Don’t need it? Then don’t pay for it.

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You know all those fantastic home features you hear your friends gushing about in their new home? The top-notch school district and Jacuzzi? The spacious third level and even more abundant yard?

Well, there’s nothing wrong with any of those things. But they’re not right for everyone.

In fact, for some buyers, they might even be a waste of money.

Are you on the hunt for a home this year? Give careful consideration to whether you’re paying for features you’ll use.

Want to know the three that people often overpay for?

The Biggest House on the Block
Have three dogs and a few active toddlers? Then room to run is a must. Is it just you and your spouse? Springing for a five-bedroom corner lot might not be worth the cash.

Buying tip:
Buy for the space you need and are planning for – not the extra level you might use someday. You can always buy a move-up property if your plans change.

A Highly Rated School District
Great schools are important if kids are in your future – or if you have little ones already. But if that’s not in the cards for you, plotting your homebuying plans around them isn’t necessary.

Buying tip:
You may find more affordable properties, and property taxes, if you search outside those school districts.

Custom Amenities
Home theaters, quartz countertops and pools are popular amenities that many buyers are willing to pay top dollar for. Are you?

Buying tip:
Focus on the amenities you know you’ll use often and get the most value from.

It’s not always easy to evaluate your short- and long-term needs. That’s why it’s essential for us to discuss how your future plans will affect your homebuying goals.

Do you need help finding your perfect-fit home with features you’ll love (and use)? Reach out today to get started.

Posted on May 30, 2019 at 8:13 pm
Chris Reis | Category: Uncategorized

Do’s and Don’ts of Presale Home Repairs

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You’ve decided it’s time to sell your home. Your neighbor just sold for a pretty penny, but they also spent a lot on remodeling and renovations. Does that mean you need to upgrade your home to sell?

Is it worth trying to sell as is? Or will your home be passed up and stuck on the market?

Fortunately, full-scale remodels aren’t required to sell your home. Sure, a home reno might fetch more money, but it’s not always worth the time and effort.

So how do you know what’s worth fixing up? Here are the do’s and don’ts of pre-listing home renovations:

Do:

  • Fix trip hazards throughout (and around) the home. Uneven flooring and sidewalks, broken stairs and off-kilter ramps aren’t just noticeable to touring buyers; they’re a downright danger.
  • Fix pet damage and lingering odors. Scratches on doors, torn window screens and holes in the yard will only make buyers wary of further pet damage on the property.
  • Fix water stains. Even if you’ve fixed the pipes or plumbing issues, buyers may still worry about mildew or mold problems.

Don’t:

  • Make partial updates to older kitchens and baths. Mixing old and new elements only highlights the age of the space. You need to commit to a full upgrade or let the buyer do a comprehensive remodel on their own.
  • Decorate the home with trendy or bold colors. Neutral colors photograph better, make the space look larger and help buyers reimagine the house with their belongings. Bold and bright colors do the opposite.
  • Renovate beyond what your neighbors have done. Buyers are going to offer what comparable sales suggest, no matter how much money you’ve poured into remodeling.

A few repairs and upgrades can certainly make your home more marketable. But a full-scale remodel? That’s not necessary in most cases.

Are you ready to sell? Get in touch today for a comprehensive review and marketing plan for selling your home.

Posted on May 16, 2019 at 8:14 pm
Chris Reis | Category: Uncategorized

Have you checked out the neighborhood?

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You wouldn’t pick out shoes before choosing an outfit, right? Or buy car accessories without first deciding if you want a truck or a sedan?

Well, house hunting should be treated the same way.

You shouldn’t search for a dream home without vetting neighborhoods or experiencing the new area for yourself.

If the area doesn’t meet your needs, the property may not provide a dream scenario. So how do you make sure you’ve found the right neighborhood? Keep these details in mind:

Cost of Living
Are the property taxes and HOA fees trending upward? Are there mostly trendy boutiques and high-end businesses in the area, or does it have a good mix of local and national retailers?

Planned commercial development could affect the long-term affordability of the area. However, having more access to retailers and entertainment could enhance your lifestyle.

Commutes and Social Life
How close do you want to be to the friends and family you visit the most? How far are you willing to drive to get to the restaurants, theaters or stores that you frequent?

It’s understandable to prioritize your work commute, but keep in mind the other places you visit on a daily or weekly basis.

Long-Term Goals
How does the community fit into your future goals? Are there good schools, parks or sports leagues for your family?

A thriving community adds to your quality of life. And it’s a good sign for future home values.

Want to try before you buy? Where possible, consider renting a unit in the area for a few days through a short-term rental site. Experiencing the neighborhood like a resident can help you to decide if it fits your current and future needs.

Are you looking for a new home? Get in touch if you’d like to see a neighborhood report.

Posted on April 25, 2019 at 8:15 pm
Chris Reis | Category: Uncategorized

No Bubble Here! How New Mortgage Standards Are Helping

No Bubble Here! How New Mortgage Standards Are Helping | Simplifying The Market

No Bubble Here! How New Mortgage Standards Are Helping

Real estate is shifting to a more normal market; the days of national home appreciation topping 6% annually are over and inventories are increasing which is causing bidding wars to almost disappear. Some see these as signs that the market will soon come tumbling down as it did in 2008.

As it becomes easier for buyers to obtain mortgages, many are suggesting that this is definite proof that banks are repeating the same mistakes they made a decade ago. Today, we want to assure everyone that we are not heading to another housing “bubble & bust.”

Each month, the Mortgage Bankers’ Association (MBA) releases a measurement which indicates the availability of mortgage credit known as the Mortgage Credit Availability Index (MCAI). According to the MBA:

“The MCAI provides the only standardized quantitative index that is solely focused on mortgage credit. The MCAI is calculated using several factors related to borrower eligibility (credit score, loan type, loan-to-value ratio, etc.).” *

The higher the measurement, the easier it is to get a mortgage. During the buildup to the last housing bubble, the measurement sat at around 400. In 2005 and 2006, the measurement more than doubled to over 800 and was still at almost 600 in 2007. When the market crashed in 2008, the index fell to just over 100.

Over the last decade, as credit began to ease, the index increased to where it is today at 186.7 – still less than half of what it was prior to the buildup of last decade and less than one-quarter of where it was during the bubble.

Here is a graph depicting this information (remember, the higher the index, the easier it was to get a mortgage):

No Bubble Here! How New Mortgage Standards Are Helping | Simplifying The Market

Bottom Line

Though mortgage standards have loosened somewhat during the last few years, we are nowhere near the standards that helped create the housing crisis ten years ago.

Posted on December 13, 2018 at 9:38 pm
Chris Reis | Category: Uncategorized

Don’t Get Caught in the Rental Trap in 2019

Don’t Get Caught in the Rental Trap in 2019

Every year around this time, we take time to reflect and plan for next year. If you are renting your current home but have dreams of homeownership, your plan for the new year may include buying, and you wouldn’t be alone!

According to the 2018 Bank of America Homebuyer Insights Report, 74% of renters plan on buying in the next 5 years, with 38% planning to buy in the next 2 years!

When those same renters were asked why they disliked renting, 52% said that rising rental costs were their top reason, and 42% of renters believe that their rent will rise every year. The full results of the survey can be seen below:

Don't Get Caught in the Rental Trap in 2019 | Simplifying The Market

It’s no wonder that rising rental costs came in as the top answer! The median asking rent price has risen steadily over the last 30 years, as you can see below!

Don't Get Caught in the Rental Trap in 2019 | Simplifying The Market

There is a long-standing rule that a household should not spend more than 28% of its income on housing expenses. With nearly half of renters (48%) surveyed already spending more than that, and with their rents likely to rise again… why are they renting?

When asked why they haven’t purchased a home yet, not having enough saved for a down payment (44%) came in as the top response. The report went on to reveal that nearly half of all respondents believe that “a 20% down payment is required to buy a home.”

If the majority of those who believe they haven’t saved a large enough down payment believe that they need 20% down to buy, that means a large number of renters may be able to buy now!

Bottom Line

If you are one of the many renters who is fed up with rising rents but may be confused about what is required to buy in today’s market, let’s get together to help you on your path to homeownership.

Posted on December 12, 2018 at 3:48 pm
Chris Reis | Category: Uncategorized

How to Simply Increase Your Family Wealth by Paying for Housing

How to Simply Increase Your Family Wealth by Paying for Housing | Simplifying the Market

How to Simply Increase Your Family Wealth by Paying for Housing

Everyone should realize that unless you are living somewhere rent-free, you are paying a mortgage – either yours or your landlord’s. Buying your own home provides you with a form of ‘forced savings’that allows you to use your monthly housing costs to increase your family’s wealth.

Every month that you pay your mortgage, you are paying off a portion of the debt that you took on to purchase your home. Therefore, you own a little bit more of your home every month in the form of home equityAs your home’s value increases you also gain home equity.

Every quarter, Pulsenomics surveys a nationwide panel of over 100 economists, real estate experts, and investment and market strategists and asks them to project how residential home prices will appreciate over the next five years for their Home Price Expectation Survey (HPES).

The latest data from their Q4 2018 Survey revealed that home prices are expected to round out the year 5.8% higher than they were in January. For the next 5 years, home values will appreciate by an average of nearly 3% a year.

This is still great news for homeowners!

For example, let’s assume a young couple purchases and closes on a $250,000 home in January. Simply through their home appreciating in value, those homeowners can build their home equity by nearly $40,000 over the next five years.

How to Simply Increase Your Family Wealth by Paying for Housing | Simplifying the Market

Let’s look at the potential equity gained over the same period of time at some higher price points:

How to Simply Increase Your Family Wealth by Paying for Housing | Simplifying the Market

In many cases, home equity is a large portion of a family’s overall net worth.

Bottom Line

If your plan for 2019 includes entering the housing market to purchase a home, whether it’s your first or your fifth, let’s get together to make your plan a reality!

Posted on December 11, 2018 at 4:45 pm
Chris Reis | Category: Uncategorized

What If I Wait A Year to Buy a Home?

What If I Wait Until 2019 To Buy A Home? | Simplifying The Market

What If I Wait A Year to Buy a Home?

National home prices have increased by 5.4% since this time last year. Over that same time period, interest rates have remained near historic lows which has allowed many buyers to enter the market and lock in low rates.

As a seller, you will likely be most concerned about ‘short-term price’ – where home values are headed over the next six months. As a buyer, however, you must not be concerned about price but instead about the ‘long-term cost’ of the home.

The Mortgage Bankers Association (MBA), Freddie Mac, and Fannie Mae all project that mortgage interest rates will increase by this time next year. According to CoreLogic’s most recent Home Price Insights Reporthome prices will appreciate by 4.8% over the next 12 months.

What Does This Mean as a Buyer?

If home prices appreciate by 4.8% over the next twelve months as predicted by CoreLogic, here is a simple demonstration of the impact that an increase in interest rate would have on the mortgage payment of a home selling for approximately $250,000 today:

What If I Wait Until 2019 To Buy A Home? | Simplifying The Market

Bottom Line

If buying a home is in your plan for this year, doing it sooner rather than later could save you thousands of dollars over the terms of your loan.

Posted on December 10, 2018 at 3:17 pm
Chris Reis | Category: Uncategorized

2008 vs. Now: Are Owners Using Their Homes as ATMs Again?

2008 vs. Now: Are Owners Using Their Homes as ATMs Again? | Simplifying The Market

2008 vs. Now: Are Owners Using Their Homes as ATMs Again?

Over the last six years, we have experienced strong price appreciation which has increased home equity levels dramatically. As the number of “cash-out” refinances begins to approach numbers last seen during the crash, some are afraid that we may be repeating last decade’s mistake.

However, a closer look at the numbers shows that homeowners are being much more responsible with their home equity this time around.

What happened then…

When real estate values began to surge last decade, people started using their homes as personal ATMs. Homeowners would refinance their houses and convert their equity into instant cash (known as “cash-out” refinances). Because homes were appreciating so rapidly, many homeowners tapped into their equity multiple times.

This left homeowners with little-or-no equity left in their homes, so when prices started to fall many homeowners found their houses in a negative equity situation (where the mortgage amount was greater than the value of the home). When some of these homeowners saw that there was no value left in their houses, they just stopped paying their mortgages altogether.

Banks eventually foreclosed on those homes and the foreclosures drove prices down even further and put more homes in the negative equity category. This cycle continued, leading to the worst housing crash in almost one hundred years.

What’s happening now…

Again, Americans are seeing their home equity grow. Today, over 48% of all single-family homes in the country have over 50% equity, and yes, some families are tapping into that equity. However, this time around, homeowners are not making irresponsible decisions. According to the latest information from Freddie Mac, the total equity being “cashed out” is a fraction of what it was leading up to the crash. Here are the numbers:

2008 vs. Now: Are Owners Using Their Homes as ATMs Again? | Simplifying The Market

Bottom Line

The recklessness that accompanied the build-up in equity prior to the last crash does not exist today. That makes this housing market much more secure than the one we had heading into 2008.

Posted on December 6, 2018 at 6:19 pm
Chris Reis | Category: Uncategorized

Where Are Interest Rates Headed in 2019?

Where Are Interest Rates Headed in 2019? | Simplifying The Market

Where Are Interest Rates Headed in 2019?

The interest rate you pay on your home mortgage has a direct impact on your monthly payment. The higher the rate, the greater the payment will be. That is why it is important to know where rates are headed when deciding to start your home search.

Below is a chart created using Freddie Mac’s U.S. Economic & Housing Marketing Outlook. As you can see, interest rates are projected to increase steadily throughout 2019.

Where Are Interest Rates Headed in 2019? | Simplifying The Market

How Will This Impact Your Mortgage Payment?

Depending on the amount of the loan that you secure, a half of a percent (.5%) increase in interest rate can increase your monthly mortgage payment significantly. But don’t let the prediction that rates will increase stop you from purchasing your dream home this year!

Let’s take a look at a historical view of interest rates over the last 45 years.

Where Are Interest Rates Headed in 2019? | Simplifying The Market

Bottom Line

Be thankful that you can still get a better interest rate than your older brother or sister did ten years ago, a lower rate than your parents did twenty years ago, and a better rate than your grandparents did forty years ago.

Posted on December 5, 2018 at 5:13 pm
Chris Reis | Category: Uncategorized

Homeowners Aged 65+ Have 48x More Net Worth Than Renters

Homeowners Aged 65+ Have 48x More Net Worth Than Renters | Simplifying The Market

Homeowners Aged 65+ Have 48x More Net Worth Than Renters

Every three years, the Federal Reserve conducts their Survey of Consumer Finances in which they collect data across all economic and social groups. Their latest survey data covers responses from 2013-2016.

The study revealed that the median net worth of a homeowner was $231,400 – a 15% increase since 2013. At the same time, the median net worth of renters decreased by 5% ($5,200 today compared to $5,500 in 2013).

These numbers reveal that the net worth of a homeowner is over 44 times greater than that of a renter.

There are many who see that statistic and point toward how broad the range of respondents are for the Federal Reserve survey. Their study includes all economic and social groups and also includes all age groups. The argument is that older respondents have a higher likelihood of being homeowners, while the homeownership rate among younger survey takers is much lower.

Recently, the Joint Center for Housing Studies at Harvard University focused on homeowners and renters over the age of 65. Their study revealed that the difference in net worth between homeowners and renters at this age group was actually 47.5 times greater!

Homeowners Aged 65+ Have 48x More Net Worth Than Renters | Simplifying The Market

Homeowners over the age of 65 are much more financially prepared for retirement and often own their homes outright if they were fortunate enough to purchase their homes before the age of 36. Their 30 years of mortgage payments have paid off as they gained equity through their monthly payments and as home values appreciated.

It is no surprise that lifelong-renters have had a hard time accruing net worth as the latest Censusreport shows that the Median Asking Rent has been climbing consistently over the last 30 years.

Homeowners Aged 65+ Have 48x More Net Worth Than Renters | Simplifying The Market

Bottom Line

As a homeowner you put your monthly mortgage payment to work for you, building your net worth with every payment.

Posted on December 4, 2018 at 6:31 pm
Chris Reis | Category: Uncategorized