become increasingly popular. In fact, one of the biggest trends on Pinterest this year is the “cloffice”—essentially a spare closet turned home office. Searches for “home library design” and “bookshelf room divider” are on the rise, as well.6

4. Staycation-Worthy Retreats

With travel options limited right now, more homeowners are turning their vacation budgets into staycation budgets. Essentially, recreate the resort experience at home—and enjoy it 365 days a year!

Bedrooms should provide a soothing sanctuary for rest and relaxation. But this year, minimalist decor and muted colors are giving way to bolder statement pieces. To create a “boutique hotel” look in your own bedroom, start with a large, upholstered headboard in a rich color or pattern. Layer on organic linen bedding and a chunky wool throw, then complete the look with a pair of matching bedside wall lights.7

Carry those vacation-vibes into your bathroom with some of the top luxury upgrades for 2021. Curbless showers and freestanding tubs continue to be popular choices that offer a modern and spacious feel, and large-format shower tiles with minimal grout lines make clean up a breeze. Add a floating vanity and aromatherapy shower head for the ultimate spa-like experience.4

5. Outdoor Upgrades

From exercise to gardening to safer options for entertaining, the pandemic has led homeowners to utilize their outdoor spaces more than ever. In fact, backyard swimming pool sales skyrocketed in 2020, with many installers reporting unprecedented demand.8 But a new pool isn’t the only way homeowners can elevate their outdoor areas this year.

The home design website Houzz recently named 2021 “the year of the pergola.” They’re a relatively quick and affordable option to add shade and ambiance to your backyard.4 Another hot trend? Decked-out, custom playgrounds for exercising (and occupying) the youngest family members who may be missing out on school and extracurricular activities.9

But don’t limit your budget to the backyard. Landscapers are reporting an increase in front yard enhancements, including porch additions and expanded seating options. These “social front yards” enable neighbors to stay connected while observing social-distancing guidelines.10

DESIGNED TO SELL

Are you contemplating a remodel? Want to find out how upgrades could impact the value of your home? Buyer preferences vary greatly by neighborhood and price range. We can share our insights and offer tips on how to maximize the return on your investment. And if you’re in the market to sell, we can run a Comparative Market Analysis on your home to find out how it compares to others in the area. Contact us to schedule a free consultation!

Sources:

  1. Good Housekeeping  –
    https://www.goodhousekeeping.com/home/decorating-ideas/g34762178/home-decor-trends-2021/
  2. The Spruce –

https://www.thespruce.com/timeless-color-rule-797859

  • Homes & Gardens –

https://www.homesandgardens.com/news/interior-design-trends-2021

  • Houzz –

https://www.houzz.com/magazine/36-home-design-trends-ready-for-takeoff-in-2021-stsetivw-vs~142229851

New Year, New Home? Set Homeownership Goals Whether You’re Buying, Selling, or Staying Put

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The start of a new year always compels people to take a fresh look at their goals, from health and career to relationships and finance. But with historically low mortgage rates, increased home sales and price growth, and a tight housing inventory, the time is right to also make some homeownership resolutions for 2021.

Home buyers, is this the year you work to improve your credit score, pay down some debt, or save for a down payment?

Home sellers, we’ve laid out plans for you to get top dollar for your property, including timing your home sale, making your property stand out from the crowd, and investing in your extra living space.

And even if you’re staying put for awhile, homeowners, you can resolve to improve your status quo by evaluating your home budget, finalizing your home maintenance schedule, or maybe investing in a second property.

So no matter your homeownership status, we’ve got some ideas and advice for you to make this year your best one yet. Read on to learn more.

HOME BUYERS

Resolution #1: Qualify for a better mortgage with a higher credit score.

Your credit report highlights your current debt, bill-paying history, and other key financial information. Importantly for your home-buying journey, it is also used by lenders and companies to calculate your credit score, which partly determines if you are qualified to obtain a mortgage. Therefore, before you start house-hunting, make sure your finances are in the best possible shape by checking your credit report from Equifax, Experian, and TransUnion (via AnnualCreditReport.com). You can also obtain your credit score for free from some banks and credit card companies.

Your credit score will be a number ranging from 300-850.1 Generally speaking, a credit score of 740 or higher is considered very good to excellent.2 If your FICO score drops below 740, you might need to work at boosting your score for a few months before you begin house-hunting. Ways to do this are to pay your bills on time every month, keep your credit card balances low, and avoid applying for new credit.

Resolution #2: Improve your credit health by paying down debt.

Do you have student loans, credit card debt, or car payments tying up your income each month? That debt is hurting your “buying power,” or the amount of home you can afford. Not only is it money that you can’t spend on your new home, but your debt-to-income ratio also affects your credit score, which we discussed above. The less debt you have, the higher your FICO score and the better mortgage you can obtain.

If you can, pay off some debt in its entirety—like a low balance on a credit card. Then apply that “extra” money you previously paid on that credit card to pay off bigger debt, like a car loan. Even if you can’t pay off all (or any) of your debt in full, reducing the balances of each account will help you qualify for the best possible mortgage terms.

Resolution #3: Create a financial safety net before applying for a mortgage.

Don’t forget that buying a home requires some cash as well. A down payment is typically 7% of a home’s purchase price, and closing costs currently average $3,700.3,4 You’ll also need money for moving expenses and any initial maintenance tasks that might pop up. And as the pandemic taught us, you never know when an unforeseen event might cause a job loss, drop in income, or health scare, so having some liquid savings will ensure that you can still pay your mortgage if a crisis occurs.

Dedicate some effort to building up your reserves. Cut down on unnecessary expenses, and consider having a portion of each paycheck automatically deposited into your savings account to avoid the temptation to spend it.

HOME SELLERS

Resolution #4: Decide on the right time to sell your home.

If you’re looking to maximize profit on the sale of your home, selling earlier in the year makes sense. Listing prices historically increase early in the year, peak in May, plateau through June, and decrease for the remainder of the year.5 And, according to the National Association of Realtors, “[w]ith both mortgage rates and the number of homes available for sale expected to remain relatively low, home prices are likely to continue to increase. [In] mid-January, home prices typically begin a quick ramp-up in a normal year.”5

But sales price isn’t the only thing to consider. You might not be ready to sell your home yet because you don’t want to uproot your kids during the school year or because you need to tackle some minor upgrades before placing your home on the market.

This means that there is no one month or season that is the perfect time to sell your home. Instead, the right timeline for you takes into account factors such as when you’ll earn the highest profit, personal convenience, and whether your home is even ready to put on the market. A trusted real estate professional can talk you through your specific needs to clarify when to sell your home.

Resolution #5: Boost your home’s resale value by making your property shine.

Housing inventory is at historic lows across the country, and that means the market is fiercely competitive.6 Selling your home in 2021 has the potential to net you a huge return right now, and you can maximize that amount with some simple fixes to make sure your property outshines your neighbors’ for sale down the street.

In your home, you might need to tackle a minor remodeling project, such as upgrading the flooring or adding a fresh coat of paint. According to the National Association of Realtors’ 2019 Remodeling Impact Report, simply refinishing existing hardwood floors recoups 100% of the cost at resale, and completely replacing it with new wood flooring recovers 106% of costs.7

Outside, you might consider improving your curb appeal by removing a dead bush, trimming a tree that blocks the front window, or power-washing your moldy driveway and sidewalks. In fact, real estate agents say cleaning the exterior of your house can add $10,000 to $15,000 to a home’s sale price.8 And according to a Virginia Tech study, improving a home’s landscaping may increase its value by 10 to 12%.9

A good agent should provide custom-tailored suggestions to ensure your property pops inside and out. Ask us about our local insider secrets that will make your home stand out from others on the market.

Resolution #6: Invest in your “extra” living space to meet current buyers’ needs.

Due to COVID-19, more people are staying at home to work, go to school, exercise, and stay entertained. And these lifestyle changes are showing up in home buyer preferences. For example, according to one study, buyers are looking more and more for homes with formal, outfitted home offices, private outdoor spaces, and updated kitchen appliances.10

So if you’ve got an underutilized room, consider turning it into an office, home gym, schoolroom, or multi-purpose room to meet current home buyer needs and attract better offers on your home. Got some underwhelming space outside? You could turn it into an outdoor entertainment area by adding a firepit, upgrading the patio furniture, or installing a grilling area. Be sure to consult with a local real estate professional before investing in a renovation, however, as each market’s buyers have different tastes.

HOMEOWNERS

Resolution #7: Evaluate your household budget to reflect financial changes.

After this past year, in particular, your financial picture may have changed. Maybe you were furloughed, had your hours reduced, or got a new job further from home. Perhaps you’ve kept the same job, but you’re now working remotely. A work-from-home arrangement could mean less money spent on gas, tolls, a professional wardrobe, and dining out for lunch.

But this could also mean new (or increased) expenses now that you’re working at home, such as new tech-related purchases, faster Wi-Fi, and higher energy bills. January marks the perfect opportunity to update your income and expenses and review last year’s spending habits, tweaking as needed for 2021.

For more specific ideas, contact us for our free report “20 Ways to Save Money and Stretch Your Household Budget.”

Resolution #8: Save money now (and earn more later) with a home maintenance plan.

Having a schedule of regular home maintenance projects to tackle will save you money now and in the long-term. You’ll avoid some surprise “emergency fixes,” and when you’re ready to eventually sell your home, you’ll get higher offers from buyers who aren’t put off by overdue repairs.

Even if nothing necessarily needs fixing right now, you can lower your energy costs by maintaining and upgrading your home.  According to the U.S. Department of Energy, simple fixes add up: replace five most frequently used bulbs with ENERGY STAR ones to save $75/year; repair leaky faucets to save $35/year; replace older toilets with low-flow models to save $100/year; and seal air leaks to save $83-$166/year.11

For a breakdown of home maintenance projects to tackle throughout the year, contact us for our free report “House Care Calendar: A Seasonal Guide to Maintaining Your Home.”

Resolution #9: Invest in real estate for a better standard of living.

Even if you don’t plan on leaving your current residence, real estate is a great way to improve your quality of life in 2021.

Have cabin fever from the long quarantine? A vacation home in a getaway location you love lets you safely spread your wings. And if you have been looking for a second stream of income, an investment property might be your answer. Just be sure to consult with a real estate professional to get a realistic sense of a property’s true income potential.

Want more information on how a second property fits into your 2021 plans? Request our free report, “Move Up vs Second Home: Which One Is Right For You?”

LET US HELP YOU WITH YOUR 2021 GOALS

Without a plan and a support system, 55% of Americans will break their new year’s resolutions.12 Whether you’re looking to buy, sell, or stay put in your home, it helps to connect with a trusted real estate agent to keep you motivated and on track.

As local market experts, we have the knowledge, experience, and networks to help you achieve your homeownership goals, whatever they may be. Reach out to us today for a free consultation and commit to a happy and prosperous new year.

Sources:

  1. USA.gov –
    https://www.usa.gov/credit-report
  2. Equifax –
    https://www.equifax.com/personal/education/credit/score/what-is-a-good-credit-score/
  3. NerdWallet –
    https://www.nerdwallet.com/article/mortgages/the-20-mortgage-down-payment-is-dead
  4. Zillow –
    https://www.zillow.com/mortgage-learning/closing-costs/
  5. Realtor.com –
    https://www.realtor.com/research/we-should-be-in-a-buyers-market-right-now-but-covid-turned-everything-upside-down-best-time-to-buy-a-home
  6. Business Insider –
    https://www.businessinsider.com/how-2020-broke-the-housing-market-inventory-could-run-out-2020-9
  7. National Association of Realtors –
    https://www.nar.realtor/sites/default/files/documents/2019-remodeling-impact-10-03-2019.pdf
  8. House Logic –
    https://www.houselogic.com/save-money-add-value/add-value-to-your-home/adding-curb-appeal-value-to-home/
  9. Virginia Cooperative Extension –
    https://www.pubs.ext.vt.edu/content/dam/pubs_ext_vt_edu/426/426-087/426-087.pdf
  10. HomeLight –
    https://www.homelight.com/blog/top-agent-insights-for-q2-2020/
  11. U.S. Department of Energy –
    https://www.energy.gov/energysaver/articles/how-much-can-you-really-save-energy-efficient-improvements
  12. Ipsos –
    https://www.ipsos.com/en-us/urban-plates-ipsos-NY-Resolutions

2020 Outlook: Real Estate Market Forecast

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We’re in the midst of the longest economic expansion in U.S. history, and economists think there’s still room to grow. A recent survey by the National Association for Business Economics found that experts believe the U.S. economy will remain positive throughout 2020.1

Still, given that recessions are a natural (and necessary) part of a business cycle, we know this period of growth will inevitably end. So you may be wondering … how will an eventual recession impact the real estate market?

Many Americans assume a recession would lead to a decline in housing prices like we saw during the Great Recession of 2008. But the real estate market crash we experienced wasn’t typical. In fact, the last recession wasn’t typical at all. It was the worst economic downturn since the Great Depression of the 1930s.

ATTOM Data Solutions analyzed real estate prices during the last five recessions and found that, in the majority of cases, home prices actually went up. Only twice (in 1990 and 2008) did prices decline, and in 1990 it was by less than one percent.2

So what can historical precedent—combined with today’s data—tell us about the future of real estate? Here’s where experts predict the housing market is headed in 2020 and beyond.

HOME PRICES WILL KEEP RISING

Economists predict U.S. housing prices will continue to rise, regardless of a recession. In fact, property data firm CoreLogic forecasts a faster rate of growth for home prices in 2020 than we saw in 2019, with the biggest gains at the lower end of the market.3

Arch MI Chief Economist Ralph DeFranco expects entry-level home prices to increase faster than incomes this year, making it even more difficult for many first-time buyers to afford to enter the market.4

“Low interest rates and a shortage of starter homes will continue to push up prices,” predicts DeFranco. “This is especially the case for lower price points, since builders have tended to focus on more expensive, higher-profit houses and less on replenishing low inventories of entry-level homes.”4

“Real estate is on firm ground with little chance of price declines,” said National Association of Realtors Chief Economist Lawrence Yun. “However, in order for the market to be healthier, more supply is needed to assure home prices as well as rents do not consistently outgrow income gains.”5

What does it mean for you? If you have the ability and desire to buy a home now, don’t let a fear of recession or falling prices hold you in limbo. Economists expect home values, as well as rent prices, to continue rising. So you’ll likely pay more the longer you wait.

INVENTORY CONSTRAINTS WILL CONTINUE

According to Redfin, Americans are staying in their homes longer. In 2019, the average homeowner had resided in their home for 13 years, up from just eight years in 2010. That means there are fewer homes available today for those who want to buy.6

It’s possible that an increase in new construction could offer some relief. The National Association of Realtors (NAR) expects single-family housing starts to total one million this year, the highest level since 2007. And NAR Chief Economist Lawrence Yun predicts the average price of new construction will decline slightly as builders shift to building smaller, more affordable homes.7

However, these efforts may not be enough to meet current demand.“Despite improvements to new construction and short waves of sellers, next year will once again fail to bring a solution to the inventory shortage,” predicts Realtor.com Senior Economist George Ratiu. “In 2020, we expect inventory to struggle to grow and could instead reach a historic low level.”8

What does it mean for you? If you’re looking to buy a starter home, be prepared to compete for the best listings. Start your search early, and if you’re up against a deadline (like a new baby), build in plenty of time to find the right home. We can help you assess your options, including new construction and up-and-coming developments.

MORTGAGE RATES WILL REMAIN LOW

Mortgage rates have declined more than a full percentage point since November 2018, when they hit a recent peak of 4.94%.9 The Mortgage Bankers Association predicts rates will remain low, at around 3.7%, through mid-2021.10

While it may not seem significant, on a $200,000 30-year fixed-rate mortgage, that lower rate means buyers could save around $145 on their monthly payment and more than $52,000 over the life of their mortgage. Lower mortgage rates make homeownership more accessible and affordable for buyers.

Although economists expect mortgage rates to stay low, they caution against waiting to act. Economic factors, shifts in supply and demand, or unforeseen impacts of the November election could cause rates to rise unexpectedly. “We recommend borrowers with long-term plans of staying in their homes to lock in a low rate now because there’s no telling how long these low rates will last,” warns Preetam Purohit, a capital markets trader at Embrace Home Loans.11

What does it mean for you? If you’re looking to buy a home, act soon to lock in a historically low mortgage rate. It will minimize your monthly payment and could save you a bundle over the long term. And if you plan to stay in your current home for a while, consider whether it makes sense to refinance your mortgage at today’s lower rates.

MILLENNIALS WILL DRIVE THE MARKET

Millennials are expected to account for more than half of all mortgages this year, outnumbering Generation X and Baby Boomers combined. It’s not surprising, considering their age and stage of life. In 2020, the largest cohort of millennials will turn 30, and the oldest millennials will turn 39.8

“Family changes tend to drive home-buying decisions,” explains Realtor.com Chief Economist Danielle Hale. “Millennials are going to be active in the housing market not just because they’re just at the age when they’re thinking about becoming first-time home buyers, but they’re also in the age range when they’re having kids.”12

Younger millennials flocked to urban centers that offered easy access to work, shopping, and restaurants. But high prices, lack of square footage, and subpar schools are driving millennials out to the suburbs as they begin to marry and expand their families.

In response, a new model for suburban living has emerged. “Hipsturbias,” or mixed-use communities that bring the live/work/play concept to the suburbs, were recently named one of the top real estate trends for 2020 by the Urban Land Institute.4

What does it mean for you? If you’re a millennial who has been priced out of urban living or is looking for more space for your growing family, a number of suburbs in our area have a lot to offer. We can point you towards the communities that will best meet your needs. And if you’re a homeowner with plans to sell, give us a call. We know how to market your home to millennials … and can help you sell quickly for top dollar by appealing to this leading market segment!

WE’RE HERE TO GUIDE YOU

While national real estate numbers can provide a “big picture” outlook, real estate is local. As local market experts, we can guide you through the ins and outs of our market and the issues most likely to impact sales and home values in your particular neighborhood.

If you’re considering buying or selling a home in 2020, contact us now to schedule a free consultation. We’ll work with you to develop an action plan to meet your real estate goals this year.

START PREPARING TODAY
If you plan to BUY this year: Get pre-approved for a mortgage. If you plan to finance part of your home purchase, getting pre-approved for a mortgage will give you a jump-start on the paperwork and provide an advantage over other buyers in a competitive market. The added bonus: you will find out how much you can afford to borrow and budget accordingly. Create your wish list. How many bedrooms and bathrooms do you need? How far are you willing to commute to work? What’s most important to you in a home? We can set up a customized search that meets your criteria to help you find the perfect home for you. Come to our office. The buying process can be tricky. We’d love to guide you through it. We can help you find a home that fits your needs and budget, all at no cost to you. Give us a call to schedule an appointment today!  

If you plan to SELL this year: Call us for a FREE Comparative Market Analysis. A CMA not only gives you the current market value of your home, it will also show how your home compares to others in the area. This will help us determine which repairs and upgrades may be required to get top dollar for your property, and it will help us price your home correctly once you’re ready to list. Prep your home for the market. Most buyers want a home they can move into right away, without having to make extensive repairs and upgrades. We can help you determine which ones are worth the time and expense to deliver maximum results. Start decluttering. Help your buyers see themselves in your home by packing up personal items and things you don’t use regularly and storing them in an attic or storage locker. This will make your home appear larger, make it easier to stage. and get you one step closer to moving when the time comes!

Sources:

  1. NBC News –
    https://www.nbcnews.com/business/economy/what-impending-recession-new-survey-shows-most-people-think-they-n1098511
  2. Curbed –
    https://www.curbed.com/2019/1/10/18139601/recession-impact-housing-market-interest-rates
  3. HousingWire  –
    https://www.housingwire.com/articles/corelogic-expects-home-prices-to-do-this-in-the-next-12-months/
  4. Forbes –
    https://www.forbes.com/sites/alyyale/2019/11/15/2020-housing-outlook-expert-predictions-for-mortgage-rates-home-prices-tech-and-more/#343ea4522935
  5. National Association of Realtors –
    https://www.nar.realtor/newsroom/expect-continued-economic-growth-slower-real-estate-price-gains-and-small-chance-for-recession-in
  6. Redfin –
    https://www.redfin.com/blog/homeowners-staying-in-their-homes-longer/
  7. HousingWire –
    https://www.housingwire.com/articles/builders-are-coming-to-the-housing-markets-rescue/
  8. Realtor.com –
    https://www.realtor.com/research/2020-national-housing-forecast/
  9. YCharts –
    https://ycharts.com/indicators/30_year_mortgage_rate
  10. MBA Mortgage Market Forecast November 2019  –
    https://www.mba.org/news-research-and-resources/research-and-economics/forecasts-and-commentary
  11. Dallas Morning News –
    https://www.dallasnews.com/sponsored/real-estate/2019/11/23/experts-predict-where-mortgage-interest-rates-land-in-2020/
  12. Realtor.com –
    https://www.realtor.com/news/trends/biggest-changes-coming-in-2020-real-estate-and-tips-for-buyers-and-sellers/