79bebe7d7e7377091cbb5d6a72a7f670w-c518859020xd-w826_h860_q80

Ahh, ‘Spathroom’: Here Are the Top Bathroom Trends of 2021

By Jennifer Kelly Geddes

Oct 6, 2021

 

Odds are you have a bathroom (or two, or three) in your home. But a “spathroom”? That’s the latest rage, according to a new survey by Houzz.

This home design site surveyed nearly 3,000 homeowners between June and July who were planning, doing, or had just completed a bathroom rehab to find out what upgrades they were asking for most. All in all, one theme came to the fore: rest and relaxation, which prompted the experts here to coin a new term to define this trend that’s sure to catch on: spathroom.

Which makes complete sense: Who doesn’t crave a clean, serene spot to recharge after a long day—or as an escape from all the craziness of (still) working from home, the kids, the dog, and the dishes?

“In the midst of the chaos created by the pandemic, we’re seeing homeowners turn to their bathrooms for respite, creating calming sanctuaries with premium features, hygienic surfaces, and plants and other greenery,” says Marine Sargsyan, Houzz senior economist.

And homeowners aren’t going the DIY route when it comes to making sure their loo is done right. Instead, 84% used a professional, up from 82% last year—and an even bigger jump was seen in the hiring of general contractors (49% versus 43% in 2020) to lead the project.

Money was also shelled out in a big way in 2021, with a median bathroom renovation costing $8,000, while more deluxe renovations in the top 10% of spending totaled $30,000 or more.

Check out more of Houzz’s 2021 bathroom trends, including the high-tech perks some folks are adding in droves.

Modern rules the day

Photo by Tocha Project

Out with the old—and old-fashioned—and in with the new. Among the folks who are renovating their bathrooms this year, the vast majority (88%) wanted a complete overhaul, stylewise. Rather than traditional or farmhouse looks, homeowners leaned toward modern, transitional, and contemporary decor in their new baths.

Marble and color are big

Photo by Melinda Mandell Interior Design

Homeowners can’t get enough chic marble for their new bathroom floors, walls, and inside the shower. (The installation of marble shower flooring is up from 13% last year to 17% in 2021.) And color in the loo is leaning oceanic, with blue vanities being chosen at double the rate in 2021 (8% now, versus just 4% in 2020).

Not to be outdone, wooden cabinetry, which offers texture and much-needed warmth in the bathroom, is also trending big-time with 14% of folks choosing vanities with medium wood tones (up from 12% in 2020) and 8% going for lighter wood shades, up from 6% in 2020.

Soaking tubs are tops

Photo by Signature Hardware

Nothing says spathroom like a gorgeous, deep soaker to sink into anytime you like. And even if bathers use more water than those running the shower, homeowners still report unwinding in a soaking tub (61%) more often than in a long, hot shower (54%).

And premium features related to tubs are definitely a must, per the report, as folks are shopping long and hard for soakers, tubs for two (romantic!), and silent whirlpool baths. On the other hand, shower upgrades are also trending—think rainfall heads, dual showers, and body sprayers.

Photo by Glenn Robert Lym Architect

Want to be on trend in your loo? Make like the Euros do. Washing one’s nether regions with a bidet in the bathroom is a great way to curb toilet paper runs. According to the Houzz survey, homeowners are asking for all kinds of toilet technology, with more than a third (36%) renovating their loos to include a variety of automated conveniences.

Bidets are indeed the most popular tech perk (20%), followed by toilets that self-clean, heated seats for those chilly mornings, overflow protection, and built-in lights to prevent trips and falls in the dark.

Nature rocks in the loo

Photo by Beth Kooby Design

Incorporating plants at home was huge during the COVID-19 pandemic—and the trend continues right into the bathroom. Greenery was up 5 percentage points, and a full third, or 32%, of homeowners report adding plants to their bathrooms post-renovation.

Pic - 9-20-21

Is It Cheaper To Buy or Build?

How Much Does It Cost To Build a House -and Is It Cheaper To Buy or Build?

By Margaret Heidenry

Sep 10, 2021

How much does it cost to build a house? The median price of constructing a single-family home is $296,652. That’s for an average-sized house of 2,594 square feet, which boils down to $115 per square foot.

Because of COVID-19, however, Americans keen to purchase new construction will need to tack on a pandemic premium of an extra $35,872, cranking up today’s total cost of building a house to $332,524.

The coronavirus pandemic’s impact on new construction

Why does it cost so much to build a house today? According to the National Association of Home Builders, the pandemic’s disruption of supply chains has caused lumber costs to triple over the past year. Framing lumber that once set builders back about $350 per 1,000 board feet is now running $1,200—a 250% jump in price.

“The pandemic has been a big source of unexpected shifts in supply and demand for all kinds of goods,” says Danielle Hale, chief economist of Realtor.com®. “As a consumer, you’ve likely experienced this in the form of empty shelves that didn’t have toilet paper or yeast or chicken.”

Given that a house is much bigger (and more expensive) than rolls of toilet paper, it’s understandable that new-construction homes, and the materials to make them, are suffering from an unprecedented price increase that has many homebuyers and builders reeling from sticker shock.

“This unprecedented price surge is hurting American homebuyers and home builders, and impeding housing and economic growth,” said NAHB Chairman Chuck Fowke. “These lumber price hikes are clearly unsustainable. Policymakers need to examine the lumber supply chain, identify the causes for high prices and supply constraints, and seek immediate remedies that will increase production.”

Still, the pandemic alone isn’t to blame for the high cost of building a house. Here’s more on why new construction costs so much, and how it compares with buying a preexisting home.

The main costs to build a house

There are a few main costs involved in the construction of a home, says Andy Stauffer, owner and president of Stauffer and Sons Construction. Sure, each time you build a home, costs are a little different, but here are the biggies:

  • The shell of the house, which includes walls, windows, doors, and roofing, can account for a third of the home’s total cost, or $93,279.
  • Interior finishes such as cabinets, flooring, and countertops can eat up another third of the budget, averaging $75,259.
  • Within the interior, kitchens and bathrooms are the most expensive rooms to build, with the average cost for cabinets and countertops alone is $13,540.
  • Mechanical—think plumbing and heating—runs around 14.7%, or $43,668.
  • Architect and engineer drawings will run about $4,335.

Also keep in mind that the cost to build a home can vary widely based on where you live.

Additional costs to build a house

Now you know the basic cost to build a home, but the expenses don’t end there. Here are a few extra costs you’ll need to be aware of that aren’t factored into the above price:

  • The cost of a plot of land to build on averages $3,160 per acre. That said, the average home is built on only 0.5 acre, so unless you want a lot of space in a highly desired neighborhood, that alone won’t break the bank.
  • Excavation and foundation work can be the most variable cost when building a home. In other words, you never know what you’re going to find until you start digging—be it bad soil or massive boulders. If excavation and foundation work go relatively smoothly, the average cost for both is $33,511.
  • You’ll need a building permit, of course—it averages $5,086 nationally.
  • Other costs you’ll incur before you hammer even one nail include inspections ($4,319) and an impact fee, levied by the government to cover the costs a new home will incur on public services like electricity and waste removal ($3,865).

The current state of the new-construction industry

“When the pandemic began to unfold, builders faced the prospect of buyers disappearing,” says Hale. “And while buyers did pull back early on, the housing market quickly did a 180 with buyers coming out en masse to find a better fit at home.”

Now, as the economy has begun opening back up, builders are struggling to balance strong demand with supply chain crunches beyond lumber that are leading to higher prices, causing some homebuyers to hold off on moving forward with new construction. But it’s not all doom and gloom.

“I expect that we’ll see new home sales eventually pick up in a more gradual manner as builders work through supply chain challenges and the development pipeline normalizes,” Hale adds.

Is it cheaper to buy or build a house?

Currently, you can buy an existing single-family house for a median price of $380,000.

In short, it’ll cost you a little bit more today to buy an old house than building a new one. Still, you save yourself the headaches that inevitably come with construction, along with the long wait before you move in. On average, the time it takes to build a house is about three to six months, but the pandemic could cause this process to drag even longer.

Still, building a house does have its advantages. Everything from pipes to the heating and cooling systems will be new. That means no costly repairs in the near future—and so a newly built home could end up costing less in the long run.

Should you buy or build a house?

All in all, it’s smart to weigh the pros and cons of new versus old construction—and the price you pay for construction costs versus an existing home is only the beginning. Here we lay out everything a homebuyer needs to know about buying an existing home compared with building one from scratch or having it built by a general contractor.

There are actually two things to consider: the upfront costs of buying versus building, and the ongoing maintenance costs.

The upfront costs

If you buy an existing home: According to the latest figures, the median cost of buying an existing single-family house is $334,500. For the average 1,500-square-foot home built before the 1960s, that comes to about $223 per square foot. That said, the exact price can vary widely based on where you live. (Go to realtor.com/local to see the price per square foot in your area.)

If you build a new home: Building a house will set you back an average of $296,652, plus about $35,872 due to the pandemic-related uptick in material costs.

But you may get a lot more for your money. For one, new construction is usually more spacious, with a median size of 2,594 square feet—so the cost to build per square foot is actually lower than the cost per square foot of existing homes.

Another advantage of having a builder construct a custom home is you pay for only what you want, whereas an existing home may have interior and exterior features (e.g., a finished basement or a basketball court) you’ll pay a premium for, even if you don’t want them. But if an older house happens to be your dream home the way it is, that may be the more bargain-friendly route.

Last but not least, by building your own house, you get to design it to your exact specifications. If you have very clear ideas about how you want your home to look, this blank slate could be worth every penny.

Maintenance

If you buy an existing home: Older homes have more wear and tear, which means certain things may need more maintenance—or, if they’re on their last legs, replacement, points out Michael Schaffer, a broker associate at Keller Williams Integrity Real Estate LLC.

Naturally, the cost of this upkeep isn’t cheap, so make sure you know the age of the main items. For example, the average furnace is expected to last 20 years and will cost $4,551 to replace. The typical HVAC system lasts 15 years and costs $7,000 and more to replace.

Another biggie is the roof: The average shingled roof holds up for about 25 years. If you need to replace roofing, you’re looking at a bill starting at $8,379. Plumbing and septic systems can go for some time without a problem, but when something goes wrong, it’s an emergency.

With an existing home, unless you step into a high-end home with everything you want, you may want to start changing things, even if they are still functional. Home improvement shows make it seem simple to change countertops and flooring, or even overhaul floor plans. When you’re paying for material that’s shot up in price recently and labor costs for plumbing and drywall work, you may start to think your total cost might have been less paying a builder for a custom home in the first place.

If you build a new home: Considerably less upkeep is one of the primary reasons to build your own single-family home, because everything from major appliances to the HVAC system is new and under warranty. In fact, sometimes the entire home is protected for up to 10 years because a builder generally offers a construction warranty “for any problems that arise,” says Schaffer. Your interior and exterior maintenance outlay for a decade is potentially zero dollars. That can make up for some home construction costs per square foot that you paid by opting for a custom home.

Landscaping

If you buy an existing home: A major perk of older homes is mature landscaping with large trees and established plantings. That may not seem like a big deal until you consider that the U.S. Forest Service estimates that strategically placed mature trees can add tens of thousands of dollars to a property’s value and save up to 56% on annual air-conditioning costs.

If you build a new home: Builders often do little or no landscaping to new construction. It may take thousands of dollars—and many years—to get the yard you want. For instance, one 6- to 7-foot-tall red maple will cost about $99.95 (if you plant it yourself), which will then grow 2 to 3 feet a year. According to HomeAdvisor, the cost of adding completely new landscaping ranges from $1,400 to $5,700-plus.

Energy efficiency

If you buy an existing home: The latest U.S. Census found the median age of American houses to be 46 years old as of 2020. Older construction means dated windows and appliances—dollars flying out the window on wasted energy expense.

If you build your own home: Recent construction almost always beats older homes in energy efficiency, says Kyle Alfriend of the Alfriend Real Estate Group Re/Max in Ohio. Homes built after 2000 consume on average 21% less energy for heating than older homes, mainly because of their increased efficiency of heating equipment and building materials. This translates into reduced energy expense every month, even with the higher square footage in many newer homes.

“However, often the regulatory requirements on new construction are stricter than existing buildings,” says Hale. “This can mean you enjoy better energy efficiency, but these requirements can also drive up the price of new homes and mean that they take longer to build.”

Appreciation

If you buy an existing home: The nice thing about old homes is that there’s context to your purchase: You can research the home’s previous sale prices, as well as prices of similar homes in the area (known as comparables, or comps) to get a feel for whether prices are rising or falling in your area. If the prices for your home and others in the area have been steadily rising, odds are decent that the trend will continue, which bodes well for you if you decide to sell later on.

If you build a new home: New house construction, particularly in up-and-coming neighborhoods, can be more of a gamble. Without a proven track record of lots of comps, there just aren’t enough data points to really know what could happen down the line. However, some buyers in hot markets are seeing incredibly quick jumps in their new-construction property value.

8-3-21

The New Normal of Selling a Home Today

If you’re selling your home right now—or thinking about doing it soon—you should know that today’s housing market is unlike anything we’ve seen or experienced lately, maybe ever.

In the past, home sellers might have waited weeks or months to get an offer that might not be as high as they’d hoped. Buyers may have lowballed, or driven a hard bargain asking sellers to make certain repairs or other concessions before closing the deal.

Today, however, many of these realities are no more: In many areas of the country, homes are getting snapped up fast, sometimes within days of going on the market. Buyers mired in bidding wars are pushing their offers over asking price, and often waiving inspections and other demands to sweeten their offer.

In general, this is all good news for sellers—but it also means that it’s more important than ever to understand the market and play your cards carefully to fetch the best offer and terms for you. Here’s what sellers need to know about the real estate landscape today.

How the COVID-19 pandemic is affecting the housing market today

The COVID-19 pandemic has changed so much of our lives, and real estate is no exception.

“We’ve all been through a hopefully once-in-a-lifetime experience that dramatically changed the way we lived, worked, and went about our daily lives,” says Realtor.com Chief Economist Danielle Hale. “Even as we move forward and get back to living the way we used to, it’s likely that these experiences will stick with us and shape the way we make decisions for years into the future.”

For one, pandemic lockdowns made many people realize that their current living spaces just aren’t working for them anymore.

“One of the major motivations of homebuyers is the desire to have a larger, more functional home,” says Jason Gelios, a real estate agent with Community Choice Realty in Southeastern Michigan.

This is particularly true for people who started working remotely during the pandemic—who, after cramming their desks into dining rooms, “cloffices,” and other corners, are ready to upgrade to a bigger house so they can work at home with more privacy and comfort.

“This allows for people who are permanently remote-working to be more productive in their home,” explains Gelios.

And since remote workers may no longer need to commute to the office often or at all, many are now house hunting in areas that they hadn’t previously considered.

“With remote work flexibility becoming the new normal, buyers sought out areas like South Florida where they could enjoy the outdoors, extra space, and the tax benefits that come with living here,” says Chad Carroll with The Carroll Group at Compass, in South Florida.

Home inventory is low

Although buyers are out in droves, there are many fewer homes on the market than usual—which is creating a highly competitive market for buyers nationwide.

“Sellers are benefiting from the historically low inventory levels and record demand,” Carroll says. “This combination has fueled bidding wars and led to properties going under contract at an insane velocity.”

These low-inventory conditions may improve somewhat over the next year. But Hale warns, “the market is so out of balance that even with improvement, the number of homes for sale will remain low.”

Home prices are high

With fewer homes and high demand for them, many sellers are seeing multiple offers that, in turn, are driving up prices.

“The ongoing increase in housing prices makes it a great time for a home seller to cash out on their homes now,” says Beatrice de Jong, consumer trends expert at online real estate transaction company Opendoor.

Often, buyers are making offers above the listing price.

“Faced with few homes available for sale, buyers intent on owning are pulling out all the stops,” says Hale.

However, this highly beneficial market for sellers comes with a big caveat if selling means you’ll need to buy a new home yourself.

“Sellers searching for their next home will face the same fierce competition,” warns de Jong.

What’s more, home prices are seeing some early signs of leveling off—or at least not be rising at the breakneck pace of the past. So if you want to sell at the top of the market, it may pay to list sooner rather than later.

Interest rates are at record lows

Even though home prices are high, mortgage interest rates have hit record lows. And since even a 1% lower interest rate could lower monthly mortgage payments by up to 20%, it make homes more affordable for buyers, which is driving them into this competitive market.

“While the cost of a home is on the higher side, the cost to obtain the financing is much lower and oftentimes offsets the higher price, spurring a huge demand for buyers to go out and shop for homes,” Gelios says.

It’s a seller’s market

“There are many ways to define a seller’s market,” says Hale. “But a few key hallmarks are limited availability of homes for sale, fast-selling homes, rising home prices, and competitive buyer offers such as offers over asking price, waiving contingencies, and flexible closing terms.”

All that said, most buyers are looking for a new home because it’s the right time for them—not because of market conditions.

“They’re getting married, moving in with a partner, expanding their family or planning to do so,” Hale explains.

And the same wisdom applies to deciding whether to sell your house: Even though market conditions are in your favor, you should make sure it’s the right time to sell your house for you. Weigh your own personal circumstances, including any current or upcoming life changes such as a new job, retirement, the arrival or departure of family members within the home, and more.

realtor.com

Debugged! How to Get Rid of Silverfish—and What’s Attracting Them in the First Place

Pic - 7-20-21

By Larissa Runkle

Aug 19, 2020

Prepare yourself: If you’ve been noticing some creepy, silvery bugs crawling around your home lately, you might just have a silverfish infestation.

Silverfish are nothing new—in fact they’re some of the oldest insects around, predating dinosaurs by about 100 million years. This means you wouldn’t be the first person to feel more than a little disturbed at the sight of them sleuthing around your kitchen in the middle of the night (yeah, they’re also nocturnal).

Fortunately, by now we know more than a few things about these ancient creepy-crawlies, including what they’re attracted to—and how to get rid of them. Here’s your debugged guide to getting rid of silverfish.

What are silverfish?

“Silverfish are grayish, wingless insects found all over the United States and many other parts of the world,” says Scot Hodges, vice president of technical services for Arrow Exterminators. “They have elongated, slender bodies that are wider at the head, silvery-gray in color, and covered with tiny scales.”

As you might have guessed, that gray color, combined with the fishlike appearance of its movements, is how the silverfish gets its name. Gross, right?

What attracts silverfish?

“They’re attracted to high humidity, so they like dark spaces like attics, crawl spaces, and humid bathrooms,” says Mike Rottler, owner of Rottler Pest & Lawn Solutions.

And let’s not forget about the food source. This bug eats just about anything.

“Since the diet of silverfish consists of cellulose, sugars, starches, and carbohydrates—books, wallpaper, grains, fabric, you name it—any home with excess humidity, can become attractive to silverfish,” explains Kristiana Kripena, content marketing director for InsectCop.net.

Where do silverfish come from?

The problem is, these creepy-crawlies are fairly well-traveled. They’ll settle in cardboard boxes and move with you from house to house. Or sometimes they might just come in through the cracks in your basement foundation, find some old magazines to munch on, and stay until evicted.

“Silverfish, like bedbugs, are usually hitchhikers, meaning you probably brought them into your home accidentally,” Rottler says.

“[Their] being nocturnal, it’s usually hard for homeowners to know if they have an infestation immediately,” he adds. “While seeing one silverfish isn’t necessarily a direct sign of an infestation, it’s good cause to conduct an inspection, either by yourself or with a professional.”

Since silverfish can live up to six years—and survive for a year without food (eek!)—having a few of them around can quickly spin into a full-on invasion.

Can silverfish cause damage to your home?

Even if they creep you out, there’s a silver (sorry, we had to) lining: Silverfish are not nearly as destructive as other pests.

“Although silverfish are unsightly insects, they don’t actually spread any diseases or bite humans or pets,” says Kripena. “In fact, they’re incapable of it since their jaws aren’t strong enough to bite anything other than paper, some dry foods, and similar substances.”

That means they can’t eat away at the foundation of your home. But you shouldn’t let silverfish get the run of your place either.

“If you don’t deal with your silverfish infestation, you risk ruining things like books, important documents, photo albums, and other paper materials,” Kripena explains. “Since silverfish also will gladly feed on things like grains and other dry foods, you also risk having to throw out all your dry food supplies because they’ve been contaminated.”

How do you get rid of silverfish?

Getting rid of silverfish starts by making your home less hospitable for them. For starters, try to keep clutter, humidity, and food sources at bay. Vacuum up food crumbs regularly, and make sure dry food (yes even the dog kibble) is stored in sealed containers.

If you have a collection of old papers rotting away in your humid basement, that would also be a good place to start your cleanup. Make sure rooms are ventilated frequently, and fix any leaks in the foundation or insulating pipes of your home.

If you’ve started in on this list, and are still finding silverfish on your nightly trips to the bathroom, consider buying a pest-control kit or hiring professionals to speed up the extermination process.

Don’t want to shell out the cash? You can even build your own silverfish trap, Kripena says, using a glass jar and homemade bait.

Most of all, be patient. Silverfish can be hard to get rid of, and it will take some time.

“Stay consistent in your treatments, no matter which route you choose,” Rottler says. “Very rarely will one treatment kill an entire infestation. However, if you’re consistent, keep your home clean, and address the issues that made your home so attractive in the first place, you can get rid of silverfish.”

The Housing Market Shows Signs of Softening—Has It Topped Out?

Pic - 6-30-21

 

By Clare Trapasso

Jun 24, 2021

For many months now, it’s seemed like nothing could slow down the American housing market. But wait! The tide may be beginning to turn—even if just a little.

Over the past few weeks, the rate of price growth has begun to slow and fewer buyers are seeking mortgages to purchase homes. The competition for available homes, while still formidable, may not be quite as intense as it’s been. And this could provide buyers a sorely needed opening.

“The market’s topping out,” says Mark Zandi, chief economist at Moody’s Analytics. It’s “starting to show cracks. It feels like we’ve hit the apex, and we’re moving to the other side of it.”

That does not mean there’s a bubble on the verge of popping and that prices are about to plummet in a free fall reminiscent of the last housing bust, according to economists and housing experts.

Median home list prices are still more than 12% higher than they were the same time a year ago. But a combination of homebuyers being priced out of the market, a severe shortage of properties for sale, fears of another real estate bubble, and a return to pre-pandemic life may have dampened the full-throttle demand we’ve been seeing all year.

This could result in fewer bidding wars and more reasonable offers over the asking price. And it might just provide the opening that many weary buyers need.

“Buyers may be taking a break from the housing market, “says Realtor.com® Chief Economist Danielle Hale. “There have been signs that the momentum in the housing market is slowing. The competition might not seem as intense as it’s been in the last few months.”

In the week ending June 19, median home list prices were up 12.2% over the same month a year ago, according to the most recent Realtor.com data. While this stunning, year-over-year increase may not immediately invoke the idea of a market cooling off, it’s less than the 17.2% annual jump in prices in April, indicating slower price growth.

To be clear: Some of April’s rise was due to the comparison to a year earlier. April 2020 was the beginning of COVID-19, when local restrictions and general fear over the virus hampered real estate markets. But that’s not the whole story as in January of this year, when prices were up 15.4% compared with January 2020, which was well before the pandemic.

Meanwhile, fewer buyers are getting mortgages to buy homes.

The number of purchase mortgages dropped 14.2% year over year in the week ending June 18, according to a survey of lenders issued by the Mortgage Bankers Association. It also fell compared with four weeks ago. (Refinances, while also down, were not reflected in this percentage.)

While some of this is because last year’s housing market was in flux as COVID-19 stalled sales, it could also be an indication of a general overall softening.

“There are certainly some signs that might indicate that a slowdown is near,” says MBA economist Joel Kan. But he expects the number of folks receiving mortgages to buy homes to rise this year, mostly driven by higher-end buyers.

“It’s a bit too early to tell,” he continues. “If we see price growth stay in the double digits, you are going to get to the place where some potential buyers might pull back.”

Why high home prices aren’t expected to fall anytime soon

Reality check: Home prices nationally aren’t expected to actually go down anytime soon. They’re still expected to keep climbing. But many real estate experts predict a deceleration and that home price growth could be in the single digits by the end of the year.

“Prices have got to start moderating. Laws of housing gravity say prices can’t continue rising at double digits. It’s just not supportable,” says Zandi. “The market is hitting the limits to what kinds of prices we can see.”

Home prices are unlikely to drop because of laws of supply and demand: There are still more people who want homes than there are places for them to live. Builders have been unable to put up new residences fast enough, constrained by labor shortages, zoning laws, fast-rising prices for lumber, and delays on receiving major appliances.

Meanwhile low mortgage interest rates—for a time touted as the lowest we may see in our lifetime—are also continuing to juice demand.

“Prices are still at record highs, and I expect them to hit another record or two this summer,” says Hale. “Buyers aren’t going to get a deal, but they might be competing with fewer offers.”

Sellers are expected to keep prices elevated. They’ve seen their neighbors’ homes recently sell for exorbitant prices and are thinking to themselves they have an extra bedroom, more acreage, or a newly remodeled kitchen. So their home should fetch even more.

They may hold out for more money. If the bidding wars they’ve envisioned don’t materialize, they could remove the “For Sale” signs from their front yards. Fewer properties for sale mean higher prices.

“I don’t think sellers are going to sell below the price that they see in the market today. That price becomes the floor on what they’re willing to sell for,” says Moody’s Zandi.

Why the housing market is beginning to soften

However, as more folks return to offices, that could alter housing demand, and cool down some markets. Folks may be less willing to move farther out when faced with the prospect of long commutes. Plus, they may not need as much space now that the kids are going back to in-person schooling and gyms are reopening.

“The surge in demand created by the work-from-anywhere phenomenon is starting to fade,” says Zandi. “People may be rethinking living in the middle of Utah or in Tampa, or wherever, and start going back.”

The Great Unfreezing of America is providing a host of distractions for buyers. There are concerts and sporting events, and vacations and restaurants, and all kinds of other things competing for their down payments. Buyers may not want to max out their budgets on a house when there are other things they can spend their money on.

Many buyers are also frustrated by the lack of homes for sale and can’t afford the double-digit price increases that have become par for the course over the past year. They’ve had it. So they’re sitting it out until prices, offers over asking, and bidding wars calm down.

It’s “a buyer’s protest,” says Ali Wolf, chief economist at the building consultancy Zonda.

In April, builders surveyed by her firm reported that about 20% of buyers were nervous about higher prices. In May, buyer hesitancy was closer to 40%.

“We’re starting to hear some people say they’re afraid about buying at the top,” she says. “We’re seeing for the first time in a year some buyers choosing to sit on the sidelines.”

Many people remember all too well the housing bust that precipitated the Great Recession. They see parallels between today’s market and the real estate mania of the mid-2000s—when investors and buyers flooded the market, bidding up just about everything in a frenzy. They don’t want to buy a home at what they believe is the top of the market just to watch their values fall.

However, a true bubble is unlikely as there are fewer homes for sale and more buyers—a complete reversal from the last time around.

More importantly, mortgage lending guidelines were tightened to prevent borrowers who can’t pay back their loans from getting them. It was homeowners defaulting on their loans that led to the financial disaster.

Lenders “don’t want to lose money,” says Hale. “They’re worried that this runup in prices will end the way the last one did.”

Why any slowdown could lead the housing market to pick right back up again

A less heated real estate market may present a welcome opportunity for buyers—but conditions could reverse quickly. In an ironic twist, many of those aspiring homeowners who took a break from the open houses and bidding wars may jump back into the fray as the market begins calming.

“The buyer pool is deep enough to keep the housing market strong,” says Zonda’s Wolf. “We’re not expecting it to become a buyer’s market anytime soon.”

Real estate experts don’t believe the market will really slow down until mortgage rates significantly jump up. Currently, they’re hovering around 3% for 30-year fixed-rate mortgages. While they fell into the mid-2% range last year, rates are still at historic lows, making mortgage payments more affordable for buyers. If they shoot up, that equation will change.

 “House prices have risen so much so quickly,” says Moody’s Zandi. “You combine that with just a small increase in mortgage rates, and housing becomes unaffordable in many markets.”

Home Sellers Are Feeling More Optimistic

1810_ibuyer

As home prices rise by double-digit margins year over year, homeowners are increasingly viewing selling favorably. Consumers reported a significantly more positive view of homeselling conditions month over month in January, jumping 16 percentage points on net, according to Fannie Mae’s Home Purchase Sentiment Index, based on a survey of 1,000 consumers.

“Overall, the index’s monthly increase was driven largely by a substantial jump in the share of consumers reporting that it’s a good time to sell a home, with many citing favorable mortgage rates, high home prices, and low housing inventory as their primary rationale,” says Doug Duncan, Fannie Mae’s chief economist. “Among owners and higher-income groups, however, the other five components of the index remained relatively flat or slightly negative, suggesting to us that some consumers are waiting to gauge the effectiveness of any new fiscal policies and vaccination distribution programs on both housing and the larger economy.”

Duncan notes that lower-income and renter groups were more optimistic in January across nearly all of the index’s components. “We will pay close attention to see if this newfound optimism develops into a trend, which could indicate either that some demographics who have been negatively impacted by the pandemic may be starting to feel the economic recovery or that this is a response to the additional stimulus enacted in December,” Duncan says.

More highlights from the January index reading:

  • 52% of consumers say it’s a good time to buy a home, mostly unchanged from December 2020.
  • 57% of consumers say it is a good time to sell a home, increasing from 50% the month prior.
  • 41% of consumers believe home prices will go up over the next 12 months.
  • 75% of consumers say they are not concerned about losing their job in the next 12 months, unchanged from December 2020.
  • 21% of consumers say their household income is significantly higher than it was 12 months ago, while the percentage who say their household income is significantly lower decreased to 14%. Sixty-four percent of consumers say their household income is about the same.
Source:

Wow! How Home Sellers Can Make a Bundle in the ‘Best’ Winter Sales Season in Years

c0d864030df51604d7f54bc92ef64ccfw-c0xd-w685_h860_q80

 | Jan 14, 2020

Selling a home in winter is often a slow process. Since many home buyers traditionally hunker down as the temperature drops, particularly during the holidays, home sellers with real estate on the market typically see fewer buyers and lower offers.

That’s your typical winter, but this winter is shaping up to be a whole different reality, even a hot seller’s market.

According to Lawrence Yun, chief economist at the National Association of Realtors®, “It will be one of the best winter sales years ever.”

Even amid the coronavirus pandemic, buyer demand this winter is expected to be sky-high—particularly among first-timers who are keen to take advantage of record-low interest rates, which have been hovering below 3%. Combine that with a dearth of homes on the market (in a recent realtor.com report, December’s home inventory was nearly 40% lower compared with the same month last year), and things look clutch for sellers.

“Sellers will have the ball in their court so to speak, as there are more buyers than sellers,” says Danielle Hale, chief economist at realtor.com®. “This means seller-friendly trends like rising home prices and quick-selling homes.”

Here’s how sellers can make the most of this unprecedented time and enjoy a blizzard of buyers this winter.

Price your home on the high end

COVID-19 has created a shaky economy, so you may think pricing your home on the low end is the way to go. But that’s not the case.

According to a realtor.com report, the national median home listing price jumped 13.4% in December compared with last year, reaching $340,000, and price per square foot rose 15.9%.

The upshot? These days, you’re likely to get offers at list price, or even higher.

“Prices are very high,” says Simon Isaacsowner/broker of Simon Isaacs Real Estate in Palm Beach, FL. “People are getting what they’re asking.”

Another plus: The low interest rates could keep monthly mortgage payments low. So buyers may be able to afford a more expensive home.

Make your home move-in ready

Today, buyers are keen to find a home that won’t need a lot of work after they move in. As such, it behooves sellers more than ever to make small repairs and upgrades that will increase a home’s value and justify a high offer.

“Sellers need to make sure their house is turnkey,” says Matt van Winkle, a real estate broker/owner of Re/Max Northwest Realtors in Seattle. “The buyer is not going to want to remodel or do repairs in the winter.”

Cleaning up the landscaping and painting are two upgrades that Isaacs always recommends to sellers.

“Landscaping is definitely something that helps to sell a home more than anything,” he says.

Sellers would also be smart to highlight (in their listing and in person) features in their home that appeal to buyers today. Since the coronavirus, people are spending more time at home, and are thus keen to purchase property with more space, privacy, rooms that can double as home offices or learning spaces, and top-notch outdoor spaces.

Make sure your listing provides a virtual tour

The pandemic has made many buyers leery of checking out homes in person unless they see one they truly love. The upshot for sellers? Your listing will really need to shine online—and one of the best ways to do this is by offering a virtual tour.

“Depending on where you live and how COVID-19 is trending in your area, sellers may want to consider having a 3D tour readily available for buyers who do not wish to do an in-person tour,” says Tracy Jones, a real estate agent with Re/Max Platinum Realty in Sarasota, FL.

This approach is also more convenient for sellers, since it can help minimize the number of strangers touring their home. Buyers can get a good sense if your home meets their needs without actually stepping inside.

Take safety seriously

Selling a home during a pandemic brings a new set of challenges. Virtual tours can minimize the foot traffic in your home, but eventually a buyer will want to see it in person. So it’s a good idea to ensure that you and your real estate agent are doing everything you can to make in-person tours as safe as possible.

Some ways to do this include limiting the number of showings per day, including gaps between showings, and limiting the size of groups seeing a home at once. Requiring masks and social distancing are also par for the course.

When people do have to see your home, leave doors, closets, and cabinets open throughout the house to minimize what they have to touch. Keep in mind, too, that once everyone leaves, it will be up to you to clean and sanitize your home.

Don’t accept an offer too quickly

The real estate market this winter is incredibly competitive. With so few homes on the market, sellers are poised to receive multiple offers, sometimes all at once. But Matt Curtis, owner of Matt Curtis Real Estatein Huntsville, AL, cautions sellers not to get in a hurry and accept an offer too quickly.

Typically, sellers have 24 to 48 hours to accept an offer. If you jump the gun and say yes too soon, you could be leaving money on the table.

“Select a real estate agent that has a strategy to handle multiple offers versus an agent that’s not equipped to handle multiple-offer situations,” Curtis says. “Literally eight hours of sleep could net you an extra $30,000.”

So take time to mull over each offer you receive. If the offer is too low, you can always counter with something closer to the asking price.

Close remotely if you can

Along with virtual home tours, home sellers should strive to make as much of the home-buying process as virtual and digital as possible. Now, more buyers and sellers are able to complete the closing processremotely in most areas of the country, something that wasn’t possible a few months ago.

Pre-pandemic, remote closings weren’t possible everywhere, because some states didn’t allow documents to be notarized remotely. To keep real estate transactions and other business flowing during the COVID-19 crisis, most states issued emergency declarations now allowing for remote notarizations, according to the National Notary Association.

Along with limiting in-person contact, remote closings are much more convenient.

“You can sign all the documents now electronically,” Isaacs says. These days it’s all about “making sure that everybody is comfortable and as safe as possible.”

Looking to sell your home?  Get in touch with me to learn more about your home’s value.  al@nexthomerealtyselect.com

Housing Market in 2021

The housing market recovery coming into the new year has been nothing short of remarkable. Many experts agree the turnaround from the nation’s economic pause is playing out extremely well for real estate, and the current market conditions are truly making this winter an ideal time to make a move. Here’s a dive into some of the biggest wins for homebuyers this season.

1. Mortgage Rates Are Historically Low

In 2020, mortgage rates hit all-time lows 16 times. Continued low rates have set buyers up for significant long-term gains. In fact, realtor.com notes:

“Given this means homes could cost potentially tens of thousands less over the lifetime of the loan.”

Essentially, it’s less expensive to borrow money for a home loan today than it has been in years past. Although mortgage rates are expected to remain relatively low in 2021, even the slightest increase can make a big difference in your payments over the lifetime of a home loan. So, this is a huge opportunity to capitalize on right now before mortgage rates start to rise.

2. Equity Is Growing

According to John Burns Consulting58.7% of homes in the U.S. have at least 60% equity, and 42.1% of all homes in this country are mortgage-free, meaning they’re owned free and clear.

In addition, CoreLogic notes the average equity homeowners gained since last year is $17,000. That’s a tremendous amount of forced savings for homeowners, and an opportunity to use this increasing equity to make a move into a home that fits your changing needs this season.

3. Home Prices Are Appreciating

According to leading experts, home prices are forecasted to continue appreciating. Today, many experts are projecting more moderate home price growth than last year, but still moving in an upward direction through 2021.

Knowing home values are increasing while mortgage rates are so low should help you feel confident that buying a home before prices rise even higher is a strong long-term investment.

4. There Are Not Enough Homes for Sale

With today’s low inventory of homes on the market, which is contributing to this home price appreciation, sellers are in the driver’s seat. The competition is high among buyers, so homes are selling quickly.

Making a move while so many buyers are looking for homes to purchase may mean your house rises to the top of the buyer pool. Selling your house before more listings come to the market in the traditionally busy spring market might be your best chance to shine.

Bottom Line

If you’re considering making a move, this may be your moment, especially with today’s low mortgage rates and limited inventory. Let’s connect to get you set up for homebuying success in the new year.

Are Home Prices Headed Toward Bubble Territory?

Boy blowing bubbles in a wooden playhouse
Boy blowing bubbles in a wooden playhouse

Talk of a housing bubble is beginning to crop up as home prices have appreciated at a rapid pace this year. This is understandable since the appreciation of residential real estate is well above historic annual averages. According to the Federal Housing Finance Agency (FHFA), annual appreciation since 1991 has averaged 3.8%. Here are the latest 2020 appreciation numbers from three reliable sources:

It’s easy to jump to the conclusion that house appreciation is out of control in today’s market. However, we need to put these numbers into context first.

Inflation and the Comeback from the Housing Crash

Following the housing crash, home values depreciated dramatically from 2007-2011. Values are still recovering from that unusually long period of falling prices. We must also realize that normal inflation has had an impact.

Bill McBride, the founder of the well-respected Calculated Risk blog, recently summed it up this way:

“It has been over fourteen years since the bubble peak. In the Case-Shiller release today, the seasonally adjusted National Index, was reported as being 22.2% above the previous bubble peak. However, in real terms (adjusted for inflation), the National index is still about 2% below the bubble peak…As an example, if a house price was $200,000 in January 2000, the price would be close to $291,000 today adjusted for inflation.”

The COVID Impact on Home Prices

The pandemic caused many households to reconsider whether their current home still fulfills their lifestyle. Many homeowners now want larger yards that are both separate and private.

Their needs on the inside of the home have changed too. People now want home offices, gyms, and living rooms well-suited for video conferencing. Barbara Ballinger, a freelance writer and the author of several books on real estate, recently wrote:

“While homeowners continue to want their outdoor spaces that offer a safe retreat, that appeal has shifted into other parts of the home, coupling comfort with function. In other words, homeowners want amenities for work and leisure, and they plan to enjoy them long after the pandemic.”

At the same time, concerns about the pandemic have caused many homeowners to put their plans to sell on hold. Realtor.com just released their November Monthly Housing Market Trends Report. It explains:

“Nationally, the inventory of homes for sale decreased 39.2% over the past year in November…This amounted to 490,000 fewer homes for sale compared to November of last year.”

More people buying and fewer people selling has caused home prices to escalate. However, with a vaccine on the horizon, more homeowners will be putting their houses on the market. This will better balance supply with demand and slow down the rapid appreciation.

That’s why major organizations in the housing industry are calling for much more moderate home appreciation next year. Here are the most recent forecasts for 2021:

This Is Nothing Like 2006

Finally, let’s put to rest some of the concerns that today’s scenario is anything like what led up to the last housing crash. Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), explains why this is nothing like 2006:

“Such a frenzy of activity, reminiscent of 2006, raises questions about a bubble and the potential for a painful crash. The answer: There’s no comparison. Back in 2006, dubious adjustable-rate mortgages taxed many buyers’ budgets. Some loans didn’t even require income documentation. Today, buyers are taking out 30-year fixed-rate mortgages. Fourteen years ago, there were 3.8 million homes listed for sale, and home builders were putting up about 2 million new units. Now, inventory is only about 1.5 million homes, and home builders are underproducing relative to historical averages.”

Bottom Line

Most aspects of life have been anything but normal in 2020. That includes buying and selling real estate. High demand coupled with restricted supply has caused home prices to appreciate above historic levels. With the end of the health crisis in sight, we will see price appreciation return to more normal levels next year.

Is Buying A Home Today A Good Financial Move?

Father and son looking out of window on rainy day

There’s no doubt 2020 has been a challenging year. A global pandemic coupled with an economic recession has caused heartache for many. However, it has also prompted more Americans to reconsider the meaning of “home.” This quest for a place better equipped to fulfill our needs, along with record-low mortgage rates, has skyrocketed the demand for home purchases.

This increase in demand, on top of the severe shortage of homes for sale, has also caused more bidding wars and thus has home prices appreciating rather dramatically. Some, therefore, have become cautious about buying a home right now.

The truth of the matter is, even though homes have appreciated by a whopping 6.7% over the last twelve months, the cost to buy a home has actually dropped. This is largely due to mortgage rates falling by a full percentage point.

Let’s take a look at the monthly mortgage payment on a $300,000 house one year ago, and then compare it with that same home today, after it has appreciated by 6.7% to $320,100:Is Buying a Home Today a Good Financial Move? | MyKCMCompared to this time last year, you’ll actually save $87 dollars a month by purchasing that home today, which equates to over one thousand dollars a year.

But isn’t the economy still in a recession?

Yes, it is. That, however, may make it the perfect time to buy your first home or move up to a larger one. Tom Gil, a Harvard trained negotiator and real estate investor, recently explained:

“When volatile assets are facing recessions, hard assets, such as gold and real estate, thrive. Historically speaking, residential real estate has done better compared to other markets during and after recessions.”

That thought is substantiated by the fact that homeowners have 40 times the net worth of renters. Odeta Kushi, Deputy Chief Economist for First American Financial Corporation, recently said:

“Despite the risk of volatility in the housing market, numerous studies have demonstrated that homeownership leads to greater wealth accumulation when compared with renting. Renters don’t capture the wealth generated by house price appreciation, nor do they benefit from the equity gains generated by monthly mortgage payments, which become a form of forced savings for homeowners.”

Bottom Line

With home prices still increasing and mortgage rates perhaps poised to begin rising as well, buying your first home, or moving up to a home that better fits your current needs, likely makes a ton of sense.