Posts by Carol Solis

The process of buying a new home can be both exhilarating and exhausting. But the journey doesn't stop when you close on your property. On the contrary, you still have quite a bit to do before you can begin the process of settling into your new place.

Fortunately, you don't have to do everything in a day. You don't have to do it all alone, either. When you work with us to sell or purchase a home, you'll have an ally by your side long after your transaction has closed. We'll continue to be a resource, offering advice and referrals whenever you need them on packing, hiring movers and contractors, and acclimating to your new home and neighborhood.

When it comes to a life event as stressful as moving, it pays to have a professional by your side. Here are some of our favorite pro tips to share with clients as they prepare for an upcoming move.

1. Watch out for moving scams.

Maybe you receive a flyer for a moving company in the mail. Perhaps you find a mover online. Either way, never assume that you're getting accurate information. According to the Better Business Bureau, moving-related fraud is on the rise. In 2021 alone, individuals and families reported more than $730,000 lost to moving scams, an increase of 216% over the previous year.¹

How can you tell if a moving deal is too good to be true? Trust your instincts. If the price appears too low or you can't pin down the mover's physical business address, try someone else. The same goes for any moving company representative who dodges questions. Reputable movers should offer transparent pricing, conduct in-home estimates, and provide referrals and copies of their insurance documents upon request.² For help finding trustworthy movers, reach out. We'd be happy to share our recommendations. 

2. Insure your belongings.

Your moving company promises to take care of your custom piano or your antique furniture. But don't just take their word for it. Ask to see how much insurance they carry and talk about how the claims process works. That way, you'll know what is (and isn't) covered in case of loss or damage.

Of course, some items are priceless because they're irreplaceable. You might want to move your more sensitive valuables (jewelry, documents, family heirlooms, etc.) in your own vehicle just to be safe. For added peace of mind, call your rental or home insurance provider if you're moving anything yourself. You might already be protected or be able to purchase extra insurance to cover your move. If those options are unavailable, you could opt for moving insurance from a third-party carrier.³

3. Start packing when you start looking for a new home.

 As soon as your house hunting begins in earnest, think about packing away things you won't need for the next few months. These could include seasonal or holiday decor, clothing, and books. Tackling just one or two boxes a day will give you a head start.

If you're going to put your current home on the market, you'll want to declutter anyway. Decluttering will make your home seem larger, and depersonalizing helps buyers envision their own items in the space. Consider selling, donating, or throwing out possessions you no longer need. The things you want to keep can be placed in storage until you officially start moving to a new place.

4. Pack to make unpacking easier.

Have you ever opened a packed box only to find that it's filled with an assortment of items that don't belong together? This isn't efficient and will only make unpacking harder. A better way to pack is to bundle items from a single room in a labeled box. Labels can let movers know (and remind you) where to place each box, whether it's fragile, and which side needs to be up. Some people like to assign colors to each room in their new home to make distributing color-coded boxes a breeze.

Feel free to unleash your inner organizer with this project. For example, you could create a spreadsheet and assign each box a number. As boxes are packed, simply fill in the spreadsheet with a list of contents. Anyone with access to the spreadsheet can log in and quickly find the desired item.

5. Think outside the box when transporting clothes.

Who wants to worry about boxing up clothes? If you plan on hiring professional movers, ask if you can leave clothing in your dressers. In many cases, they will use plastic to wrap the dresser so the drawers don't fall out during transport. If keeping your clothes in your furniture makes it too heavy, the movers might be able to wrap and move drawers by themselves.

Another easy transport trick involves turning clean garbage bags into garment bags. Poke a hole in the bottom of a garbage bag, turn the bag upside down, slide it over five to seven garments on hangers, and lay the items flat in the back seat or trunk of your vehicle. The bags will help prevent wrinkling, and your clothes will be ready to hang up when you get to your new home.

6. Document prior to disassembling appliances and furnishings.

Few things are as confusing as looking at a plastic baggie filled with nuts, bolts, and screws from your disassembled dining room table or sorting through a box of electrical wires and cords to see which ones fit your TV.

The best workaround to easier reassembly is to document the disassembly process. Take photos and videos or thorough notes as you go. Whether it's your headboard or treadmill, be very precise. And just a tip: Construct your beds first when you get to your new home. After a long moving day, the very last thing you want is to be assembling beds into the wee hours of the morning.

7. Prioritize unpacking kids' rooms.

Children can become very stressed by a big move. To ease their transition, consider prioritizing unpacking their rooms as their "safe zones."⁴ You aren't obligated to unpack everything, certainly. However, set up your children's rooms to be functional. That way, your kids can hang out in a private oasis away from the chaos while you're running around and moving everything else.

Depending upon how old your youngsters are, you might want to give them decorating leeway, too. Even if it's just letting them choose where furniture goes, it gives them a sense of buy-in. This can help ease the blues of leaving a former home they loved.

8. Be a thoughtful pet parent.

Many types of pets can't handle the commotion of moving day. Knowing this, be considerate and seek ways to give your pets breaks from the action. You might ask a friend to pet sit your pooch or keep your kitty in a quieter room, like a guest bathroom.

Be sure to check in on your pet frequently. Pets like to know that you're around. Give them treats, food, and water throughout the day. When it's time to transport your pet, do it calmly. At your new property, give your pet access to just a room or two at first. Pets typically prefer to acclimate themselves slowly to unfamiliar environments.⁵

9. Plan for your move like you're planning for an exciting vacation.

When you plan vacations, you probably look up local restaurants, shops, and recreational areas. Who says you can't do the same thing when moving? Create a list of all the places you want to go and things you want to do around your newly purchased home. Having a to-explore list keeps everyone's spirits high and gives you starting points to settle into the neighborhood.

And don't feel that you have to cook that first night. Once the moving trucks are gone, you can always pop over to a local eatery or order DoorDash for major convenience. The first meal in your new home should be a happy, welcoming treat. And if you're relocating to our neck of the woods, we would love to introduce you to all the hot spots in town and recommend our local favorites. 

10. Pack an "Open Me First!" box.

You won't be able to unpack all your boxes in one day, but you shouldn't go without your sheets, pillows, or toothbrush. Designate some boxes with "Open Me First!" labels. (Pro tip: Keep a tool kit front and center for all that reassembling.)

Along these lines, use luggage and duffel bags to transport everyone's personal must-have items and enough clothing for a couple of days. That way, you won't have to rummage through everything in the middle of your move looking for sneakers or snacks.

When packing your "Open Me First!" boxes, think about which items you'll need in those first 24 hours. For example, toilet paper and hand soap are musts. A box cutter will make unpacking a lot easier, and paper towels and trash bags are sure to come in handy. Reach out for a complete, printable list of "Open Me First!" box essentials to keep on hand for your next move!

LET'S GET MOVING

Getting the phone call from your real estate agent that your bid was accepted is a thrilling moment. Make sure you keep the positivity flowing during the following weeks by mapping out a streamlined, efficient move. Feel free to get in touch with us today to help make your big move your best move.

Sources:

1. Better Business Bureau - https://www.bbb.org/article/scams/24198-bbb-scam-alert-avoid-moving-scams-this-national-moving-mont
2. org -
   https://www.move.org/how-to-tell-moving-company-scam/
3. Forbes -
   https://www.forbes.com/advisor/homeowners-insurance/moving-insurance/
4. New York Times -
   https://www.nytimes.com/2020/07/13/parenting/moving-tips-kids.html
5. ASPCA -
   https://www.aspca.org/pet-care/general-pet-care/moving-your-pet

Getting ready for a home inspection is one of the more nerve-wracking things about selling your home. The good news is that you don't have to wait until after the inspection to fix some of the most common trouble spots.

There are certain spots in a home that every inspector will check. Focusing on these issues now is the best way to maximize your budget and your chance of a favorable inspection result.

1. Address Electrical Issues
   Electrical systems are always an area of focus during home inspections as old or damaged wiring can present a significant safety hazard. You can take care of some of the simple stuff like replacing broken switch plates and making sure that all light bulbs are working. It's also a good idea to contact a trusted electrician for a full review of your electrical systems. Better to find and fix it now rather than learn about a problem on inspection day.
   
   
   
2. Freshen Your Fireplace
   A fireplace can be a major attraction to homebuyers as long as it's clean, safe, and well-maintained. Staying on top of fireplace maintenance is always a good idea because an inspector will check it thoroughly. In addition to cleaning up, make sure your fireplace meets all relevant safety codes.
   
   
   
3. Eliminate Mold and Mildew
   Mold and mildew in a home are enough to scare off most buyers before things even reach the stage of inspection. Scour bathrooms, basements, kitchens, and anywhere else mold might develop. You can find specially formulated cleaning products to deal with mold at most hardware stores. If you have a serious mold problem, it's worth calling in the pros to get the job done thoroughly.
   
   
   
4. Fix Roof and Basement Leaks
   If you do have mold or mildew issues in your home, there's a good chance that leaks play a part. Roof and basement leaks are among the most common ways for water to enter the home and often cause significant damage before being detected. Have a professional contractor repair any leaks. It's an absolute must if you're preparing for inspection.
   
   
   
5. Check Your Plumbing
   Leaks don't just come from the outside of the home and faulty plumbing is sure to draw the attention of any home inspector. Taking care of any leaks is the first priority, but it's also a good idea to make sure that your water systems are functioning at their best. Check that the water pressure is high and your water heater works properly.

Investing the time and resources to repair these problems now will save a lot of stress in the long run and will likely save you some money at closing time. Better yet, a positive inspection result puts you one step closer to turning your dreams of a home sale into a reality.

Moving doesn't have to be a stressful experience.

You're moving! Let's face it; whether you're moving across the street or across the country, it can be one of life's more stressful events. Before you surround yourself with cardboard boxes and packing tape, use these tips to find and hire a reliable moving company in your area.

1. Stay Local
   Use someone in your local community. Ask your real estate agent, family, or friends who they trust for moving projects. They will point you in the right direction.
   
   The majority of moving scams are found online so stay local by searching businesses in your hometown. You can search online but remember, by staying local, it is easier to verify that they are a legitimate business.
   
   
   
2. Read Reviews
   In the moving industry, reputation is everything. You're going to tell everyone how great the movers were and that word of mouth is what keeps their business going.
   
   Further, check out the reviews posted for several moving companies that you are researching. In doing so, you will help ensure that you get a great company for a good value.
   
   
   
3. Visit the BBB
   Visit the Better Business Bureau and check for any complaints or reports against the moving company. Look for customer complaints and business reports, and even check their Department of Transportation license. Simply ask your moving company for their DOT Number.
   
   You can then search the database to investigate their record. Make sure the company is insured. Check their insurance number. Visit the moving companies beforehand to see what their operations are like.
   
   
   
4. Get Estimates
   Get at least three estimates from three different companies that have passed your initial screening tests. Try to ask for a not-to-exceed binding estimate. This means a cap will be placed on the maximum amount they can charge you for the move.
   
   When the moving company comes to your home, show them your belongings. Further, let them see your home's layout and what challenges they may face with stairs or other obstacles in moving items out of your home. Estimates should be free and always conducted in person. Phone estimates are bad.
   
   
   
5. Check the Paperwork
   Just like selling your home comes with paperwork, so should a good moving company provide you with several documents. They should give you a bill of lading, which is a legal document that serves as a receipt of the shipment of goods.
   
   Further, an inventory list should include all of the items they are moving for you. The most important document is the estimate itself which should be a written binding estimate which is dated and signed by the moving company.

You Are Ready to Move

You have checked potential companies thoroughly and should feel good about your choice. You have done your homework. Now choose the best one. A smooth transition awaits.

Your vacation is just around the corner. One thing you might not have planned is double-checking your home security.

The security of your home is just as important as your hotel reservations and flight schedule. These simple steps will help you avoid coming home to find your valuables were stolen or your house damaged.

1. Newspaper and Mail
   Either ask a neighbor to bring in your newspapers and mail or stop deliveries until after vacation. You can also stop any scheduled UPS package deliveries. UPS will hold them for up to 30 days. Mail and newspapers piling up in your mailbox are sure signs that you're away.
   
   
2. Light Timer
   Plug several lights throughout your home into a timer. It's also a good idea to have your television or speakers on the timer to create noise. Stagger the settings so your lights don't always come on simultaneously every day. You can pair many timers with an app on your smartphone so that you can control it from anywhere.
   
   
3. Home Improvement
   Before leaving for vacation, mow the lawn, trim your shrubs, wash the windows and clean up the yard. An overgrown lawn is a sure giveaway that no one is home. Burglars are less likely to target a well-maintained home, thinking someone is there. If you're planning an extended trip, hire someone to mow and water the lawn and make other small home improvements while you're away. For example, if a storm blows through, have someone pick up fallen branches and knocked over lawn furniture.
   
   
4. Check the Locks
   If you don't have durable deadbolts, consider replacing them before you leave. Lock all your windows, the garage door, the basement door, and any deck entryways. Secure every entry into your home. If you have a house key hidden outside, remove it because an experienced burglar will find it. Give your house key directly to any person you have coming to your house to water your plants or feed your fish while you're away.
   
   
5. Let The Authorities Know
   Before heading out the door, call the local police and let them know the dates you'll be out of town. Most local PDs send a police car by your home a few times, making sure nothing looks amiss.
   
   
6. Leave The Blinds Open
   Many people think it's better to close the window blinds, so no one can peek into the house while on vacation. This is actually not a good idea. If everyone in the neighborhood has window shades pulled up and your house has the shades down, it's a red flag.

With these tips, you can relax on your vacation without worrying about what's going on back home.

No matter what's going on in the housing market, the process of selling a home can be challenging. Some sellers have a hard time saying goodbye to a treasured family residence. Others want to skip ahead to the fun of decorating and settling into a new place. Almost all sellers want to make the most money possible.

Whatever your circumstances, the road to the closing table can be riddled with obstacles — from issues with showings and negotiations to inspection surprises. But many of these complications are avoidable when you have a skilled and knowledgeable real estate agent by your side.

For example, here are seven common mistakes that many home sellers make. These can cause anxiety, cost you time, and shrink your financial proceeds. Fortunately, we can help you avert these missteps and set you up for a successful and low-stress selling experience.

MISTAKE #1: Setting an Unrealistic Price

Many sellers believe that pricing their homes high and waiting for the "right buyers" to come along will net them the most money. However, overpriced homes often sit on the market with little activity, which can be the kiss of death in real estate — and result in an inevitable price drop.¹

Alternatively, if you price your home at (or sometimes slightly below) market value, it can be among the nicest that buyers see within their budgets. This can increase your likelihood of receiving multiple offers.²

To help you set a realistic price from the start, we will do a comparative market analysis, or CMA. This integral piece of research will help us determine an ideal listing price based on the amount that similar properties have recently sold for in your area.

Without this data, you risk pricing your home too high (and getting no offers) or too low (and leaving money on the table). We can help you find that sweet spot that will draw in buyers without undercutting your profits. 

MISTAKE #2: Trying to Time the Market

You've probably heard the old saying, "Buy low and sell high." But when it comes to real estate, that's easier said than done.

Delaying your home sale until prices have hit their peak may sound like a great idea. But sellers should keep these factors in mind:

1. Predicting the market with certainty is nearly impossible.
2. If you wait to buy your next home, its price could increase as well. This may erode any additional proceeds from your sale.
3. If mortgage rates are rising, your pool of potential buyers could shrink — and you would have to pay more to finance your next purchase.

Instead of trying to time the market, choose your ideal sales timeline. This may be based on factors like your personal financial situation, shifting family dynamics, or the seasonal patterns in your neighborhood. We can help you figure out the best time to sell given your individual circumstances.

MISTAKE #3: Failing to Address Needed Repairs

Many sellers hope that buyers won't notice their leaky faucet or broken shutters during home showings. But minor issues like these can leave buyers worrying about more serious — and costly — problems lurking out of sight.

Even if you do receive an offer, there's a high likelihood that the buyer will hire a professional home inspector, who will flag any defects in their report. Neglecting to address a major issue could lead buyers to ask for costly repairs, money back, or worse yet, walk away from the purchase altogether.

To avoid these types of disruptions, it's important to make necessary renovations before your home hits the market. We can help you decide which repairs and updates are worth your time and investment. In some cases, we may recommend a professional pre-listing inspection.

This extra time and attention can help you avoid potential surprises down the road and identify any major structural, system, or cosmetic faults that could impact a future sale.³  

MISTAKE #4:  Neglecting to Stage Your Home

Staging is the act of preparing your home for potential buyers. The goal is to "set the stage" to help buyers envision themselves living in your home. Some sellers opt to skip this step, but that mistake can cost them time and money in the long run. A 2021 survey by the Real Estate Staging Association found that, on average, staged homes sold nine days faster and for $40,000 over list price.⁴

Indoors, staging could include everything from redecorating, painting, or rearranging your furniture pieces to removing personal items, decluttering, and deep cleaning. Outdoors, you might focus on power washing, planting flowers, or hanging a wreath on the front door.

You may not need to do all these tasks, but almost every home can benefit from some form of staging. Before your home hits the market, we can refer you to a professional stager or offer our insights and suggestions if you prefer the do-it-yourself route.

MISTAKE #5: Evaluating Offers on Price Alone

When reviewing offers, most sellers focus on one thing: the offer price. While dollar value is certainly important, a high-priced offer is worthless if the deal never reaches the closing table. That's why it's important to consider other factors in addition to the offer price, such as:

• Financing and buyer qualifications
• Deposit size
• Contract contingencies
• Closing date
• Leaseback options

Depending on your circumstances, some of these factors may or may not be important to you. For example, if you're still shopping for your next home, you might place a high premium on an offer that allows for a flexible closing date or leaseback option.

Buyers and their agents are focused on crafting deals that work well for them. We can help you assess your needs and goals to select an offer that works best for you.

MISTAKE #6: Acting on Emotion Instead of Reason

It's only natural to grow emotionally attached to your home. That's why so many sellers end up feeling hurt or offended at some point during the selling process. Low offers can feel like insults. Repair requests can feel like judgments. And whatever you do — don't listen in on showings through your security monitoring system. Chances are, some buyers won't like your decor choices, either!

However, it's a huge mistake to ruin a great selling opportunity because you refuse to counter a low offer or negotiate minor repairs. Instead, try to keep a cool head and be willing to adjust reasonably to make the sale. We can help you weigh your decisions and provide rational advice with your best interests in mind.

MISTAKE #7: Not Hiring an Agent

There's a good reason 90% of homeowners choose to sell with the help of a real estate agent. Homes listed by agents sold for 22% more than the average for-sale-by-owner home, according to a recent study by the National Association of Realtors.⁵

 Selling a home on your own may seem like an easy way to save money. But in reality, there is a steep learning curve. And a listing agent can:

• Skip past time-consuming problems
• Use market knowledge to get the best price
• Access contacts and networks to speed up the selling process

 If you choose to work with a listing agent, you'll save significant time and effort while minimizing your personal risk and liability. And the increased profits realized through a more effective marketing and negotiation strategy could more than make up for the cost of your agent's commission.

We can navigate the ins and outs of the housing market for you and make your selling process as stress-free as possible. You may even end up with an offer for your home that's better than you expected.

BYPASS THE PITFALLS WITH A KNOWLEDGEABLE GUIDE

Your home selling journey doesn't have to be hard. When you hire us as your listing agent, we'll develop a customized sales plan to help you get top dollar for your home without any undue risk, stress, or aggravation. If you're thinking of buying or selling a home, reach out to a Montague Miller real estate professional today to schedule a free consultation and home value assessment.

Sources:

1. The Washington Post -
   https://www.washingtonpost.com/business/2019/07/22/just-because-its-sellers-market-doesnt-mean-you-should-overprice-your-home/
2. com -
   https://www.realtor.com/advice/sell/spark-a-bidding-war-for-your-home/
3. American Society of Home Inspectors - https://www.homeinspector.org/Newsroom/Articles/Before-You-Sell-6-Reasons-to-Get-a-Pre-Listing-Inspection/15766/Article
4. Real Estate Staging Association -
   https://www.realestatestagingassociation.com/content.aspx?page_id=22&club_id=304550&module_id=164548
5. National Association of Realtors -
   https://www.nar.realtor/research-and-statistics/quick-real-estate-statistics

Every buyer-to-be knows searching for a home can be a challenge. However, your house hunt doesn't have to mean chaos if you start with an organized plan. Streamlining your search starts with a healthy dose of preparation by including a great real estate agent, setting a budget, creating a wish list, and reviewing real estate listings that meet your requirements.

These six tips can keep you organized and focused as you search for your new home.

1. Involve Your Agent
   Your real estate agent isn't there just to set up visits and oversee the closing process when you're buying a house. They're also your number one resource for answering questions, sharing ideas, and providing real estate advice.
   
   
2. Set a Budget
   While you don't have to know exactly how much you'll be able to spend at the start, it's a good idea to narrow your budget down to a comfortable range. Setting a sensible budget from the start makes every step that comes after easier. You can always adjust later if your finances change.
   
   
3. Scout First
   Before you start scheduling visits, it's a good idea to scout some neighborhoods and identify possible matches. Doing online research will help you narrow down the possibilities. You can learn even more by driving through the most appealing spots that your research uncovers. Be sure to write down the info of any homes that catch your eye so that you can visit them later for a closer look.
   
   
4. When in Doubt, Make a List
   Making lists are a great way to stay organized and super helpful when buying a house. Making lists of your needs, wants, and deal-breakers will help you lock in on the best fits and save time by quickly eliminating homes that just aren't a match.
   
   
5. Ask Around
   Have any friends or family members who recently bought in a new community or live in a neighborhood you're considering? It helps to get the inside scoop on a neighborhood from someone you trust.
   
   
6. Get Pre-Approved
   Want to impress potential sellers and gain some peace of mind in the process? Getting pre-approved for a mortgage is an excellent idea when shopping for a house and will make life much easier when it's time to make an offer. Get this step out of the way early and you'll be in great shape.

Creating a plan before you start your search for a home gives you the chance to enjoy the process and to make an efficient, informed decision when it's time to place an offer on your new house.

Once you've decided to sell your home, there is one question that looms large, hanging over your head like a heavy weight. What am I going to do with all this stuff? The question is especially relevant if you will be downsizing into a smaller house.

If you have lived in your current home for an extended period of time, the problem may be just that much worse. The accumulation of life's stuff is easy to put out of sight and out of mind during the day-to-day bustle. But when it is time to start packing and getting a home ready to sell, it can be like an avalanche bursting forth from every corner.

What's the best way to start downsizing your life and do it efficiently? It may sound easy — keep the stuff you need and purge the stuff you don't — but if you aren't careful how you do it, you can create more problems for yourself than just having too much junk.

Have a Plan to Ease the Pain

• Start with the big stuff. If you are selling your three-bedroom home to move into a two-bedroom home, there's no need to move that extra bedroom furniture. It's just not needed. Take that approach with the rest of your home as well. Consider the space you are moving into and what you will need to fill it.
  
  
• Be cautious. It can be easy to get on a "get rid of it" kick when it comes to smaller items, but be careful. Some things you know you will never need again, sell or donate. For other things that you are on the fence about, separate boxes into "must keep" and "maybe keep" boxes. That way, you can adjust as needed if your new home has the space to accommodate more of your things.
  
  It also helps to think about your belongings like this: If they were all wiped away by a fire, what would I replace and in what order would I replace them. It can be counter-productive to aggressively downsize, only to find that you need to re-buy things when you get in to your new home.
  
  
• Go through those boxes again. Do you have boxes of keepsakes or mementos that you just couldn't live without but have never been unpacked from your previous home? Go through those boxes again, separating what's truly needed from what will never be missed.
  
  
• Some space hogs can be effectively downsized without disappearing from your life. Take this opportunity to digitize old photos, CDs, DVDs or even VHS tapes. Uploading them to the cloud keeps them accessible while reducing the amount of stuff you have to move.
  
  
• One year rule. When selling your home and downsizing, it helps to follow one simple rule: If you haven't used it in the last year, get rid of it.

Take your new uncluttered attitude with you into your new home. Recognize clutter culprits in your old home and take pains to reduce what can build up in your new one. The easiest stuff to get rid of is the stuff you never accumulate.

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.

 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 counterintuitive 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.

 HOME PRICES KEEP CLIMBING

 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.

 INVENTORY REMAINS EXTREMELY LOW

 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 one of our Montague Miller & Co real estate professionals to schedule a free consultation. We can help you assess your options and make the most of this unique real estate landscape.

Sources:

1. Marketwatch - https://www.marketwatch.com/picks/home-price-appreciation-will-normalize-what-5-economists-and-real-estate-pros-predict-will-happen-to-home-prices-in-2022-01646940841
2. Bankrate -
   https://www.bankrate.com/mortgages/mortgage-rate-forecast
3. CNBC -
   https://www.cnbc.com/2022/04/16/heres-how-much-the-same-mortgage-costs-now-compared-to-last-year.html
4. Fortune -
   https://fortune.com/2022/03/23/housing-market-interest-rate-economic-shock/
5. National Association of Realtors -
   https://www.nar.realtor/blogs/economists-outlook/instant-reaction-mortgage-rates-april-07-2022
6. Fortune -
   https://fortune.com/2022/03/16/home-prices-2022-2023-bank-of-america-forecast-mortgage-rates/
7. Fortune -
   https://fortune.com/2022/03/07/what-home-prices-will-look-like-2023-fannie-mae/
8. Fortune -
   https://fortune.com/2022/03/17/home-prices-drop-housing-markets-california-michigan-massachusetts-corelogic/
9. CNN -
   https://www.cnn.com/2022/03/23/success/us-national-rent-february/index.html
10. MarketWatch -
    https://www.marketwatch.com/story/home-prices-increase-at-one-of-the-fastest-rates-on-record-but-higher-mortgage-rates-should-slow-future-growth-11648559497
11. com -
    https://www.realtor.com/research/us-housing-supply-gap-expands/
12. NPR -
    https://www.npr.org/2022/03/29/1089174630/housing-shortage-new-home-construction-supply-chain
13. Investopedia -
    https://www.investopedia.com/housing-market-dips-in-early-march-2022-5222449
14. NPR -
    https://www.npr.org/2022/03/29/1089174630/housing-shortage-new-home-construction-supply-chain
15. Fortune -
    https://fortune.com/2022/03/14/housing-market-key-metric-inventory-zillow-bad-for-buyers/