Top 6 Home Design Trends To Watch in 2023

Home Design Trends for 2023

Many of us have spent extra time at home—and appreciate the design that make a house cozy and comfortable.

Some of us have adapted our dwellings ways, from creating functional home offices to upgrading the appliances we use most. 

It’s important to make your home your own, think about the long-term impact your renovations could have on its value. Choosing highly-personalized fixtures and finishes can make it harder for future homebuyers to envision themselves in the space. , investing in popular design choices that are likely to stand the test of time will make things easier down the road. 

And if you’re in the market for a new home, it’s wise to keep an eye out for designs that might need to be updated soon so you can factor renovation costs into your budget.

We’ve rounded up six trends that we think will influence interior design in 2023, as well as ideas for how you might incorporate them in your own home. Remember, before taking action, it’s always wise to consult with a real estate professional to understand how specific updates and upgrades will affect your property’s value in your local market. 

  1. Separate Kitchen, Dining and Living Areas

For years, home design has been dominated by open-concept floor plans, particularly for kitchen, dining, and living areas. However, as the pandemic forced families to work and study from home, many struggled to find the privacy and separation they needed. As a result, designers report that more families are choosing to bring back kitchen and dining room walls to break up the space and create quieter areas.

That doesn’t mean that we’re returning to an era of dark and cramped spaces, however. Even as walls make a return, it’s important to take care to retain a sense of flow and openness within the home and to prioritize natural light. 

If you’re buying or building a new home, consider how you will use the space and whether or not an open floor plan will suit your needs. If you already live in a home with an open floor plan and it isn’t working for you, try rearranging furniture and strategically placing pieces like bookshelves, room dividers, or rugs to create distinct areas within the home and reduce noise.

  1. Nature-Inspired Design

In the past few years, we’ve seen the “biophilia” trend explode, and there are no signs that it will be any less popular in 2023. This trend is all about bringing the outside in by adding natural touches throughout your home. 

Home design experts predict that natural, sustainable materials like bamboo, cork, and live-edge wood will lend character without being overwhelming. Wooden kitchen cabinets and islands will become more common in 2023, with white oak and walnut among the most popular choices. Wood will also appear in bathroom vanities and shelving and furniture throughout the home. 

Colors inspired by nature (think mossy greens and desert tones) will also play into this trend and will blend seamlessly with wood tones. We’re also seeing a return to natural stone countertop materials like quartzite, marble, dark leathered granite, and soapstone.

If you’re planning to add new shelving or redo your kitchen, consider turning to these materials to embrace the biophilic look. Or, incorporate elements of the trend by choosing nature-inspired paint colors and adding to your houseplant collection.

  1. Lighting as a Design Feature

Spending more time at home has shown us the importance of having the right lighting for specific tasks and times of the day. As a result, many homeowners are reconsidering the ways they light their homes and using light fixtures to change the usability and mood of their spaces.5

In particular, homeowners are rejecting bright, flat overhead lighting and replacing it with lamps and task-specific options. A layered approach to lighting—such as using a combination of under-cabinet, task, and ambient lighting in a kitchen—enables homeowners to tweak the level of light they’re using based on the time of day and what they are doing. 

In 2023, we expect to see more statement chandeliers, pendants, and wall sconces in a variety of shapes and materials. Thinking about switching up the lighting in your home design? Start by adding floor or table lamps and swapping out fixtures before you invest in rewiring your space. Take note of what works and what doesn’t and watch how the light in your home changes throughout the day. You can then use that home design to make lighting decisions that require a bigger investment. 

  1. More Vibrant Color Palettes

After the long dominance of whites and grays, vibrant colors are coming back as a way to add character and dimension to home design. 

This year, warm and earthy neutrals, jewel tones, and shades of red and pink are particularly popular. If your style tends toward the subtle, consider options like light, calming greens, blues, and pastels.

Major paint brands have responded to these homeowner preferences with their newest releases. Benjamin Moore’s 2023 color of the year, Raspberry Blush, is a lively shade of pinkish coral, while Sherwin William is embracing warm neutrals with Redend Point, a blushing beige. Behr’s choice of the year, Blank Canvas, is a creamy off-white that’s a warmer version of the stark whites that have been trending over the past few years.

If you’re planning to put your home on the market, play on the safer side, avoid paint that extremely bold.

Instead, try incorporating pops of color through throw pillows, art, and accessories.

  1. Curved Furniture and Architectural Accents

Goodbye, sharp corners. In 2023, arches and curves lend a sleek feel that draws on classical design and retro trends while remaining modern. Rounded corners feel more relaxed and natural than sharp edges.

Incorporating the trend into your new build ,curved kitchen islands and bars are all good options. You can also carry this trend through to your light fixtures by incorporating a bubble chandelier or globe pendants.

It’s easy to embrace this look without renovations, too. Look for a softer feel in furniture, with sofas, chairs, and tables that showcase curved edges. Or, break up your space with an arched folding screen and a circular rug.

  1. Art Deco Revival

Art Deco, the architecture and design style that took hold in the 1920s and ’30s, is enjoying a resurgence.

As a style, Art Deco is marked by bold geometry, textures, and colors, as well as an emphasis on art. But the 2023 interpretation of this style is likely to be a bit less splashy than its historical roots.

Instead of incorporating the elements of the style, pick bursts of color to bring some whimsy to their space. 

Check for design that bring a touch of Art to your home or embrace bold colors and fabrics like velvet.
Choose accessories with bright colors and geometric patterns to nod to the look without diving in all the way.

DESIGNED TO SELL

Are you thinking about remodeling or making significant design changes to your home? Wondering how those changes might impact your future resale value? 

Buyer preferences vary significantly based on your home’s neighborhood and price range. We’re happy to share our insights on the upgrades that will make it easier to sell your home. Give us a call for a free consultation!

The above references an opinion and is for informational purposes only.  It is not intended to be financial, legal, or tax advice. Consult the appropriate professionals for advice regarding your individual needs.

You can’t find a home. Now What?

Inventory Trend of Homes For Sale in MA is not going the right way
Homes For Sale in MA – Not a good trend

It’s January 2023 and you can’t find a home in Massachusetts or Rhode Island. As of the date of this writing, the total number of residential homes for sale in Massachusetts, which includes single family homes and condominiums, is 5,133.

As you can see from the title image, there has been a major drop in homes for purchase in the area. On January 1st, 2018, there were 14,885 homes for sale. That’s a drop in inventory of 190% over 5 years!

So what can you do about it?

Let’s explore some tactics you can put to use to become a homeowner in 2023.

Challenges Home Buyers Face In 2023

This is pretty straightforward.

Buyers have little inventory to consider, are facing higher interest rates and, while competition has dropped, the drop in inventory hasn’t made competition much easier.

What’s a buyer to do?

Buyers can’t find a home and are frustrated trying to find a suitable home within their budget or in their desired location.

I think we need to have a mental reset and redefine a successful home search.

You may need to alter your needs assessment, your budget, and/or your aspirations for finding your long-term home.

I know rising interest rates are a major concern, so let’s talk about all of it here.

No topic is taboo… and maybe we need to reframe the discussion entirely.

Let’s go.

Alternative Strategies to Consider In Your Home Search

It’s certainly not my place to tell you how to conduct your search.

However, if you’re not seeing success and can’t find a home, why would you continue to do the same things?

I’m reminded of a famous parable:

Let’s get you some different results!

Consider Homes in Less Desirable Locations or Neighborhoods

Sometimes we just need to be less stubborn. Homes in “less desirable” locations or neighborhoods will certainly come at a lower price and are likely to be less competitive.

Consider, also, that desirability is in the eye of the beholder. It may be “less desirable” to you but still may be in an area where you’ll have no trouble selling in the future.

While I wouldn’t suggest a client live in a high-crime or stigmatized area, perhaps the desirability of an area is a figment of your imagination or irrelevant to your current situation in life.

Maybe you’re considering the school district without having children? If you have no children, consider that most children don’t enter the school system until the age of 5 or 6, so you have a minimum 6 or 7 years before you really need to consider the school system.

Just be willing to open your mind is all I’m saying.

Consider Homes That Need Some Work or Updating

It’s highly likely that homes that need work will be cheaper with reduced competition.

I know it’s hard to consider after the last few years where EVERYTHING was being bid up.

We’re not seeing that as often anymore.

I don’t want to downplay your concerns about the cost of renovations and the availability of contractors.

Those concerns are legitimate.

The cost of construction materials has also risen in recent years.

It doesn’t mean you should ignore opportunities.

Work With a Real Estate Agent Who Has Experience With Renovating Properties

A skilled agent can help buyers find properties that need updating and can help buyers estimate the cost of renovations, which can help buyers make a more informed decision about whether to purchase a home.

As a licensed contractor in the Commonwealth of Massachusetts (Licensed General Contractor: CS-109536/HIC-188354), I am uniquely qualified to assist. I have built homes from scratch and I have renovated dozens of properties.

We would certainly need to have a discussion about your comfort level and the type of work you’re willing to consider, but in an inventory constrained market where you can’t find a home, you need to keep all options open.

Focus on Homes That Need Cosmetic Updates

Not every renovation needs to be massive. Avoid homes that need structural updates because I’ve yet to run into a structural update that’s “minor”.

Updating the paint, flooring, fixtures, and appliances can make a big difference in the appearance of a home and can be done relatively inexpensively.

If you’re willing to get your hands dirty, most of these types of renovations can be downright cheap and provide you with a major equity boost.

Look For Recently Renovated Homes That Have Not Sold

I know this one sounds weird, but nearly every municipality in Massachusetts has put many of their records online, including building permits.

You can do a search for homes with recently closed building permits and work with your agent to craft a reach out strategy.

Many people decide to update their home prior to listing it, so you could come across an opportunity that never makes its way to market.

This could help you to avoid a bidding war and get the property at a lower price.

Consider A Renovation Loan

There are many types of renovation loans out there.

I’m not saying they’re easy, because they’re not.

They can be a bit of a pain… but if you start down this path and come across a property that needs work, you could move faster than another buyer who hasn’t started down this path.

You can look for homes that say things like “handyman special” or “will not pass FHA financing”.

At that point, it’s a matter of your comfort level with a property that needs some attention.

You may be concerned about how you protect yourself from buying a money pit. Consider that you’ll still be having a home inspection. If a home inspection finds items that are outside your comfort zone, you’ll have the option to exit the purchase at no cost to you if you have an agent that structures your contract properly (beyond the cost of the inspection). You can also purchase, or request the seller purchase, a home warranty.

Look for Properties That Have Unique Features or Character

Some buyers may overlook properties that need updating because they don’t have the latest finishes or appliances. However, properties that have unique features or character, such as original hardwood flooring, crown molding, or a fireplace, can be worth considering, even if they need updating. These features can add value to the home and make it more desirable to buyers.

Consider the Location

The location of the property is often more important than the condition of the property. Properties located in desirable areas, even if they need updating, can be more valuable in the long run.

Consider the Future Potential of the Property

Some properties that need updating may have potential for future development, such as a basement or attic that can be finished, or a large lot that can accommodate an addition or an in-law apartment. It’s important to consider the future potential of the property, as it can add value to the home in the long run.

The Renovation Elephant In the Room

I’m not here to blow rainbows up your backside.

Renovations can be expensive, especially when you factor in the cost of materials.

The cost of materials for home renovations has risen in recent years, and the trend has accelerated in the past few years due to a number of factors, including supply chain disruptions caused by the COVID-19 pandemic and increased demand for home renovation projects.

Heck, over the last year, the price of renovations has risen 19%.

According to the National Association of Home Builders, the cost of lumber has increased significantly in recent months, with some reports indicating that lumber prices have more than doubled since April 2021. The increase in lumber prices has been driven by a combination of factors, including increased demand for new housing construction, supply chain disruptions caused by the pandemic, and a lack of available trucking capacity.

Additionally, the cost of other building materials, such as drywall, roofing, and insulation, have also increased in recent months.

According to the National Association of Home Builders, the average cost of materials for a single-family home rose by 2.6% in December 2021, and the price of softwood lumber alone rose by 29.3%.

Renovation Costs Are Up AND You Can Still Benefit

With prices for construction materials and labor rising, it may be more expensive for buyers to renovate a home in the short term. However, these rising costs can also be seen as a sign of a strong economy and housing market. As the economy continues to recover and more people are able to afford to buy homes, the demand for housing will continue to increase, which can drive up home prices.

Keep in mind that housing supply continues to severely lag housing demand.

Can't find a home? Housing production hasn't met demand.

If you’re able to purchase a home that needs updating now, even with the higher costs of renovations, you may still be able to benefit from the appreciation in your home’s value in the future.

Consider, also, that the rising costs of construction materials and labor may discourage some investors and flippers from entering the market. This will lead to less competition for buyers looking for fixer-upper properties.

Buyers who are able to purchase and renovate a home now, despite the higher costs, may be able to benefit from the appreciation in home values in the future and may also be able to avoid some of the competition in the market.

Consider Short-Term Gains Over Long-Term Stability

Let me translate this for you – you don’t HAVE to find your forever home THIS time.

Instead of focusing on finding a home you can be in for a long time, consider purchasing a home as an investment with the goal of flipping it for a profit. This approach will involve looking for properties that are undervalued and have potential for appreciation or those that can be quickly renovated and resold at a higher price.

This doesn’t mean you’re “looking for a flip” like an investor. You’re looking for a home that may need some work in an area you don’t intend to be in for the long-term. The home should still meet many of your goals, just not your long-term goals.

The point is to get into a home and start building equity rather than standing still waiting for the perfect opportunity.

So let’s address some of the common fears associated with this approach.

Fear #1: Not Being Able To Sell the Property

You may fear that you won’t be able to find a buyer for your property, especially if the market conditions change or the property is located in an area with low demand.

Fear #2: Not Being Able to Make A Profit

You may fear that you won’t be able to make a profit on the sale of the property, especially if the renovation costs are high or the market conditions are not favorable.

Fear #3: Not Being Able To Handle The Renovation Work

You may fear that you won’t be able to handle the renovation work yourself and will have to hire contractors, which can be costly and time-consuming.

Fear #4: Not Being Able To Handle The Legal and Financial Aspects

You may fear that you won’t be able to handle the legal and financial aspects of buying and selling a property, such as dealing with mortgages, taxes, and closing costs.

These are all legitimate fears and is why…

Can't find a home? Who you work with matters.

In Conclusion

We are in a market with historically low inventory. As a buyer who can’t find a home, you can continue to do what you’ve been doing with no success, or you can alter your strategy.

Part of altering your strategy includes altering your mindset and being open to different areas, different home styles, homes that need work, smaller homes that can fit your needs for the short-term, or homes with unique features that will increase in value over time.

Surrounding yourself with the right professionals can make all the difference in the world.

Now, more than ever, who you work with matters.

If you’d like to schedule time to chat, you can schedule time on my calendar here, or connect with me on social media on Facebook or Instagram.

2023 Real Estate Market Outlook (And What It Means for You)

This is one of the challenging real estate periods to forecast, here’s what industry experts predict will happen to the U.S. housing market in the coming year. So what can we expect in 2023? Will mortgage rates continue to climb? Could home prices come crashing down?

Last year, one factor drove the real estate market more than any other: rising mortgage rates. 

The Federal Reserve began a series of interest rate hikes in March 2022 in an effort to slow inflation. And while some market sectors have been slow to respond, the housing market has reacted accordingly.

Both demand and price appreciation have tapered, as the primary challenge for homebuyers has shifted from availability to affordability. The higher-mortgage-rate is difficult for buyers and sellers, it should eventually result in a stable and balanced real estate market.

MORTGAGE RATES WILL FLUCTUATE LESS

In 2022, 30-year fixed mortgage rates surged from roughly 3% in January to around 7%. According to Rick Sharga of real estate data company ATTOM, “We’ve never seen rates double in so short a period.”

This year, economists forecast a less dramatic shift.

Bankrate’s View

In an interview with Bankrate, Nadia Evangelou, senior economist for the NAR, shares her forecast of three possible mortgage rate scenarios:

  1. Inflation continues to surge, forcing the Fed to repeatedly raise interest rates. In that scenario, she predicts that rates could reach as high as 8.5%.
  2. Inflation decelerates and mortgage rates follow suit, averaging 7 to 7.5% for the year.
  3. Rising interest rates cause a recession, causing mortgage rates to fall closer to 5% by the end of the year.

Realtor.com’s View

According to Realtor.com, mortgage rates will average 7.4% in 2023, before falling to 7.1% by the end of the year. The 30-year fixed rate will fall steadily throughout the year, averaging 6.2% in Q1 and 5.2% by Q4.

Fannie Mae’s View

Economists at Fannie Mae fall somewhere in the middle. In a recent press release, they predicted that the U.S. economy will experience a “modest recession” this year. However, according to their December Housing Forecast, 30-year fixed mortgage rates will fall by half a point from an average of 6.5% in Q1 to 6.0% in Q4.

“From our perspective, the sector appears well-positioned to help lead the economy out of what we expect will be a brief recession,” said Fannie Mae Chief Economist Doug Duncan.

What does it mean for you?  

Even the experts can’t say for certain where mortgage rates are headed. Concentrate on purchasing or selling a home when the time is right for you. Several mortgage options available to make a home purchase more affordable, including adjustable rates, points, and buydowns—and refinance later. We’d be happy to refer you to a trusted mortgage professional who can outline your best options.

SALES VOLUME WILL FALL AND INVENTORY WILL RISE

CalcuatedRiskBlog.com – Will inventory increase further in 2023?

It looks like the home-buying frenzy we experienced in recent years is behind us. While the desire to own a home remains strong, higher mortgage rates have made it unaffordable for would-be buyers. 

Economists says the number of sales to continue to decline this year, leading to increase in inventory, days-on-market, or the time to sell a home. But, there is a wide range when it comes to specifics.

Fannie Mae’s View

Economists at Fannie Mae forecast that total home sales will fall by around 20% this year before rising again by nearly 15% in 2024. National Association of Realtors Chief Economist Lawrence Yun projects a less extreme dip of 7% in 2023 with a rebound of 10% next year.

Realtor.com’s View

Realtor.com Chief Economist Danielle Hale foresees something in between. “The high home prices and mortgage rates limit the pool of eligible home buyers which will decelerate home sales. We anticipate that existing home sales will decline another 14.1% in 2023.” She expects this drop in sales to lead to a nearly 23% increase in inventory levels this year, offering more choices for buyers who have struggled to find a home in the past.

However, given the severe lack of housing supply, even with a double-digit increase, the market is expected to remain relatively tight and below pre-pandemic levels. Hale points out: “It’s important to keep historical context in mind. The level of inventory in 2023 is expected to fall roughly 15% short of the 2019 average.”

What does it mean for you?  

If you’ve been frustrated by a lack of inventory in the past, 2023 may bring new opportunities for you to find the perfect home. And today’s buyers have more negotiating power than they’ve had in years. Contact us to find out about current and future listings that meet your criteria.

If you’re hoping to sell, you may want to act fast; rising inventory levels will mean increased competition. We can help you chart the best course to maximize your profits, starting with a professional assessment of your home’s current market value. Reach out to schedule a free consultation.

HOME PRICES WILL REMAIN RELATIVELY STABLE

While some economists expect home prices to fall this year, many expect them to remain fairly stable. “For most parts of the country, home prices are holding steady since available inventory is extremely low,” said Yun at a November conference.

Nationally, Yun expects the average median home price to tick up by 1% in 2023, with some markets experiencing greater appreciation and others experiencing declines. Economists at Fannie Mae offer a similar projection, forecasting a slight decrease in their Home Price Index of about 1.5%, year-over-year.

Other experts foresee a larger fluctuation. Hale expects U.S. home prices to rise by 5.4% this year, while Morgan Stanley is forecasting a 7% drop from the peak in June 2022.

Still, many economists agree that a housing market crash like the one we experienced in 2008 is highly unlikely. The factors that caused home prices to plunge during the Great Recession—specifically lax lending standards and a surplus of inventory—aren’t prevalent in our current market. Therefore, home values are expected to remain comparatively stable.

What does it mean for you? 

It can feel scary to buy a home when there’s uncertainty in the market. However, real estate is a long-term investment that has been shown to appreciate over time. The best bargains are often found in a slower market, like the one we’re experiencing right now. Contact us to discuss your goals and budget. We can help you make an informed decision about the right time to buy.

And if you’re planning to sell this year, you’ll want to chart your path carefully to maximize your profits. Contact us for recommendations and to find out what your home could sell for in today’s market.

RENT PRICES WILL CONTINUE TO CLIMB

Rent has outpaced forecasts and should continue to climb, then moderate, in 2023
Federal Reserve Bank of Dallas – https://www.dallasfed.org/research/economics/2022/0816

Affordability challenges for would-be buyers, inflationary pressures, and an overall lack of housing could continue to drive “above-average” rent price increases in much of the country. The Federal Reserve Bank of Dallas expects year-over-year rental price growth to tick up to 8.4% in May before moderating later in the year.

According to Hale, “U.S. renters will continue to face challenges from limited supply and excess demand in the coming year that will keep upward pressure on rent growth. At a national level, we forecast rent growth of 6.3% in the next 12 months, somewhat ahead of home price growth and historical rent trends.”

However, there are signs that the surge in rent prices could be tapering. According to Jay Parsons, head of economics for rental housing software company RealPage, there’s some evidence of a slowdown in demand. He predicts that market-rate rents will rise just 3.3% this year. Still, analysts agree that a return to lower pre-pandemic rental prices is unlikely.

What does it mean for you?  

Rent prices are expected to keep climbing. But you can lock in a set mortgage payment and build long-term wealth by putting that money toward a home purchase instead. Reach out for a free consultation to discuss your options. 

And if you’ve ever thought about purchasing a rental property, now may be a perfect time. Contact Us Today to get your investment property search started.

WE’RE HERE TO GUIDE YOU

While national real estate forecast can provide a “big picture” outlook, real estate is local. And as local market experts, we can guide you through the ins and outs of our market and the issues most likely to impact sales and drive home values in your particular neighborhood. 

If you’re considering buying or selling a home in 2023, contact us now to schedule a free consultation. We’ll work with you to develop an action plan to meet your real estate goals this year.

The above references an opinion and is for informational purposes only.  It is not intended to be financial, legal, or tax advice. Consult the appropriate professionals for advice regarding your individual needs.

Home for the Holidays: How To Stretch Your Budget in a Season of Inflation

Stretch Your Budget In A Season of Inflation - decorate gingerbread cookies at home

You don’t have to break the bank to celebrate the holidays in style. Prices may be higher on everything, but there are still plenty of opportunities to stretch your budget even in a season of inflation. 

For example, according to the U.S. Environmental Protection Agency (EPA), sealing your home and boosting the insulation can save you a couple of dollars. In Massachusetts you may have access to the Mass Save program which may cover all of the costs, or at least a good portion of them, to improve your energy efficiency. Other small fixes can boost your yearly savings enough to pay off some of your holiday budget.

And online shopping makes it easier to find deals on new and pre-owned furniture, thrifted gifts, DIY decor, and more. Even secondhand stalwarts like Goodwill, makes it a cinch to score gently-used treasures at extra-low prices.

You won’t be the only one bargain-hunting your way to a more financially-stable New Year. Multiple surveys have found that inflation is not only chilling people’s spending, it’s also prompting shoppers to search for better deals and creative ways to reduce their bills. 

Here are some strategies you can use to boost your holiday budget by trimming household expenses: 

Hunt for Deals on Groceries

If you’re finding it harder than it used to be to stretch your budget in a season of inflation and serve your family dinner, you’re not alone. With the U.S. food-at-home index (a measure of grocery price inflation) at a 43-year high, many families are struggling to control costs on food staples, such as meat, dairy, produce, and grains. 

That’s made pulling off holiday gatherings especially stressful lately. But don’t despair: Even with inflation, retailers are still giving motivated shoppers plenty of opportunities to whittle down their bills. 

The key is to pay attention to the cost of each item on your shopping list—not just the most expensive—and look for easy swaps and discounts. For example, try buying non-perishable items in bulk, especially when they’re on sale, and only in-season produce. Or trade name-brand goods for less expensive options from a store’s private label. As you tap into your inner bargain hunter, you could be surprised by what you save when you’re more mindful of your selections. 

And unlike in the old days, you no longer have to clip your way through paper flyers to snag a bargain. Instead, you can save both time and money by scouting for deals online, digitally clipping coupons, and earning cash back through special apps and browsers. For example, coupon aggregation sites, like Coupons.com, and shopping apps—such as Checkout 51 and Ibotta—make it easy to score discounts and cash back on a variety of purchases, including groceries.

Also, check to see if your neighborhood grocer posts their weekly flyers online. If you’re hosting a holiday party, the markdowns you find can help you narrow your food and recipe choices, based on what’s currently on sale.

Prep Your Home for Holiday Guests With Pre-Owned Finds 

You don’t have to sacrifice style for the sake of preserving your holiday budget either. If you’re expecting company this year and would like to add some festive flair to your home, you can do so inexpensively—especially if you’re willing to decorate with items that are secondhand. 

Thrifting is back in vogue, with an increasing number of shoppers preferring pre-owned furniture and home goods. A recent study found that the “recommerce” market grew almost 15% last year, which was twice the pace of general retail. Plus, buying used isn’t just a great way to save money, it also helps the environment by keeping reusable items out of landfills.

Fortunately, it’s become easier to score secondhand deals online. For example, you can scout consumer marketplaces on Facebook, Craigslist, and OfferUp. Or you can take advantage of neighborhood freecycles and “Buy Nothing” groups. And a number of thrift shops now have e-commerce sites, including major chains, like Goodwill. 

If you’re handy with a paintbrush or have some basic carpentry skills, you can also modernize some of your existing furniture by upcycling it yourself. Or, if you enjoy crafting, search through your own recycling or sewing bin for raw material to make one-of-a-kind decorations.

Don’t stress yourself out, though, if you don’t have the time or money to dress your home the way you hoped. “A house doesn’t have to be perfect or completely done for it to feel festive or inviting,” designer Justina Blakeney noted in an interview with the Washington Post. “These are family and friends, and they are not judging you.”

Forgo Major Renovations in Favor of DIY Home Improvements 

Holidays are always a tricky time to undergo big renovations. But with ongoing worker and material shortages, now is an especially bad time to commit. Inflated costs can add thousands to your reno budget –—and unnecessary stress to your holiday. 

Instead of suffering through an ill-timed remodel, you’re better off saving this time of year for simpler, less expensive projects you can do yourself. 

One winter-perfect upgrade to consider: Build a DIY fire pit so that you and your guests can roast marshmallows and relax in the cozy comfort of your backyard. You can also add some extra ambiance by hanging energy-efficient LED outdoor string lights that change from white to colorful. These are festive enough for the holidays, but also versatile enough to use year-round.

Or, if you’d rather curl up by an indoor fire, channel your DIY energy into a fireplace upgrade. Adding a wooden beam to the top of your mantel can add an extra layer of coziness. Alternatively, re-tiling or painting your fireplace surround can lend contemporary flair. 

Just be sure to stick to DIY projects that you know you can do a quality job on—especially if your changes will be difficult to reverse. Feel free to reach out for a free assessment to find out how your planned renovations could impact your home’s resale value.

Invest in Home Maintenance Projects That Cut Your Utility Bills 

You can save money by completing basic home maintenance tasks, such as swapping your furnace filter and updating your lightbulbs. But if you really want to lower your bills this winter and stretch your budget in a season of inflation, consider projects that make your home more energy efficient. 

According to the EPA, 9 out of 10 homes in the U.S. are under-insulated, which wastes energy and money.7 Luckily, there are plenty of DIY insulation projects that you can complete in just a few days. For example, the EPA offers guides on how to: 

  • Insulate your attic or basement crawl space
  • Weatherstrip doors and windows
  • Seal areas around the house that may be leaking air, including electrical outlets and fireplaces

The money save you get from these projects can really add up. The EPA estimates that sealing and insulating your ducts can make your HVAC system up to 20% more efficient. And thanks to new provisions from the Inflation Reduction Act, you can also save a bundle this year by investing in certain energy-efficient upgrades and claiming a tax credit. Check with us about any local rebates and incentives that may be available, too, before getting started on a project. 

Use Expense Tracking to Boost Your Holiday Budget 

To avoid stress during the holidays and stretch your budget in a season of inflation, one of the best things you can do is track your income and expenses. If your monthly budget is tight, you may need to make some adjustments to free up cash for holiday expenditures.

For example, here’s a sample budget worksheet that we created to save more money . Begin by entering your expenses: list your standard expenses in the “Typical” column, and any areas where you could

Then consider how your standard wages may be adjusted this month by extra shifts, additional tips, or an end-of-year bonus. By decreasing your spending and/or increasing your income, you can build room in your budget for holiday gifts and gatherings.

Feel free to use this worksheet as a template that you can personalize to your needs.

WE’RE HERE TO HELP

We would love to help you meet your financial goals now and in the year ahead. We are happy to provide our insights and referrals for lower-cost alternatives for home renovations, maintenance, or services.

And if you’re saving up to buy a new home, we can help with that, too. This is an good time to get a great deal, motivated homebuyers and sellers are currently active in the market.

So reach out to schedule a free consultation. We can tell you about some of the exciting programs and incentives that are making homeownership more affordable.

The above references an opinion and is for informational purposes only. It is not intended to be financial, legal, or tax advice. Consult the appropriate professionals for advice regarding your individual needs.

Your Home Sale Price: 7 Tips to Maximize it

Over the past few years, a real estate buying frenzy bid up home sale price to eye-popping amounts. However, as mortgage rates have risen, buyer demand has cooled. Consequently, home sellers who enter the market today may need to reset their expectations.

The reality is, it’s no longer enough to stick a “for sale” sign in the yard and wait for buyers to bang down the door. If you want to net the most money possible for your property in today’s market, you’ll need an effective game plan and a skilled team of professionals to implement it. 

Fortunately, we’ve developed a listing strategy that combines our proven approach to preparation, pricing, and promotion—all designed to help you get top dollar for your home. But you will play an important role in the selling process, as well. 

Here are some crucial steps you can take to set yourself up for success as a home seller in this market:

1 Make Strategic Repairs and Improvements

When you sell something, it’s important to consider what your customer wants to buy. And according to the National Association of Realtors, only 6% of today’s buyers report that they are looking for a DIY fixer-upper. The vast majority want a move-in-ready home, which means that any outstanding repairs or dated features can be a major turn-off.

Before your home goes on the market, we’ll conduct a thorough walk-through to identify any problems that could prevent it from selling. In some cases, we may recommend a professional pre-listing inspection. Finding and addressing issues like leaks, rot, and foundation problems up front can pay off in the final home sale price. Plus, it prevents sales from falling through because of a red flag on the home inspection, a scenario no seller wants to face.

Beyond repairs, we’ll also help you identify the simple upgrades that offer the highest return on your investment. For example, new paint can give your home a fresh look at a reasonable cost. However, it’s important to choose the right colors. One study found that painting your bathroom light blue could lead to a 1.6% increase in the offer price! Similarly, minor landscaping improvements can pay off in a major way. A healthy lawn offers an estimated 256% return on investment.

2 Declutter and Depersonalize

When buyers look at a home for sale, they’re trying to envision themselves living there. That’s hard to do if it’s chock-full of the current owner’s family photos, children’s artwork, and souvenir collections. Plus, cluttered homes look smaller, and older items can make them feel dated. 

Decluttering before you put your home up for sale will help you in the long run—after all, you’ll need to move all your things to your new home eventually. Now is the time to shred, digitize, or organize old documents, donate old clothes, or move bulky furniture into storage. At a minimum, you’ll want to pack away excess items neatly before potential buyers view the home. Remove personal photos and other trinkets to create a blank slate that viewers can imagine decorating with their own prized possessions.

If you feel overwhelmed by this process, we’d be happy to make recommendations or refer you to a local service provider who can help.

3 Stage Your Home for Success

Just as you take care to dress professionally for a job interview, you should always ensure your home looks its best for potential buyers. Home shoppers today are used to scrolling through Instagram and Pinterest, and they want to see the same wow factor when touring a home.

The process of making your home look its best and appeal to potential buyers is called staging, and it can be a game changer. According to the International Association of Home Staging Professionals, an average priced staged home sells 5 to 11 times faster than its unstaged counterpart. Even better, the majority of staged homes sell for 4% to 20% over list price!

Some sellers hire a professional stager, who may bring in furniture and decor to increase the home’s appeal. Others choose to stage their homes themselves. We can help advise you on which route to choose and how much to invest in the process. 

It’s also important to consider what buyers in your neighborhood are likely to be looking for in a home. We can help guide your staging choices with our local market insights. For example, in neighborhoods where a large share of residents work from home, it may be effective to stage one room as an office space so potential buyers can envision their day-to-day routine.

4 Prep for Each Showing

Most of us don’t live picture-perfect lives, and our homes reflect that (sometimes messy) reality. But when your home is on the market, it’s important to ensure that it is always ready for viewers, even on short notice. A missed showing is a missed opportunity to sell your home!

Before your home hits the market, it may be worth hiring professional cleaners to get in all the nooks and crannies. After, try your best to keep things spic and span. Just a few minutes a day wiping down counters, sweeping the floors, and vacuuming can make a big difference. 

It’s also worth noting that most buyers will open cabinets, drawers, and closets—so try to make sure everything is as neat and organized as possible. Keep toiletries and small appliances off countertops, and secure valuables and sensitive documents in a safe or off-site.

Want help finding a cleaning service to make your home shine for buyers? Reach out for a referral!

5 Price Your Home Correctly From the Start

In the past few years, you may have seen homes in your neighborhood sell for shocking amounts and wondered if you could get a similar price for your property. The temptation to list your home on the high side can be strong, but it’s best to be realistic from the start. Even in a hot market, some homes will sit for months. And the longer a property is listed, the more buyers worry that something is wrong with it.

Of course, you also don’t want to set your home sale price too low and lose out on potential profit. It’s essential to work with real estate agents who know the local market. In a quickly-evolving market, comparable sales from a few months ago can lag the current market reality. 

Fortunately, owning your home for several years, has more worth today than you paid for it. That means you stand to walk away with a handsome profit. In fact, recent reports show that homeowner equity is at an all-time high.

6 Avoid Acting on Emotion

The past few years of over-asking-price offers with few contingencies have set certain expectations for many sellers. If an offer comes in lower than what you think is your home worth is quite offending.  

However, the market conditions were unprecedented, and we are now returning to a more typical market. Home sellers who act rationally, rather than emotionally, are going to get the best home sale price. 

Remember: You can always counter a low offer. The same goes for repair requests and contingencies—everything is negotiable. However, it’s important to accept that the market is adjusting and flexibility is key. Keep your expectations reasonable, and remain open-minded. We’ll be by your side to help you navigate the process and negotiate a great deal.

7 Work With a Local Market Expert

The economics impacting mortgage rates may be national, but real estate markets are hyperlocal. That’s why working with a professional agent who understands your neighborhood’s dynamics is essential. Through our experience, we’ve gathered insights that can help us position your home for success in this market. Plus, we have the resources to connect with qualified buyers searching for a home like yours. 

Working with a knowledgeable agent is also the secret to getting as much money as possible for your home. We have extensive data on recent sales, which we will use to determine your home sale price. That’s one reason why homes sold by agents draw much higher prices than those sold by their owners alone. In 2020, for-sale-by-owner homes went for a median price of $260,000, the median for homes sold by agents was $318,000. That’s a difference of $58,000—and money you don’t want to leave on the table.

YOUR AGENT AND ADVOCATE

Selling a home in a fast-changing market can be stressful. Hearing advices and opinions from people, and decisions like how much to list your home for can be overwhelming. 

That’s where we come in. The market may be adjusting, but it’s advantageous for sellers—and we’re here to help you. We’re listing experts in our area, and we know what steps you need to take for a smooth, profitable transaction.

If you’re considering buying or selling a home, we invite you to reach out to schedule a free consultation. We’re happy to talk through your specific situation and goals and help you identify your next steps.

The above references an opinion and is for informational purposes only.  It is not intended to be financial, legal, or tax advice. Consult the appropriate professionals for advice regarding your individual needs.

Buy Now or Rent Longer? 5 Questions to Answer Before Purchasing Your First Home

If you’re a first-time homebuyers, deciding to buy or rent is not an easy decision. But in today’s whirlwind market, you may find it particularly challenging to pinpoint the best time to start exploring homeownership.  

A real estate boom during the pandemic pushed home prices to an all-time high. Add higher mortgage rates to the mix, and some would-be buyers are wondering if they should wait to see if prices or rates come down.

But is renting a better alternative? Rents have also soared along with inflation – and are likely to continue climbing due to a persistent housing shortage. And while homebuyers can lock in a set mortgage payment, renters are at the mercy of these rising costs for the foreseeable future. 

So, what’s the better choice for homebuyers? There’s a lot to consider when it comes to buying versus renting. Luckily, you don’t have to do it alone. Reach out to schedule a free consultation and we’ll help walk you through your options. You may also find it helpful to ask yourself the following questions:

1. How long do I plan to stay in the home?

Homebuyers get the most financial benefit from a home purchase if they own the property for at least five years. If you plan to sell in a shorter period of time, a home purchase may not be the best choice for you.

There are costs associated with buying and selling a home, and it may take time for the property’s value to rise enough to offset those expenditures. 

Even though housing markets can shift from one year to the next, you’ll typically find that a home’s value will ride out a market’s ups and downs and appreciate with time. The longer you own a property, the more you are likely to benefit from its appreciation. 

Once you’ve found a community that you’d like to stay in for several years, then buying over renting can really pay off. You’ll not only benefit from appreciation, but you’ll also build equity as you pay down your mortgage – and you’ll have more security and stability overall.

Also important: If you plan to stay in the home for the life of the mortgage, there will come a time when you no longer have to make those payments. As a result, your housing costs will drop dramatically, while your equity (and net worth) continue to grow.

2. Is it a better value to buy or rent in my area?

Image courtesy of consumerfinance.gov

If you know you plan to stay put for at least five years, you should consider whether buying or renting is the better bargain in your area.

One helpful tool for evaluating your options is a neighborhood’s price-to-rent ratio: just divide the median home price by the median yearly rent price. The higher the price-to-rent ratio is, the more expensive it is to buy compared to rent. Keep in mind, though, that this equation provides only a snapshot of where the market stands today. As such, it may not accurately account for the full impact of rising home values and rent increases over the long term.

According to the National Association of Realtors, a typical U.S. homeowner who purchased a single-family existing home 10 years ago would have gained roughly $225,000 in equity — all while maintaining a steady mortgage payment.

In contrast, someone who chose to rent for the past 10 years would have not only missed out on those equity gains, but they would have also seen U.S. rental prices increase by around 66%.

So even if renting seems like a better bargain today, buying could be the better long-term financial play.

Ready to compare your options? Then reach out to schedule a free consultation. As local market experts, we can help you interpret the numbers to determine if buying or renting is the better value in your particular neighborhood.

3. Can I afford to be a homeowner?

If you determine that buying a home is the better value, you’ll want to evaluate your financial readiness. 

Start by examining how much you have in savings. After committing a down payment and closing costs, will you still have enough money left over for ancillary expenses and emergencies? If not, that’s a sign you may be better off waiting until you’ve built a larger rainy-day fund.

Then consider how your monthly budget will be impacted. Remember, your monthly mortgage payment won’t be your only expense going forward. You may also need to factor in property taxes, insurance, association fees, maintenance, and repairs.

The monthly cost of homeownership is comparable to renting, especially if you make a sizable down payment. Landlords often pass the extra costs of homeowning onto tenants, so it’s not always the cheaper option. 

If you’re looking to buy a home, we want to help you figure out if you can afford it. You’ll be the one who stands to benefit from the fruits of your investment. Every major upgrade makes your home a nicer place to live; it also helps boost your home’s market value.

4. Can I qualify for a mortgage?

If homebuyers are prepared to handle the costs of homeownership, you’ll next want to look into how likely you are to get approved for a mortgage.

Every lender will have its own criteria. But, in general, you can expect a creditor to scrutinize your job stability, credit history, and savings to make sure you can handle a monthly mortgage payment.

For example, lenders like to see evidence that your income is stable and predictable. So if you’re self-employed, you may need to provide additional documentation proving that your earnings are dependable. A lender will also compare your monthly debt payments to your income to make sure you aren’t at risk of becoming financially overextended.

In addition, a lender will check your credit report to verify that you have a history of on-time payments and can be trusted to pay your bills. Generally, the higher your credit score, the better your odds of securing a competitive rate. 

Whatever your circumstances, it’s always a good idea to get preapproved for a mortgage before you start house hunting. Let us know if you’re interested, and we’ll give you a referral to a loan officer or mortgage broker who can help.

Want to learn more about applying for a mortgage? Reach out to request a copy of our report: “8 Strategies to Secure a Lower Mortgage Rate”

5. How would owning a home change my life?

Before the preapproval process, Homebuyers must know how homeownership would affect their life, aside from the long-term financial gains

There can be a fair amount of upkeep involved. Prepared to invest more time and energy in owning a home than you do renting one.

You might relish the chance to tinker in your very own garden or make HGTV-inspired improvements. Or, if you’re more social, you might enjoy hosting family gatherings or attending block parties with other committed homeowners. 

Owning a home can generally do what you want with it.

The choice – like the home – is all yours.   

HAVE MORE QUESTIONS? WE’VE GOT ANSWERS

The decision to buy or rent a home is among the most consequential homebuyers will make in their lifetime. We can make the process easier by helping you compare your options using real-time local market data. So don’t hesitate to reach out for a personalized consultation, regardless of where you are in your deliberations. We’d be happy to answer your questions and identify actionable steps you can take now to reach your long-term goals.

The above references an opinion and is for informational purposes only.  It is not intended to be financial, legal, or tax advice. Consult the appropriate professionals for advice regarding your individual needs.

8 Strategies to Secure a Lower Mortgage Rate

Lower Mortgage Rate

Mortgage rates have been on a roller coaster ride this year, rising and falling amid inflationary pressures and economic uncertainty. And even the experts are divided when it comes to predicting where rates are headed next.

This climate has been unsettling for some homebuyers and sellers. But with careful planning, you can qualify for the best mortgage rates available – and open the door to lower refinancing rate.

How does a lower mortgage rate save you money? According to Trading Economics, the average new mortgage size in the United States is currently around $410,000. Let’s compare a 5.0% versus a 6.0% fixed-interest rate on that amount over a 30-year term.

Mortgage Rate
(30-year fixed)		Monthly Payment on $410,000 Loan
(excludes taxes, insurance, etc.)		Difference in Monthly PaymentTotal Interest Over 30 YearsDifference in Interest
5.0 %$2,200.97$382,348.72
6.0 %$2,458.16+ $257.19$474,936.58+ $92,587.86

With a 5% rate, your monthly payments would be about $2,201. At 6%, those payments would jump to $2,458, or around $257 more. This amounts to a difference of about $92,600 over the life of the loan. Saving just one percentage point on your mortgage may save you roughly $100,000 in the long run.

So, how can you improve your chances of securing a low mortgage rate? Try these eight strategies:

1. Raise your credit score.

Borrowers with higher credit scores are viewed as “less risky” to lenders, so they are offered lower interest rates. Clearly, a good credit score typically starts at 690 and can move up into the 800s. To know your score, check with your bank or credit card company to see if they offer free access. If not, there are a plethora of both free and paid credit monitoring services you can utilize.

You can take steps to improve your score including:

  • Correct any errors on your credit reports, which can bring down your score. You can access reports for free by visiting AnnualCreditReport.com.
  • Pay down revolving debt. This includes credit card balances and home equity lines of credit.
  • Avoid closing old credit card accounts in good standing. It could lower your score by shortening your credit history and shrinking your total available credit.
  • Make all future payments on time. Payment history is a primary factor in determining your credit score, so make it a priority.
  • Limit your credit applications to avoid having your score dinged by too many inquiries. If you’re shopping around for a car loan or mortgage, minimize the impact by limiting your applications to a short period, usually 14 to 45 days.

Over time, you should start to see your credit score climb — which will help you qualify for a lower mortgage rate.

2. Keep steady employment.

If you are preparing to purchase a home, it might not be the best time to make a major career change. Unfortunately, frequent job moves or gaps in your résumé could hurt your borrower eligibility.

When you apply for a mortgage, lenders will typically review your employment and income over the past 24 months. If you’ve earned a steady paycheck, you could qualify for a better interest rate. A stable employment history gives lenders more confidence in your ability to repay the loan.

That doesn’t mean a job change will automatically disqualify you from purchasing a home. But certain moves, like switching from W-2 to 1099 (independent contractor) income, could throw a wrench in your home buying plans.

3. Lower your debt-to-income ratios.

Even with a high credit score and a great job, lenders will be concerned if your debt payments are consuming too much of your income. That’s where your debt-to-income (DTI) ratios will come into play.

There are two types of DTI ratios:

  1. Front-end ratio — What percentage of your gross monthly income will go towards covering housing expenses (mortgage, taxes, insurance, and dues or association fees)?
  2. Back-end ratio — What percentage of your gross monthly income will go towards covering ALL debt obligations (housing expenses, credit cards, student loans, and other debt)?

What’s considered a good DTI ratio? For better rates, lenders typically want to see a front-end DTI ratio that’s no higher than 28% and a back-end ratio that’s 36% or less.

If your DTI ratios are higher, you can take steps to lower them, like purchasing a less expensive home or increasing your down payment. Your back-end ratio can also be decreased by paying down your existing debt. A bump in your monthly income will also bring down your DTI ratios.

4. Increase your down payment.

Minimum down payment requirements vary by loan type. But, in some cases, you can qualify for a lower mortgage rate if you make a larger down payment.

Why do lenders care about your down payment size? Because borrowers with significant equity in their homes are less likely to default on their mortgages. That’s why conventional lenders often require borrowers to purchase private mortgage insurance (PMI) if they put down less than 20%.

A larger down payment will also lower your overall borrowing costs and decrease your monthly mortgage payment since you’ll be taking out a smaller loan. Just be sure to keep enough cash on hand to cover closing costs, moving expenses, and any furniture or other items you’ll need to get settled into your new space.

5. Compare loan types.

All mortgages are not created equal and the loan type you choose could save (or cost) you money depending on your qualifications and circumstances.

For example, here are several common loan types available in the U.S. today:

When considering loan type, you’ll also want to weigh the pros and cons of a fixed-rate versus variable-rate mortgage:

  • Fixed rate — With a fixed-rate mortgage, you’re guaranteed to keep the same interest rate for the entire life of the loan. Traditionally, these have been the most popular type of mortgage in the U.S. because they offer stability and predictability.
  • Adjustable rate — Adjustable-rate mortgages, or ARMs, have a lower introductory interest rate than fixed-rate mortgages, but the rate can rise after a set period of time — typically 3 to 10 years.

According to the Mortgage Bankers Association, 10% of American homebuyers are now selecting ARMs, up from just 4% at the start of this year. An ARM might be a good option if you plan to sell your home before the rate resets. However, life is unpredictable, so it’s important to weigh the benefits and risks involved.

6. Shorten your mortgage term.

A mortgage term is the length of time your mortgage agreement is in effect. Particularly, the terms are 15, 20, or 30 years. Although, the majority of homebuyers choose 30-year terms, if your goal is to minimize the amount you pay in interest, you should crunch the numbers on a 15-year or 20-year mortgage.

With shorter loan terms, the risk of default is less, so lenders typically offer lower interest rates. However, it’s important to note that even though you’ll pay less interest, your mortgage payment will be higher each month, since you’ll be making fewer total payments. So before you agree to a shorter term, make sure you have enough room in your budget to comfortably afford the larger payment.

7. Get quotes from multiple lenders.

When shopping for a mortgage, be sure to solicit quotes from several different lenders and lender types to compare the interest rates and fees. Depending upon your situation, you could find that one institution offers a better deal for the type of loan and term length you want.

Some borrowers choose to work with a mortgage broker. Like an insurance broker, undoubtedly, they can help you gather quotes and find the best rate. Also, If you employ a broker, understand how they are compensated and contact several to compare their suggestions and prices.

Don’t forget that we can be a valuable resource in finding a lender, especially if you are new to the home buying process. After a consultation, we can discuss your financing needs. Moreover, connect you with loan officers or brokers best suited for your situation.

8. Consider mortgage points.

Even if you score a great interest rate on your mortgage, you can lower it even further by paying for points. When you buy mortgage points — also known as discount points — you essentially pay your lender an upfront fee in exchange for a lower interest rate. The cost to purchase a point is 1% of your mortgage amount. For each point you buy, your mortgage rate will decrease by a set amount, typically 0.25%. You’ll need upfront cash to pay for the points, but you can more than make up for the cost in interest savings over time.

However, it only makes sense to buy mortgage points if you plan to stay in the home long enough to recoup the cost. You can determine the breakeven point, or the period of time you’d need to keep the mortgage to make up for the fee, by dividing the cost by the amount saved each month. Indeed, this can help you determine whether or not mortgage points would be a good investment for you.

Getting Started

Unfortunately, the rock-bottom mortgage rates we saw during the height of the pandemic are behind us. However, today’s 30-year fixed rates still fall beneath the historical average of around 8% and are well below the all-time peak of 18.45% in 1981.

The increased mortgage rates made financing a home purchase more expensive, they have also decreased some of the market’s competition.

Today’s buyers have more options, fewer bidding, and more sellers prepared to negotiate or give incentives toward closing expenses.

If you’re ready and able to buy a home, there’s no reason that concerns about mortgage rates should sideline your plans. The reality is that many economists predict home prices to continue climbing. Without a doubt, buying a home today at a higher rate is better than paying more after a few years. Also, you can refinance if mortgage rates go down, but you can’t make up for the lost years of equity growth and appreciation.

If you have questions or would like more information about buying or selling a home, reach out to schedule a free consultation. We’d love to help you weigh your options, navigate this shifting market, and reach your real estate goals!

3 Factors Impacting The Real Estate Market in 2022

There are 3 factors impacting the real estate market in 2022 that make this year different than the last two years.

The last two years caught many of us off guard—and not just because of the pandemic. They also ushered in the hottest housing market on record, with home prices rising nationally by nearly 19% in 2021, driven primarily by low mortgage rates and a major supply shortage.1

But while some had hoped 2022 would bring a return to normalcy, the U.S. real estate market continues to boom, despite rising interest rates and decreasing affordability.
So what’s driving this persistent demand? And is there an end in sight?

Here are three factors impacting the real estate market right now. Find out how they could affect you if you’re a current homeowner or plan to buy or sell a home this year.

Factors Impacting the Real Estate Market #1: MORTGAGE RATES ARE RISING FASTER THAN EXPECTED

Factors impacting the real estate market: Mortgage Rates are rising faster than expected

Over the past couple of years, homebuyers have faced intense competition for new homes—in part due to historically low mortgage rates that were a result of the Federal Reserve’s efforts to keep the economy afloat during the COVID-19 pandemic.

However, in response to a concerning level of inflation, the Fed is now reversing those efforts by raising the federal funds rate. And as a result, mortgage rates are rising, as well. Few experts predicted, though, that mortgage rates would go up as quickly as they have. 

In January 2022, the Mortgage Bankers Association projected that rates would reach 4% by the end of this year.2 By mid-April, however, the average 30-year fixed mortgage rate had already hit 5%, up from around 3% just one year prior.3 On a $400,000 mortgage, that 2% difference could translate into an additional $461 per monthly payment.

Since then, mortgage rates have continued on an upward trend. So what impact are these rising rates having on demand? While many buyers had hoped for a cooling effect, experts warn that may not be the case.

Ali Wolf, chief economist at housing market research firm Zanda, told Fortune magazine, “Rising mortgage rates are having a counter-intuitive effect on the housing market. Home shoppers are actually sprung into action in an attempt to buy a home before mortgage rates rise any higher.”4 

Since inventory remains low, the resulting “race” has kept the homebuying market highly competitive–at least for now.

What does it mean for you?

While current 30-year fixed mortgage rates represent an increase over previous months, they remain well below the historical average of 8%.5 As inflation across the economy continues, the Fed is likely to raise rates further this year. Buyers should act fast to secure a good mortgage rate. We’d be happy to refer you to a lender who can help.

For sellers, speed is also of the essence. The pool of potential buyers may shrink as mortgages become more expensive. And if you plan to finance your next home, you’ll want to act quickly to secure a favorable rate for yourself. Contact us today to discuss your options.

Are you thinking about selling? Download a FREE Home Equity Report that will show you what a buyer may pay for your home in today’s market! Just click the image above.

Factors Impacting the Real Estate Market #2: HOME PRICES KEEP CLIMBING

Factors impacting the real estate market: US median home prices have risen 37.0% between 01/01/2019 and 01/01/2022.
The National Median Home Price has risen 37.0% between 01/01/2019 thru 01/01/2022

History shows that higher interest rates don’t necessarily translate to lower home prices. In fact, home prices rose 5% between 1980 and 1982, a period of significantly higher mortgage rates and inflation.5 

Forecasters expect that home prices will continue to go up throughout 2022, though likely at a slower pace than the 18.8% increase of the last 12 months.4 Bank of America predicts that prices will be up approximately 10% by the end of this year, while Fannie Mae estimates 11.2%.6,7

In addition to limited supply and a race to beat rising mortgage rates, home values are also climbing because of positive economic indicators, like low unemployment.8 Plus, rents are soaring–up 17% from a year ago–which is prompting more first-time homebuyers to enter the market.9 Add to that the continued popularity of remote work, and it’s easy to see why property prices continue to surge.

However, it’s not all bad news for prospective homebuyers. Economists expect that as mortgage rates rise, the rate of appreciation will continue to taper, though the effect may be gradual. 

“Eventually mortgage rates will slow down home prices,” according to Ken Johnson, an economist at Florida Atlantic University interviewed by Marketwatch.10 “We should not see rapid upticks in prices as mortgage rates rise.” Forecasters agree—Fannie Mae expects price increases to slow to 4.2% in 2023.7

What does it mean for you?

While the pace of appreciation is likely to decrease next year, home prices show no signs of going down. However, current labor shortages are leading to higher salaries and better job opportunities for many workers. You may find that your income growth outpaces home prices, making homeownership more affordable for you in the future.

For homeowners, the outlook’s even brighter. You could find yourself sitting on a nice pile of equity. Contact us for a free home value assessment to find out.

Factors Impacting the Real Estate Market #3: INVENTORY REMAINS EXTREMELY LOW

Factors impacting the real estate market: Inventory remains extremely low
US Existing Home Inventory Units courtesy YCharts.com

As noted, one of the largest hurdles to homeownership is a lack of inventory. According to a February 2022 report by Realtor.com, there’s an expanding gap between household formation and home construction, which has resulted in a nationwide shortage of 5.8 million housing units.11

The origins of this shortage date back to the 2008 housing crisis, during which crashing home values led contractors to stop building new properties—a trend that has not been fully reversed.12 

That decline in home construction also resulted in a decrease in the number of home building professionals, a trend that was exacerbated by job losses during the COVID-19 pandemic. Now, many builders are limited by their ability to find qualified labor.

Another major challenge is a staggering increase in the cost of materials. Pandemic-related supply chain shortages have been a significant driver, with home building material costs rising on average 20% on a year-over-year basis. The price of framing lumber alone has tripled since August 2021.13 

These trends add tens of thousands of dollars to the cost of a typical home. Factors like a lack of buildable land in many areas, restrictive zoning, and a shortage of developers are also contributing to the issue.14

Most homebuying experts agree that the lack of inventory is the primary factor driving rising housing prices and unprecedented competition for homes. With available housing units near four-decade lows, the end of the current housing boom is not yet in sight.15

What does it mean for you?

Prospective buyers should be prepared to compete for a home, since low inventory can lead to multiple offers. You may also need to expand your search parameters. If you’re ready to look, we’re ready to help.

For sellers, the picture is rosier. In this strong market, your home may be worth more than you realize. Contact us to find out how much your home could sell for in today’s market.

WE’RE HERE TO GUIDE YOU

While national real estate trends can provide a “big picture” outlook, real estate is local. And as local market experts, we can guide you through the ins and outs of our market and the local issues that are likely to drive home values in your particular neighborhood. 

If you’re considering buying or selling a home, contact us now to schedule a free consultation. We can help you assess your options and make the most of this unique real estate landscape.

Are you thinking about selling? Download a FREE Home Equity Report that will show you what a buyer may pay for your home in today’s market! Just click the image above.

5 Ways to Write a Winning Offer in Today’s Real Estate Market

You already know our nation is in the midst of a serious housing crunch. Last year, a lack of inventory and soaring prices left many would-be homebuyers feeling pinched. But now, with interest rates climbing, many of them are also feeling desperate to lock in a mortgage—which has only added fuel to the fire. It begs a very difficult question to answer – how do you write a winning offer?

I first touched on this topic back in 2018 in my article, “14 Strategies To Win A Multiple Offer Situation“. I’m revisiting the topic now because this has been the most challenging real estate market I’ve ever worked through… and that includes the financial meltdown of 2008-2012.

Fortunately, if you’re a buyer struggling to find a home, we have some good news. While it’s true that higher mortgage rates can decrease your purchasing budget, there are additional ways to compete in a hot market.

Yes, a high offer price gets attention. But most sellers consider a variety of factors when evaluating an offer. With that in mind, here are five ways to write a winning offer you can utilize to sweeten your proposal and outshine your competition.

We can help you evaluate each tactic to create a strong offer designed to win—without giving away the farm.

1. Demonstrate Solid Financing

If a home sale falls through no one gets paid. That’s why sellers (and their listing agents) favor offers with a high probability of closing. This is why solid financing is Write a Winning Offer Tip #1.

Sellers particularly love all-cash offers because there’s no chance of financing issues cropping up at the last moment. But don’t despair if you can’t pay cash for your home. According to the National Association of Realtors, only about 1 in 4 home purchases are all-cash deals. The vast majority of home purchases are financed with a mortgage.

If sellers are assured that financing will come through, buying with a mortgage doesn’t have to be a big disadvantage. The most important step you can take as a buyer is to get pre-approved before you start looking for homes. A pre-approval letter shows sellers that you are serious about buying and that you will be able to make good on your offer.

You’ll need to provide a lender a few things in order to obtain a pre-approval:

  • Last month of pay stubs
  • Previous 2 months of bank statements
  • Last 2 years of tax returns
  • If you have any other sources of regular income, you’ll need to provide that information, too. Examples include:
    • A structured settlement
    • Investment account statements (if you use those funds on a regular basis)
    • Child support payments
    • Alimony/Palimony

It’s also important to consider the reputation of your lender. While sellers may not know or care about a lender’s reputation, their agents often do. Some lenders are easier to work with than others. If you’re unsure who to choose, we can refer you to great lenders that are easy to work with.

2. Put Down a Sizable Deposit

Write A Winning Offer Tip #2: Put Down A Sizable Deposit
Photo by Giorgio Trovato on Unsplash

Money talks and BS walks. If you want to show sellers you’re serious you need “skin in the game”. That means putting down a large earnest money deposit. All else being equal, the offer with the most money down wins. This is why Write a Winning Offer Tip #2 is putting down a sizable down payment.

Earnest money is a deposit held in escrow by a title company or the seller’s broker or lawyer.  This deposit will be applied to the final purchase price. If the sale falls through, the buyer may lose some or all of that deposit.

Earnest money deposits are typically around 5% of the sale price in MA and RI. Offering a higher deposit can help demonstrate to the seller that you’re serious about the property. However, this strategy can also be risky. We can help you determine an appropriate deposit to offer based on your specific circumstances.

3. Ask for Few (or No) Contingencies

In today’s real estate market, nearly any contingency is a way to get your offer thrown out. When a seller has many offers to evaluate, it can be very difficult to compare one offer to another. This is why Tip #3 to write a winning offer is probably the most important tip we can share right now.

Most real estate offers include contingencies. Contingencies are clauses that allow a party to back out of the agreement if certain conditions are not met. These contingencies appear in the purchase agreement and must be accepted by both parties to be legally binding.

Common Contingencies

Common contingencies include:

  • Financing: A financing contingency gives the buyer a window of time to secure a mortgage. If they are unable to do so, they can withdraw from the purchase and the seller can move on to other buyers.
  • Inspection: An inspection contingency gives the buyer the opportunity to have the home professionally inspected. A typical home inspection looks for issues with the structure, wiring, plumbing, etc. Typically, the seller may choose whether or not to remediate those issues; if they do not, the buyer may withdraw from the contract.
  • Appraisal: No lender will want to offer a mortgage on a home that’s more than the home is worth. An appraisal is an “independent assessment of value” ordered by the lender. If an appraisal comes in low, the seller may be asked to renegotiate the contract.
  • Sale of a prior home: Some buyers cannot afford to purchase a new home until they sell their previous one. If the buyer can’t sell their current home within a specific time, this contingency allows them to back out without penalty.

Since contingencies reduce the likelihood that a sale will go through, they generally make an offer less desirable to the seller. The more contingencies that are included, the weaker the offer becomes. Therefore, buyers in a competitive market often volunteer to waive certain contingencies.

Contingencies in Today’s Market

In today’s market, it’s not uncommon to see a buyer waive not just the inspection but also the appraisal contingency. If they don’t waive the appraisal all together, they may offer “appraisal gap coverage”. Gap coverage is when a buyer declares they will come out of pocket if the property doesn’t appraise. The amount of the gap coverage is negotiable.

It’s very important to make these decisions carefully and recognize the risks of doing so. A buyer who chooses to waive a home inspection may find out too late that the home requires extensive renovations. A buyer who waives the appraisal may risk their mortgage falling through. Backing out of a home purchase without the protection of a contingency means you may lose your earnest money deposit. We can help you assess the risks and benefits involved.

4. Offer a Flexible Closing Date and/or Leaseback Option

Write A Winning Offer Tip #4: Be Flexible
Write A Winning Offer Tip #4: Be Flexible

When it comes to selling a house, money isn’t everything. People sell their homes for a wide variety of reasons. Flexible terms that work with their personal situations can sometimes make all the difference. If a seller is in the process of planning a significant move, they may prefer a longer closing timeline that gives them time to find housing in their new location.

Similarly, short-term leaseback options, in which the sale is completed but the seller retains the right to rent the home for a specified period of time, can be compelling. These arrangements enable the seller to use the money from the sale of their home to purchase their next house. A leaseback agreement also makes it possible for them to avoid moving twice.

Tip #4 to write a winning offer is to consider flexible closing dates and/or offer a leaseback option. These tools can provide a powerful advantage for first-time homebuyers. A month-to-month lease, for example, may allow you to offer a more flexible timeline than other buyers.

Of course, the value of these terms depends on the seller’s situation. We can reach out to the listing agent to find out the seller’s preferred terms. We would then collaborate with you to write a compelling offer that works for both parties.

5. Work With a Skilled Buyer’s Agent

In this ultra-competitive real estate market, one of the greatest advantages you can give yourself is to work with a skilled and trustworthy real estate professional. We will make sure you fully understand the process and help you submit an appealing offer without taking on too much risk.

Plus, we know how to write a winning offer that is designed to win over both the seller and their listing agent. The truth is, listing agents play a huge role in helping sellers evaluate offers. They want to work with skilled buyer’s agents who are professional, communicative, and courteous.

Once your offer is accepted, we’ll handle any further negotiations and coordinate all the details involved in your home purchase. You’ll have a knowledgeable, licensed advocate on your side watching out for your best interests every step of the way.

Helping You Get to the Right Offer

In many cases, a competitive offer doesn’t need to be all-cash, contingency-free, or significantly above asking price. But if you’re serious about buying a home in today’s market, it’s important to consider what you can do to sweeten the deal.

If you’re a buyer, we can help you compete in today’s market without getting steamrolled. And if you’re a seller, we can help you evaluate offers by taking all the relevant factors into account. Contact us today to schedule a free consultation.

5 Smart Home Upgrades To Increase Your Home’s Appeal

From kitchen renovations to a new roof, there are several home upgrades you can complete to help make your home more appealing to potential buyers. However, if you’re looking to give your home a technological improvement, smart home upgrades can be a brilliant option.

While these upgrades can improve the livability of your space, they can also increase its appeal. 81 percent of homebuyers said they would prefer to buy a home with some smart home products already installed. So consider adding a few of these enhancements to your home before listing it for sale.

Smart Thermostat

5 Smart Home Upgrades: Smart Thermostats
5 Smart Home Upgrades: Smart Thermostats

A smart thermostat helps regulate the temperature of your home while reducing your heating and cooling costs. Installing a smart thermostat can help you save up to 10 percent on monthly heating costs and up to 15 percent on cooling costs. These savings depend on your preferred temperature and the location and size of your home. You can control your smart thermostat from your phone or set it to a schedule so it turns on as you arrive home from work. A new smart thermostat will cost anywhere from $100 to $300. Set up is typically easy and makes an excellent DIY project.

Smart Blinds

5 Smart Home Upgrades: Smart Blinds
5 Smart Home Upgrades: Smart Blinds

You can add privacy and reduce energy loss by installing smart blinds you can control with a remote, an app, or voice command. You can even automate these blinds to open or close depending on the time of day or if someone is home. During the summer and winter, smart blinds help block outdoor temperatures from affecting your home. The cost of smart blinds will vary depending on the size, number of windows in your home, and if you go with battery, plug-in, or hard-wired blinds. However, most models start at around $100.

Smart Smoke Detector

Smart Smoke Detectors
5 Smart Home Upgrades: Smart Smoke Detectors

A smoke detector is a must-have safety feature in any home. However, a smart smoke detector can provide even more safety. It can sound an alarm while you’re at home and send an alert to your phone if it detects danger. Some smart smoke detectors will send a message to your phone when the batteries become low. Installing these upgraded smoke detectors could even get you a discount on your homeowners insurance depending on your company. Best of all, they only cost between $50 to $100.

Video Doorbell

5 Smart Home Upgrades: Video Doorbells
5 Smart Home Upgrades: Video Doorbells

Add a sense of security to your home with a video doorbell. By placing a video doorbell at your front door, you’ll receive a message on your smartphone alerting you of deliveries or someone standing outside, and you’ll have a saved video clip of any activity. Depending on the type you choose, you may be able to speak with visitors at your door. Some video doorbells will need to be hard-wired into your home’s electrical system, while others will be battery-powered. Most video doorbells cost $100 or less.

Smart Lock

Smart Locks
5 Smart Home Upgrades: Smart Locks

Another way to increase the security of your home is by installing smart locks on your exterior doors. Forgetting your keys will never be a worry again with a smart lock. These devices allow you to unlock your doors through an app on your phone, scanning your fingerprint, or entering a numerical code. Additionally, you can let guests in remotely or give guests an access code that you can turn on and off. The cost of a smart lock depends on the device you choose, but typically run between $100 up to $300.

From American Lifestyle Magazine.

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