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Market Update March 2021

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While many areas of the economy have contracted, the housing market has stayed remarkably strong. But can the good news last?

When COVID-related shutdowns began in March, real estate brokers and clients scrambled to respond to the shift. Record-low interest rates caused some lenders to call a halt to new underwriting, and homeowners debated whether or not to put their houses on the market. However, those first days of uncertainty ushered in a period of unprecedented demand in the U.S. real estate market, which ended the year with increasing average home prices (up 13.4% from the previous year) and shrinking days on market (13 fewer than in 2019).1

Now, as the spring market approaches, you may be wondering whether the good times can continue to roll on. If you’re a homeowner, should you take advantage of this opportunity? If you’re a buyer, should you jump in and risk paying too much? Below we answer some of your most pressing questions.

How is today’s market different from the one that caused the 2008 meltdown?

At the beginning of the pandemic, fears of an economic recession and an ensuing mortgage meltdown were top of mind for homeowners all across the country. For many buyers and sellers, the two seemed to go hand in hand, just as they did in the 2008 economic crisis.

In reality, however, the conditions that led to 2008’s recession were very different from those that triggered the current downturn—and this time, the housing market is the source of much of the good news.2 This is in line with historical patterns, as housing prices traditionally hold steady in the face of recession, with homeowners staying put and investors putting their money into bricks and mortar to ride out uncertainty in the stock market.

This time around, because of lessons learned in 2008, banks are better funded, homeowners are holding more accrued equity, and, crucially, much of the economic activity is focused on financial factors outside the housing market. As many industries quickly pivoted to work-from-home, early fears of widespread job loss-related foreclosures have failed to materialize. Federal stimulus payments and the Paycheck Protection Program also helped to offset some of the worst early effects of the shutdown.

Are we facing a real estate bubble?

A real estate bubble can occur when there is a rapid and unjustified increase in housing prices, often triggered by speculation from investors. Because the bubble is (in a sense) filled with “hot air,” it pops—and a swift drop in value occurs. This leads to reduced equity or, in some cases, negative equity conditions.

Below is a graph showing annual home price appreciation over the past four years compared to the four years leading up to the height of the housing bubble. Though price appreciation was quite strong last year, it’s nowhere near the rise in prices that preceded the crash.

There’s a stark difference between these two periods of time. Normal appreciation is 3.8%. So, while current appreciation is higher than the historic norm, it’s certainly not accelerating out of control as it did in the early 2000s. This is nothing like the last time.

By contrast, the current rise in home prices is based on the predictable results of historically low interest rates and widespread low inventory. Basically, the principle of supply and demand is working just as it’s supposed to do. In addition, experts predict a strong seller’s market throughout 2021 along with increases in new construction.3 This should allow supply to gradually rise and fulfill demand, slowing the rate of inflation for home values and offering a gentle correction where needed.

Effects of low interest rates

According to Freddie Mac, rates are projected to continue at their current low levels throughout 2021.4 This contributes to home affordability even in markets where homes might otherwise be considered overpriced. These low interest rates should keep the market lively and moving forward for the foreseeable future.

The affordability formula has three components: the price of the home, the wages earned by the purchaser, and the mortgage rate available at the time. Fifteen years ago, prices were high, wages were low, and mortgage rates were over 6%. Today, prices are still high. Wages, however, have increased, and the mortgage rate is about 3%. That means the average homeowner pays less of their monthly income toward their mortgage payment than they did back then. Here’s a chart showing that difference:

Effects of low inventory

Continuing low inventory is another reason for higher-than-average home prices in many markets.5 This should gradually ease as an aggressive vaccination rollout and continuing buyer demand drive more homeowners to move forward with long-delayed sales plans and as new home construction increases to meet demand.6

The months’ supply of inventory needed to sustain a normal real estate market is approximately six months. Anything more than that is an overabundance and will causes prices to depreciate. Anything less than that is a shortage and will lead to continued appreciation. As the next graph shows, there were too many homes for sale in 2007, and that caused prices to tumble. Today, there’s a shortage of inventory, which is causing an acceleration in home values.

Some may think new construction is filling the void. However, if we compare today to right before the housing crash, we can see that an overabundance of newly built homes was a major challenge then, but isn’t now.

Aren’t some markets and sectors looking particularly weak?

One of the big stories of 2020 was a mass exodus from attached home communities and high-priced urban areas as both young professionals and families fled to the larger square footage and wide-open spaces of suburban and rural markets. This trend was reinforced by work-from-home policies that became permanent at some of the country’s biggest companies.

Speculation then turned to the death of cities and the end of the condo market. However, it appears that rumors of the demise of these two residential sectors have been greatly exaggerated.

With the first vaccine rollouts, renters have begun returning to major urban centers, attracted by the sudden rise in available inventory and newly discounted rental rates.7 In addition, buyers who were previously laser-focused on a single-family home responded to tight inventory by taking a second look at condos.8 While nationwide condo prices continue to lag behind those of detached homes, they’ve still seen significant price increases and days on market reductions year over year.

In addition to these improvements, the 2020 migration has spread the economic wealth to distant suburban and rural enclaves that normally don’t benefit from increases in home values or an influx of new investment. As many of these new residents set up housekeeping in their rural retreats, they’ll revitalize the economies of their adopted communities for years to come.

How has COVID affected the “seasonal” real estate market?

Frequently, the real estate market is seen as a seasonal phenomenon. However, the widespread shutdowns in March 2020, coming right at the beginning of the market’s growth cycle in many areas, has led to a protracted, seemingly endless “hot spring market.”

While Fannie Mae’s chief economist Douglas Duncan predicts slower growth from 2020’s historic numbers, the outlook overall is positive as we embark on the 2021 spring selling cycle.9 Duncan anticipates an additional lift in the second half of 2021 as buyers return to business as usual and look to put some of their pandemic savings to work for a down payment. Thus we could be looking at another longer-than-usual, white-hot real estate market.

How will a Biden administration affect the real estate market?

Projected policy around housing promises to be a boost to the real estate market in many cases.10 While some real estate investors bemoan proposed changes to 1031 Exchanges, the Biden plan for a $15,000 first-time homebuyer tax credit aims to increase affordability and bring eager new home buyers into the market. In addition, Biden-proposed policy pinpoints low inventory as a primary driver of unsustainable home values and is geared toward more affordability through investments in construction and refurbishment.

Overall, according to most indicators, the real estate news looks overwhelmingly positive throughout the rest of 2021 and possibly beyond. Pent-up demand and consumer-driven policies, along with a continued low-interest-rate environment and rising inventory, should help homeowners hold on to their increased equity without throwing the market out of balance. In addition, the increase in long-term work-from-home policies promises to give a boost to a wide variety of markets, both now and in the years to come.

STILL HAVE QUESTIONS? WE HAVE ANSWERS

While economic indicators and trends are national, real estate is local. We’re here to answer your questions and help you understand what’s happening in your neighborhood. Reach out to learn how these larger movements affect our local market and your home’s value.

Sources:

  1. Realtor.com –
    https://www.realtor.com/research/december-2020-data/
  2. New York Magazine –
    https://nymag.com/intelligencer/2020/06/why-this-economic-crisis-wont-be-as-bad-as-2008.html
  3. Washington Post –
    https://www.washingtonpost.com/business/2021/01/11/2021-housing-market-predictions/
  4. Freddie Mac –
    http://www.freddiemac.com/research/forecast/20210114_quarterly_economic_forecast.page?
  5. Wall Street Journal –
    https://www.wsj.com/articles/housing-market-stays-tight-as-homeowners-stay-put-11611226802?mod=re_lead_pos1
  6. Marketwatch –
    https://www.marketwatch.com/story/new-home-construction-activity-soars-to-highest-level-in-over-a-decade-as-builders-rush-to-produce-single-family-homes-2021-01-21
  7. Forbes –
    https://www.forbes.com/sites/noahkirsch/2021/01/14/signs-of-a-rebound-new-york-city-rent-prices-are-climbing-back
  8. Washington Post –
    https://www.washingtonpost.com/business/2021/01/07/condo-sales-rebound-amid-dwindling-inventory-houses/
  9. Mortgage Professional America –
    https://www.mpamag.com/news/fannie-mae-chief-economists-forecast-for-us-economy-housing-market-in-2021-244045.aspx
  10. Inman –
    https://www.inman.com/2020/11/09/what-a-joe-biden-presidency-means-for-real-estate-and-housing/

5 Inspiring Home Design and Remodeling 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

 

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 and ASK FOR OUR FREE REPORT on R.O.I. vs RETURN in the Southwest US!

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

  1. Homes & Gardens –

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

  1. Houzz –

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

  1. Zillow – https://www.prnewswire.com/news-releases/the-end-of-open-floor-plans-how-homes-will-look-different-after-coronavirus-301080662.html
  2. Pinterest – https://business.pinterest.com/content/pinterest-predicts/more-door/
  3. Homes & Gardens – https://www.homesandgardens.com/spaces/decorating/bedroom-trends-224944
  4. Reuters – https://www.reuters.com/article/us-health-coronavirus-pools/pool-sales-skyrocket-as-consumers-splash-out-on-coronavirus-cocoons-idUSKCN2520HW
  5. Realtor.com – https://www.realtor.com/advice/home-improvement/2021-design-trends/
  6. Realtor Magazine – https://magazine.realtor/daily-news/2020/12/09/4-outdoor-home-trends-that-may-gain-steam-in-2021

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 may qualify for 3.5% downpayment, or first time home buyer grants that cover 100% if you stay put for 3-5 years: contact us to learn to find out and set a realistic goal!)

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.  

In January 2021 the number of active listings are down nearly 43.4% in Dallas-Fort Wort, yet sales are up 17.6%… it’s an official sellers market with only 1.6 months of “inventory options” for buyers to choose from.

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. As trusted real estate professionals, we can guide 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. We can attest, it will certainly sell faster when properly prepared to give buyers a reason to bid with confidence and lower risk of hidden concerns.  By the way: 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, view 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? View 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

Give Back This Holiday

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10 Ways to Give Back to Our Local Community This Holiday Season

This year has demonstrated, perhaps more than ever, the importance of our family, friends, neighbors, and community. It truly “takes a village” to keep a community functioning effectively, whether that’s by keeping our waterways clean, feeding the hungry, teaching our kids, or supporting small businesses.

With the holidays right around the corner, December offers the perfect opportunity to give back to the place we call home. You might want to focus your efforts near home, expand to our larger community, or even help support the people closest to you. Whether you’re passionate about a particular cause or just want to get more involved in general, let these 10 ways, both big and small, inspire you to do good in your town.

GIVE BACK NEAR HOME

1. Attract local wildlife. By making your neighborhood more wildlife friendly, you’re helping to  create a balanced and healthy ecosystem. Plus, many of the animals you can attract help with pest control and pollination.1

Ideas:

  • Add a birdbath to your backyard or create a rain garden to attract wildlife (and filter out local pollutants).
  • Place bird feeders on your property to feed birds all year long.
  • Tie corncobs to tree branches to feed squirrels.
  • Hang birdhouses on your property to provide shelter.
  • Use native plants in your landscaping to provide food and shelter for birds, bees, butterflies, and other critters.

Take action: While you might not be able to “break ground” until spring, start researching native plants now to design a landscaping plan that provides food, shelter, and water for local wildlife.

2. Clean up our community. Besides beautifying the area, picking up trash keeps it out of our local waterways, which means a cleaner water supply for all of us.

Ideas:

  • Whether you make this a solo effort or join in an organized group event, pick up trash in your neighborhood, at a local park, or elsewhere in our community.
  • Depending on your community’s regulations, you can recycle many home items such as paper, glass, and aluminum.
  • And don’t forget to clean the exterior of your home, where water runoff (such as on your driveway and sidewalks) can carry debris into the local sewer system.2

Take action: Check with your local municipality to learn about environmental clean-up efforts in our community, as well as recycling and composting. 

3. Organize or join a neighborhood watch. According to a recent report, neighborhoods with Neighborhood Crime Watch programs experience roughly 16 percent less crime.3 Keeping an eye out for each other instills a sense of safety and security in your neighborhood by increasing surveillance, reducing opportunities, and enhancing information sharing among residents. Even if your neighborhood doesn’t have an official program, you can still share crime information via a neighborhood Facebook group or apps like NextDoor.

Ideas:

  • Make a point of looking out for each other and being observant of what’s going on.
  • You can even make it official by joining a neighborhood watch program.
  • Don’t have one? Consider launching a neighborhood watch program with the help of other interested neighbors.

Take action: Some police forces use online mapping tools that provide crime alerts to people in neighborhoods where recent criminal activity occurred.3 Share this information with your neighbors.

HELP OUT LOCAL ORGANIZATIONS

 

4. Boost your civic engagement. Regardless of your politics, you can get more involved as a citizen to make a positive difference in our community.

Ideas:

  • Sign a petition to make a needed change in our community.
  • Join a peaceful march, protest, or rally to support a cause dear to your heart.
  • Attend local school board meetings, town halls, or city council meetings to understand (and have a voice in) local issues.4
  • Watch (and read) a variety of local news sources to get balanced reporting on what’s happening in our community.
  • If you don’t know your neighbors very well, introduce yourself.
  • Then make a commitment to check in on those who might need help, such as an elderly neighbor.
  • Get plugged into the resources and events in our town by visiting local museums, taking historical tours, borrowing materials from our local library, and attending community festivals.

Take action: Do you know who our local leaders are, such as our mayor or city councilwoman? Get to know their names, their policies, and their stand on issues that affect our community. Subscribe to their newsletter and follow them on social media.

5. Support local businesses. Our community has been impacted by the pandemic, with many businesses being forced to limit capacity, instill social distancing efforts, and even shutter entirely in some cases. Help keep money in our local economy by shopping local instead of relying on online shopping from national chains.

Ideas:

  • From handcrafted soaps and one-of-a-kind apparel to locally produced chocolate and small-batch wines, you’ll find plenty of unique gifts at the small businesses that dot our community.
  • Consider purchasing tickets to attend live-streamed holiday concerts and shows.
  • Buy cookies and other baked goods from our local bakery.
  • Get takeout from our local restaurants.
  • Support local farmers by purchasing fresh fruits and vegetables at community farmer’s markets.

Take action: If you’re concerned about shopping in person right now, many of these businesses, though small, offer online shopping, with options for in-store pick-up, curbside delivery, and/or mail options.

6. Donate to local charities. Nonprofits could always use your financial support, so consider making a monetary donation to help them carry out their mission in our community. But if money is tight (or you want to support in other ways), think beyond just donating dollars.

Ideas:

  • Consider donating to a charity in someone else’s name as an altruistic gift on behalf of a friend or relative.
  • Give blood to our local blood bank.
  • Donate new or used books to our community library.
  • Send school supplies to our neighborhood elementary school.
  • Help struggling neighbors by donating blankets to the homeless.
  • Pick out toys to give to a charity that caters to families. 5

Take action: Many collection efforts run by charitable organizations and businesses take place during the holidays. Look to see what’s already taking place in our community and choose one or more to give to this season.

CARE FOR YOUR NEIGHBORS

7. Organize a holiday food drive. This year, in particular, people are struggling to pay their bills and put food on the table. The pandemic has caused many businesses to close or reduce their staff size, putting many people out of work.

Ideas:

  • If you personally know someone who needs help buying groceries, reach out and offer to help that one family.
  • If not, partner with a local food bank, soup kitchen, nonprofit or community organization that feeds people in need.
  • Round up a few friends, family, co-workers, or neighbors to collect food for a few weeks. Then deliver the bounty in time for the holidays.

Take action: Take advantage of your grocery store coupons and buy-one-get-one offers to inexpensively stock up on nonperishable goods.

8. Adopt a family or an individual. The holidays can be a struggle, especially financially, for some families. They might not be able to buy a Christmas tree or presents for their children. Maybe their holiday meal consists of boxed macaroni and cheese because they can’t afford a turkey and fresh vegetables. You can make a difference by “adopting” a particular family (or even just a child) to help make their holiday special.

Ideas:

  • If you know a needy family, help them directly.
  • If not, ask a community group for the name of a family or individual in need.
  • Some businesses even sponsor toy drives or “angel trees” where you can pick the name of a needy family off the tree and buy from their wish lists.

Take action: This works great as a family project. Get the kids in your life involved to help make holiday cards and pick out toys to give to the children in the adopted family.

9. Volunteer. Depending on your schedule and your preferences, you might be able to volunteer in-person or from home, whether it’s a one-time effort or ongoing project. It’s a great way to meet like-minded people in your community as you make a positive impact together for a shared cause.

Ideas:

  • Give your time to a cause or organization that really matters to you, such as your local school, animal rescue organization, mental health awareness group, or environmental nonprofit.6
  • Tap into a skill you already have, like creating videos, and offer your services.
  • Or learn a new skill (like fundraising) to benefit your cause of choice.

Take action: Start with your local community to see where its needs are the greatest. Make a point to help this holiday season, perhaps extending your commitment throughout 2021.

10. Perform random acts of kindness. Don’t think you need to “go big or go home” in your give-back efforts. You can make a big difference one small act at a time.

Ideas:

  • Give a generous tip to a waitress.
  • Pay for the coffee of the car behind you in the drive-through.
  • Take care of a neighbor’s pet while they’re out of town.
  • Send holiday cards to deployed military personnel.
  • Deliver a plate of homemade holiday cookies to our local fire or police station.
  • Smile at a stranger.
  • Rake leaves for an elderly neighbor.
  • Thank your child’s teacher for all their hard work this year.
  • Send an uplifting text to a friend.
  • Compliment someone.
  • Help a coworker with an unpleasant task.   

Take action: Need more ideas? Visit randomactsofkindness.org for hundreds of inspiring ways to make someone’s day a little brighter.

HOW WE CAN HELP YOU?

As real estate experts in our local community, we’re tuned into the unique needs of the place we all call home. Reach out to us today to discuss more ways to make a positive impact in our community—this holiday season and beyond. And we want to make sure you’re taken care of, too. If you’re thinking about buying or selling a home now or in the near future, let us help you!

Sources:

  1. Redfin –
    https://www.redfin.com/blog/attract-wildlife-to-your-backyard/#:~:text=Sow%20plants%20that%20provide%20essentials,these%20alternate%20natural%20food%20sources
  2. The Groundwater Foundation –
    https://www.groundwater.org/action/home/raingardens.html
  3. The Globe and Mail –
    https://www.theglobeandmail.com/life/home-and-garden/how-neighbours-and-online-maps-can-help-deter-break-ins/article34886427/
  4. Parade –
    https://parade.com/1083640/stephanieosmanski/what-is-civic-engagement/
  5. MentalFloss –
    https://www.mentalfloss.com/article/88663/15-ways-give-back-holiday-season
  6. Together We Rise –
    https://www.togetherwerise.org/blog/7-ways-give-back-community/

2020 Design Trends

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Top 5 Home Design Trends for a New Decade

Whether you’re planning a simple refresh or a full-scale renovation, it’s important to stay up-to-date on the latest trends in home design. Sellers who make tasteful updates can generate increased buyer interest and, in some cases, a premium selling price. And buyers should consider which features of a home will need updating immediately (or in the near future) so they can factor renovation costs into their overall budget.

Even if you have no immediate plans to buy or sell, we advise our clients to be thoughtful about the colors, materials, and finishes they select when planning a remodel, or even redecorating. Choosing over-personalized or unpopular options could hurt a home’s value when it does come time to list your property. And selecting out-of-style or overly-trendy elements could cause your home to feel dated quickly.

To help, we’ve rounded up five of the hottest home design trends for 2020. 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. IN: Sustainability / OUT: Fast Furniture

Consumers have become increasingly eco-conscious. Many are shunning the mass-produced, “fast furniture” popularized by retailers like IKEA, opting instead for higher-quality pieces that are built to last. And the availability of non-toxic, environmentally-friendly furniture and decor options is set to grow in 2020 and beyond.

At the same time, there’s been a noticeable shift toward individuality in today’s interior design. Instead of following the latest fad, more homeowners are opting to embrace their personal style and invest in items they believe will “spark joy” (à la Marie Kondo) for years to come.

Want to know more about Marie Kondo’s famous organization method and how it can increase your home’s value? Contact us for a free copy of our recent report, “Top 6 Home Organization Upgrades That ‘Spark Joy’ for Buyers.”

To incorporate this trend, designers recommend layering old and new pieces for a curated look that you can build over time. Instead of purchasing a matching furniture set from a big-box retailer, buy one or two sustainably-sourced pieces that complement what you already own. Try searching estate sales and Craigslist for vintage classics or well-built furniture that can be refinished. And to accessorize your room, mix sentimental items with newer finds to create a truly personalized space.

 


2. IN: Cozy / OUT: Cold

Designers are moving away from cool grays, industrial finishes, and stark modernism. In 2020, there’s a big emphasis on creating warm and cozy spaces through color, texture, and shape.

Gray has dominated the color palette for the past decade. This year, expect to see a move toward warmer neutrals, earth tones, and nature-inspired shades of blue and green. Warm metals, like gold and brass, will also continue to trend. And hardwood floors are heating up, as cool gray and whitewashed finishes fade in popularity. Expect to see a rise in classic choices like walnut, mahogany, and oak in richer and darker tones.

Furniture will also get cozier—and curvier—in 2020. From rounded sofas and curved-back chairs to oval dining tables, softened-angles are dominating the furniture scene right now. And designers expect softly-textured fabrics—like velvet, shearling, and mohair—to be big this year, as homeowners strive to add a touch of comfort.

Want to warm up your home decor? Try one of the top paint colors for 2020: Benjamin Moore’s First Light (soft pink), Sherwin Williams’s Naval (rich blue), or Behr’s Back to Nature (light green).

 


3. IN: Bold / OUT: Boring

Bold is back! After years of neutral overload, vivid colors and prints will take center stage in 2020. Expect to see geometric designs, color blocking, and floral and botanical patterns on everything from pillows to rugs to wallpaper.

The hottest trend in interior paint right now is bold trim and ceilings. Monochromatic rooms (e.g., walls, ceilings, and millwork painted the same color) will be big this year, as well as high-contrast pairings, like white walls with black trim. Color is coming back to kitchens, too, and two-toned color schemes continue to gain steam. In 2019, 40% of remodelers chose a contrasting color for their kitchen island.1 While white was still the top choice for cabinets, blue and gray are increasingly popular alternatives.

If you’re ready to “go bold,” separated spaces like laundry and powder rooms are great places to start. It’s easier to incorporate busy wallpaper or a bright wall color in an enclosed area because it doesn’t have to flow with the rest of your decor.  Accent pillows are always a temporary way invest without a permanent change and you can pack your style-to-go should you move.

Of course, clients always want to know how design choices could impact their home’s value. The reality is, neutral finishes are still the safest bet for resale. If you’re prepping your home to go on the market, stick with non-permanent fixtures—like artwork and accessories—to brighten your space.

 


4. IN: Nature / OUT: Industrial

Biophilic design has been big the past few seasons, and it isn’t going anywhere in 2020. It centers around the health and wellness benefits of connecting with nature, even while indoors, and it’s impacted the latest trends in color, prints, and materials.

As we mentioned previously, floral and botanical patterns are hot right now, along with nature-inspired hues, like blues, greens, and earth tones. We’re also seeing a heightened use of organic shapes and sustainable materials in furniture and furnishings, including wood, wicker, rattan, and jute. This infusion of nature coincides with a decline in the popularity of urban-industrial fixtures. Designers predict that concrete floors and Edison light bulbs are on the way out.

Want to bring in elements of biophilic design on a budget? Houseplants are a great place to start. But you can also enhance your home’s natural light and create a visual sightline to the outdoors by removing heavy curtains and blinds. And when the weather is nice, open your windows and enjoy the breeze, sounds, and smells of nature. These simple acts are scientifically proven to help reduce stress, boost cognitive performance, and enhance mood!2

 

 


5. IN: Functional / OUT: Fussy

In 2020, homeowners want design that’s beautiful, but also liveable. With the rise in remote workplaces, online shopping, and virtual exercise classes, many of us are spending more time at home than ever before. Cue the growing appeal of multi-functional spaces, like a combination kitchen/office or gym/playroom. Real life—and rising housing prices—necessitates creative use of limited space.

Durable, low-maintenance materials will also surge in popularity this year. Engineered quartz—which is more stain, heat, and chip-resistant than natural stone—is now the #1 choice for kitchen countertops.1 Waterproof, wood-look luxury vinyl is the fastest-growing segment in the flooring industry.3 And improvements to water and stain-resistant performance fabric has made it a mainstream option for both indoor and outdoor upholstery.

Now that functional is hot, what’s not? Designers say that mirrored furniture, open shelving, and all-white kitchens are too impractical for today’s busy families.

So how can you start enjoying the time and energy-saving benefits of this design trend? Begin by structuring each room so that it best suits your needs. And when purchasing furniture or fixtures, choose options that are durable and easy-to-clean. The truth is, design fads come and go. But a comfortable and relaxed home (that you don’t spend every spare minute maintaining!) can help create memories to last a lifetime.

 

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. Ask for our Professional Equity Assessment to help you invest wisely. 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. Houzz –
    https://www.houzz.com/magazine/2020-us-houzz-kitchen-trends-study-stsetivw-vs~129594531
  2. Terrapin Bright Green – https://www.terrapinbrightgreen.com/reports/14-patterns/
  3. Remodeling Magazine –
    https://www.remodeling.hw.net/products/vinyl-ceramic-and-hardwood-oh-my-todays-popular-flooring-trends_o
  4. Elle Decor –
    https://www.elledecor.com/design-decorate/trends/g29859422/design-trends-2020/?slide=1
  5. Forbes – https://www.forbes.com/sites/amandalauren/2019/12/23/twelve-interior-design-trends-well-see-in-2020/#43f81f044a5f
  6. Wall Street Journal –
    https://www.wsj.com/articles/the-top-6-interior-design-trends-for-2020-11577460357
  7. Good Housekeeping –
    https://www.goodhousekeeping.com/home/decorating-ideas/g29849170/home-decor-trends-2020/
  8. Architectural Digest –
    https://www.architecturaldigest.com/story/top-design-trends-of-2020
  9. Los Angeles Times –
    https://www.latimes.com/lifestyle/story/2020-01-11/2020-home-design-trends
  
Silver Elk Realty Group
“Building Relationships & Investing in Dreams.” At Silver Elk Realty we are blessed to work together as married, and licensed sales agents… you get both of us on every sale and our goal is to Guide You Home! Real Estate is about relationships
and change management is an art. We are fully dedicated to serving our clients before, during and especially after each purchase & sale. Gorden is our lead agent & master negotiator. Kemberly sets up private tours, coordinates staging, marketing & client care programs.

Our SILVER STAR experience includes: Genuine Care, Effective Communication, Exceptional Education, and 100% Commitment to Your Goals.

Feel free to visit our company page www.SilverElkRealty.com to learn more about us and read our reviews.

We would love to meet you & support you with a strategic plan to Guide YOU Home.

2021 Housing Market Update

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A Strong Housing Market Expected to Continue into 2021

“2020 will be known for a lot of things, and a record-breaking year for real estate will certainly be one of its more unexpected legacies,” prominent economist Daryl Fairweather said.1

And he’s right: most of us would have expected the housing market to suffer from circumstances like a once-in-a-hundred-years pandemic and historic inventory shortages. But, rather than a slowdown, we are continuing to experience a surprisingly robust real estate market across the country. And experts estimate that these conditions are likely to last well into the new year.

Fannie Mae Senior VP and Chief Economist Doug Duncan predicts that existing home sales will ultimately “be up a percent or more in 2021.” He believes home prices will continue to rise due to limited inventory, but he is confident the Federal Reserve will keep interest rates low into the future, which will be “very good for households.”2

Market conditions like fewer available listings, changing criteria for desired homes, and record-low mortgage rates are changing the way people buy and sell homes, most likely in a lasting way. But this sustained activity, even in the uncertainty that is 2020, proves that our country still views real estate as a sound investment. The only question now is how you can take advantage of the housing market’s “new normal.”

FEWER LISTINGS EQUALS A SELLER’S MARKET

Inventory, meaning the number of homes for sale, is at a record low across the country. The National Association of Realtors (NAR) reports there are fewer homes on the market today than the association has seen in data going all the way back to 1982.3 Currently, the total housing inventory is about 1.47 million units, which is a decline of 19.2% from one year ago.4

Experts do predict some relief on the horizon. MarketWatch had previously anticipated housing starts would occur at a pace of 1.45 million and building permits would come in at a pace of 1.52 million.5 But it turns out that the market exceeded expectations: compared with last year, housing starts are up 11% and permitting for new homes occurred at a seasonally-adjusted annual rate of 1.55 million. That represents a 5% increase from August and an 8% increase from a year ago.

For now, the fact that there are fewer listings creates an advantageous housing market for sellers.

There are several reasons why:

For one, buyers have to act fast to snap up available homes. As a result, most properties that come on the market stay for an average of just 21 days before they are sold.6 “That is the fastest ever recorded in our monthly series,” says NAR Chief Economist Lawrence Yun.

Another benefit is that sellers are enjoying higher net returns on their listings. This is thanks to the tough competition for homes, which often results in bidding wars between buyers. Nationwide, the median home price in September rose to $311,800. That translates to about $40,000 (15%) more than just a year ago.7

This seller’s market is not simply a product of the pandemic. In fact, in the country’s top 100 metro markets, inventory has been dwindling since the first quarter of 2020.8 This means that even with increased construction, buyers can’t simply wait for things to go back to normal before reentering the market. Rather, all signs indicate that this is the new normal.

What It Means for Homeowners:

These higher home prices show that buyers are willing to spend more on a home right now than they did last year. So, if there ever were a time to list for top dollar—and expect to receive asking price quickly—that time is now.  Serious Sellers can access our Market Guide INSTANTLY to simply the facts and options. Ask us for a free consultation of your home’s value today and be sure to learn about virtual home tours or staging tips for top dollar in our former Elk Insights Blog. 

What It Means for Homebuyers:

Due to low inventory, buyers could easily find themselves in a bidding war. Time is of the essence in a seller’s market, so you’ll need to get your financing in order and be pre-approved for a loan before you begin your home search. We can connect you with a trusted mortgage professional to get you started. Keep reading to learn where your advantage is in this housing market and download our Buyer’s Guide INSTANTLY to boost your confidence on what to expect and why.  

BUYERS BENEFIT FROM LOW MORTGAGE RATES AND A BIGGER PLAYING FIELD

Don’t worry, homebuyers. This “new normal” of real estate has benefits for you too.

For example, people used to base their next home purchase on how far the commute was to work or in which public school district it was. But now, thanks to the pandemic shifting the locus of jobs and work, they are free to consider what they need from a home to make it a place they truly want to be in as they work, teach, exercise, cook, and live.

Often, this equates to needing more space in different types of areas. Realtor.com consumer surveys show that people are desiring quieter neighborhoods, home offices, updated kitchens, and access to the great outdoors.9 The search for these criteria is driving residents out of densely populated metropolitan areas and into the suburbs.10 And this exodus from cities is good news for buyers: it opens up more possibilities for inventory that they could not have considered pre-pandemic.

Another advantage for buyers is the record-low mortgage rates. The average rate for a 30-year fixed-rate mortgage hit a record low in mid-October when rates fell to 2.81%. That’s the lowest since Freddie Mac began conducting the survey in 1971, and well below last year’s 3.69%.11 Similarly, a 15-year fixed-rate mortgage can be had for as low as 2.35% compared to 3.15% a year ago.

Thanks to these rates, buyers are afforded the opportunity to buy nearly $32,000 more home than they could one year ago, while keeping their monthly payment the same.12 So even though home prices are high now, it is currently more affordable to buy a home now than it was last year.  With these kind of rates, my father now has the perfect retirement villa and only a $1200 payment on a 205,000 loan; freeing up his overhead to enjoy golfing on a daily basis and still saving for vacations!

If you want to take advantage of these rock-bottom mortgage rates, you need to act fast. Though rates are projected to stay low, housing economists predict that the window of opportunity to get the best rate could be closing in the coming months. Mike Fratantoni, chief economist at the Mortgage Bankers Association, said he expects the average rate on a 30-year mortgage to rise to 3.5% by the end of 2021.13

Download your free eGuide!

What It Means for Homeowners:

Record-low mortgage rates offer you the opportunity to lower your monthly payment—or even take out some equity—with a refinance. With those additional funds, you could even choose to invest in a second home in a new desirable location. Reach out to us for a referral to a trusted mortgage professional or an agent in those markets.  If you’re in a position to plan how to vacation in the future without being shut out, or shut down maybe its time to invest in that second home away from home. 

What It Means for Homebuyers:

The time is now to determine how much home you can comfortably afford and make a plan to find it. We can set up an EXCLUSIVE search for you to find homes that best meet your new needs, even if they’re in neighborhoods you wouldn’t have considered before. 

A RECORD-SETTING YEAR FOR HOME SALES IS JUST THE BEGINNING

Despite the seemingly adverse buyer conditions, 2020 experienced a 14-year high number of home sales, NAR reports. Existing-home sales, which include single-family homes, townhomes, condominiums and co-ops, rose 9.4% in September to a seasonally adjusted annual rate of 6.54 million.14 That’s a 21% increase from a year ago!

Every region of the country has seen a surge in sales activity.  According to George Ratiu, senior economist for Realtor.com, part of the reason for these continued sales is that the pandemic has created a paradigm shift in the patterns of real estate.15 For example, housing needs are typically resolved by late summer and early fall to coincide with the commencement of the new school year. With homeschooling and remote work, however, buyers have been freed to continue their home search into the traditionally slow winter months.

Another reason for the robust market is that Millennials are finally putting their money into homeownership. According to the U.S. Census Bureau, the homeownership rate for 25-to-34-year-olds rose to 40.7% by the end of last year.16 This is significant because Millennials, the generation of people in their mid-20s to late-30s, currently surpasses Baby Boomers as the nation’s largest living adult generation. As the remaining percentage of this group starts investing in homes in the near future, demand will persist.

All of these factors indicate that the housing market is poised to remain strong as we head into the new year. And as Jonathan Woloshin, head of U.S. real estate at UBS Global Wealth Management, believes, they could “buoy the housing market for years to come.”17

What It Means for Homeowners:

It’s tempting to believe that homes will basically sell themselves in a market like this. But we’re still seeing properties that are overpriced and under-marketed sit unsold. We can help you optimize the process of selling your home so you can get the best possible offer.  Pricing properly one of the keys to protecting your equity.  Try consulting with a Certified Residential Listing Specialist during your preparation or learning why those public evaluation estimates are erroneous and often set unrealistic expectations costing sellers, especially F.S.B.O sellers, thousands of dollars. 

What It Means for Homebuyers:

Preparation is key to success in a seller’s market like this, but don’t let yourself become paralyzed. We are here to answer your questions and offer sound advice to guide you through all the options that are available to you.

REAL ESTATE IS A SAFE BET

Your other investments might have been on roller coasters this year, but the real estate market has been steady, competitive, and strong throughout. That makes it a good choice for your financial future.

National real estate numbers can give us a pulse on the market, but real estate happens in our own backyard. As your local market experts, we can help you understand the finer points of the market that impact sales and home values in your own neighborhood. 

 

If you’re considering buying or selling a home before the new year or in early 2021, contact us now to schedule a free consultation. We’ll work with you to develop an actionable plan to meet your goals.  

 

Sources:

  1. Redfin –
    https://www.redfin.com/news/housing-market-news-september-2020/
  2. Housing Wire –

https://www.housingwire.com/articles/fannie-maes-doug-duncan-offers-his-predictions-for-2021/

  1. CNBC –

https://www.cnbc.com/2020/10/22/september-existing-home-sales-jump-9point5percent.html

  1. NAHB –

http://eyeonhousing.org/2020/10/existing-home-sales-surge-despite-record-low-supply

  1. MarketWatch –

https://www.marketwatch.com/story/new-home-construction-slows-slightly-in-august-driven-by-pullback-in-multifamily-starts-2020-09-17

  1. National Association of Realtors –

https://www.nar.realtor/newsroom/existing-home-sales-soar-9-4-to-6-5-million-in-september

  1. Business Insider – https://www.businessinsider.com/how-2020-broke-the-housing-market-inventory-could-run-out-2020-9
  2. Forbes –

https://www.forbes.com/sites/petertaylor/2020/10/11/covid-19-has-changed-the-housing-market-forever-heres-where-americans-are-moving-and-why/#74e7355761fe

  1. Realtor.com –
    https://www.realtor.com/research/top-consumer-home-features-coronavirus/
  2. Wealth Advisor – https://www.thewealthadvisor.com/article/covid-19-has-changed-housing-market-forever-heres-where-americans-are-moving-and-why
  3. Washington Post –

https://www.washingtonpost.com/business/2020/10/15/30-year-mortgage-rate-drops-record-low/

  1. Forbes –

https://www.forbes.com/advisor/mortgages/buying-a-home-low-mortgage-rates/

  1. BankRate –

https://www.bankrate.com/mortgages/refinance-window-could-close-soon/

  1. National Association of Realtors –

https://www.nar.realtor/newsroom/existing-home-sales-soar-9-4-to-6-5-million-in-september

  1. Forbes –

https://www.forbes.com/sites/petertaylor/2020/10/11/covid-19-has-changed-the-housing-market-forever-heres-where-americans-are-moving-and-why/#74e7355761fe

  1. TD Economics –

https://economics.td.com/us-falling-mortgage#:~:text=The%20homeownership%20rate%20among%20millennials,47.7%25%20at%20a%20comparable%20age.&text=This%20means%20that%201.4%20million,that%20of%20the%20older%20generation

  1. Axios Media –

https://www.axios.com/real-estate-market-819e3c85-3765-4014-91c0-b545be6d5935.html

5 Secrets about Virtual Home Tours

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For years now, virtual home tours have helped real estate buyers far and wide find the perfect home. From long-distance military personnel being relocated, to investors expanding their portfolio, to homeowners looking for a vacation getaway, this technology makes finding a house that’s a bit out of driving distance much easier. And for real estate agents, virtual tours have been a useful way to help buyers with their home search and to assist sellers in creatively marketing their listings.

Because of the pandemic, virtual home showing options recently experienced a huge spike in popularity. One survey found that nearly 33% of recent home tour requests were for virtual tours, as compared to just 2% pre-pandemic.1 And it’s easy to see why.

Buyers want to quickly find their next safe haven, one that may need to serve as their office, gym, and even classroom for months to come. And sellers want to limit the number of strangers in their home, yet still have the ability to reach enough potential buyers to get the best offer on their property.

Virtual home tours are the popular thing right now, but that doesn’t automatically mean they’re the only option for your homebuying or selling experience. In this post, we’ll reveal five important secrets behind the virtual real estate scene. Read on to learn how they impact today’s home buyers and sellers.

SECRET #1: Virtual Tours Have Evolved

Lots of real estate professionals who had never used virtual tours before were forced to quickly adapt when the pandemic struck. Because of restrictions on time and resources, not everyone is able to create what would have been deemed a “virtual tour” last year. So instead, we’ve expanded the definition of the phrase by creating innovative new ways to show homes while keeping our clients safe and socially-distanced. Here are some terms you might come across as you explore homes with virtual tours.

Traditional virtual tours use 360° Photos, which are images that allow you to see all angles of a space. These are what allow virtual tour viewers to look up, down, and all around the interior and exterior shots of a home. Using a software program, 360° photos can be stitched together to create a digital model that looks like a dollhouse. This is called a 3D Tour.  This may be the best way to EXPERIENCE a layout, but it doesn’t allow for scale or “wow” to connect with a home.

Sometimes agents will also add Virtual Staging, which decorates rooms with digital furniture and accents like wallpaper or paint. Boy are these an emotional let-down once you arrive in person, but might help you visualize an unusual room layout.  Unfortunately, not every agent abides by our Realtor® Code of Ethics which requires any changes to house features to be disclosed or labeled openly. 

Traditional virtual tours allow you to click to move from room to room in the home, but Online Walkthroughs feature the actual action of walking around. Either the seller or the agent (depending on factors such as time and safety requirements) will create a video by holding their camera or smartphone and simply moving through the home.

Online Walkthroughs can be filmed in advance or happen live. If they are live, they can also be referred to as Virtual Showings or Online Open Houses.

A Virtual Showing is often a scheduled, one-on-one event that mimics an in-person tour of the home, in which the agent and viewer start at the exterior and move their way through the property.

If your agent offers to FaceTime or Skype you from a home you’re interested in, for example, that would be a type of Virtual Showing. In contrast, an Online Open House is more freeform, allowing more viewers to pop in and out of a group video call on apps such as Facebook or Zoom.

SECRET #2: Virtual Doesn’t Mean Impersonal

All these styles of virtual tours showcase the property’s details better than static photos ever could. But for a purchase as intimate as your next home, details like a new refrigerator or the size of the master closet aren’t the only deciding factors. Luckily, virtual tours are exceptional tools for personal connection.

As a prospective buyer, virtual tours give you a feel for the property, inside and out, so you can easily picture yourself in the space and decide if the home’s flow and features work for your lifestyle. Live video walkthroughs with the real estate agent will give you insights on those crucial non-visual aspects, like creaky floors, super-fast internet speed, and neighborhood dynamics. Plus, you’ll be able to ask questions and get an insider’s perspective on what’s so great about the home.

For sellers, if your agent recommends using a virtual tour to market your home, you could attract more buyers.2 And you can be sure that those interested buyers are still getting the up-close and personal look inside your home that will inspire their strongest offers. 

The Silver Elk Group includes 3D Tours, Online walk-through videos and LIVE Online Open Houses to help filter serious buyers for those in-person or virtual agent tours during the pandemic. A complimentary “lifestyle tour” of the community and local ammenites is part of how we #GuideYouHome. 

SECRET #3: Virtual Is Just The First Step To Safe Home Sales

Even as government restrictions begin to ease in some areas, virtual tours are still recommended as a safer way to buy and sell real estate.3 Buyers don’t have to worry about exposure to anyone who previously visited the property, and sellers cut down on the foot traffic in their home. Some data even suggest that virtual tours keep agents safer as well, since they’re hosting fewer in-person showings and open houses.4

But despite the variety of virtual tours available, buyer are still encouraged to visit a home themselves in order to feel confident enough to submit an offer; whenever possible.  In this situation, listing agents and sellers will work together to come up with a procedure that ensures everyone feels safe and comfortable. You can expect interested buyers to present a pre-qualification letter, tours conducted by private appointment and only with essential parties, as well as buyers being asked to self-disclose whether they have COVID-19 or exhibit any symptoms.3

The day of the in-person tour, agents might ask buyers to remain in their vehicle until they arrive at the property, and to wear protective gear such as face coverings and gloves. Many will provide hand sanitizer and will ask buyers to refrain from touching any surfaces in the home. The new protocol should be for the agent (or seller, prior to the buyers’ arrival) to turn on lights, open doors, and pull back curtains for buyers to simply EXPERIENCE a home. Then, after everyone has left, the agent will return the home to its original state and disinfect it as needed.3. 

SECRET #4: The Speed of Closing Depends on Your Goals

Though maybe not literally, virtual tours are opening doors for both buyers and sellers in terms of options available to them. In 2019, buyers viewed an average of 10 homes over a period of 10 weeks before submitting an offer.5 But thanks to an increased prevalence of virtual tours saving them driving time, they’re able to peek inside that number of homes in a much shorter period to make their final choice.

With all this viewing activity, it makes sense that sellers whose listings feature virtual tours are receiving more offers on their properties. According to one study, virtual tours can add between two and three percent to the sales price of a home, in part because increased buyer interest has made sellers feel confident waiting for the exact right offer.2

So if you’re a buyer luxuriating in viewing homes from your couch, just remember that you’re not alone in your search. Your competition is virtually viewing the same properties you are, so it’s still important to work with your real estate agent to quickly submit a strong offer when you find the home of your dreams. And for sellers, if a speedy sale is important to you, carefully weigh that against the temptation to entertain more and more offers, which can keep your home on the market up to six percent longer.2 Your agent can help you decide the right strategy for your priorities.

SECRET #5: Virtual May Not Always Be the Right Choice

Creating, editing, uploading, and marketing virtual tours for a listing can be pricey. Packages through popular 3D imaging platforms like Matterport and Immoviewers can cost hundreds of dollars on their own.6 Virtual staging will further bloat a listing’s marketing budget, and then there’s the advertising dollars needed. Even seemingly inexpensive options like video call walkthroughs still require time and energy on behalf of both the seller and agent.

These costs mean that a full virtual tour package might not always be the right choice for sellers. When you talk to an agent about marketing your home, it may be that an elaborate virtual tour, showing, and open house just don’t make sense. It could be that your potential buyers may not resonate with that type of marketing, that the investment-to-return ratio isn’t in your favor, or that there are more effective ways to get your listing seen by qualified buyers.  Look no further to obtain top dollar for the sale of your home, as Silver Elk Group includes every one of the above options to bring the largest market to your doorstep in the safest possible manner. 

Buyers, you may notice that some listings within your search parameters don’t offer virtual tours. That’s because those for-sale homes might not have needed a full virtual marketing package to entice buyers to submit offers, or those homes are better marketed through more traditional tactics. Don’t close the door on your dream home because it doesn’t have virtual events and features. Stay open-minded so you can consider the wealth of home options that fit your lifestyle, needs, and budget.  

ARE VIRTUAL HOME TOURS IN YOUR FUTURE?

As technology develops, it will become easier and cheaper to create virtual tours. Coupled with the high demand for them, this means that virtual tour options are likely not only here to stay, but will continue to grow into a common addition to listings.

If buying or selling a home is on your mind, we’d be happy to discuss how virtual tours can play a part in your real estate experience. Reach out to us today for help finding local homes for sale that have virtual tours, or to chat about if adding a virtual tour to your upcoming listing is the right fit.

Sources:

  1. Rocket Mortgage – https://www.rocketmortgage.com/learn/evolution-of-home-showings-during-covid-19
  2. Radio Iowa – https://www.radioiowa.com/2020/07/28/trying-to-sell-a-house-ui-study-finds-virtual-tours-will-bring-more/
  3. NAR Showing Guidance During Reopening – https://cdn.nar.realtor/sites/default/files/documents/Showing-Guidance-During-COVID-05-14-2020.pdf
  4. NAR 2020 Member Safety Report – https://cdn.nar.realtor/sites/default/files/documents/2020-member-safety-report-08-31-2020.pdf
  5. NAR 2019 Profile of Home Buyers and Sellers – https://cdn.nar.realtor/sites/default/files/documents/2019-profile-of-home-buyers-and-sellers-highlights-11-21-2019.pdf
  6. Realtor.com – https://www.realtor.com/advice/sell/how-to-host-virtual-home-tours-almost-as-good-as-the-real-thing/

Move Up vs Second Home

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The pandemic has changed the way many of us live, work, and attend school—and those changes have impacted our priorities when it comes to choosing a home.

According to a recent survey by The Harris Poll, 75% of respondents who have begun working remotely would like to continue doing so—and 66% would consider moving if they no longer had to commute as often. Some of the top reasons were to gain a dedicated office space (31%), a larger home (30%), and more rooms overall (29%).1

And now that virtual school has become a reality for many families, that need for additional space has only intensified. A growing number of buyers are choosing homes further from town as they seek out more room and less congestion. In fact, a recent survey found that nearly 40% of urban dwellers had considered leaving the city because of the COVID-19 outbreak.2

But not everyone is permanently sold on suburban or rural life. Instead, some are choosing to purchase a second home as a co-primary residence or frequent getaway. Without the requirements of a five-day commute, many homeowners feel less tethered to their primary residence and are eager for a change of scenery after spending so much time at home.

If you’re feeling cramped in your current space, you’ve probably considered a move. But what type of home would suit you best: a move-up home or a second home? Let’s explore each option to help you determine which one is right for you.

WHY CHOOSE A MOVE-UP HOME?

A move-up home is typically a larger or nicer home. It’s a great choice for families or individuals who simply need more space, a better location, or want features their current home doesn’t offer—like an inground pool, a different floor plan, or a dedicated home office.

Most move-up buyers choose to sell their current home and use the proceeds as a downpayment on their next one. If you’re struggling with a lack of functional or outdoor space in your current home, a move-up home can greatly improve your everyday life. And with mortgage rates at their lowest level in history, you may be surprised how much home you can afford to buy without increasing your monthly payment.3,4

To learn more about mortgage rates, contact us for a free copy of our recent report!
“Lowest Mortgage Rates in History: What It Means for Homeowners and Buyers”

One major benefit of choosing a move-up home is that you can typically afford a nicer place if you spend your entire budget on one property. However, if you’re longing for that vacation vibe, a second home may be a better choice for you.

WHY CHOOSE A SECOND HOME?

Once reserved for the ultra-wealthy, second homes have become more mainstream. Home sales are surging in many resort and bedroom communities as city dwellers search for a place to escape the crowds and quarantine in comfort.5 And with air travel on hold for many families, some are channeling their vacation budgets into vacation homes that can be utilized throughout the year.

A second home can also be a good option if you’re preparing for retirement. By purchasing your retirement home now, you can lock in a low interest rate, start paying down the mortgage, and begin enjoying the perks of retirement living while you’re still fit and active. Plus, it’s easier to qualify for a mortgage while you’re employed, although you may be charged a slightly higher interest rate than on a primary home loan.6

One advantage of choosing a second home is that you can offset a portion of the costs—and in some cases turn a profit—by renting it out on a platform like Airbnb or Vrbo. However, be sure to consult with a real estate professional or rental management company to get a realistic sense of the property’s true income potential.

WHICH ONE IS RIGHT FOR ME?

You may read this and think: I’d really like both a move-up home AND a second home! But if you’re dealing with a limited budget (aren’t we all?), you’ll probably need to make a choice.  These three tactics can help you decide which option is right for you.

  1. Determine Your Time and Financial Budget

You may meet the bank’s qualifications to purchase a home, but do you have the time, energy, and financial resources to maintain it? This is an important question to ask yourself, no matter what type of home you choose.

Most buyers realize that a second home will mean double mortgages, utilities, taxes, and insurance. But consider all the extra time and expense that goes into maintaining two properties. Two lawns to mow. Two houses to clean. Two sets of systems and appliances that can malfunction. Second homes aren’t always a vacation. Make sure you’re prepared for the labor and carrying costs that go into maintaining another residence.

Of course, some move-up homes require more work than a second home. For example, if your move-up option is a major fixer-upper, you’ll probably invest more energy and capital than you would on a small vacation condo by the beach. Have an honest discussion about how much time and money you want to spend on your new property. Would a move-up home or a second home be a better fit given your parameters?

  1. Rank Your Priorities

If you’re still undecided, make a wish list of the characteristics you’d like in your new home. Then rank each item from most to least important. This exercise can help you determine your “must-have” features—and which ones you may need to sacrifice or delay. Here’s a sample to help you get started:

#

FEATURE

Dedicated home office

Extra bedroom

Pool

Walk to the beach

Big backyard

Close to friends and family

Short commute to the office

Investment potential
  1. Explore Your Options

Once you’ve determined your parameters and priorities, it’s time to begin your home search.

If you’re still not sure whether a move-up home or a second home is right for you, we can help.

Contact us to schedule a free consultation. We’ll discuss your options and help you assess the pros and cons of each, given your unique circumstances.

We can also send you property listings for both move-up homes and second homes within your budget so you can better envision each scenario. Sometimes, viewing listings of homes that meet your criteria can make the decision clear.

LET’S GET MOVING

Whether you’re ready to make a move or need help weighing your options, we’d love to help. We can determine your current home’s value and show you local properties that fit within your budget. Or, if your heart is set on a second home in another market, we can refer you to an agent in your dream locale. Contact us today to schedule a free, no-obligation consultation!

Sources:

  1. Zillow –
    https://www.zillow.com/research/coronavirus-remote-work-suburbs-27046/
  2. The Harris Poll –
    https://theharrispoll.com/should-you-flee-your-city-almost-40-have-considered-it-during-the-pandemic/
  3. MarketWatch –
    https://www.marketwatch.com/story/mortgage-rates-keeping-falling-so-will-they-finally-drop-to-0-2020-08-13
  4. Toronto Star –
    https://www.thestar.com/business/2020/08/07/you-can-get-a-fixed-rate-as-low-as-184-per-cent-which-is-unbelievable-low-mortgage-rates-driving-up-home-prices.html
  5. Kiplinger –
    https://www.kiplinger.com/real-estate/buying-a-home/601091/timely-reasons-to-buy-a-vacation-home
  6. The Press-Enterprise –
    https://www.pe.com/2018/11/17/5-tips-on-when-should-you-buy-a-retirement-house-hint-before-you-quit-work/

Add Value To Your Home With These 9 DIY Improvements

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Add Value To Your Home With These 9 DIY Improvements

Whether you’re prepping your house to go on the market or looking for ways to maximize its long-term appreciation, these nine home improvement projects are great ways to add function, beauty, and real value to your home.

The best part is, once you’ve secured the materials, most of these renovations can be completed over the course of a weekend. And they don’t require a lot of specialized skills or experience. So grab your toolbox, then get ready to boost your home’s appeal AND investment potential! 

Don’t forget we collect referrals from all of our past clients and can connect you with highly regarded contractors or budget friendly supplies.

1. Spruce Up Your Landscaping

Landscaping improvements can increase a home’s value by 10-12%.1 But which outdoor features do buyers care about most? According to a survey of Realtors, a healthy lawn is at the top of their list. If your lawn is lacking, overseeding or laying new sod can be a worthwhile investment—with an expected return of 417% and 143% respectively.1

Planting flowers is another great way to enhance your home’s curb appeal. And if you choose a perennial variety, your blooms should return year after year. For an even longer-term impact, consider planting a tree. According to the Council of Tree and Landscape Appraisers, a mature tree can add up to $10,000 to the value of your home.2

2. Clean The Exterior

When it comes to making your house shine, a sparkling facade can be just as important as a clean interior. Real estate professionals estimate that washing the outside of a house can add as much as $15,000 to its sales price.3

A rented pressure washer from your local home improvement store can help you remove built-up dirt and grime from your home’s exterior, walkway, and driveway. Just be sure to read the instructions carefully—and only use it on surfaces that can withstand the intensity. When in doubt, a scrub brush and bucket of sudsy water will often do the trick.

3. Add A Fresh Coat Of Paint

New paint can have a big impact on both the appearance and value of a property. In fact, it’s one of the most effective ways to revitalize a home’s exterior, update its interior, and make it appear larger and brighter. The best part? Painting is relatively easy and inexpensive!

To get the maximum return at resale, stick with a modern but neutral color palette that will appeal to a broad range of buyers. According to a recent survey of home design experts, cool neutrals are a safe bet when it comes to interior paint. And respondents chose white and gray as the best exterior paint colors to use when selling a home.4 However, it’s important to consider a property’s architecture, existing fixtures, and regional design preferences, as well.   

4. Install Smart Home Technology

In a recent survey, 78% of real estate professionals said their buyer clients were willing to pay more for a home with smart technology features.5 The most requested smart devices? Thermostats (77%), smoke detectors (75%), home security cameras (66%), and locks (63%).6

The good news is, many of these gadgets are fairly easy to install. And some of them, including smart thermostats and light bulbs, will pay for themselves over time by making your home more energy efficient. In fact, many manufacturers report that smart thermostats can cut back on heating and cooling costs by 10-20%.7

If you already own a smart speaker, like Amazon Alexa or Google Home, choose devices that will pair with your existing technology. This will enable you to create a truly integrated (and in many cases voice-activated) smart home experience.

5. Modernize Your Window Treatments

Smart—or motorized—blinds are also growing in popularity, and several manufacturers make models you can order and install on your own. But they’re not the only way to modernize your window treatments.

If you have old aluminum blinds, consider replacing them with plantation shutters, which are energy efficient, durable, and have strong buyer appeal.8 Roman and roller shades are another stylish alternative, and they come in a variety of colors and fabrics, which you can personalize to meet your design and privacy preferences.

Fortunately, upgrading your blinds has gotten easier and less expensive in recent years. There are a number of retailers that specialize in affordable window coverings that are simple to measure and hang yourself.

6. Replace Outdated Fixtures

Drastically transform the look and feel of your home by swapping out dingy and dated fixtures for contemporary alternatives. Start by assessing your current light fixtures, faucets, cabinet hardware, door knobs, and even switch plates. Then prioritize replacing those that are particularly outdated or in highly-visible areas, such as your entryway or kitchen.

Even if your home is fairly new, consider trading your builder-grade fixtures for higher-end options to give it a more upscale appearance. And forget the old rule about sticking to one metal tone throughout your property. According to designers, mixing metal finishes can add interest and character to a space.9

For more designer insights and decor trends, contact us for a free copy of our recent report: “Top 5 Home Design Trends for a New Decade.”  

7. Upgrade Your Bathroom Mirror

A minor bathroom remodel offers one of the best returns on investment, with a $1.71 increase in home value for every $1 you spend.10 We’ve already explored several improvements you can make to your bathroom: new paint, fixtures, and hardware. Now complete the look by upgrading your vanity’s mirror.

Before you purchase a new mirror, examine your existing one to see how it is attached to the wall. Some vanity mirrors are glued to the wall and difficult to remove without shattering the glass or damaging the sheetrock behind it.11

If you prefer to keep your existing mirror, you can paint the frame—or add one if it’s currently frameless. There are several online retailers that will send you the frame components cut to your specifications, which you can assemble and mount yourself. Much like a work of art, your vanity mirror serves as a focal point for your bathroom, so let your creativity shine through!

8. Shampoo Your Carpet

Carpet is notorious for trapping dust, dirt, and allergens. It’s one of the reasons that most buyers prefer hard surface flooring.12 But if you love your carpet, or you’re not ready to invest in an alternative, make an effort to keep it clean and odor-free.  We invested in a Roomba since we have two golden retrievers, and “Harriet” is affectionately known as our marriage counselor; since that little robot reduced 99% of our our reason to argue about cleanliness. 

To properly maintain your carpet, you should vacuum it weekly. Experts also recommend a deep shampoo at least every two years.13 Fortunately, this is a cheap and easy DIY project you can knock out in about 20 minutes per room. According to Consumer Reports, you can rent a machine and purchase cleaning fluid and supplies for around $90. With an average return on your investment of 169%, it’s well worth the effort and expense.14

9. Customize Your Closet

Real estate professionals estimate that a closet remodel can add $2500 to a home’s selling price. And while a professional renovation can cost upwards of $6000, there are many high-quality DIY closet systems you can customize and install yourself.15. 

Experts recommend taking a thorough inventory of your wardrobe and accessories before you get started. Make sure frequently-worn pieces are easy to reach, and store seasonal and seldom-used items on high shelves. Place shoe racks near the closet entrance so they are easy to access.16 A little planning can go a long way toward building a closet that you (and your future buyers!) will love.

GET A COMPLIMENTARY ANALYSIS OF YOUR PROJECT

We’ve been talking averages. But the truth is, the actual impact of a home improvement project will vary depending on your particular home and neighborhood. Before you get started, contact us to schedule a free virtual consultation. We can help you determine which upgrades will offer the greatest return on your effort and investment.  CONTACT US TODAY FOR A COPY OF THE MOST RECENT COST vs RENNO REPORT in the Southwest. 

Sources:

  1. HomeLight –
    https://www.homelight.com/blog/improve-curb-appeal-landscaping/
  2. National Association of Realtors –
    https://www.realtor.com/advice/home-improvement/landscape-renovations-that-pay-off/
  3. HouseLogic.com – https://www.houselogic.com/save-money-add-value/add-value-to-your-home/adding-curb-appeal-value-to-home/
  4. Fixr –
    https://www.fixr.com/blog/2020/01/14/paint-color-trends-in-2020/
  5. T3 Sixty –
    https://blog.coldwellbanker.com/wp-content/uploads/2018/01/CES2018-Smart-Homes-An-Emerging-Real-Estate-Opportunity.pdf
  6. Consumer Reports –
    https://www.consumerreports.org/smart-home/smart-home-tech-upgrades-to-help-sell-your-house/
  7. American Council for Energy Efficient Economy
    https://www.aceee.org/sites/default/files/publications/researchreports/a1801.pdf
  8. Forbes – https://www.forbes.com/sites/trulia/2016/07/05/10-upgrades-under-1000-that-increase-home-values-2/#47b0d3162e60
  9. Insider –
    https://www.insider.com/home-design-rules-you-should-be-breaking-2020-1
  10. Zillow –
    https://www.zillow.com/sellers-guide/roi-for-bathroom-remodel/
  11. Lowes –
    https://www.lowes.com/n/how-to/remove-a-bathroom-mirror
  12. HomeLight –
    https://www.homelight.com/blog/what-flooring-increases-home-value/
  13. Angie’s List –
    https://www.angieslist.com/articles/how-often-should-i-clean-my-carpets.htm
  14. HomeLight –
    https://www.homelight.com/blog/projects-that-increase-home-value/
  15. National Association of Realtors – https://www.nar.realtor/research-and-statistics/research-reports/remodeling-impact
  16. EasyClosets –
    https://www.easyclosets.com/tips-ideas/2016/10/02/how-to-plan-your-walk-in-closet/

Lowest Mortgage Rates in History: What It Means for Homeowners and Buyers

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Lowest Mortgage Rates in History: What It Means for Homeowners and Buyers

In July, the average 30-year fixed-rate mortgage fell below 3% for the first time in history.1 And while many Americans have rushed to take advantage of this unprecedented opportunity, others question the hype. Are today’s rates truly a bargain?

While average mortgage rates have drifted between 4% and 5% in recent years, they haven’t always been so low. Freddie Mac began tracking 30-year mortgage rates in 1971. At that time, the national average was 7.31%.2 As the rate of inflation started to rise in the mid-1970s, mortgage rates surged. It’s hard to imagine now, but the average U.S. mortgage rate reached a high of 18.63% in 1981.3

Fortunately for home buyers, inflation normalized by October 1982, which sent mortgage rates on a downward trajectory that would bring them as low as 3.31% in 2012.3 Since 2012, 30-year fixed rates have risen modestly, with the daily average climbing as high as 4.94% in 2018.4

So what’s causing today’s rates to sink to unprecedented lows? Economic uncertainty.

Mortgage rates generally follow bond yields, because the majority of U.S. mortgages are packaged together and sold as bonds. As the coronavirus pandemic continues to dampen the economy and inject volatility into the stock market, a growing number of investors are shifting their money into low-risk bonds. Increased demand has driven bond yields—and mortgage rates—down.5

However, according to National Association of Realtors Chief Economist Lawrence Yun, “the number one driver of low mortgage rates is the accommodating Federal Reserve stance to keep interest rates low and to buy up mortgage-backed securities.” According to Yun, “we will see mortgage rates stay near this level for the next 18 months because of the significance of the Fed’s stance.”6

HOW DO LOW MORTGAGE RATES BENEFIT CURRENT HOMEOWNERS?

Low mortgage rates increase buyer demand, which is good news for sellers. But what if you don’t have any plans to sell your home? Can current homeowners benefit from falling mortgage rates? Yes, they can!

A growing number of homeowners are capitalizing on today’s rock-bottom rates by refinancing their existing mortgages. In fact, refinance applications have surged over the past few months—and for a good reason.7 Reduced interest rates can save homeowners a bundle on both monthly payments and total payments over the lifetime of a mortgage.

The chart below illustrates the potential savings when you decrease your mortgage rate by just one percentage point. When it comes to refinancing, the bigger the spread, the greater the savings.

Estimated Monthly Payment On a 30-Year Fixed-Rate Mortgage

Loan Amount

4.0%

3.0%

Monthly Savings

Savings Over 30 Years

$100,000

$477

$422

$55

$20,093

$200,000

$955

$843

$112

$40,184

$300,000

$1,432

$1,265

$167

$60,277

$400,000

$1,910

$1,686

$224

$80,368

$500,000

$2,387

$2,108

$279

$100,461

Be sure to factor in any prepayment penalties on your current mortgage and closing costs for your new mortgage. For a refinance, expect to pay between 2% to 5% of your loan amount.8 You can divide your closing costs by your monthly savings to find out how long it will take to recoup your investment, or use an online refinance calculator. For a more precise calculation of your potential savings, we’d be happy to connect you with a mortgage professional in our network who can help you decide if refinancing is a good option for you.

HOW DO LOW MORTGAGE RATES BENEFIT HOME BUYERS?

We’ve already shown how low rates can save you money on your mortgage payments. But they can also give a boost to your budget by increasing your purchasing power. For example, imagine you have a budget of $1,500 to put toward your monthly mortgage payment. If you take out a 30-year mortgage at 5.0%, you can afford a loan of $279,000.

Now let’s assume the mortgage rate falls to 4.0%. At that rate, you can afford to borrow $314,000 while still keeping the same $1,500 monthly payment. That’s a budget increase of $35,000!

If the rate falls even further to 3.0%, you can afford to borrow $355,000 and still pay the same $1,500 each month. That’s $76,000 over your original budget! All because the interest rate fell by two percentage points. If you’ve been priced out of the market before, today’s low rates may put you in a better position to afford your dream home.

On the other hand, rising mortgages rates will erode your purchasing power. Wait to buy, and you may have to settle for a smaller home in a less-desirable neighborhood. So if you’re planning to move, don’t miss out on the phenomenal discount you can get with today’s historically-low rates.

HOW LOW COULD MORTGAGE RATES GO?

No one can say with certainty how low mortgage rates will fall or when they will rise again. A lot will depend on the trajectory of the pandemic and subsequent economic impact.

Forecasters at Freddie Mac and the Mortgage Bankers Association predict 30-year mortgage rates will average 3.2% and 3.5% respectively in 2021.9,10 However, economists at Fannie Mae expect them to dip even lower to an average of 2.8% next year.11

Still, many experts agree that those who wait to take advantage of these unprecedented rates could miss out on the deal of a lifetime. “With rates now at all-time historic lows, it’s hard to imagine that people may be holding out for something even better,” warns Paul Buege, president and COO of Inlanta Mortgage.12 Positive news about a vaccine or a faster-than-expected economic recovery could send rates back up to pre-pandemic levels.

HOW CAN I SECURE THE BEST AVAILABLE MORTGAGE RATE?

While the average 30-year mortgage rate is hovering around 3%, you can do a quick search online and find advertised rates that are even lower. But these ultra-low mortgages are typically reserved for only prime borrowers. So what steps can you take to secure the lowest possible rate?

  1. Consider a 15-Year Mortgage Term

Lock in an even lower rate by opting for a 15-year mortgage. If you can afford the higher monthly payment, a shorter mortgage term can save you a bundle in interest, and you’ll pay off your home in half the time.13

  1. Give Your Credit Score a Boost

The economic downturn has made lenders more cautious. These days, you’ll probably need a credit score of at least 740 to secure their lowest rates.14 While there’s no fast fix for bad credit, you can take steps to help your score before you apply for a loan:15

  • Dispute inaccuracies on your credit report.
  • Pay your bills on time, and catch up on any missed payments.
  • Hold off on applying for new credit.
  • Pay off debt, and keep balances low on your credit cards.
  • Don’t close unused credit cards (unless they’re charging you an annual fee).
  1. Make a Large Down Payment

The more equity you have in a home, the less likely you are to default on your mortgage. That’s why lenders offer better rates to borrowers who make a sizable down payment. Plus, if you put down at least 20%, you can avoid paying for private mortgage insurance.

  1. Pay for Points

Discount points are fees paid to the mortgage company in exchange for a lower interest rate. At a cost of 1% of the loan amount, they aren’t cheap. But the investment can pay off over the long-term in interest savings.

  1. Shop Around

Rates, terms, and fees can vary widely amongst mortgage providers, so do your homework. Contact several lenders to find out which one is willing to offer you the best overall deal. But be sure to complete the process within 45 days—or else the credit inquiries by multiple mortgage companies could have a negative impact on your credit score.16

READY TO TAKE ADVANTAGE OF THE LOWEST MORTGAGE RATES IN HISTORY?

Mortgage rates have never been this low. Don’t miss out on your chance to lock in a great rate on a new home or refinance your existing mortgage. Either way, we can help.

We’d be happy to connect you with the most trusted mortgage professionals in our network. And if you’re ready to start shopping for a new home, we’d love to assist you with your search—all at no cost to you! Contact us today to schedule a free consultation.

The above references an opinion and is for informational purposes only. It is not intended to be financial advice. Consult a financial professional for advice regarding your individual needs.

Sources:

  1. CNN Business –
    https://www.cnn.com/2020/07/16/success/30-year-mortgage-rates-record-low/index.html
  2. Freddie Mac –
    http://www.freddiemac.com/pmms/pmms30.html)
  3. Value Penguin –
    https://www.valuepenguin.com/mortgages/historical-mortgage-rates
  4. Federal Reserve Bank of St. Louis –
    https://fred.stlouisfed.org/graph/?g=NUh
  5. Bankrate –
    https://www.bankrate.com/mortgages/how-interest-rates-are-set/
  6. Washington Post –
    https://www.washingtonpost.com/business/2020/06/25/mortgage-rate-remains-historic-low/
  7. Yahoo! Finance –
    https://finance.yahoo.com/news/mortgage-refinancing-makes-big-comeback-151500346.html
  8. Bankrate –
    https://www.bankrate.com/mortgages/is-no-closing-cost-for-you/
  9. Freddie Mac June 2020 Quarterly Forecast –
    http://www.freddiemac.com/fmac-resources/research/pdf/202006-Forecast.pdf
  10. Mortgage Bankers Association Mortgage Market Forecast July 15, 2020 –
    https://www.mba.org/news-research-and-resources/research-and-economics/forecasts-and-commentary
  11. Fannie Mae July 2020 Housing Forecast –
    https://www.fanniemae.com/resources/file/research/emma/pdf/Housing_Forecast_071420.pdf
  12. Washington Post –
    https://www.washingtonpost.com/business/2020/06/25/mortgage-rate-remains-historic-low/
  13. Investopedia –
    https://www.investopedia.com/articles/personal-finance/042015/comparison-30year-vs-15year-mortgage.asp
  14. Money –
    https://money.com/mortgage-rates-below-three-percent/
  15. Experian –
    https://www.experian.com/blogs/ask-experian/credit-education/improving-credit/improve-credit-score/
  16. Equifax –
    https://www.equifax.com/personal/education/credit/report/understanding-hard-inquiries-on-your-credit-report/