GETTING STARTED IS THE EASY PART.

Starting the Search for Your Dream Home? Here Are 5 Tips!

In today’s real estate market, low inventory dominates the conversation in many areas of the country. It can often be frustrating to be a first-time homebuyer if you aren’t prepared.

In a realtor.com article entitled, “How to Find Your Dream Home—Without Losing Your Mind,” the author highlights some steps that first-time homebuyers can take to help carry their excitement of buying a home throughout the whole process.

1. Get Pre-Approved for a Mortgage Before You Start Your Search

One way to show you are serious about buying your dream home is to get pre-qualified or pre- approved for a mortgage before starting your search. Even if you are in a market that is not as competitive, understanding your budget will give you the confidence of knowing whether or not your dream home is within your reach. This step will also help you narrow your search based on your budget and won’t leave you disappointed if the home you tour, and love, ends up being outside your budget!

2. Know the Difference Between Your ‘Must-Haves’ and ‘Would-Like-To-Haves’

Do you really need that farmhouse sink in the kitchen to be happy with your home choice? Would a two-car garage be a convenience or a necessity? Could the ‘man cave’ of your dreams be a future renovation project instead of a make-or-break right now? Before you start your search, list all the features of a home you would like and then qualify them as ‘must-haves’, ‘should-haves’, or ‘absolute-wish list’ items. This will help keep you focused on what’s most important.

3. Research and Choose a Neighborhood You Want to Live In

Every neighborhood has its own charm. Before you commit to a home based solely on the house itself, the article suggests test-driving the area. Make sure that the area meets your needs

for “amenities, commute, school district, etc. and then spend a weekend exploring before you commit.”

4. Pick a House Style You Love and Stick to It

Evaluate your family’s needs and settle on a style of home that would best serve those needs. Just because you’ve narrowed your search to a zip code, doesn’t mean that you need to tour every listing in that zip code. An example from the article says, “if you have several younger kids and don’t want your bedroom on a different level, steer clear of Cape Cod–style homes, which typically feature two or more bedrooms on the upper level and the master on the main.”

5. Document Your Home Visits

Once you start touring homes, the features of each individual home will start to blur together. The article suggests keeping your camera handy to document what you love and don’t love about each property you visit. Making notes on the listing sheet as you tour the property will also help you remember what the photos mean, or what you were feeling while touring the home.

The Takeaway

In a high-paced, competitive environment, any advantage you can give yourself will help you on your path to buying your dream home. Save yourself time, effort and heartache by following these 5 easy tips. And as always, we are just a call away.

SIGNATURE.png



INVENTORY ON THE RISE

The Market is Rising but is Inventory Slowing it Down?

We recently reported that many believe a recession could happen within the next two years. We explained that 70% of economists and market analysts surveyed last year believe that a recession will occur in 2019 or 2020 and that 42% of consumers currently looking to purchase a home also agree that a recession will occur this year or next. However, the U.S. economy has performed well in the first quarter of 2019 and that has caused some experts to change their thinking on an impending economic slowdown. Here are a few notable examples:

Anthony Chan, Chief Economist at JPMorgan Chase

“I feel really comfortable that the economy is slowing down this year, but not going into a recession... It doesn’t look, to me, like the odds of a recession in 2020 are there.”

Dean Baker, Senior Economist at the Center for Economic & Policy Research

“To sum up the general picture, the U.S. economy is definitely weakening... However, with

wages growing at a respectable pace, and job growth remaining healthy, we should see enough consumption demand to keep the economy moving forward. That means slower growth, but no recession.”

Lisa Shalett, Chief Investment Officer, Wealth Management at Morgan Stanley

“I’m not convinced a recession is coming soon... I see an improving housing market (low rates help), a rebound in bank lending, a tight labor market, higher oil prices and well-behaved credit markets. All these point to a stable U.S. economic outlook.”

But now that home values are up and distressed sales (foreclosures and short sales) have fallen to their lowest point in years, there is one thing that may cause the industry to tap the brakes: a lack of housing inventory! Buyer demand naturally increases during the summer months, but supply has not kept up.

Here are the thoughts of a few industry experts on the subject:

Lawrence Yun, Chief Economist at National Association of Realtors

“Further increases in inventory are highly desirable to keep home prices in check, the sustained steady gains in home sales can occur when home price appreciation grows at roughly the same pace as wage growth.”

Jessica Lautz, Vice President of NAR

“There’s a supply-demand mismatch... More inventory is needed at the lower end and a price reduction may be needed at the upper end.”

Danielle Hale, Chief Economist of Realtor.com

“Heading into spring, U.S. prices are expected to continue to rise and inventory is expected to continue to increase, but at a slower pace than we’ve seen the last few months as fewer sellers want to contend with this year’s more challenging conditions... A buyer’s experience will vary notably depending on the market and price point they’re targeting.”

If you are thinking of selling, now may be the time! Demand for your house will be strong at a time when there is very little competition. Is this your year for a move?

SIGNATURE.png



YOU READY FOR YOUR FIXER UPPER?

SURGING SPRING BUYERS MAKE THE FIXER UPPER THE RIGHT MOVE.

Last fall, some predicted that the 2019 residential real estate market would be a dumpster fire. Some even thought that a crash like the last was on the horizon. However, according to two separate reports, buyer demand dramatically increased over the last three months, leading into this spring buyers’ market (the March data is not yet available). Both the ShowingTime Showing Index and the National Association of REALTORS Buyer Traffic Index show that buyer demand has increased in each of the last three months.

IMG_6287.png

According to the National Association of Realtors’ Economists’ Outlook Blog, purchasing a home has become more affordable, which has led to increased demand.

“Due to the combination of falling home prices and mortgage rates, the income needed to make an affordable mortgage payment (mortgage no more than 25% of income) on a median-priced home with 10% down payment and 30-year fixed rate mortgage decreased from $60,425 in June 2018 to $53,783 as of February 2019, and the difference of $6,642 represents a gain in buying power because one can afford a home purchase at a lower level of income.”

However, more buyers doesn’t mean more homes for sale, particularly at the entry-level price range. According to a new survey from Move.com, the wave of first-time homebuyers hitting the market this summer has resulted in an interesting statistic. Nearly 60% of buyers searching for a home this spring are willing to consider buying a fixer-upper, with 95% believing that the projects needed will increase their new home’s value! Realtor.com’s Chief Economist, Danielle Hale, pointed to low-inventory at the entry-level price range for the increase in willingness to renovate.

“The combination of rising home prices and limited entry-level homes for sale is prompting many home shoppers to consider homes that need renovating. Replete with inspiration at their fingertips – like Pinterest, Instagram, and various home renovation TV shows – some home shoppers are comfortable tackling home renovation jobs to find a home that balances their needs with their budget.”

Just over half of all respondents who said they would be willing to buy a home in need of some TLC, would also spend more $20,000 to make the home fit their needs. The most common ‘expected’ renovation is a kitchen remodel which can run anywhere from $22,000 for a minor remodel to $66,000 for a major remodel. This isn’t a new trend by any means. According to the Joint Center for Housing Studies at Harvard University, home improvement project spending reached a new high in 2018.“Americans spent $336.9 billion on remodeling projects, up 7.4% from the $313.6 billion a year earlier.” Home renovation television shows have given many buyers hope that they could renovate a home they can afford into their dream home!

If you are one of the many Americans considering buying a home this spring, continue to move forward to take advantage of falling interest rates. Whether your future home is turn-key ready or a complete rehab, give us a call so we can do this together.

SIGNATURE.png



WILL STUDENT LOANS STOP MY DREAMS?

Student Loan Debt a Threat No More?

Over the course of the last thirty years, a shift has happened. An entire generation has been raised to believe that a college education is their key to unlocking opportunities that were not available to their parent’s or grandparent’s generations. Due to this stellar idea, student loan debt has soared to $1.5 trillion and represents the largest category of debt, surpassing credit card and auto loan debt in 2010 and never looking back. As more and more Americans continue their education amongst rising tuition costs, this number will no doubt increase.

Many housing experts have blamed student loans for a drop in the homeownership rate for young families, and to an extent, they’ve been right. Increased debt at the time of graduation has no doubt limited young people from being able to afford a home at the same rate as their parents or grandparents did at the same age. In a recent Forbes article, the author explained that “in just the class of 2017, the average student has about $40,000 in debt — almost enough for a 20% down payment on a median-priced home.” The Federal Reserve set out to determine exactly how much impact student loan debt has had on the homeownership rate of those 18-34 (millennials). Their results found that, “Every $1,000 in student loan debt delays homeownership by about 2.5 months, but it doesn’t prevent homeownership entirely. In fact, by the time college grads reach their 30s, those with student loan debt have a homeownership rate nearly identical to those who didn’t take out loans.” In the Wall Street Journal’s coverage of the Fed report, they found that recent graduates prioritize paying off their student loans over saving for a down payment, despite their desire to be a homeowner. Many with debt want to “get that monkey off (their) back (before they) make any new investments.” This has just delayed the wave of young home buyers from hitting the market. But as Danielle Hale, the Chief Economist at realtor.com warns,


WATCH OUR NEW EPISODE OF “ESTATE OF GRACE”

where we talk about STUDENT LOAN DEBT and home ownership!


“2020 will be peak millennial, the year when the largest number of millennials will turn 30.”

By age 30, those who attained a bachelor’s degree right after high school will be one or two years away from paying off their loans and will have been in their career long enough to earn a higher salary. In the long run, research shows that attaining a bachelor’s degree or more actually increases the chances that someone will become a homeowner.


If you are one of the many millennials who has prioritized paying down your student loans over saving for a down payment, you’re not alone. Even if you are a couple years away from paying off your loans, let’s get together to help you determine if waiting really is the best decision for you!

SIGNATURE.png

TELL ME WHY!?

3 Questions You Need To Ask Before Buying A Home.

If you are debating with yourself about whether right now is the time to purchase a home or not, you are likely getting a lot of advice from others. Though your friends and family have your best interests at heart, they may not be fully aware of your needs and what is currently happening in the real estate market.

Try asking yourself the following three questions to help determine if now is the time to buy in today’s current market.

1. Why am I buying a home in the first place?

This is the most critical of all 3 questions. And you have to forget about your finances for a moment... Why did you begin to consider purchasing a home? What was the trigger? For most, the reason has nothing to do with money. For example, a study by realtor.com found that “73% said buying in a good school district was “important” in their search.”

This report supports a study by the Joint Center for Housing Studies at Harvard University which revealed that the top four reasons Americans buy a home have nothing to do with money. The actual reasons are:

A good place to raise children and provide them with a good education

A place where you and your family feel safe

More space for you and your family

Control of that space

What does owning a home mean to you? What non-financial benefits will you and your family gain from being home owners? It’s a tough question but it is designed to be! This is your “why” and the driving force to becoming a home owner.

2. Where are home values headed?

According to the latest Existing Home Sales Report from the National Association of Realtors (NAR), the median price of homes sold in February (the latest data available) was $249,500. This is up 3.6% from last year. The increase also marks the 84th consecutive month with year-over-year gains.

Looking at home prices year over year, CoreLogic is forecasting an increase of 4.6%. In other words, a home that costs you $250,000 today will cost you an additional $11,500 if you wait until next year to buy it.

Simply put, with prices increasing, it may cost you more if you wait until next year to buy. Your down payment will also need to be higher in order to account for the higher price of the home you wish to buy.

3. Where are mortgage interest rates headed?

A buyer must be concerned about more than just prices. The ‘long-term cost’ of a home can be dramatically impacted by even a small increase in mortgage rates.

Freddie Mac, Fannie Mae, the Mortgage Bankers Association and NAR have all projected that mortgage interest rates will increase over the next twelve months, as you can see in the chart below:


Only you and your family know for certain if now is the time to purchase a home. Consider the above and be honest with yourself. Could this be your year?

SIGNATURE.png