Existing Home Sales Point Toward a Good Time to Sell

August 2nd, 2019

Some Highlights:

  • Existing Home Sales dropped 1.7% from May to a seasonally adjusted annual rate of 5.27 million in June.
  • Low inventory levels are still a factor in the market. The current supply of homes for sale is at 4.4 months, which is less than the optimal 6-month supply.
  • Median home prices were up 4.3% from June 2018, hitting $285,700. This marked the 88th consecutive month with year-over-year price gains.

Mid-Year Housing Market Update: Three Things to Know Today

July 24th, 2019

Shifting trends and industry-leading research are pointing toward some valuable projections about the status of the housing market for the rest of the year.

If you’re thinking of buying or selling, or if you just want to know what experts are saying is on the horizon, here are the top three things to put on your radar as we head into the coming months:

  1. Home prices are appreciating at a more normal rate: Home prices have been appreciating for about ten years now. Experts at the Home Price Expectation Survey, Mortgage Bankers Association, Freddie Mac, and Fannie Mae are forecasting continued growth throughout the next year, although it should be leveling-off to normal appreciation (3.6%), as we move into 2020.
  2. Interest rates are low: Over the past 30 years, the average mortgage rate in the United States has been 8.27%, and rates even peaked as high as 18% in the 1980s. Today, at 3.81%, the rate is considerably lower than the historical 30-year average. Although experts predict it may climb into the low 4% range in the near future, that’s still remarkably lower than our running average, suggesting a great time to get more for your money over the life of your loan.
  3. An impending recession does not mean there will be a housing crash: Although expert research studies such as those found in the Duke Survey of American CFOs and the National Association of Business Economics, are pointing toward a recession beginning within the next 18 months, a potential recession isn’t expected to be driven by the housing industry. That means we likely won’t experience a devastating housing crash like the country felt in 2008. Expert financial analyst Morgan Housel tweeted:

“An interesting thing is the widespread assumption that the next recession will be as bad as 2008. Natural to think that way, but, statistically, highly unlikely. Could be over before you realized it began.”

In fact, during 3 of the 5 last U.S. recessions, housing prices actually appreciated:Mid-Year Housing Market Update: Three Things to Know Today | MyKCM

Bottom Line

With prices appreciating and low interest rates available, it’s a perfect time to buy or sell a home. Let’s get together to discuss how you can take the next step in the exciting journey of homeownership.

Coming Soon in Como!

July 15th, 2019

Check out this 3 bed, 2 bathroom Como home BEFORE it hits the market! Imagine yourself living just blocks away from Lake Como, while enjoying the convenience of having an attached garage and lower level.

Give Todd a call today if you or someone you know would LOVE this home… (651) 398-8201

Should You Hire a Realtor When Buying New Construction?

July 9th, 2019

There are unmistakably unique allures built into every newly constructed home: the window for personal customization sits open, wide as it ever will. A bevy of brand new appliances, amenities and of-the-moment upgrades come ready for you and your family to experience. Lest we forget the most fundamental pull—there’s the personal privilege to christen it yours, first.

If you’re wondering whether you can employ a real estate agent for a newly-built home purchase, the answer is an unequivocal “YES!” While the developer’s agent will be always ready to assist potential buyers, you’re definitely going to want an expert of your own ready to represent your side of the deal. Suffice to say purchasing new vs. purchasing resale is a whole other ballgame, one requiring a buyer’s agent to successfully navigate complex headwinds, and protect your involvement at every step. Let’s break this down for a closer look.

 

 

The Builder’s Agent vs Your Real Estate Agent

The Builder’s:

It’s important to identify who’s on what side of the transaction, along with the roles each person plays. In this situation the builder plays a dual role also functioning as the “seller.” The agent representing the builders sales office functions as that builder/sellers agent. It should go without saying the primary duty of this agent is to generate sales for their builder. Consequently, the agent’s attention won’t be devoted to your best interests, but that of the builder.

While price negotiations with this agent (especially without your own agent) are bound to produce some spirited discussions, you can in fact rely on them for some valuable information. Builder agents can be a wealth of knowledge on things such as background details on home construction and housing development in regards to a newly built home.

Your Agent

Your realtor is your personal advocate. Not only will they ensure you’re aware of your rights at the table, securing the most value out of your budget is of top mind. These benefits and more all come together making for a relatively painless purchasing process.

Should you decide to move forward on a new home purchase working with an agent, make sure to disclose this detail to the selling party on your initial visit to the model home. It’s ideal to clarify upfront that you will have a representative, and that the builder agrees to this. This is good to remember because most builders require a serious buyer to be accompanied by a real estate agent on their first visit.

Here are some of the biggest reasons why you should hire a real estate agent to represent you:

A real estate agent will round out your knowledge of the builder, the home and its construction quality.

While the builder’s agent is unquestionably knowledgeable there’s a risk in relying solely on their word. You may likely be getting just a narrow, potentially biased perspective of a fuller picture. It isn’t for lack of insight, but more-so about what can sometimes get lost in a property breakdown. An experienced real estate agent will be well familiar with every major area builder and their work quality, cluing you in on things that may have been omitted from the seller agent. If you’re at all unsure of where to buy, a qualified realtor can recommend the right builder and neighborhood for you.


They will help you make the right choices according to your budget.

Especially if you’re a first time home buyer, purchasing new construction can not only be overwhelming, but expensive to boot. Considering the endless array of upfront upgrades and modifications to choose from your agent can help guide you through the personalization process, delivering the best options for your budget. From floor plans to the latest amenities, you can think of your realtor as your personal shopper here. They can make informed considerations on items better to install at present, versus items that are easier to improve upon in the future. An added bonus: if you’re thinking about selling your property a couple of years down the line, your realtor can appraise you on the features and amenities likely to attract future buyers in the long-term.


They’re your negotiator.

An experienced agent will come into talks knowing prior what “is” and “isn’t” on the table for discussion. In this approach, your realtor can better broker on things such as paint color, style of utilities and even closing costs. This is especially valuable since builders are far more likely to negotiate on fees or upgrades than they are on the purchase price of the home. It’s important to note, varying builder by builder, whether or not one is even willing to negotiate. Your agent will act as your guide through all of this, additionally making you aware of any “builder promotions” available to take advantage of.


No realtor fees on your end.

That’s right. Hiring a realtor to buy new construction comes at no cost to you since the builder will be the one paying your agent’s commission. Builders rely on outside agents to bring clients to them. As such, they view commissions as part of their cost of doing business, usually adding it into the marketing budgets of the homes. However, this doesn’t mean the builder would credit you the commission should you forego a realtor; they would much rather dole it out to an agent on your behalf. Builders are also unlikely to reduce the price of the home because it sets the comparison price for future home sales in that neighborhood.


Your realtor will help you set and oversee a home inspection.

You may be thinking, “Why do I need a home inspection if it’s a newly built home?” Well, even with the best construction, using only the best materials, contractors, etc., new homes can still have their fair share of defects just the same as resale homes. The builder’s agent is unlikely to push for or offer up an inspection, likely because the builder doesn’t necessarily want to inspect it themselves. You may be thinking you  can depend on a new home warranty to cover unaccounted for issues despite this, but let’s just say we wouldn’t hold our breath on that.

It’s up to you and your real estate agent to set up a home inspection. An excellent realtor has connections to multiple independent inspectors who will work in your best interest. Your agent will help you set up an appointment then review the inspection report to identify potential areas of negotiation with the builder. Also, it’s best to attend the walkthrough with your agent so they can help spot errors on the new home.


What you see is NOT what you get.

You might be amazed when you tour the model home and see top tier granite countertops, upgraded appliances, crown molding, rough-in plumbing—you name it. However, it’s prudent to remember that the model you visited is not necessarily the home you’ll end up purchasing. That model is worth more than the base price being advertised precisely because of all those amenities. In this case, keep that old adage in mind. Like buying a new car, your home could feel distinctly different from what you see on the showroom floor.

With the help of your realtor, you can differentiate between base price and whatever comes at the cost of an upgrade. With this you can accurately price compare between a model brimming with every possible bell and whistle, and a more sensible option, possibly with a little less flash, but a healthy amount nonetheless.


Your realtor is also your contract and paperwork guru.

Be honest, how familiar are you with real estate contracts? Unfortunately, every real estate purchase involves some level of exhaustive paperwork that can not only be confusing but also very intimidating. When buying new construction, you will have to sign a builder’s standard contract, which covers all the pertinent details of a new-home purchase. Your agent, being an expert in the industry, will review any contracts you sign to ensure everything is in order, and most importantly, that you are protected. They will guarantee your comfort and understanding pertaining to every aspect of the agreement. Whatever has been agreed upon by you and the builder (fees, timelines, upgrades) a realtor is going to ensure it is incorporated into the contract. Moreover, they will make sure that all other paperwork is reviewed and filed correctly for a smooth transaction.


They can recommend financing.

A builder will typically have a preferred lender and will even offer incentives to ensure a buyer works with that lender. This reassures them that the buyer is a good credit risk. However, the smartest thing you can do is to shop around and find the best loan that works for you and your situation. Your agent can help you with your search by exercising their rolodex of connections, partnering you with only the most reputable of lenders and letting you compare rates. At the end of the day, you will need to find the best loan for you and not for the builder—an agent is a great resource to rely on.

Americans Rank Real Estate Best Investment for 6 Years Running!

July 3rd, 2019

Some Highlights:

  • Real estate has outranked stocks/mutual funds, gold, savings accounts/CDs, and bonds as the best long-term investment among Americans for the last 6 years.
  • Stock owners are more positive about real estate than stocks as an investment.
  • Of the 4 listed, real estate is the only investment you can also live in!

 

Home Wants vs. Needs

June 26th, 2019

Before You Look for Your Dream Home: Know What You Want vs. What You Need!

In this day and age of being able to shop for anything anywhere, it is really important to know what you’re looking for when you start your home search.

If you’ve been thinking about buying a home of your own for some time now, you’ve probably come up with a list of things that you’d LOVE to have in your new home. Many new homebuyers fantasize about the amenities that they see on television or Pinterest, and start looking at the countless homes listed for sale through rose-colored glasses.

Do you really need that farmhouse sink in the kitchen to be happy with your home choice? Would a two-car garage be a convenience or a necessity? Could the “man cave” of your dreams be a future renovation project instead of a make-or-break right now?

The first step in your home buying process should be getting pre-approved for your mortgage. This allows you to know your budget before you fall in love with a home that is way outside of it.

The next step is to list all the features of a home that you would like, and to qualify them as follows:

  • “Must-Haves” – if this property does not have these items, then it shouldn’t even be considered (ex: distance from work or family, number of bedrooms/bathrooms).
  • “Should-Haves” – if the property hits all of the ‘must-haves’ and some of the ‘should-haves,’ it stays in contention but does not need to have all of these features.
  • “Absolute-Wish List” – if we find a property in our budget that has all of the ‘must-haves,’ most of the ‘should-haves,’ and ANY of these, it’s the winner!

Bottom Line

Having this list fleshed out before starting your search will save you time and frustration. It also lets your agent know what features are most important to you before they start showing you houses in your desired area.

Time For Your Dream Home, Gen X!

June 20th, 2019

During the housing market crash, Gen X homeowners lost more wealth than other generations. However, things are changing now! A strong economy, increasing home prices, and the recovery of the housing market are helping this generation to regain their lost wealth.

According to Pew Research Center,

Their fortunes have rebounded more than those of other generations during the post-recession economic expansion and as home and stock prices have risen. Since 2010, the median net worth of Gen X households has risen 115%. In fact, in 2016, the most recent year with available data, the net worth of a typical Gen X household had surpassed what it was in 2007 ($84,200 vs. $63,400)”.

The same report also mentioned,

15% of Gen X’s homeowners were ‘underwater’ on their homes in 2010 (meaning they owed more than they owned). By 2016 only 3% were underwater.

As a result of homes regaining market value and their increasing net worth, many Gen Xers are presented with the opportunity of selling their current home in order to move up to the house they always dreamed of!

According to the 2019 Home Buyers and Sellers Generational Trends Report by the National Associations of Realtors, in 2018 Gen Xers made up the second largest share of home buyers by generation at 24%.

The report also provided some highlights about their purchase:

  • Greatest share that purchased a multi-generational home (16%).
  • Largest share that purchased a detached single-family home (88%).
  • Highest median household income ($111,100).
  • Bought the most expensive homes of all the generations.
  • Job-related relocation was identified as the primary reason to buy.

But this generation is not only buying- they are selling too!

  • Largest share of home sellers (25%).
  • Highest median household income among sellers ($123,600).
  • Tenure in the previous home was a median of 9 years.
  • House too small was indicated as the primary reason to sell.
  • 91% sold the home using a real estate professional.

Bottom Line

If you are a Gen Xer who would like to know exactly how much your house is worth today so you can move up to the home of your dreams, let’s get together to analyze your current circumstances.

Moving Day Cheat Sheet!

June 18th, 2019

5 Ways You can ACE Moving to a New Home When You Have Kids

June 13th, 2019

According to the National Association of Realtors® (NAR), home buyers and sellers with children face a unique set of difficulties and stressors during the moving process. If you are a parent anticipating a move, it’s likely you have a ton of things on your mind. Maybe you need to sell your old house, contact the movers, pack your belongings, and prepare all the things needed in your new home. Then add the kids to the situation and you’re probably facing a whole different level of chaos and anxiety.

If you’re already feeling nervous and worried about your upcoming move just imagine how difficult it can be for your kids. Whether you have a toddler or a teen, the idea of getting ready to start somewhere new can be very scary. However, there are things you can do to get the youngest family members prepared and even excited about this new chapter and to help the family’s moving process go smoothly.

5 Ways You Can Ace Moving To A New Home When You Have Kids

1. Keep them informed.

The best way you can prepare your kids for your expected move is to talk to them about it. Keep them informed and tell them what they can expect. Even if they won’t be thrilled by the news, especially the teens, help them deal with their feelings. Explain to them why the family needs to do it — whether it’s for your new job or because they will need bigger rooms — and address any concerns they share with you. The sooner you can explain it to them, the more time they will have to cope with the news in their own way. Lastly, reassure them that not everything will be changing once you move into your new home.

2. Get them involved.

While moving and packing when you have kids can be more stressful, there are ways to cope with it. If your children are old enough to help, get them involved by allowing them to pack their own things and personalize their boxes. This will help keep them busy and will also help you identify their belongings when it’s time for you to unpack. Help them decide on what things they want to keep, especially their toys and clothes, and what can be sold or donated to a charity. But be ready because they might get upset when they have to let go of some things.

When you arrive at the new house, tour them around and let them contribute to little things like choosing the wall colors or the furniture arrangement of their new room. Make sure they’ll get to unload their belongings first so they will see familiar objects as soon as possible, particularly those things they are attached to.

3. Let them have proper goodbyes.

Material things aside, the biggest problem your kids might have emotionally is whether they will make friends and become accepted in your new area. “Will I be able to find a new best friend?”, “Is my new teacher as kind as Miss Lily?”, “Can I continue playing baseball or football?” Even if you aren’t sure about these circumstances continue to talk with them to ease their fears.

Throw a farewell party so they can say proper goodbyes to their close friends. You can also encourage them to stay connected through writing and mailing letters (let them know how exciting it is to have a penpal!). In today’s age there are also plenty of ways to connect through social media. These little things can help them keep their old friends, while at the same time you can encourage them that they can build new and better relationships in your new place.

4. Turn the move into an adventure.

Ah, moving, it’s one of a kind exhilarating experience. Or is it? Don’t let all the packing and unpacking become the only thing that your child will remember about this journey. They may not love all the hustle and bustle that comes with moving, but they will surely love any adventure you add to it. Especially when you’re moving far away, have a road trip so they can discover new places.

Show them around interesting landmarks, museums, and other kid-friendly attractions along the route. The distraction will relieve any anxiety the children have and it could help them think that moving is really fun. If you’re traveling from one state to another, don’t forget to collect souvenirs from the places you visit. Arranging these alternative activities can also help you relax, be happy, and bond with the kids.

5. Help them focus on new beginnings, but stick to family routines.

Always remind your children that not everything is changing. Sure, you’ve got a new house in a new neighborhood, but help them understand that it is only really the location. It’s important to keep their routines as much as possible throughout the moving process. Stick to your schedule like afternoon naps, family rituals, bonding activities, study sessions, etc. Keeping these little things consistent will reassure the children that the family is keeping life as normal as possible.

Finally, help them focus on the bigger and more exciting things they can look forward to. Is there a bigger park near your place? Are they now allowed to have pets now that your family has a bigger space? Also make sure to sign them up for sports, participate in hobbies, or any other activities that can help them feel more comfortable and will help them make new friends.

Bottom Line

We understand that with kids everything is easier said than done, but the best any parent can do is to try not to add to the stress and anxiety that children are having about relocating. The most important way to relieve that stress, however far or near your family is moving, is to stay positive. Keep in mind that kids are like little sponges and they will always take after their parents. If you stay positive, your kids will stay positive. With a little patience—well, probably a lot of patience— flexibility, and creativity, you’ll create new memories in your new place in no time.

4 Reasons to Buy A Home This Summer

June 7th, 2019

Here are four reasons to consider buying today instead of waiting.

1. Prices Will Continue to Rise

CoreLogic’s latest U.S. Home Price Insights reports that home prices have appreciated by 3.7% over the last 12 months. The same report predicts that prices will continue to increase at a rate of 4.8% over the next year.

Home values will continue to appreciate. Waiting may no longer makes sense.

2. Mortgage Interest Rates Are Projected to Increase

Freddie Mac’s Primary Mortgage Market Survey shows that interest rates for a 30-year fixed rate mortgage have started to level off around 4.3%. Most experts predict that rates will rise over the next 12 months. TheMortgage Bankers Association, Fannie Mae, Freddie Mac, and the National Association of Realtors are in unison, projecting rates will increase by this time next year.

An increase in rates will impact YOUR monthly mortgage payment. A year from now, your housing expense will increase if a mortgage is necessary to buy your next home.

3. Either Way, You Are Paying a Mortgage

Some renters have not yet purchased a home because they are uncomfortable taking on the obligation of a mortgage. Everyone should realize that unless you are living with your parents rent-free, you are paying a mortgage – either yours or your landlord’s.

As an owner, your mortgage payment is a form of ‘forced savings’ which allows you to have equity in your home that you can tap into later in life. As a renter, you guarantee your landlord is the person with that equity.

Are you ready to put your housing cost to work for you?

4. It’s Time to Move On with Your Life

The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise.

But what if they weren’t? Would you wait?

Examine the actual reason you are buying and decide if it is worth waiting. Whether you want to have a great place for your children to grow up, greater safety for your family, or you just want to have control over renovations, now could be the time to buy.

Bottom Line

If the right thing for you and your family is to purchase a home this year, buying sooner rather than later could lead to substantial savings.