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buying a home | 94 Posts
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real estate news | 44 Posts
selling a home | 28 Posts
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July
6

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.

 

July
6

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.

July
6

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.

June
24

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.

June
1

 

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/

May
23

Some Highlights

What does the rest of the year hold for the Houseing Market? Here's what experts have to say about what lies ahead.

Home Prices are projected to rise and so are mortgage rates.  Experts are also forecasting another strong year for home sales as people move to meet their changing needs. 

Connect with a Montague Miller & Co local real estate professional so you can make your best move this year.

Resources: Keeping Current Matters, CoreLogic, Freddie Mac, Fannie Mae, NAR, Calculated Risk, MBA

May
1

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.1

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 tactics you can utilize to sweeten your proposal and outshine your competition.

We can help you weigh the risks and benefits of each tactic and craft a compelling offer designed to get you your dream home—without giving away the farm. 

1.   Demonstrate Solid Financing

The reality is, no one gets paid if a home sale falls through. That's why sellers (and their listing agents) favor offers with a high probability of closing.

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, which means the vast majority are financed with a mortgage.2

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 preapproved before you start looking for homes. A preapproval letter shows sellers that you are serious about buying and that you will be able to make good on your offer.

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 much easier to work with than others, especially if you are pursuing certain types of mortgages like FHA or VA loans.3 If so, you'll want a lender who specializes in these types of mortgages. If you're unsure who to choose, we are happy to refer you to reputable lenders known for their ease of doing business.

2.   Put Down a Sizeable Deposit

Buyers can show sellers that they're serious about their offer and have "skin in the game" by putting down a large earnest money deposit.

Earnest money is a deposit held in escrow by a title company or the seller's broker or lawyer.  If the purchase goes through, it is applied to the down payment and closing costs—if the sale falls through, the buyer may lose some or all of that deposit.

While an earnest money deposit is typically around 1-2% of the sale price, offering a higher deposit can help demonstrate to the buyer that you are serious about the property.4 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

Most real estate offers include contingencies, which are clauses that allow one or both parties 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 the buyer and seller to be legally binding.5

Common contingencies include:

  • Financing: A financing contingency gives the buyer a window of time in which 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 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: Most lenders will not offer a mortgage on a home that costs more than it's worth. An appraisal contingency gives the buyer an opportunity to get the home professionally assessed to ensure that its value is at or above the sales price. 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 is unable to sell their current home within a specified window of time, this contingency enables them to withdraw from the contract 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.

However, it's very important to make this decision carefully and recognize the risks of doing so. For example, a buyer who chooses to waive a home inspection contingency may find out too late that the home requires extensive renovations, and a buyer who waives the appraisal may risk their mortgage falling through. If you back out of a home purchase without the protection of a contingency, you could lose your earnest money deposit.6 We can help you assess the risks and benefits involved.

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

When it comes to selling a house, money isn't everything. People sell their homes for a wide variety of reasons, and flexible terms that work with their personal situations can sometimes make all the difference. For example, 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.7 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 when their next home is not yet ready to occupy.

Flexible closing dates and leaseback options can provide a powerful advantage for first-time homebuyers. If you have a month-to-month or easily transferable lease, for example, you may be able to offer a more flexible timeline than a buyer who is simultaneously selling their existing home.

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, and 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 offers that are 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, and they want to work with skilled buyer's agents who are professional, communicative, and courteous.

Once your offer is accepted, we'll also handle any further negotiations and coordinate all the paperwork and other details involved in your home purchase. The best part is, you'll have a knowledgeable, licensed advocate on your side who is 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 a local Montague Miller & Co real estate professionals today to schedule a free consultation.

Sources:

  1. National Association of Realtors -
    https://www.nar.realtor/newsroom/pending-home-sales-dwindle-4-1-in-february
  2. National Association of Realtors -
    https://www.nar.realtor/newsroom/existing-home-sales-fade-7-2-in-february
  3. Forbes -
    https://www.forbes.com/advisor/mortgages/housing-crisis-tips/
  4. com -
    https://www.realtor.com/advice/finance/earnest-money-deposit-mistakes-buyers-make/
  5. Bankrate -
    https://www.bankrate.com/real-estate/contingency-clause/
  6. Home Buying Institute -
    http://www.homebuyinginstitute.com/mortgage/risks-of-waiving-a-contingency/
  7. com -
    https://www.realtor.com/advice/sell/what-is-a-rent-back-agreement
April
26

April
26

March
9

Key Factors That Impact Affordability Today | MyKCM

You can't read an article about residential real estate without the author mentioning the affordability challenges that today's buyers face. There's no doubt homes are less affordable today than they were over the last two years, but that doesn't mean homes are now unaffordable.

There are three measures used to establish home affordability: home prices, mortgage rates, and wages. Let's look closely at each of these components.

1. Home Prices

The most recent Home Price Insights report by CoreLogic shows home values have increased by 19.1% from last January to this January. That was one reason affordability declined over the past year.

2. Mortgage Rates

While the current global uncertainty makes it difficult to project mortgage rates, we do know current rates are almost one full percentage point higher than they were last year. According to Freddie Mac, the average monthly rate for last February was 2.81%. This February it was 3.76%. That increase in the mortgage rate also contributes to homes being less affordable than they were last year.

3. Wages

The one big, positive component in the affordability equation is an increase in American wages. In a recent article by RealtyTrac, Peter Miller addresses that point:

"Prices are up, but what about wages? ADP reports that job holder incomes increased 5.9% last year but rose 8.0% for those who switched employers. In effect, some of the higher cost to buy a home has been offset by more cash income."

The National Association of Realtors (NAR) also recently released information that looks at income and affordability. The NAR data provides a comparison of the current median family income versus the qualifying income for a median-priced home in each region of the country. Here's a graph of their findings:

Key Factors That Impact Affordability Today | MyKCM

As the graph shows, the median family income (shown in blue on the graph) is greater than the qualifying income needed to buy a median-priced home (shown in green on the graph) in all four regions of the country. While those figures may vary in certain locations within each region, it's important to note that, in most of the country, homes are still affordable.

So, when you think about affordability, remember that the picture includes more than just home prices and mortgage rates. When prices rise and rates rise, it does impact affordability, and experts project both of those things will climb in the months ahead. That's why it's less affordable to buy a home than it was over the past two years when prices and rates were lower than they are today. But wages need to be factored into affordability as well. Because wages have been rising, they're a big reason that, while less affordable, homes are not unaffordable today.

Bottom Line

To find out more about affordability in our local area, let's discuss where home prices are locally, what's happening with mortgage rates, and get you in contact with a lender so you can make an informed financial decision. Remember, while less affordable, homes are not unaffordable, which still gives you an opportunity to buy today.

March
9

Down Payment Assistance Programs Can Help You Achieve Homeownership | MyKCM

For many homebuyers, the thought of saving for a down payment can feel daunting, especially in today's market. That's why, when asked what they find most difficult in the homebuying process, some buyers say it's one of the hardest steps on the path to homeownership. Data from the National Association of Realtors (NAR) shows:

"For first-time home buyers, 29 percent said saving for a downpayment [sic] was the most difficult step in the process."

If you're finding that your down payment is your biggest hurdle, the good news is there are many down payment assistance programs available that can help you achieve your goals. The key is understanding where to look and learning what options are available. Here's some information that can help.

First-Time and Repeat Buyers Are Often Eligible

According to downpaymentresource.com, there are thousands of financial assistance programs available for homebuyers, like affordable mortgage options for first-time buyers. But, of the many programs that are available, down payment assistance options make up the large majority. They say 73% of the assistance available to homebuyers is there to help you with your down payment.

And it's not just first-time homebuyers that are eligible for these programs. Downpaymentresource.com notes:

"You don't have to be a first-time buyer. Over 38% of all programs are for repeat homebuyers who have owned a home in the last 3 years."

That means no matter where you are in your homeownership journey, there could be an option available for you.

There Are Local Programs and Specialized Programs for Public Servants

There are also multiple down payment assistance resources designed to help those who serve our communities. Teacher Next Door is one of those programs:

"The Teacher Next Door Program was designed to increase home ownership among teachers and other public servants, support community development and increase access to affordable housing free from discrimination."

Teacher Next Door is just one program that seeks to help teachers, first responders, health providers, government employees, active-duty military personnel, and veterans reach their down payment goals.

And, most importantly, even if you don't qualify for these types of specialized programs, there are many federal, state, and local programs available for you to explore. And the best way to do that is to connect with a local real estate professional to learn more about what's available in your area.

Bottom Line

If saving for a down payment seems daunting, there are programs available that can help. And if you work to serve our community, there may be even more opportunities available to you. To learn more about your options, let's connect so you can start your homebuying journey today.

Resources: Keeping Current Matters, Teacher Next Door, Simplifying the Market, National Association of Realtors (NAR)

March
9

Highlights

  • Today's housing market is the direct result of low supply and high buyer demand. Here's what that means for you and your plans to buy or sell.
  • For buyers, expect competition, be ready to move fast, and be prepared to submit your strongest offer. For sellers,  know your house will be the center of attention  and that it'll likely sell quickly and get multiple offers.
  • If you're ready to move, let's connect to talk about our local area and how you can take advantage of today's unprecedented housing market.

Resources by Keeping Current Matters, NAR

February
8

What's Your Home Buying Power?

If you're in the market for a new home or investment property, one of the first questions you'll probably ask is, "What can we afford?" Many buyers become so caught up in how much they can afford that they don't realize their total buying power—that is, the total amount of purchasing potential they actually have.

 Buying Power Defined

Your buying power is comprised of the total amount of money you have available each month for a mortgage payment. This means the money you have each month after fixed bills and expenses. Any money you've saved for a down payment, the proceeds from the sale of your current home, if applicable, and the amount of money you're qualified to borrow all impact your buying power as well. When you take all of this into account, you may find you are able to purchase a larger home or a home in a more desirable neighborhood, or you might realize you should be looking for homes in a lower price range.

 What About Housing Affordability?

Housing affordability is a metric used by real estate experts to assess whether or not the average family earning an average wage could qualify for a mortgage on the average home.1 Although this figure is essential to creating a comprehensive overview of the real estate market, it's not a factor you should consider in your home search. What may be considered affordable to you based on your income and other factors may be different than what's affordable to the average buyer.

Why Buying Power Matters

A common misunderstanding is that a home's list price determines whether or not you can purchase it. Although it's important to look at the price tag, it's essential to consider what your monthly payment will be if you own the home. After all, the purchase price doesn't include the housing-related expenses, such as annual property taxes, homeowner insurance, associated monthly fees, and any maintenance or repairs. Figuring out the payment will prevent you from overestimating or underestimating your buying power. After all, you'll live with your monthly payment, not the sales price.

Once you have clarity on your buying power, you'll be able to buy the home you want, instead of settling for a home because you feel it's the only one you can afford. It will also prevent you from becoming "house poor," a common term for someone who's put all their money toward the down payment, leaving them nothing left over for fees outside of their monthly house payment. Both scenarios can negatively impact the lifestyle you want to live. Understanding your buying power can help you get the home you want without sacrificing the lifestyle you desire.

If you haven't sold your current home yet, a Comparative Market Assessment (CMA) will give you a general idea of how much you may get for your home based on what other homes have sold for in your area. Contact our team for a FREE CMA!

Calculating Your Buying Power

You might be wondering, "How do I know what my buying power is?" Buying power is calculated by adding the money you've saved for a down payment and/or the money you made from selling your home (minus fees and mortgage payoff) to all of your sources of income and investments that could be used to make your monthly payment. Make sure to include your monthly pay, commissions or tips, dividends from investments, payments from rental properties or other monthly income you receive as well as the loan amount you're willing to finance and qualify for.

Most lenders advised buyers to spend no more than 35 to 45 of their pretax income on housing, meaning all your income and sources of revenue prior to paying taxes. Make sure you factor in not only your mortgage payment but also property tax and home insurance to the cost of housing.2 However, other financial experts advise spending no more than a very conservative 25 percent of your after-tax income on your housing expenses.2  Whether you plan to spend the average, play it conservative or split the difference is up to you.

Traditionally, mortgage lenders have targeted the ideal housing expense amount to be a ratio of 28 percent or less.3

However, these figures bring up an important point: you don't have to spend all of your savings and available monthly income on a mortgage payment. It's important to set money aside for regular home maintenance, unexpected repairs, and monthly fees, such as a condominium or homeowners association fee. While the above ratios are commonly accepted, a lender will look at your total financial picture when they decide how much they're willing to lend. It may be tempting to take out a large loan in order to purchase the home of your dreams, but keep in mind the less money you have to borrow, the stronger your buying power may be.

4 Things That Impact Buying Power

  1. Credit score. A great score can help you lock into a lower interest rate.
  2. Debt-to-income ratio. The lower the ratio, the better risk you may be to lenders as long as you have an established credit history.
  3. Assets, including the documentation of where the money for the purchase is coming from and the mix of your investments.
  4. Down payment. The more you're able to put down, the less you will have to borrow. With a down payment of 20 percent or more, you won't have to purchase private mortgage insurance (PMI) and you may also be able to negotiate a lower interest rate.

How to Save for a Down Payment

If you're thinking of buying a home one day, one of the first steps to take is to start saving for a down payment. Here are some tips to make saving easier.

First-time buyers:

  1. Set a savings goal. One way to figure out how much to save is to use the average sales price for homes that are similar to what you want and figure out your target down payment percentage. For example, if homes are selling for $200,000 in your area and you want to put 20 percent down, you'll have to save $40,000. Set a goal to save that amount within a specific time frame; just keep in mind the longer you save, the more the average selling price will change. Although the majority of buyers saved for six months or less, 29 percent of all buyers (and 31 percent of first-time buyers) saved for more than two years for a down payment.4
  1. Cut back on expenses. Review your monthly expenses and look for ways to save. Twenty-nine percent of buyers cut spending on non-essentials items and 22 percent cut spending on entertainment while they were saving for a home.4 Think about items you can live without or cut back on temporarily while you're saving. 
  1. Look for ways to boost your income. Get a side job or sell items online or at a garage sale to increase your income in a short amount of time. Be sure to save any windfalls you get, including your annual income tax refund or work bonuses.
  1. Check out home-buying programs. Your state, county or local government may offer special programs, such as grants, for first-time buyers to use.
  2. Ask your family. Thirteen percent of all buyers, and 24 percent of first-time buyers, were given money from family or friends to use toward the down payment of their home.4

Repeat buyers:

More than 52 percent of repeat buyers used the proceeds from the sale of their primary residence toward the down payment on their next home.4 Similarly, 76 percent tapped into their savings accounts.4 If you're thinking of buying another home, here are more ways to save more money, in addition to the tips listed above:

  1. Rent a room. If you have an income flat (or mother-in-law unit) attached to your home, rent it out and channel the income into a high-interest savings account.
  1. Make your money work for you. If you don't plan to buy for at least five years, invest it and let the compound interest work for you. Discuss this option with your financial planner or broker to see if this is ideal for you and your goals.
  1. Tap into your 401(k). If you have a 401(k) plan, you may be allowed to borrow a portion of it, the lessor of up to $50,000 or half of its value, for your down payment. Remember, it's a loan so you'll have to pay it back. If you leave or lose your job before you've repaid the loan, you'll have between 60 to 90 days to repay the balance or face stiff taxes and penalties.

If you want to buy an investment property

Whether you're buying a second home or a rental property, here are a couple of tips to save for a down payment.

  1. Tap into your equity. If you've paid off or paid down your mortgage on your primary home, you may be able to tap into your equity to purchase another property. Contact your lender to learn more about a HELOC or home equity loan.

  1. Get a partner. Find a friend or relative who's willing to purchase property with you. Typically, you'll split the costs and profits equally. Just make sure to work with an attorney to create a partnership agreement to fit your situation.

Work Out Your Buying Potential

What's your buying potential? Fill out this worksheet to get an estimate.

 

Housing Expense Ratio:

1. Monthly income before taxes

$

2. Multiply line 1 by 0.28

X 0.28

3. Monthly mortgage payment (PITI) should not exceed this amount

= $

4. Monthly income before taxes

$

5. Multiply line 4 by 0.36

X 0.36

6. Total monthly payments on all debts (including mortgage) should not exceed this amount

= $

7.  Subtract the total monthly payments on all outstanding debts (e.g., car loans, credit cards, student loans, etc.)

- $

8. The monthly mortgage payment should not exceed this amount

$

9. Look at line 3 and line 8. The lower figure is an estimate of the maximum mortgage payment in consideration of your income and debts.

$

10. Multiply line 9 by 0.80

X 0.80

11. This equals portion of your mortgage payment that is the principal and interest only

$

12. Use the table below to see the size of the loan you may be able to obtain with this monthly mortgage payment.

 

Source: Iowa State University Extension, What is your house-buying power?

 

Monthly Payment on 30-Year Fixed Rate Mortgage

Loan amount

3%

3.5%

4%

4.5%

5%

5.5%

6%

$50,000

211

225

239

253

268

284

300

$75,000

316

337

358

380

402

426

450

$100,000

421

449

477

506

536

568

600

$150,000

632

674

716

759

804

852

900

$200,000

842

898

954

1012

1072

1136

1200

$250,000

1052

1123

1193

1265

1340

1420

1500

$300,000

1263

1347

1431

1518

1608

1704

1800

 

Didn't see your desired loan amount? Use the table below to estimate your monthly payment (principal and interest) per $1,000 of your loan. To figure out an estimated loan payment, multiply the factor by the number of thousands in the amount of your mortgage.

For example, if you intend to borrow $400,000, with a loan term of 30 years at 4% interest, multiply 4.77x 400 = $1908 per month.

Interest Rate

15-Year Term

30-Year Term

 

Monthly Payment

Monthly Payment

3%

6.90

4.21

3.5%

7.14

4.49

4%

7.39

4.77

4.5%

7.64

5.06

5%

7.90

5.36

5.5%

8.18

5.68

6%

8.44

6.00

Source: HSH.com 

 

Don't forget to factor in property taxes and insurance. These are often added to your principal and interest of your mortgage payment—the money used to pay down the balance of your loan and the charge for borrowing the money. Since these numbers vary, contact your county assessor's office for the current property tax rate and your insurer for a home insurance quote. Once you have these figures, divide each by 12 to estimate how much they'll add to the above payment amounts.

Do you want a clearer picture of your buying power? Would you like to see what kind of homes you can get with your buying power? Give us a call!

 

Sources: 1. National Association of REALTORS  2. Moneyunder30.com 3. Credit.com  4. National Association of REALTORS, 2016 Profile of Home Buyers and Sellers 5. Iowa State University Extension  6. HSH.com 

 

 

 

 

 

February
4

 

There's a lot to consider when selling your home, from the market and appraisals to where you'll go next. Don't forget, however, that design is also a key factor. It's often one of the first things buyers notice when they walk into a home, and it's also a detail that you, as a seller, can easily control.

According to Realtor.com's 2022 housing market forecast, home for-sale inventory will increase from last year, as will the projected number of overall sales.1 This means, if you're looking to sell in the near future, now is the time to consider how you can stand out.

Updating your home design is one way to do that. Changes like new security features or upgraded siding can add value to your home now and be highlighted when you market it for sale later. To get the most out of your updates, focus on these popular home design features that will wow buyers in 2022.

Keep in mind, not all of these will work well in every house. If you plan to buy, list, or renovate a property, give us a call. We can help you realize your vision and maximize the impact of your investment.

Eco-Friendly Fixtures

Millennials account for the largest share of current homebuyers, according to the National Association of Realtors.2 Sustainable living tops the list of priorities for this generation. A recent Deloitte survey found that nearly one-third of millennials initiate or deepen their consumer investment in products or services that help the environment—this also includes the houses they choose to live in.3

Here are a few eco-friendly design features that will be attractive to these millennial buyers in 2022. Bonus, they can net a significant return on investment (ROI) for you, as a seller, too.

  • Energy-Efficient Windows: Heat gain or loss from low-performance windows drives 25–30 percent of home heating and cooling costs, according to gov.4 Therefore, energy-efficient windows can help homeowners save money.
  • Low-Flow Water Fixtures: According to the EPA, replacing your shower head with one that's labeled with WaterSense can save four gallons of water with each shower.5 Doing the same with your faucet can save 700 gallons per year. This leads to cost savings and environmental support.
  • Native Landscaping: According to the American Society of Landscape Architects, 58 percent of members report increased client demand for native trees and plants as a means to combat biodiversity loss from climate change..6 Enhance the eco-friendly appeal of your home with some native plants in the front yard.

Wellness Retreat Nooks

The pandemic has had a significant impact on mental health. For example, in an effort to prioritize mental health, many people are relocating to quieter, more peaceful homes, with 22 percent of city dwellers planning a move to less congested residential areas, according to the Home Improvement Research Institute's (HIRI) 2021 Insights Summit.7

However, no matter where you live, you can still intrigue buyers by jumping on this trend. At-home wellness amenities, which were once viewed as luxuries, are now on many homeowners' must-have lists. Indoor spaces that function as a retreat for wellness and self-care have become extremely popular, according to HIRI.

Improve your quality of life in your home with reading nooks, spa-inspired bathrooms, and exercise or meditation spaces. Even if your house doesn't have the square footage to section off an entire room for relaxation, making simple tweaks to natural light, air purifiers, and indoor plants can help you feel better in your home now while enabling future buyers to see the opportunity for their own space.

Calming Paint Colors

Paint colors that produce a calming atmosphere will also be a key selling point in 2022. Soft earth tones and natural hues will prevail this year, including various shades of blue, green,  brown, and beige. Recent research suggests steering clear of trendy paint colors in favor of a more classic palette to bring the feel of nature indoors in a subtle and soothing way.8 

In fact, the same research found that buyers are often willing to pay an extra $4,698 for a house with a light blue bathroom or an extra $1,491 for a house with a dark blue bedroom. Another crowd-pleasing hue to refresh the walls with is BEHR's 2022 paint color of the year, known as Breezeway.9

This shade of green with silver undertones was created to mimic sea glass. As the BEHR website describes it, Breezeway "evokes feelings of coolness and peace, while representing a desire to move forward and discover newfound passions." 

Home Safety Features

Buyers want peace of mind more now than ever before. According to a 2021 survey from the American Institute of Architects, members report seeing an increase in the popularity of these home safety features10

  • Emergency backup power generation
  • Accommodations for multiple generations
  • Wider accessible doorways and hallways
  • Home security monitoring equipment
  • Interior ramps and home elevator features

Consider how you can build home safety features like these into the design of your home to enhance your quality of life now and attract more buyers later. For example, you could install a backup generator in the garage and sell it with the house or update your major doorways to be wider.

Before making an investment in expensive home safety upgrades, contact us. We can help you determine what will deliver the greatest ROI for your location and goals.

Designated Work Spaces 

It may come as no surprise that after the pandemic, 63 percent of homebuyers want their next house to feature room for a designated office, according to the National Association of Home Builders.11 In addition, 70 percent of these buyers want the office to be at least 100 square feet (or a 10x10 room).    

If you can, consider turning a bedroom or a den into a work-from-home office. When designing the space, make it both functional and aesthetically pleasing. Position a desk near the window for natural light, install a bookshelf unit, arrange a few succulents on the work surface, and hang a few framed posters or a cork bulletin board on the wall. You want the space to foster productivity as well as be a place in your home you enjoy spending time.

When you get ready to sell, we can help you highlight your designated work space. Given the high demand for this design feature, it can help you interest more buyers and attract more competitive offers—if marketed creatively.

Luxury Kitchen Retouches

The kitchen has always been a main focal point of interior design, and that's no different in 2022. Families will always need this space to come together in their own homes.

This year's buyers want a kitchen with new upgrades and retouches, but you don't have to renovate the entire kitchen to make an impact. If you're not sure where to start, here are a few tips on how to create a kitchen that buyers will love without spending too much money on renovations:

  • Repaint the kitchen, keeping the calm and nature-inspired colors in mind that are most popular right now. Taking a kitchen from dark to light by painting cabinets and walls can make all the difference.
  • Update the hardware. These kitchen "accessories" stand out and add personality to an otherwise standard kitchen.
  • Update light fixtures to bring in more light while also adding a fresh look and feel to the space.

Unique Accent Walls

In a recent interview with the National Association of Realtors, Brian Santos, the director of education for Fresh Coat Painters, explains that bold, unique accent walls are trendy right now.12 An accent wall gives a home character while maintaining the calming feel of natural- and neutral-colored walls.

Santos also explains that this is part of a design aesthetic that draws inspiration from the Roaring Twenties, and it's likely to remain a sought-after home feature in 2022. Here are some bold colors to consider for your home's accent walls:

  • Solid black
  • Jewel or metallic tones
  • Textured wallpaper
  • Painted ceilings
  • Built-in shelves

If you're planning to sell in the next year, talk to us before adding an accent wall. Depending on your target buyer, it may be a design feature that actually hurts your home's value. We can run a free Comparative Market Analysis on your home to help you understand what would resell best in your neighborhood.

Exterior Siding Updates

A new exterior siding refresh is one of the most affordable renovation projects you can do to help increase a home's resale value. The average cost is just $12 per square foot, but higher-end material options can push costs closer to  $50 per square foot.13 What's more, there are many siding materials available, from fiber-cement, brick, and wood to vinyl, metal, and stone. 

While all these options can infuse the exterior with character and add curb appeal, fiber-cement and vinyl deliver the highest ROI. In fact, according to a 2021 Cost vs. Value Report, a vinyl siding replacement can boost resale value by $11,315 (68.3 percent cost recoup), and a fiber-cement siding replacement can boost resale value by $13,618 (69.4 percent cost recoup).14

Give your home this simple, affordable, and attractive facelift before putting it on the market. If you're not sure how to get started yourself, our team can connect you with a trusted vendor to guide you through the process.

Keep These Home Design Features on Your Radar in 2022

These design features can infuse personality into your home while helping to close the deal if you plan to sell in 2022. The average buyer knows just what they're looking for in a space they plan to call home, so with some investment and foresight, you can give your house an edge over the competition—and boost resale value in the process.

However, you don't need to make all these changes to attract more buyers. We can help you determine which design features you should add to your home by sharing insights and tips on how to maximize the return on your investment. We can also run a Comparative Market Analysis on your home to find out how it compares to others in the area, which will help us decide what changes need to be made. Contact us to schedule a free consultation!

Sources:

  1. Realtor -
    https://www.realtor.com/research/2022-national-housing-forecast/
  2. National Association of Realtors -
    https://www.nar.realtor/research-and-statistics/research-reports/home-buyer-and-seller-generational-trends
  3. Deloitte -
    https://www2.deloitte.com/content/dam/Deloitte/global/Documents/2021-deloitte-global-millennial-survey-report.pdf
  4. gov -
    https://www.energy.gov/energysaver/update-or-replace-windows
  5. gov -
    https://www.epa.gov/watersense/about-watersense
  6. American Society of Landscape Architects -
    https://www.asla.org/NewsReleaseDetails.aspx?id=60427
  7. Home Improvement Research Institute -
    https://www.hiri.org/blog/4-major-home-wellness-trends-from-hiri-summit-speaker-dr-jie-zhao
  8. Zillow -
    http://zillow.mediaroom.com/2021-07-15-Homes-With-Light-Blue-Bathrooms,-Dark-Blue-Bedrooms-Could-Sell-for-Up-to-4,698-More-Than-Expected
  9. Behr -
    https://www.behr.com/colorfullybehr/behr-announces-2022-color-of-the-year-and-trends-palette/
  10. American Institute of Architects -
    http://info.aia.org/AIArchitect/2021/0910/aia-interactive/index.html#
  11. National Association of Home Builders -
    ​​https://www.nahb.org/-/media/NAHB/news-and-economics/docs/housing-economics-plus/special-studies/2021/special-study-what-home-buyers-really-want-march-2021.pdf?_ga=2.188050984.1824982414.1639512139-1247360189.1639512139
  12. National Association of Realtors -
    https://www.nar.realtor/blogs/styled-staged-sold/hot-home-trend-the-accent-wall-is-back
  13. Forbes -
    https://www.forbes.com/advisor/home-improvement/how-much-does-siding-cost-to-install/

Remodeling Magazine -
https://www.remodeling.hw.net/cost-vs-value/2021/

December
27

It's clear that owning a home makes financial sense. But lately, the emotional side of what drives homeownership is becoming increasingly important.

No matter the living space, the feeling of a home means different things to different people. Whether it's a familiar scent or a favorite chair, the feel-good connections to our own homes can be more important to us than the financial ones. Here are some of the reasons why.

1. Owning your home is an accomplishment worth celebrating

You've put in a lot of work to achieve the dream of homeownership, and whether it's your first home or your fifth, congratulations are in order for this milestone. You've earned it.

2. There's no place like home

Owning your own home offers not only safety and security but also a comfortable place where you can simply relax and unwind after a long day. Sometimes that's just what we need to feel recharged and truly content.

3. You can find more space to meet your needs

Whether you want more room for your changing lifestyle (think: working from home, dedicated space for a hobby, or a personal gym) or you simply prefer to have a large backyard for entertaining, you can invest in a home that truly works for your evolving needs.

4. You have control over renovations, updates, and your style

Looking to try one of those decorative wall treatments you saw on Pinterest? Tired of paying an additional pet deposit for your apartment building? Maybe you want to create an entire in-home yoga studio. You can do all of these things in your own home.

Whether you're a first-time homebuyer or a repeat buyer who's ready to start a new chapter in your life, now is a great time to reflect on the non-financial factors that turn a house into a happy home. Reach out to a trusted real estate professional to help guide you.

Resource: Keeping Current Matters

December
18

Advice for First-Generation Homebuyers | MyKCM

The sense of pride you'll feel when you purchase a home can't be overstated. For first-generation homebuyers, that feeling of accomplishment is even greater. That's because the pride of homeownership for first-generation buyers extends far beyond the homebuyer. AJ Barkley, Head of Neighborhood and Community Lending for Bank of America, says: 

"Achieving this goal can create a sense of pride and accomplishment that resonates both for the buyer and those closest to them, including their parents and future generations."

In other words, your dream of homeownership has far-reaching impacts. If you're about to be the first person in your family to buy a home, let that motivate you throughout the process.  As you begin your journey, here are three helpful tips to make that dream come true.

1. Reach Out to a Real Estate Professional

It's important to reach out to a trusted advisor early in your homebuying process. Not only can an agent help you find the right home, but they'll serve as your expert advisor and answer any questions you might have along the way.

The latest Profile of Home Buyers and Sellers from the National Association of Realtors (NAR) surveyed first-time homebuyers to see how their agent helped them with their home purchase (see chart below):Advice for First-Generation Homebuyers | MyKCM

As the graph shows, your agent is a great source of information throughout the process. They'll help you understand what's happening, assess a home's condition, and negotiate a contract that has the best possible terms for you. These are just some of the reasons having an expert in your corner is critical as you navigate one of the most significant purchases of your life.

2. Do Your Research and Know What You Can Afford

The second piece of advice for first-generation homebuyers is practical: do your research so you know what you can afford. That means getting your finances in order, reviewing your budget, and getting pre-approved through a lender. It also means learning the ins and outs of what it takes to pay for your home, including what you'll need for a down payment.

Many homebuyers believe the common misconception that you can't purchase a home without coming up with a 20% for a down payment. As Freddie Mac says: 

"The most damaging down payment myth—since it stops the homebuying process before it can start—is the belief that 20% is necessary."

The chart below shows what recent homebuyers have actually put down on their purchases:

Advice for First-Generation Homebuyers | MyKCM

On average, first-time buyers only put 7% down on their home purchase. That's far less than the 20% many people believe is necessary. That means your down payment, and your home purchase, may be in closer reach than you realize. Keep that in mind as you work with a real estate professional to better understand what you'll need for your purchase.

3. Don't Lose Sight of What Home Means to You

Finally, it's important keep in mind why you're searching for a home to begin with. Overwhelmingly, first-generation homeowners recognize the financial and non-financial benefits of owning a home. In fact, in a recent survey:

  • 73% of first-generation homeowners say the safety and security homeownership provides is increasing in importance.
  • Nearly two-thirds of first-generation homeowners say the importance of building equity in a home is growing more important as well.

As AJ Barkley explains:

"For many first-generation homeowners and their families, homeownership has a unique importance, given the collective efforts to overcome financial challenges that can often span generations…"

If you're a first-generation homebuyer, being prepared and working with a trusted expert is key to achieving your dream. Connect today so you can get started on your path to homeownership.

Resources: National Association of Realtors (NAR), Keeping Current Matters

February
21

Whether you are new to the home-buying process or a seasoned homeowner selling your home, you will likely be faced with a flurry of details and big decisions, making the process seem overwhelming.

We're here to help. At Montague, Miller & Co., we take pride in our ability to educate and guide our clients to successful outcomes through professionalism and honest counsel. As a three-generation family company, we've been serving Charlottesville and surrounding communities for over 70 years.

Our Montague Miller & Co REALTORS® live and work in your community. We have a breadth of experience navigating competitive markets to help you find your perfect home, or sell your home for the best price, all the while ensuring the process is as seamless and enjoyable as possible.

Although Montague Miller has the distinction of being a local, independent company, it has the advantage of being able to offer global services on our client's behalf through our relationship with Leading Real Estate Companies of the World (LRE). LRE offers world-class resources and referral connections to our clientele, giving them a truly exceptional real estate experience.

Whether you're buying or selling a home locally or globally, searching for investment opportunities, or just have questions, we're here to help you make your next move.

Connect with one of your local Montague Miller & Co real estate professionals here. 

February
7

In 1963, Martin Luther King, Jr. inspired a powerful movement with his famous "I Have a Dream" speech. Through his passion and determination, he sparked interest, ambition, and courage in his audience. Today, reflecting on his message encourages many of us to think about our own dreams, goals, beliefs, and aspirations. For many Americans, one of those common goals is owning a home: a piece of land, a roof over our heads, and a place where we can grow and flourish.

If you're dreaming of buying a home this year, start by connecting with a local real estate professional to understand what goes into the process. With a trusted advisor at your side, you can then begin to answer the questions below to set yourself up for homebuying success.

1. How Can I Better Understand the Process, and How Much Can I Afford?

The process of buying a home is not one to enter into lightly. You need to decide on key things like how long you plan on living in an area, school districts you prefer, what kind of commute works for you, and how much you can afford to spend.

Keep in mind, before you start the process to purchase a home, you'll also need to apply for a mortage.  Lenders will evaluate several factors connected to your financial track record, one of which is your credit history. They'll want to see how well you've been able to minimize past debts, so make sure you've been paying your student loans, credit cards, and car loans on time. If your financial situation has changed recently, be sure to discuss that with your lender as well. Most agents have loan officers they trust and will provide referrals for you.

According to ConsumerReports.org:

"Financial planners recommend limiting the amount you spend on housing to 25 percent of your monthly budget."

2. How Much Do I Need for a Down Payment?

In addition to knowing how much you can afford on a monthly mortgage payment, understanding how much you'll need for a down payment is another critical step. Thankfully, there are many different options and resources in the market to potentially reduce the amount you may think you need to put down.

If you're concerned about saving for a down payment, start small and be consistent. A little bit each month goes a long way. Jumpstart your savings by automatically adding a portion of your monthly paycheck into a separate savings account or house fund. AmericaSaves.org says: 

"Over time, these automatic deposits add up. For example, $50 a month accumulates to $600 a year and $3,000 after five years, plus interest that has compounded."

Before you know it, you'll have enough for a down payment if you're disciplined and thoughtful about your process.

3. Saving Takes Time: Practice Living on a Budget

As tempting as it is to pass the extra time you may be spending at home these days with a little retail therapy, putting that extra money toward your down payment will help accelerate your path to homeownership. It's the little things that count, so start trying to live on a slightly tighter budget if you aren't doing so already. A budget will allow you to save more for your down payment and help you pay down other debts to improve your credit score.

A survey of millennial spending shows, "68% reported that shelter in place orders helped them save for their down payment." Danielle Hale, Chief Economist at realtor.com, also notes:

"If there is any silver lining to the current economic landscape, it's that mortgage rates are hanging around record lows…Additionally, shelter-in-place orders helped many who were fortunate enough to keep their jobs save for a down payment — one of the largest hurdles of buying a home. The combination of low rates and the opportunity to save is enabling many millennials to move up their home buying timeline."

While you don't need to cut all of the extras out of your current lifestyle, making smarter choices and limiting your spending in areas where you can slim down will make a big difference.

Bottom Line

If homeownership is on your dream list this year, take a good look at what you can prioritize to help you get there. To determine the steps you should take to start the process, connect with a local Montague Miller & Co real estate professional today. 

research by Keeping Current Matters

October
28

Making Memories With Fall Leaves

Our Golden Ash Tree dropped its leaves today... yes, all in one day!

When the kids were young, this event called for a festive time beginning with a long day of raking huge amounts of golden leaves into piles. Then it took several more days for pets and children to tire of playing "hide and go seek" in their huge forts. Before it dared to rain on our fluffy mounds, we rolled the leaves onto tarps and dragged them into garden beds where the leaves worked thier magic throughout the winter!

Our children are grown now, with yards of their own. However, on this perfectly beautiful fall day, with a new leaf blower in hand, I took great pleasure in revisiting memories of assorted hand rakes, children's laughter and smiling faces and playful pets.

Best Wishes for pleasant fall days with your family! Here are some tips on how to use your leaves this fall...

Why Are Leaves Valuable to the Gardener?

It's simple. When incorporated into soil, fall leaves:

  • Add nutrients, including phosphorous and potassium
  • Increase the soil's microbial life
  • Boost its water-holding capacity
  • Improve its structure, known as tilth

And did I mention that leaves are free? It takes little effort on your part to get them working for you, so instead of sweeping them to the curb, here are several ways to use leaves in your garden.

Protect Outdoor Potted Plants

When the weather turns cold and potted plants (the hardy ones, not houseplants or tropicals, which must be brought indoors) go dormant, pick a sheltered place on the north, west or east side of your house. Cluster the pots together against the house, ideally beneath an overhang. Pile dried leaves over, under and between the entire grouping of pots.

If the area is windy, corral the pots with chicken wire so the leaves won't blow away. Pile the leaves inches deep, covering the pot and as much of the plant as possible. Under this insulating blanket, both plants and pots should come through the winter just fine. With this method, even terra-cotta pots can stay outdoors, as long as water can't get into them and freeze.

Make Leaf Mold

Leaf mold is simply wet leaves that have decomposed into a rich, black, soil-like substance that makes a perfect mulch for plants. Pile the leaves in a spot where they're out of the way and won't blow away. Or make large (3- or 4-foot) circles of chicken wire, 3 feet high, and pile the leaves in them. Wet the leaves as you go so they'll rot. Turning the pile a few times during the winter will accelerate the process.

Mix Leaves — Shredded or Not — Into a Compost Pile Now, Where They'll Break Down Over Winter

Even better: Stockpile dried leaves, in garbage bags or piled in that out-of-the-way place, for summer. In warm weather there's an abundance of succulent green material (nitrogen) for your compost pile. But to keep the composting process aerobically working, and not rotting, it needs lots of "browns" (carbon), in the form of dried material.

Add Them to Vegetable Beds

You can incorporate whole or chopped leaves into any cleared-out vegetable beds. They will mostly decompose over the winter, then in spring you can mix in whatever is left. If you don't want to see leftover leaves in your beds, shred them first.

Don't have a shredder? A garbage can and a string trimmer will work. Use a 55-gallon garbage can. Fill it three-quarters of the way with leaves. Put the string trimmer in, turn it on and move it through the layers of leaves. Be sure to wear eye and ear protection.

Mow Them Into the Lawn

Then there's the easy way but much less fun for the kids- just mow them with your mower.
Together, shredded leaves and grass clippings add carbon (leaves) and nitrogen (grass) to the soil, reducing your need to add store-bought fertilizers later.

Memories of Fall contributed by Carol Solis, always enjoying the country life and family fun!

October
15

If you have been putting off outside maintenance on your home because of the summer heat, not to worry, the weather has changed! Fall is a great time to do dive into outdoor work and start preparing your house for winter and the cold weather ahead. Here are a few things you should be doing to make sure your home is ready for the changing colder temperatures ahead. 

  1. Clean Your Gutters Make sure your gutters are clear of leaves and debris so water doesn't pool and cause damage to your home. 
  2. Check For Leaks and Water Damage Give your home a good look over to make sure there are no leaks, potential leaks, or water damage that you may have missed. Make sure to look thoroughly at your roof and attic to make sure there are no problems. 
  3. Winterize Your Outdoor Faucets Close off shut-off valves for outside faucets and fully drain the line of all water so they don't freeze and burst when the temperature drops. Consider using a cover on outdoor faucets. 
  4. Maintain Your Home's Heating System Make sure your filters are being replaced regularly and schedule a service check if you are due or haven't done one in awhile. Make sure your heating system is ready to get you through the cold winter months without issues. 
  5. Fireplace Maintenance If you have a fireplace, schedule a chimney sweep to make sure your fireplace is clean and ready to go this winter. Also, make sure to check your flue and vents before using the fireplace for the first time. 
  6. Reverse Your Ceiling Fans Reversing the rotation of your ceiling fans to clockwise makes heating your home more efficient. 
  7. Drain Your Hot Water Heater Draining your hot water heater helps flush sediment and debris which can cause your hot water heater to work less efficiently. Draining the hot water heater yearly may help your system last longer as well. 

If you have questions about anything on this checklist or if you are looking for a professional to help you with any of these services, get in touch with one of our Montague Miller & Co real estate professionals who will help answer your questions.

 

August
14

The much-welcomed summer season can bring with it some unwelcomed problems- humidity and mold! It's always easier to prevent than to remediate, so here are 10 tips to help set you up for success in efforts to combat mold in your home.

1. Control Indoor Climate

Mold problems often emerge during hot, humid summers when you're tempted to play with the air conditioner. But set the thermostat too high, and the air conditioner won't dehumidify your air effectively; set it too low, and you create cold surfaces where water vapor can condense. To prevent moisture problems and maximize energy efficiency, set the thermostat at 78 degrees F.

2. Monitor Humidity

An indoor humidity monitor will help you keep track of moisture levels that, ideally, fall between 35% and 50% relative humidity; in very humid climates, at the height of summer, you may have to live with readings closer to 55%.

But if you reach 60% relative humidity, it's time to look for the source of the added moisture; above 70% relative humidity, certain species of mold can begin growing.

Indoor humidity monitors start at less than $20; more sophisticated models that simultaneously and remotely track several rooms can climb to $200.

3. Eliminate Clutter

Cast a critical eye on household clutter, and pare down your stuff. Clutter blocks airflow and prevents your HVAC system from circulating air. Furniture and draperies that block supply grilles cause condensation. All this moisture creates microclimates in your home that welcome and feed mold growth.

So throw out things you don't love or don't use. Push furniture away from vents and grilles to keep air circulating. On humid, still days, run a couple of fans to keep air moving.

4. Shut Windows and Doors When AC Is On

When you open windows and doors, you let air conditioning escape, waste money, and invite humid air into your cooler home. This causes condensation, which mold loves. So keep doors and windows shut when the AC is humming.

Also, maintain your home at around 80 degrees when you're on vacation or at work. Too often, we bump the thermostat up to 85 degrees or turn off the AC when we're away. This raises temperature and humidity, which creates the ideal home for mold.

5. Properly Size Your AC Unit

Make sure your air-conditioning unit is properly sized for your house. If it's too small, the unit will run constantly, elevating costs but not the temperature; too big, and the unit will constantly start and stop, which wastes energy, too.

Install an HVAC unit that's just right. For guidance, call an HVAC professional or consult Energy Star's square footage/AC capacity chart.

6. Evaluate Your AC

If you get a high humidity reading of 60% or more, make sure your air conditioner is doing its job.

  • Is it set to the proper temperature?
  • Is it cycling on and off periodically?
  • Does it blow cold air when it reaches the set point?
  • Are the coils clean?

Inspect the condensate drain pipe (the narrow white pipe sticking out the side) to make sure it's dripping regularly. If it isn't, the pipe is blocked and water may be accumulating inside the unit -- or on your floor. If you suspect a problem, call your HVAC professional. To prevent blockage and mold buildup, pour a cup of bleach mixed with water down the drain annually.

7. Look for Standing Water

If the air conditioner isn't the issue, search for standing water or chronic dampness that's increasing indoor humidity and providing a lovely environment for mold. 

Check for puddles or dampness around hot water tanks, sump pumps, freezers, refrigerators, basement doors, and windows. Inspect crawl spaces for ground water dampness or foundation leaks.

8. Cover Your Crawl Space Floor

Groundwater seeping into crawl spaces can add gallons of moisture vapor into your house every day. The simplest defense is to cover crawl space floors with a plastic vapor barrier -- 6 mil polyethylene (landscapers' plastic) -- that traps moisture in the ground.

If you regularly crawl in your crawl space, use a heavier plastic that won't rip as easily: Some 20 mil plastic coverings are on the market.

9. Add a Dehumidifier

A dehumidifier removes excess moisture from the air.

You can buy a whole house dehumidifier ($1,100-$1,800) that attaches to your furnace, treats air throughout the house, and connects to a drain so you never have to empty a tank. If you live in a very humid area, a whole-house system is the way to go.

If you have occasional bouts of dampness and musty smells, a portable dehumidifier will suffice ($150-$200).

Most models have an auto-shutoff that keeps the unit from overflowing when the storage tank is full. Some portables have a hose hookup that automatically sends water into a nearby floor drain.

10. Call a Professional

For peace of mind, if you can't find the moisture problem on your own, or how to correct a problem, call a home inspector or indoor air quality consultant. The American Society of Home Inspectors or the Indoor Air Quality Association is a good place to start if you don't have a recommended professional

 

July
23

 

One of the bright spots of the 2020 real estate market is the growth in equity homeowners are experiencing across the country. According to the recently released Homeowner Equity Insights Report from CoreLogic, in nearly every state there was a year-over-year first-quarter equity increase, averaging out to a 6.5% overall gain.

The report notes:

"CoreLogic analysis shows U.S. homeowners with mortgages (roughly 63% of all properties) have seen their equity increase by a total of nearly $590 billion since the first quarter of 2019, an increase of 6.5%, year over year." (See map below):

This means that "In the first quarter of 2020, the average homeowner gained approximately $9,600 in equity during the past year."

That's a huge win for homeowners, especially for those looking to sell their houses and make a move this summer. Having equity to re-invest in your next home is a major force that can make moving a reality, especially while buyers are expressing such a high demand for homes to purchase.

Frank Martell, President and CEO of CoreLogic addresses the potential long-term outlook and how homeowners will likely fare much more positively through the current recession  than many did during the last one:

"Many homeowners will experience a recession during their lifetime, and it is reasonable to compare the current recession to those in the past. But the comparison is not apples to apples — every recession is different. Primary drivers of the Great Recession were an overbuilt housing stock, risky mortgages and the collapse of home prices, creating a massive increase in negative equity that proved difficult to recover from. Today's housing environment has low vacancy and delinquency rates and a large home equity cushion."

Now is a great time to consider leveraging your equity and making a move, especially while buyer interest is high. Reach out to a Montague Miller & Co real estate professional to explore your equity position and help make your next move a reality. 

June
9

Your home will probably be the MOST EXPENSIVE purchase you ever make. 

Both financially and emotionally, a housing choice is a major milestone and a significant transaction. It is essential to work with a professional that you trust and who can guide you expertly through a complicated process. REALTORS® are indisputably the leaders of the real estate industry – we subscribe to a Code of Ethics that ensures clients' priorities are always protected, and we pursue in-depth education on all issues that could affect your ability to buy, sell, or rent a property.

Not every broker, agent or sales associate is a REALTOR®What's the difference between a REALTOR® and a non-REALTOR®? It's simple. It's a commitment to YOU and YOUR BEST INTERESTS. Virginia REALTORS® have pledged to:

  • Protect the individual rights of real estate ownership
  • To be honorable and honest in all dealings
  • To better represent clients by building knowledge and experience
  • To serve our communities

REALTORS® provide expertise, knowledge, and advocacy.

June
2

 

The Benefits of Homeownership May Reach Further Than You Think | MyKCM

More than ever, our homes have become an integral part of our lives. Today they are much more than the houses we live in. They're evolving into our workplaces, schools for our children, and safe havens that provide shelter, stability, and protection for our families through the evolving health crisis. Today,  65.3% of Americans are able to call their homes their own, a rate that has risen to its highest point in 8 years.

June is National Homeownership Month, and it's a great time to reflect on the benefits of owning your own home. Below are some highlights and quotes recently shared by the National Association of Realtors (NAR). From non-financial to financial, and even including how owning a home benefits your local economy, these items may give you reason to think homeownership stretches well beyond a sound dollars and cents investment alone.

Non-Financial Benefits

Owning a home brings families a sense of happiness, satisfaction, and pride.

  • Pride of Ownership: It feels good to have a place that's truly your own, especially since you can customize it to your liking. "The personal satisfaction and sense of accomplishment achieved through homeownership can enhance psychological health, happiness and well-being for homeowners and those around them."
  • Property Maintenance and Improvement: Your home is your stake in the community, and a way to give back by driving value into your neighborhood.
  • Civic Participation: Homeownership creates stability, a sense of community, and increases civic engagement. It's a way to add to the strength of your local area.

Financial Benefits

Buying a home is also an investment in your family's financial future.

  • Net Worth: Homeownership builds your family's net worth. "The median family net worth for all homeowners ($231,400) increased by nearly 15% since 2013, while net worth ($5,000) actually declined by approximately 9% since 2013 for renter families."
  • Financial Security: Equity, appreciation, and predictable monthly housing expenses are huge financial benefits of homeownership. Homeownership is truly the best way to improve your long-term net worth.

Economic Benefits

Homeownership is even a local economic driver.

  • Housing-Related Spending: An economic force throughout our nation, housing-related expenses accounted for more than one-sixth of the country's economic activity over the past three decades.
  • GDP Growth: Homeownership also helps drive GDP growth as the country aims to make an economic rebound. "Every 10% increase in total housing market wealth would translate to approximately $147 billion in additional consumer spending, or 0.8% of GDP, as well as billions of dollars in new federal tax revenue."
  • Entrepreneurship: Homeownership is even a form of forced savings that provides entrepreneurial opportunities as well. "Owning a home enables new entrepreneurs to obtain access to credit to start or expand a business and generate new jobs by using their home as collateral for small business loans."

Consider this...

The benefits of homeownership are vast and go well beyond the surface level. Homeownership is truly a way to build financial freedom, find greater satisfaction and happiness, and make a substantial impact on your local economy. If owning a home is part of your dream, connect with a Montague Miller & Co real estate professional today so you can begin the homebuying process.

Keeping Current Matters June 1, 2020

February
26

With interest rates hovering at near historic lows, now is a great time to look back at where they've been, and how much they've changed over time.

  • According to Freddie Mac, mortgage interest rates are currently hovering near a five-decade low.
  • The impact your interest rate has on your monthly mortgage payment is significant. An increase of just $20 dollars in your monthly payment can add up to $240 per year or $7,200 over the life of your loan. Maybe it's time to lock in now while rates are still low.
November
8

Sellers are already rooted, having lived in their current home an average of 10 years, NAR's report shows. Sellers are equity-rich and rely on real estate professionals for guidance now more than ever before, according to the National Association of REALTORS®' 2019 Profile of Home Buyers and Sellers. Equity gains prove a boon to sellers. Higher home prices have translated into faster appreciation for homeowners.

Snapshot of Todays Sellers

  • Average age: 57
  • Median household income: $102,900
  • Living situation: 72% married; 16% single females
  • Tenure in the home: 10 years (up from 6 years from 2001 to 2008)
  • Median length of time on the market: three weeks
  • Price sold: Median of 99% of the list price
  • Median equity: $60,000 higher than what owner originally paid at purchase
  • Incentives for buyers: 34% offered incentives, such as home warranty policies or assistance with closing costs
  • Most common method for finding a real estate agent: Referrals from friend, neighbor, or relative, as well as repeat business
  • Sellers' high-priority tasks for agents: Market the home (21%); sell the home within a specific time frame (20%); price the home competitively (19%); help fix the home to prepare it for sale (16%); and find a buyer (13%).

 

  • Published in National Association of REALTORS®' 2019 Profile of Home Buyers and Sellers
July
1

Americans Rank Real Estate Best Investment for 6 Years Running!

Real estate has outranked stocks/mutual funds, gold, savings accounts/CDs, and bonds as the best long-term investment among Americans for the last 6 years, according to a May 2019 Gallup survey report!

As you can see...

Stock owners are more positive about real estate than stocks as an investment.

Of the 4 listed, real estate is the only investment you can also live in!

February
13

Studies have shown, the vast majority of Americans believe that homeownership is an important part of their American Dream. The benefits of homeownership are both financial and non-financial reasons (emotional/social). 

As an added bonus, for Americans approaching retirement age, one of the greatest benefits to homeownership is the added net worth they have been able to achieve simply by paying their mortgage!

The Joint Center for Housing Studies at Harvard University focused on homeowners and renters over the age of 65. Their study revealed that the difference in net worth between homeowners and renters at this age group was actually 47.5 times greater, with nearly half their net worth coming from home equity!

Homeowners over the age of 65 are much more financially prepared for retirement and often own their homes outright if they were fortunate enough to purchase their homes before the age of 36.

Their 30 years of mortgage payments have paid off as they gained equity through their monthly payments and as home values appreciated.

It is no surprise that lifelong renters have had a hard time accruing net worth as the latest Census report shows that the Median Asking Rent has been climbing consistently over the last 30 years.

In summary, a homeowner's monthly mortgage payment is a form of 'forced savings' building your net worth with every payment!

August
21

Some are attempting to compare the current housing market to the market leading up to the "boom and bust" that we experienced a decade ago. They look at price appreciation and conclude that we are on a similar trajectory, speeding toward another housing crisis.

However, there is a major difference between the two markets. Last decade, while demand was being artificially created by extremely loose lending standards, a tremendous amount of inventory was coming to the market to satisfy that demand. Below is a graph of the inventory of homes available for sale leading up to the 2008 crash.

A normal market should have approximately 6 months supply of housing inventory. As we can see, that number jumped to over 11 months supply leading up to the housing crisis. When questionable mortgage practices ceased, and demand dried up, there was a glut of inventory on the market which caused prices to drop as there was too much supply and not enough demand.

Today is radically different!

There are those who believe that low mortgage rates have created an artificial demand in the current market. They fear that if mortgage rates continue to rise, some of the current demand will dry up (which is a possibility).

However, if we look at supply again, we can see that the current supply of homes is well below the norm of 6 months.

Bottom Line

We will not have a glut of inventory like we did back in 2008 and home values won't come tumbling down. Instead, if demand weakens, we will return to a normal market (approximately a 6-month supply) with historic levels of appreciation (3.6% annually).

Originally published by Keeping Current Matters August 16, 2018

May
18

You May Be Surprised!

CoreLogic's latest Equity Report revealed that 675,000 US homeowners regained positive equity in their homes in 2017. This is great news for the country, as 95.1% of all mortgaged properties are now in a positive equity situation.

"U.S homeowners with mortgages (roughly 63% of all the properties) have seen their equity increase by a total of $908.4 billion since the fourth quarter 2016, an increase of 12.2%, year over year."

Price Appreciation = Good News for Homeowners

Frank Nothaft, CoreLogic's Chief Economist, explains:

"Home-price growth has been the primary driver of home-equity wealth creation. The CoreLogic Home Price Index grew 6.2 percent during 2017. The largest calendar-year increase since 2013. Likewise, the average growth in home equity was more than $15,000 during 2017, the most in four years."

He also believes this is a great sign for the market in 2018, saying:

"Because wealth gains spur additional consumer purchases, the rise in home-equity wealth during 2017 should add more than $50 billion to U.S. consumption spending over the next two to three years." 

This is great news for homeowners! But, do they realize that their equity position has changed?

A study by Fannie Mae suggests that many homeowners are not aware that they have regained equity in their homes as their investment has increased in value. For example, their study showed that 23% of Americans still believe their home is in a negative equity position when, in actuality, CoreLogic's report shows that only 4.9% of homes are in that position (down from 6.3% in Q4 2016).

The study also revealed that only 37% of Americans believe that they have "significant equity" (greater than 20%) when in actuality, 83% do!

This means that 46% of Americans with a mortgage fail to realize the opportune situation they are in. With a sizeable equity position, many homeowners could easily move into a house (either larger or smaller) that better meets their current needs.

Fannie Mae spoke out on this issue in their report:

"Homeowners who underestimate their homes' values not only underestimate their home equity, they also likely underestimate:1) how large a down payment they could make with their home equity, 2) their chances of qualifying for mortgages, and, therefore, 3) their opportunities for selling their current homes and for buying different homes."

Bottom Line

If you are one of the many Americans who is unsure of how much equity you have built in your home, don't let that be the reason you fail to move on to your dream home in 2018! Meet with a Montague Miller & Co REALTOR® today who can help you evaluate your situation and assist you along the way!

March
5

Photo by Steve Zamek

Invite a Family of Bluebirds to Share Your Yard

A peaceful farm in the country, just minutes east of Charlottesville, is home to our horses and an ever growing population of deer, squirrels, foxes, groundhogs, beaver, rabbits and just about every bird native to Central Virginia.  Even Canada geese who fly to and from neighboring ponds call it home, as well as titmice, house wrens, chickadees, and nuthatches, woodcocks, woodpeckers and especially our good friends, Eastern Bluebirds.

This seasonally warm first weekend in March beckoned bluebird scouts back for a brief visit in quest of making sure last year's nest boxes had been cleaned and readied for their return migration from North Carolina later this month.

But you don't have to live on a farm or even have much acreage to invite a family of bluebirds to share your yard, even if you live in town. Birds adapt quite well, in fact, "If You Build It, They Will Come"!

In more developed areas, bluebirds are likely to be found around large open lawns, quiet roadways, old railroad paths, parks, cemeteries, golf courses, new housing developments, and neighborhoods on the edge of cities. They usually don't hang out in heavy woods or city centers. So, rest assured, your yard will do just fine! But beware… your invited guests may return year after year!

When installing a bluebird house, consider:

  • Location: While scattered trees or shrubs are fine, choose a fairly open spot away from woods.
  • Mounting: A pole or fence post is ideal, especially if you can add a baffle to keep out predators such as cats, snakes, and raccoons. Mount the house at around 5' high, so that you can easily reach it to monitor and clean.
  • Orientation: Ideally, face the opening toward a safe perch, such as a small tree or fence. Also try to face it away from prevailing winds, and away from midday sun in hot climates. If you are installing the house near a road, face it parallel to the road, so the birds won't fly out directly into traffic.
  • Spacing: Bluebirds are competitive and usually claim two or three acres, so be sure their houses are widely spaced. Ideally, Eastern bluebird houses should be 100-150 yards apart.
  • Organic Garden: Since bluebirds eat insects, they can provide natural insect control, but avoid areas with heavy application of pesticides.

 The Challenge of Competitors:

One of the biggest challenges for bluebirds is the threat of other birds competing for the nesting space. European starlings and house swallows pose the largest threat to bluebird nesting, and these non-native birds will attack bluebird nests and destroy the eggs.

You can reduce the risk by making sure your bluebird house has the right size opening by purchasing (try Tractor Supply, Lowes or Amazon) or making it yourself using bluebird specific dimensions. Here is a link to How To Build Bluebird boxes by Audubon's specifications.

These gorgeous birds are so sweet and charming, swooping from tree to post to guard their nests and checking you out. And if their stunning beauty weren't enough, they're also great for natural summer insect control!

Enjoy your new neighbors and many thanks for helping reestablish our Eastern bluebird's diminishing natural habit! 

By Carol Solis, Montague Miller & Co. When not assisting REALTORS® with their marketing needs, Carol can be found "on the farm" with her family enjoying everything country living has to offer.

 

August
21

 

If you imagine playing golf in cool crisp mountain air in the middle of summer, or walking with your clubs over easy rolling picturesque hills, look no further. We have it all here in Central Virginia!

Golf magazines have ranked Williamsburg and the Virginia mountains among the 50 best golf destinations in the world. From Virginia's beaches to the Allegany Mountain tops, you will encounter a diverse menu of golf courses in the state's list of 220 public courses.

Central Virginia has some of the country's best classic designs and modern layouts. One of Virginia's great mountain courses is 40 miles west of Charlottesville, The Cascades Course at the Omni Homestead Resort in Hot Springs.  The Cascades is regarded as one of the finest mountain golf course destinations in the country and offers challenging links set against the backdrop of Virginia's breathtaking Allegheny Mountains.  American professional golfer and one of the top players in the world for four decades, Sam Snead,  launched his career on this well known Virginia mountain golf course. 

A few minutes east Charlottesville is Keswick Hall's Full Cry, a modern wonder designed by golf course designer, Pete Dye. Full Cry combines modern golf course architecture and the bucolic hunt country of Virginia. The brand new 18 traverses the scenic rolling terrain and appeals to every level of golfer. 

One of the area's most enjoyable courses just 20 minutes east of Charlottesville, is Spring Creek Golf Club, rated by Golf Week as the "Top Ranked Residential Public Course in Virginia."

Golf is played throughout Virginia's scenic rural areas and quaint towns and no matter where you find yourself, it's a sure bet you're just a few miles from a great golf experience. Plus, there is plenty to do beyond the course. Be sure to ask your Montague Miller REALTOR® where to start!

Take your time and enjoy the rolling hills and cool mountain air while experiencing favorite everyday links treasures in and around Charlottesville!

Charlottesville area: Meadowcreek, Farmington, Birdwood Golf Course at Boar's Head, Full Cry and Glenmore in Keswick, Lake Monticello in Palmyra, Old Trail in Crozet, Spring Creek in Gordonsville, The Highlands in Ruckersville, Green Hills in Standardsville, Waynesboro Golf  in Waynesboro.

Amherst County: Poplar Grove, Shadow Ridge, Winton in Amherst, Colonial Hills and Ivy Hill in Forest, The Vista Links and Glen Maury Park in Buena Vista, Devils Knob in Wintergreen

Madison and Orange County: Greene Hills in Standardsville, The Highlands in Ruckersville, Shoolhouse Nine in Sperryville and Caverns in Luray, Tanyard in Louisa, and Meadows Farms in Locust Grove

 

March
16

hidden home equity

 

CoreLogic released their 2015 2nd Quarter Equity Report which revealed that 759,000 properties had regained equity in the last quarter. That means that 91% of allmortgaged properties (approximately 45.9 million) are now in a positive equity position. Anand Nallathambi, president and CEO of CoreLogic, reported:

"For much of the country, the negative equity epidemic is lifting. The biggest reason for this improvement has been the relentless rise in home prices over the past three years which reflects increasing money flows into housing and a lack of housing stock in many markets."

Obviously, this is great news for the financial situation of many homeowners.

But, do they realize their equity position has changed?

recent study by Fannie Mae suggests that many homeowners are unaware that their equity position has changed…in some cases dramatically. For example, their study showed that 23% of Americans still believe their home is in a negative equity position when, in actuality, only 9% of homes are in that position.

The study also revealed that, though 69% of homes had "significant equity" (greater than 20%), only 37% of Americans realize it.

Significant Equity | Keeping Current Matters

This means that 32% of Americans with a mortgage fail to realize the opportune situation they are in. With a sizeable equity position, many homeowners could easily move into a housing situation that better meets their current needs (moving to a larger home or downsizing).

Fannie Mae spoke out on this issue in their report:

"Homeowners who underestimate their homes' values not only underestimate their home equity, they also likely underestimate 1) how large a down payment they could make with their home equity, 2) their chances of qualifying for mortgages, and, therefore, 3) their opportunities for selling their current homes and for buying different homes."

Bottom Line

Every homeowner should be aware of the true equity in their house and also realize the opportunities that go along with it. If you are unsure of the savings you currently have built up in your home, contact a real estate professional to help ascertain that number. You may be surprised.

March
11

Montague Miller Real Estate Feb 2016 Graphic

 
March
16

difference between cost and price buying a home

 

As a seller, you will be most concerned about 'short term price' – where home values are headed over the next six months. As a buyer, you must be concerned not about price but instead about the 'long term cost' of the home.

The Mortgage Bankers Association (MBA), the National Association of RealtorsFannie Mae and Freddie Mac all projected that mortgage interest rates will increase by about three-quarters of a percentage point over the next twelve months.

According to CoreLogic's most recent Home Price Index Report, home prices will appreciate by 5.2% over the next 12 months.

What Does This Mean as a Buyer?

Here is a simple demonstration of what impact an interest rate increase would have on the mortgage payment of a home selling for approximately $250,000 today if home prices appreciate by the 5.2% predicted by CoreLogic over the next twelve months:

Cost of Waiting | Keeping Current Matters

March
21

 
March
30

home prices in the next five years

 

Today, many real estate conversations center on housing prices and where they may be headed. That is why we like the Home Price Expectation Survey.

Every quarter, Pulsenomics surveys a nationwide panel of over one hundred economists, real estate experts and investment & market strategists about where they believe prices are headed over the next five years. They then average the projections of all 100+ experts into a single number.

The results of their latest survey:

Home values will appreciate by 3.9% by the end of 2015, 3.4% in 2016 and 3.1% in each of the following four years (as shown below). That means the average annual appreciation will be 3.2% over the next 5 years.

Projected Mean Appreciation | Keeping Current Matters

The prediction for cumulative appreciation rose from 18.1% to 21.6% by 2020. Even the experts making up the most bearish quartile of the survey still are projecting a cumulative appreciation of 13.8%.

Cumulative House Appreciation | Keeping Current Matters

Bottom Line

Individual opinions make headlines. We believe the survey is a fairer depiction of future values.

April
13

buying home less expensive than renting title graphicIn the Rent vs. Buy Report from Trulia, they explained that homeownership remains cheaper than renting with a traditional 30-year fixed rate mortgage throughout the 100 largest metro areas in the United States.

The updated numbers actually show that the range is from an average of 16% in Honolulu (HI), all the way to 55% in Sarasota (FL), and 35% Nationwide!

The other interesting findings in the report include:

  • Interest rates have remained low and even though home prices have appreciated around the country, they haven't greatly outpaced rental appreciation. "In the past year, these two trends have made homeownership even more affordable compared with renting."
  • Some markets might tip in favor of renting if home prices increase at a greater rate than rents and if – as most economists expect – mortgage rates rise, due to the strengthening economy.
  • Nationally, rates would have to rise to 10.6% for renting to be cheaper than buying – and rates haven't been that high since 1989.

Bottom Line

Buying a home makes sense socially and financially. Rents are predicted to increase substantially in the next year, lock in your housing cost with a mortgage payment now.

February
17

equity matters freddie mac title graphicThere are many reasons, both financial and non-financial, that homeownership remains an important part of the American Dream. One of the biggest reasons is the fact that it helps build family wealth. Recently, Freddie Mac wrote about the power of home equity. They explained:

"In the simplest terms, equity is the difference between how much your home is worth and how much you owe on your mortgage. You build equity by paying down your mortgage over time and through your home's appreciation. In a nutshell, your money is working for you and contributing toward your financial future."

They went on to show an example where a person bought a home for $150,000 with a down payment of 10% ($15K), resulting in a loan amount of $135,000. The buyer secured a 30-year fixed-rate mortgage at 4.5% with a monthly mortgage payment of $684.03 (not including taxes and insurance).

The chart below demonstrates the home equity built after 7 years of making mortgage payments and assuming the historic national average of 3% per year home appreciation:

Home Equity Earned | Keeping Current Matters

And that number continues to build as you continue to own the home.

Merrill Lynch published a report earlier this year that showed the average equity homeowners have acquired by certain ages.

Average Home Equity | Keeping Current Matters

Bottom Line

Home equity is important to building wealth as a family. Referring to the first scenario above, Freddie Mac explained:

"Now, if you continued to rent, and made the same payment of $684.03 per month, you'd have zero equity and no means to build it. Building equity is a critical part of homeownership and can help you create financial stability."

Put your housing cost to work for you and your family. Meet with a real estate professional today to explore your options.

June
15

rent vs buy either way you are paying a mortgage mm blog titleThere are some people that have not purchased a home because they are uncomfortable taking on the obligation of a mortgage. Everyone should realize that, unless you are living with your parents rent free, you are paying a mortgage – either your mortgage or your landlord's.

As The Joint Center for Housing Studies at Harvard University explains:

"Households must consume housing whether they own or rent. Not even accounting for more favorable tax treatment of owning, homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord plus a rate of return.

That's yet another reason owning often does—as Americans intuit—end up making more financial sense than renting."

Christina Boyle, a Senior Vice President, Head of Single-Family Sales & Relationship Management at Freddie Mac, explains another benefit of securing a mortgage vs. paying rent:

"With a 30-year fixed rate mortgage, you'll have the certainty & stability of knowing what your mortgage payment will be for the next 30 years – unlike rents which will continue to rise over the next three decades."

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

The graph below shows the widening gap in net worth between a homeowner and a renter:

Increasing Gap in Family Wealth | Keeping Current Matters

Bottom Line

Whether you are looking for a primary residence for the first time or are considering a vacation home on the shore, owning might make more sense than renting with home values and interest rates projected to climb.

January
6

mortgage interest rate over 4 percent title graphicMortgage interest rates, as reported by Freddie Mac, have increased over the last several weeks. Along with Freddie MacFannie Mae, the Mortgage Bankers Association and the National Association of Realtors are all calling for mortgage rates to continue to rise over the next four quarters.

This has caused some purchasers to lament the fact they may no longer be able to get a rate less than 4%. However, we must realize that current rates are still at historic lows.

Here is a chart showing the average mortgage interest rate over the last several decades.

Historic Mortgage Rates By Decade | Keeping Current Matters

Bottom Line

Though you may have missed getting the lowest mortgage rate ever offered, you can still get a better interest rate than your older brother or sister did ten years ago; a lower rate than your parents did twenty years ago and a better rate than your grandparents did forty years ago.

 
June
29

title graphic montague miller homeowner net worth great than renterEvery three years the Federal Reserve conducts a Survey of Consumer Finances in which they collect data across all economic and social groups. The latest survey, which includes data from 2010-2013, reports that a homeowner's net worth is 36 times greater than that of a renter ($194,500 vs. $5,400).

In a recent Forbes article the National Association of Realtors' (NAR) Chief EconomistLawrence Yun predicts that in 2016 the net worth gap will widen even further to 45 times greater.

The graph below demonstrates the results of the last two Federal Reserve studies and Yun's prediction:

Increasing Gap in Family Wealth | Keeping Current Matters

Put Your Housing Cost to Work For You

Simply put, homeownership is a form of 'forced savings'. Every time you pay your mortgage you are contributing to your net worth. Every time you pay your rent, you are contributing to your landlord's net worth.

The latest National Housing Pulse Survey from NAR reveals that 80% of consumers believe that purchasing a home is a good financial decision. Yun comments:

"Though there will always be discussion about whether to buy or rent, or whether the stock market offers a bigger return than real estate, the reality is that homeowners steadily build wealth. The simplest math shouldn't be overlooked."

Bottom Line

If you are interested in finding out if you could put your housing cost to work for you through homeownership, meet with a real estate professional in your area who can guide you through the process.