It is officially November and the start to a new month!
In the November issue of our newsletter you will find events this month, featured listings, market predictions for 2021, and how to follow us on social media.
Wonder what your house — or a house you might buy — is really worth? Knowing how to calculate your home’s value with the help of online tools and trained professionals better prepares you to buy, sell, refinance, tap into your home’s equity or even negotiate lower property taxes.
Searching “how much is my house worth?” online reveals dozens of home value estimators. In fact, 22% of U.S. homeowners who determined their home’s value used an online estimator, according to a survey. The technical term for these tools is automated valuation model, or AVM, and they’re typically offered by lenders or real estate sites like Zillow and Redfin.
Using public records like property transfers, deeds of ownership and tax assessments along with some mathematical modeling, these tools try to predict your home’s value based on recent sales and listing prices in the area.
When you’re ready to dive deeper into your home value, you can ask a local real estate agent for a comparative market analysis, or CMA.
Though not as detailed as a professional appraisal, a CMA provides an agent’s evaluation of the home and market to provide an estimate of value, typically for listing purposes.
If you’re wary of AVMs but still want a quick estimate of what your home is worth, the Federal Housing Financing Agency’s house price index (HPI) calculator applies a more scientific approach.
The tool uses the “repeat sales method,” says FHFA senior economist Will Doerner. Armed with millions of mortgage transactions gathered since the 1970s, the FHFA tracks a house’s change in value from one sale to the next. Then it uses this information to estimate how values fluctuate in a given market.
Lenders require a home appraisal before they’ll approve a mortgage, but as a property owner, you can hire an appraiser to estimate home value at any time. More than one-fourth (28%) of U.S. homeowners determined their home’s value through an appraisal, according to the survey.
One thing appraisals and AVMs have in common is their reliance on the recent sale value of comparable properties, often called “comps.” Well over half (56%) of U.S. homeowners estimated their home’s value by looking at comparable properties. On its face, this approach seems simplest.
Pulling comps is one way to determine market value without paying an appraiser, but use good judgment. “Just because the property next door sold doesn’t mean it’s a comp,” Lundquist says.
To choose accurate comps, you must employ an “apples to apples” approach, Lundquist says. Think about which properties would interest a buyer if yours weren’t available. Look for similar size, location, condition and upgrades.
Knowing your home’s value allows you to evaluate what you can afford, determine whether a listing is priced appropriately and decide how to price your own home, says Gayle Weiswasser, senior vice president of marketing and communications at Homesnap, an app that offers home value estimates.
And the benefits of finding a home’s value don’t end with a purchase or sale: Refinances, home equity lines of credit, insurance premiums and annual property taxes are all based on home value.
It is officially October and the start to a new month!
In the September issue of our newsletter you will find events this month, featured listings, market predictions for 2021, and how to follow us on social media.
As the federal government teeters near the edge of another shutdown, you might wonder what it could mean for you if the slow gears grind to a halt.
Congress hasn’t adopted any appropriations bills before the new fiscal year, which starts Oct. 1. If it doesn’t meet the deadline by midnight Sept. 30 – or adopt a continuing resolution to buy more time – a shutdown is likely.
It’s pretty unlikely that the housing market will crash in the next two years. Remember, home prices have already seen a 23% increase in 2021, almost triple original predictions. That’s a good thing for the economy!
Back in 2020, experts projected that home prices would keep increasing in 2022, growing at a slightly slower rate of 5.5%. Well, they’re still thinking home prices will grow, but more slowly than they have this year—probably around 3% with a median purchase price of $334,000.20 But after seeing how far off predictions were for 2021 . . . well, who knows what will happen.
So, the question that’s always looming: When is the market expected to crash? Here’s the deal. As long as new buyers continue to enter the market and there aren’t enough homes for sale to meet demand, home sales and prices will continue going up, and the market should stay healthy.
On the other hand, if the number of houses for sale was crazy high and the number of buyers willing to buy them suddenly plummeted, home prices would get slashed—and that’s when a crash would be something to worry about.
It is officially September and the start to a new month!
In the September issue of our newsletter you will find events this month, featured listings, market predictions for 2021, and how to follow us on social media.
Bigger isn’t always better. In many cases, less is more – think of the tiny home trend and the overall popularity of downsizing. People downsize for many reasons. The most common ones we hear from our clients who downsize are to save money and to get rid of unused space. Downsizing your home can be the right move at any stage of life depending on your goals. You may find that purchasing a smaller home makes the most sense once you become an empty-nester, or maybe you’re a millennial who’d like more money to retire early or travel. Since there are so many reasons to downsize, we created a guide to help you learn how to downsize your home efficiently and live clutter-free.
You should start the downsizing process as soon as possible to give yourself time to properly sort through your house without feeling overwhelmed. A general rule of thumb is that you’ll want to start at least 3 months before you plan to move but honestly, the sooner the better.
Aside from getting a jump on the downsizing process, you can also keep your home free of clutter and things you no longer need. There are some different organization methods that have gained popularity in recent years, like the KonMari method. Whatever method you choose, the goal is to find a balanced workflow and to end up with possessions that you actually need to keep around. Some popular methods include:
The thought of decluttering or organizing your whole home might be daunting, so remember to take it one step at a time. You’re more likely to complete the whole process if you break it into multiple, more manageable projects. Try creating a plan or schedule broken down by room or smaller projects within a room to make sure that you stay on track but don’t get overwhelmed. Some example tasks to take on one at a time could include:
In order to properly downsize, you have to know the size of the space you’re aiming to fit into. Ideally, you’ll know the square footage and shape of each room. This will help you figure out which large furniture pieces you should get rid of before the move. If you don’t have the exact measurements of your new place or don’t have a new place selected yet, focus on decluttering and getting rid of items you know you won’t need. Once you get more specifics, you can dig into those items that you were on the fence about.
Know that your current furniture might not fit in your space. Rather than squeezing large furniture into a smaller space, see what actually fits and take the opportunity to simplify and redesign your space.
Aside from inch-by-inch measurements, you should also consider the bigger picture of what you’re hoping to gain from downsizing. You should be considering not just what will fit physically but what items fit in what you want out of your new space. Downsizing is a chance to reset and revamp – so take advantage of that!
Understanding your core reasoning and goals can help you stick to your plan and make you more excited about the process. Take it a step past the common answers of saving money and space and ask yourself the deeper “why.” Maybe you’re hoping to save money by downsizing, but “why?” Is it to be able to travel more or help send your grandchildren to college? Or maybe you want less home to maintain so you can spend more time with your partner or pick up a new hobby. The more specific your goals, the more effective they are in motivating you. Some questions to ask yourself include:
By setting your intentions and goals ahead of time, you’ll have a much clearer view of what items will fit into your new lifestyle and home.
Once you start decluttering and combing through items, it could become easy to make exceptions here and there. Before you know it, all you’ve done is taken items from one place and moved them to another, instead of determining where they actually belong.
The best way to avoid this is by sticking to a strong set of ground rules and options for sorting your items. A common set of options could be:
Of course, categories can vary based on your specific needs and goals, but you should try to avoid categories that fall in between, as “maybes” can quickly stack up.
Whether you’re decluttering for the sake of organization or to move to a smaller space, try to remember to document the process and take before and after photos – this can help you reminisce and also encourage you to keep up your good habits once decluttering and downsizing is complete!
It is officially August and the start to a new month!
In the August issue of our newsletter you will find events this month, featured listings, market predictions for 2021, and how to follow us on social media.
The housing market is as hot as it’s ever been. In some areas, homes are going under contract almost as soon as they come on the market and prices keep going up, up, up.
COVID-19 has impacted how people use their homes and where they want to live, and historically low interest rates have pushed thousands of additional buyers onto the market. Could prices keep going up? Many homeowners are wondering whether holding on to their homes until 2022 makes sense.
We’ve spoken with experienced Realtors, and one thing is clear: if you’re on the fence about selling your home, don’t be. Now is a great time to sell a house, and things can change quickly: 2022 may not be the white-hot seller’s market that 2021 has been so far. Here’s what you need to know.
One of the big reasons buyers flooded the market this year – despite the uncertainty of a pandemic – was the historically low interest rates.
Low mortgage rates meant that buyers could save thousands of dollars over the lifetime of their home loan, so many potential buyers who were waiting on the sidelines began searching for their dream home. The incredibly low rates also meant that people could upgrade from their old home into a larger one while maintaining the same monthly mortgage payments.
All pendulums eventually swing the other way, though, and Spring 2021 has seen mortgage rates begin to rise – and they likely will continue to do so, thanks to renewed economic activity.
“It’s smart to get on market while the rates are so low,” advises DC-based listing agent Angela Allison. “The rates are going to go up, they have to go up, and we’re going to start to see a turn in buyer demand. It’s so crazy how this market turns on a dime – it can shift that much, that quick. Get on now, because we really don’t know what’s going to happen in the fall.”
Allison is right: there is a clear relationship between interest rates and home buying activity. According to CNBC, when the interest rate for 30 year fixed-rate mortgages increased from 2.96% to 2.98% this February, mortgage applications fell by 5.1%.
Now imagine the drop of home loan applications the market might see if the mortgage rates rise by half a percentage point instead of .02, and you’ll begin to understand just how much of an impact the low rates have been having on the current housing market. When rates go up, buyers can’t qualify for the same amount of house as before.
“Prices are at all-time highs. Rates are rising which will lower the buyer price points, which will stall the market,” explains Tampa-based listing agent Windy Back. “If we raise rates to a point where buyers are knocked out of being able to purchase, then yes, it’s going to create an issue.”
Once mortgage rates rise significantly – and it’s not a matter of “if,” it’s a matter of “when” – thousands of home buyers are going to retreat from the market, softening some of the red-hot demand we’ve been seeing.
“We’re definitely seeing some shifts in interest rates,” notes Baltimore-based listing agent June Piper-Brandon. “It starts to come out of the buyer’s pocket and it hurts more. With lower interest rates, people could get more home for the same price. That quarter of a point can be the difference between qualifying for the home of your dreams, and not qualifying for the home of your dreams.”
Chart via YChart shows 30 year mortgage rates rising above 3% this March
Across the U.S., there are fewer homes on the market, period – and this is helping to push prices sky high. Housing inventory declined 39.6% on a national level in 2020, according to Fool.com. Sellers have all the bargaining power when there are so few homes to choose from, and low inventory often forces buyers to bid over asking price on homes.
By selling now, you get to reap the benefits of a low inventory market. That means a better chance at getting multiple bids, cash offers, no contingency offers, and above-asking price offers. Once buyers have more options, they’ll also have greater leveraging power when it comes to the closing table – and you’ll be waiting longer for your home to sell.
Some factors that can impact 2021/2022 housing inventory:
When COVID-19 hit, the U.S. government issued foreclosure moratoriums to prevent people from losing their homes. Homeowners who were having trouble paying their mortgage could request an extended forbearance that would last until the end of June 2021. For this reason, very few foreclosures have been on the market in the past year – even fewer than usual.
Eventually, though, the moratorium will end – and some people are not going to be able to hold onto their homes. “All the people that have been furloughed or laid off because of COVID – they’re going back to work but they may be making less than they were making before, or maybe they’re only back part time,” notes Piper-Brandon. And some foreclosures will happen for typical, non-COVID related reasons.
And once foreclosed homes hit the market, they tend to lower the value of nearby listing homes by way of affecting supply. Once there are more discounted homes that can be snapped up, there is decreased demand for homes listed at top dollar.
“There’s a backlog of foreclosures that have not hit the market. As soon as that shadow inventory starts hitting the market, your prices and your comps are going to start to drop,” explains Piper-Brandon. “And as a result, you’re no longer going to get the value that you would’ve gotten in the current market place.”
Home building in the U.S. nosedived after the 2007 market crash and has only been slowly climbing up over the past decade – in other words, not yet keeping pace with how many people want homes.
Today, though, home builders are feeling more confident in the market, and they’re starting to push out more homes than before.
Data from the U.S. Census Bureau indicates that – with the exception of a short dip that occurred during the beginning of COVID-19 – more and more homes are being built every year to accommodate the growing population (chart: 800 = 800,000 homes).
source: tradingeconomics.com
By June, anyone in the U.S. who wants a COVID-19 vaccine should be able to access one, according to the government’s current rollout timeline.
Many homeowners were holding on to their homes due to the uncertainty of the market and their own lives – many people switched to working from home, which made commute considerations a thing of the past. And others had to deal with lost income that impacted their ability to buy a new home, and therefore move out of their old one.
As the national economy begins to approach normalcy again, though, many of the temporary reasons people were holding on to their homes will fade away.
“Buyers are exhausted right now; it’s been such a bidding war. I highly recommend getting on market now, before the dog days of summer. With the vaccine, everything’s opening back up; it’s going to be a more normal market this year and July and August are going to be really slow,” advises Allison.
Did you know that baby boomers (ages 57-75 approx.) currently hold about a third of the U.S. housing stock – or about 21 million homes? Over the next decade, millions of baby boomers will be entering retirement homes, dying, moving in with relatives, or downsizing, and the result will be thousands of additional homes entering the market each year.
Your goal as a home seller should be to get in front of all these homes entering the market, rather than coming in at the middle and fighting to be seen.
University of Arizona researchers also predict that there is a mismatch between the homes that will become available, and what younger homebuyers will be looking for:
“The study predicts that many baby boomers and members of Generation X will struggle to sell their homes as they become empty nesters and singles. The problem is that millions of millennials and members of Generation Z may not be able to afford those homes, or they may not want them, opting for smaller homes in walkable communities instead of distant suburbs.”
“If you want to get top dollar for your property, now is the time to sell.” -Listing agent Windy Back
“Now is a really great time to sell because six months down the road, a year down the road, the economy won’t be the same.” -Listing agent June Piper-Brandon
Numerous factors have contributed to this being one of the best times to sell a house over the past decade. Take advantage of the unusual opportunity while it’s still around, instead of kicking yourself when the market slows down and you go from a multiple-bid situation to accepting offers for $10,000 below your asking price.
“Should I sell my house?” to recap, here’s why the answer is yes:
Today, there is significant demand for most homes due to a lack of inventory – but that demand can change, and when it does change it will change quickly, giving homeowners little time to react. The best time to get top dollar for your home may be today, rather than tomorrow.
It is officially July and the start to a new month!
In the July issue of our newsletter you will find events this month, featured listings, market predictions for 2021, and how to follow us on social media.