On the Fence of Whether or Not To Move This Spring? Consider This.

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On the Fence of Whether or Not To Move This Spring? Consider This..

If you’re thinking of selling your house, it may be because you’ve heard prices are rising, listings are going fast, and sellers are getting multiple offers on their homes. But why are conditions so good for sellers today? And what can you expect when you move? To help answer both of those questions, let’s turn to the data.

Today, there are far more buyers looking for homes than sellers listing their houses. Here are the maps of the latest buyer and seller traffic from the National Association of Realtors (NAR) to help paint the picture of what this looks like:

On the Fence of Whether or Not To Move This Spring? Consider This. | Simplifying The Market

Notice how much darker the blues are on the left. This shows buyer traffic is strong today. In contrast, the much lighter blues on the right indicate weak or very weak seller traffic. In a nutshell, the demand for homes is significantly greater than what’s available to purchase.

What That Means for You

You have an incredible advantage when you sell your house under these conditions. Since buyer demand is so high at a time when seller traffic is so low, there’s a good chance buyers will be competing for your house.

According to NAR, in February, the average home sold got 4.8 offers. When buyers have to compete with one another like this, they’ll do everything they can to make their offer stand out. This could play to your favor and mean you’ll see things like waived contingencies, offers over asking price, earnest money deposits, and more. Selling when demand is high and supply is low sets you up for a big win.

If you’re also looking to buy a house, you may be tempted to focus more on just the seller traffic map and wonder if it means you’ll have trouble finding your next home. But remember this: perspective is key. As Danielle Hale, Chief Economist at realtor.com, says:

“The limited number of homes for sale is a lesson in perspective. This same stat that frustrates would-be homebuyers also means that today’s home sellers enjoy more limited competition than last year’s home sellers.”

If you look at the big picture, the opportunity you have as a seller today is unprecedented. Last year was a hot sellers’ market. This year, inventory is even lower, and that means an even bigger opportunity for you. Even though finding your next home in a market with low inventory can be challenging, is that concern worth passing on some of the best conditions sellers have ever seen?

As added peace of mind, remember real estate professionals have been juggling this imbalance of supply and demand for nearly two years, and they know how to help both buyers and sellers find success when they move. A skilled agent can help you capitalize on the great opportunity you have as a seller today and guide you through the buying process until you find the perfect place to call your next home.

Bottom Line

If you’re ready to move, you have an incredible opportunity in front of you today. Trust the experts. Let’s connect so you have expertise on your side that can help you win when you sell and when you buy.

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Using Your Tax Refund To Achieve Your Homeownership Goals This Year

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Using Your Tax Refund To Achieve Your Homeownership Goals This Year.

If you’re buying or selling a home this year, you’re likely saving up for a variety of expenses. For buyers, that might include things like your down payment and closing costs. And for sellers, you’re probably working on a bit of spring cleaning and maintenance to spruce up your house before you list it.

Either way, any money you get back from your taxes can help you achieve your goals. Using a tax refund is a common tactic for buyers and sellers. SmartAsset estimates the average American will receive a $2,897 tax refund this year. The map below provides a more detailed estimate by state:

Using Your Tax Refund To Achieve Your Homeownership Goals This Year | Simplifying The Market

If you’re getting a refund this year, here are a few tips to help with your home purchase or sale this season.

How Buyers Can Use Their Tax Refund

According to American Financing, there are multiple ways your refund check can help you as a homebuyer. A few include:

  • Growing your down payment fund – If you haven’t started saving for your down payment, let your tax refund kick off the process. And if you have a fund already, the money you get back could put you closer to your goal.
  • Paying for your home inspection – Your home inspection can save you a lot of headaches down the road by helping you determine the condition of the house. As a buyer, you’ll typically be responsible for paying for your inspection, and it’s definitely worth the investment.
  • Saving for closing costs – Closing costs are additional expenses you’ll need to pay once it’s time to close. They average anywhere between 2-5% of the purchase price of your home.

This list is a great start, but it isn’t exhaustive of all the costs you may encounter as you set out on your homebuying journey. The best way to prepare is to work with a trusted real estate professional to make sure you understand what’s to come in the process.

How Sellers Can Use Their Tax Refund

If you own a home and are planning to sell this spring, your tax refund can help you make sure your home is ready to list. Here are a few ways current homeowners can put their tax refund to good use:

  • Making small upgrades – NerdWallet provides a list of great ways to use your tax refund, including tackling small projects or boosting your curb appeal to help your home stand out.
  • Making repairs – If there’s anything in your house that needs to be fixed, American Financing notes that completing repairs is another great use of that money.
  • Buying your next home – Whether you’re selling to move up or downsize, you can use your tax refund to help pay for any costs on the purchase of your next home.

Of course, it’s important to talk with your trusted real estate advisor before taking on any projects. They’ll make sure you can focus on areas that’ll help you receive the best possible price when you sell.

Bottom Line

Funding your home purchase or sale can feel like a daunting task, but it doesn’t have to be. Your tax refund can help you reach your goals. Let’s connect to discuss how you can start on your journey.

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Do You Know How Much Equity You Have in Your Home? [INFOGRAPHIC]

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Do You Know How Much Equity You Have in Your Home? [INFOGRAPHIC].

Do You Know How Much Equity You Have in Your Home? [INFOGRAPHIC] | Simplifying The Market

Some Highlights

  • If you’re a homeowner, your net worth has gotten a big boost. That’s because recent home price appreciation has increased your equity.
  • Your equity grows as you pay down your loan and as your home increases in value. Over the past year, the average homeowner’s equity grew by $55,300.
  • Ready to sell? Let’s connect to talk about how you can use that equity to fuel your next move.
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The Future of Home Price Appreciation and What It Means for You

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The Future of Home Price Appreciation and What It Means for You.

Many consumers are wondering what will happen with home values over the next few years. Some are concerned that the recent run-up in home prices will lead to a situation similar to the housing crash 15 years ago.

However, experts say the market is totally different today. For example, Odeta Kushi, Deputy Chief Economist at First American, tweeted just last week on this issue:

“. . . We do need price appreciation to slow today (it’s not sustainable over the long run) but high price growth today is supported by fundamentals- short supply, lower rates & demographic demand. And we are in a much different & safer space: better credit quality, low DTI [Debt-To-Income] & tons of equity. Hence, a crash in prices is very unlikely.”

Price appreciation will slow from the double-digit levels the market has seen over the last two years. However, experts believe home values will not depreciate (where a home would lose value).

To this point, Pulsenomics just released the latest Home Price Expectation Survey – a survey of a national panel of over 100 economists, real estate experts, and investment and market strategists. It forecasts home prices will continue appreciating over the next five years. Below are the expected year-over-year rates of home price appreciation based on the average of all 100+ projections:

  • 2022: 9%
  • 2023: 4.74%
  • 2024: 3.67%
  • 2025: 3.41%
  • 2026: 3.57%

Those responding to the survey believe home price appreciation will still be relatively high this year (though half of what it was last year), and then return to more normal levels over the next four years.

What Does This Mean for You as a Buyer?

With a limited supply of homes available for sale and both prices and mortgage rates increasing, it can be a challenging market to navigate as a buyer. But buying a home sooner rather than later does have its benefits. If you wait to buy, you’ll pay more in the future. However, if you buy now, you’ll actually be in the position to make future price increases work for you. Once you buy, those rising home prices will help you build your home’s value, and by extension, your own household wealth through home equity.

As an example, let’s assume you purchased a $360,000 home in January of this year (the median price according to the National Association of Realtors rounded up to the nearest $10K). If you factor in the forecast for appreciation from the Home Price Expectation Survey, you could accumulate over $96,000 in household wealth over the next five years (see graph below):

The Future of Home Price Appreciation and What It Means for You | Simplifying The Market

Bottom Line

If you’re trying to decide whether to buy now or wait, the key is knowing what’s expected to happen with home prices. Experts say prices will continue to climb in the years ahead, just at a slower pace. So, if you’re ready to buy, doing so now may be your best bet for your wallet. It’ll also give you the chance to use the future home price appreciation to build your own net worth through rising equity. If you want to get started, let’s connect today.

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What You Need To Budget for When Buying a Home

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What You Need To Budget for When Buying a Home.

When it comes to buying a home, it can feel a bit intimidating to know how much you need to save and where to find that information. But you should know, you’re not expected to have all the answers yourself. There are many trusted professionals who can help you understand your finances and what you’ll need to budget for throughout the process.

To get you started, here are a few things experts say you should plan for along the way.

1. Down Payment

As you set your savings goal for your purchase, your down payment is likely already top of mind. And, like many other people, you may believe you need to set aside 20% of the home’s purchase price for that down payment – but that’s not always the case. The National Association of Realtors (NAR) says:

“One of the biggest misconceptions among housing consumers is what the typical down payment is and what amount is needed to enter homeownership. Having this knowledge is critical to know what to save . . .”

The good news is, you may be able to put as little as 3.5% (or even 0%) down in some situations. To understand your options, partner with a trusted professional who can go over the various loan types, down payment assistance programs, and what each one requires.

2. Earnest Money Deposit

Another item you may want to plan for is an earnest money deposit. While it isn’t required, it’s common in today’s highly competitive market because it can help your offer stand out in a bidding war.

So, what is it? It’s money you pay as a show of good faith when you make an offer on a house. This deposit works like a credit. You’re using some of the money you already saved for your purchase to show the seller you’re committed and serious about their house. It’s not an added expense, it’s just paying some of that up front. First American explains what it is and how it works:

“The deposit made from the buyer to the seller when submitting an offer. This deposit is typically held in trust by a third party and is intended to show the seller you are serious about purchasing their home. Upon closing the money will generally be applied to your down payment or closing costs.”

In other words, an earnest money deposit could be the very first check you’ll write toward your purchase. The amount varies by state and situation. Realtor.com elaborates:

“The amount you’ll deposit as earnest money will depend on factors such as policies and limitations in your state, the current market, what your real estate agent recommends, and what the seller requires. On average, however, you can expect to hand over 1% to 2% of the total home purchase price.”

Work with a real estate advisor to understand any requirements in your local area and what they’ve recommended for other buyers in your market. They’ll help you determine if it’s something that could be a useful option for you.

3. Closing Costs

The next thing to plan for is your closing costs. The Federal Trade Commission (FTC) defines closing costs as:

“The upfront fees charged in connection with a mortgage loan transaction. …generally including, but not limited to a loan origination fee, title examination and insurance, survey, attorney’s fee, and prepaid items, such as escrow deposits for taxes and insurance.”

Basically, your closing costs cover the fees for various people and services involved in your transaction. NAR has this to say about how much to budget for:

“A home costs more than just the sale price. For example, closing costs—which make up about 2% to 5% of the home’s purchase price—are a major added expense…Lenders provide a Closing Disclosure at least three business days prior to closing on a mortgage. But buyers will need to budget for these added costs ahead of time to avoid sticker shock days before closing.”

The key takeaway is savvy buyers plan ahead for these expenses so they can come into the process prepared. Freddie Mac sums it up like this:

“If you’re in the market to buy a home, your down payment is probably top of mind. And rightly so – it’s likely the biggest cost of homebuying. However, it is not the only cost and it’s critical you understand all your expenses before diving in. The more prepared you are for your down payment, closing and other costs, the smoother your homebuying journey will be.”

Bottom Line

Knowing what to budget for in the homebuying process is essential. To make sure you understand these and any other expenses that may come up, let’s connect so you have reliable expertise on what to expect when you buy a home.

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Balancing Your Wants and Needs as a Homebuyer Today

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Balancing Your Wants and Needs as a Homebuyer Today.

Since the number of homes for sale is low today, it can feel challenging to find one that checks all your boxes. But if you know which features are absolutely essential in your next home and which ones are just nice bonuses, you can land a home that fits your needs.

Danielle Hale, Chief Economist for realtor.com, explains it like this:

“Focus on the goal you set out for yourself, like your list of must-haves and nice-to-haves and your budget, . . . Stick to that. Be persistent.”

So how do you go about creating your list of desired features? The first step is to get pre-approved for your mortgage. Pre-approval helps you better understand your budget, and that plays an important role in how you’ll craft your list. After all, you don’t want to fall in love with a home that’s too far out of reach.

Once you have a good grasp of your budget, you can begin to list all the features of a home you would like. Here’s a great way to think about them before you begin:

  • Must-Haves – If a house doesn’t have these features, it won’t work for you and your lifestyle (examples: distance from work or loved ones, number of bedrooms/bathrooms, etc.).
  • Nice-To-Haves – These are features that you’d love to have but can live without. Nice-To-Haves aren’t dealbreakers, but if you find a home that hits all the must-haves and some of the these, it’s a contender (examples: a second home office, garage, etc.).
  • Dream State– This is where you can really think big. Again, these aren’t features you’ll need, but if you find a home in your budget that has all the must-haves, most of the nice-to-haves, and any of these, it’s a clear winner (examples: farmhouse sink, multiple walk-in closets, etc.).

Finally, once you’ve created your list and categorized it in a way that works for you, discuss it with your real estate advisor. They’ll be able to help you refine the list further, coach you through the best way to stick to it, and find a home in your area that meets your needs.

Bottom Line

Crafting your home search checklist may seem like a small task, but it can save you time and money. It’s also one of the keys to being successful in today’s competitive market. Let’s connect so we can work together to find a home that fits your wants and needs.

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How an Energy Efficient Home Can Be a Bright Idea [INFOGRAPHIC]

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How an Energy Efficient Home Can Be a Bright Idea [INFOGRAPHIC].

How an Energy Efficient Home Can Be a Bright Idea [INFOGRAPHIC] | Simplifying The Market

Some Highlights

  • With inflation driving up the cost of everyday items, seeking out an energy-efficient home can be a great way to decrease the expenses you can control.
  • Energy efficiency can help lower your utility bills and possibly even save you money on your taxes. Options to look for include efficient appliances, windows, and solar panels.
  • If you’re planning to buy a home this year, consider energy efficiency in your search. Let’s connect so you can better understand features that can save you money for years to come.
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