Home Buying Strategies 2020

home buying strategies
Home Buyers (infograpic from nar.realtor)

Experts’ home sale inventory forecasts for the spring echo expectations from recent years. And in some regions, it could be a very competitive home buyer market.  Affordability is likely to be a major issue according to CoreLogic’s chief economist Frank Nothaft (Peering into the Housing and Mortgage Outlook with 20/20 Vision; corelogic.com; December 5,2019).  The CoreLogic Home Price Index predicts that 2020 home prices will increase more than they did during 2019.  Lower priced homes will likely appreciate at a much higher rate than upper bracket and luxury homes.  Buyers should have their home buying strategies in mind when looking for homes.

Many first-time home buyers may become discouraged and decide to continue renting.  However, renting is expected to be less affordable in 2020.  CoreLogic’s Single-Family Rent Index indicates that rents are increasing at double the rate of inflation.  So, although renting may seem like the default fallback, it may be the more expensive option.  A combination of increasing rent, a continuing good economy, and historically low mortgage rates are expected to be the catalyst for home buyers to get into the market.

If you’re a home buyer, the 2020 housing market outlook may sound daunting. Although you may be anticipating something akin to the Game of Thrones this spring, take heart because planning and having home buying strategies can help your home buying success.

Talk to a mortgage lender.  One of the worst feelings is finding out a seller took another offer because your offer didn’t have a financing letter.  Not identifying a lender and securing an approval letter before looking at homes is a strategic error, especially if you need to move fast on making an offer. Having awesome credit scores, a good income, and savings in the bank, means nothing to a home seller unless a mortgage professional confirms this with a mortgage approval letter. 

Work out a home buying budget.  Consult financial professionals, such as your financial planner or CPA to review income, assets, and debts to determine a realistic housing budget.  In deciding on your housing budget, consider monthly mortgage payments, HOA or condo fees, property tax, insurance, utilities, maintenance, etc.  Your loan officer can help determine a home price range based on your monthly housing budget.  Although, your home buying budget may be less than the maximum mortgage amount for which you qualify, don’t be tempted to go beyond your budget.  Sticking to your budget can help you avoid “buyer’s remorse.”  

Although the national housing market is portrayed as very competitive for home buyers, CoreLogic’s Nothaft suggests that local neighborhood markets can differ widely.  As a home buyer, keep an open mind and consider a wider home search area.  Consider all your home buying options, including new construction, and the possibility of doing an FHA 203k renovation

One of the most important home buying strategies is to choose your Realtor carefully, as not all agents are the same.  Hookup with an experienced full-time real estate agent.  Empirical research studies indicate that a seasoned, veteran agent can make a positive impact on your home purchase.  Experienced agents understand the nuances of negotiating and can make your home buying experience more efficient.  Full-time agents know the market, which is an asset during your home search.  Don’t just rely on the first agent you meet at an open house, or finding an agent on the internet.  Talk to several (or more) Realtors to determine if they’re a good fit for your goals.  Make sure the agent you hire has your best interests in mind when searching homes and negotiating. 

Original article is published at https://dankrell.com/blog/2020/01/10/home-buying-strategies-2020/

By Dan Krell
Copyright© 2019

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Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.

Holiday Home Safety

holiday home safety
Holiday home safety (ifographic from cpsc.gov)

For some, the holiday season is a time of enjoying family and friends.  For others it’s a time of giving.  Regardless, many agree that it’s a time we wish each other joy and happiness.  Here’s some thoughts on holiday home safety keeping your holiday safe and enjoyable. 

Holiday home safety includes protecting your home from fire.  According to the Consumer Product Safety Commission (cpsc.gov), from 2014 to 2016 there were “about 100 Christmas tree fires and about 1,100 candle fires that resulted in 10 deaths, 150 injuries, and nearly $50 million in property damage each of those years.”  If you have a live tree, make sure it has plenty of water so it doesn’t become potential tinder.  If you have an artificial tree, make sure it’s “fire resistant” (check the label).  Keep your tree away from the fire place and candles.  If you’re using candles, keep an eye on them as they burn.  Make sure they are away from curtains or other flammable items.  Remember to blow out candles when leaving the room.  To lower the fire risk, consider using “flameless” candles.  When using holiday lights, check to make sure they are safety rated by a “nationally-recognized testing laboratory.”  Throw out your old lights if they have: cracked sockets, frayed insulation, bare wires, and/or loose connections.  Make sure your holiday decorations are flame retardant. 

Holiday home safety is also about avoiding accidents. More stats from the Consumer Product Safety Commission indicate that the potential for accidents increase during the holiday season.  Consider that there were five holiday decorating deaths during the 2018 holiday season.  There were about 18,100 holiday “decorating-related injuries” during the 2017 holiday season.  Since many holiday injuries are the result of falls, make sure you use a proper ladder or step-stool when decorating.  Also consider having a helper to help stabilize the ladder or step-stool. 

Children are typically at high risk for injuries, especially during the holiday season.  The Centers for Disease Control and Prevention (cdc.gov) recommends to keep an eye on children during the festive season.  During the holidays, be mindful of age appropriate toys, some toys can be choking hazards to young children. 

Holiday season is prime time for thieves, so don’t make it easy for them.  Secure your home just as you would any other time of the year.  Security experts concur that it typically takes sixty seconds for a burglar to break into the average home. Because their risk of being caught in the act increases with every second, they will likely move to the next house if they can’t get in within a minute or two.

Don’t forget to deploy your deterrents and other preventative measures to discourage burglars from breaking-in, especially if you’re traveling.  Besides the usual measures, there are other precautions to consider during the holidays.  Don’t allow would-be thieves see your presents, place them out of site.  Be aware that trash and recycling can also reveal your new and expensive items.

If you’re expecting deliveries when you are not at home, plan ahead to thwart porch pirates.  Consider having your packages delivered at work or to a neighbor who is home during the day.  Use parcel lockbox that keeps the package out of site and locked away.  Install a camera to see front door activity.

More information about holiday home safety can be obtained from the CPSC, CDC, and your local government agencies (such as the Montgomery County Fire and Rescue Service, and the Montgomery County Police Department).

Original article is published at https://dankrell.com/blog/2020/01/02/holiday-home-safety/

By Dan Krell
Copyright© 2019

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Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.

Winter Home Cleaning

winter home cleaning
” A pack rat’s guide to shredding ” (infographic from ftc.gov)

Each spring, we talk about cleaning our homes after cocooning during the winter months.  The American Cleaning Institute (ACI) publishes an annual survey that reveals how many of us actually do a “spring cleaning,” as well as cleaning priorities and outcomes.  However, a winter home cleaning can make your spring a breeze.

According to ACI’s stats from their 2019 survey (cleaninginstitute.org), 41 percent of respondents don’t remember the last time cleaning their refrigerator (4 percent respondents never cleaned their refrigerator).   Would you be surprised to know that 23 percent of respondents don’t remember the last time they cleaned their bed linens?  Another 16 percent can’t remember the last time they cleaned their guest bathroom toilet.  Maybe not a surprise is the 47 percent who don’t remember cleaning their ovens, and the 20 percent who never cleaned their washing machines.   Of those who clean, 25 percent believe they don’t clean well, and about 33 percent don’t clean everything in their homes. 

Nonetheless, the ACI reported 77 percent (their highest number recorded) of respondents indicated they would be doing a spring cleaning.  A majority of respondents indicated their cleaning will take five or more days.  Windows take top priority during the spring cleaning, followed by closets/drawers, ceiling fans, curtains, and carpets.  Why is spring cleaning a big deal?  ACI Senior Vice President of Communications Brian Sansoni stated, “Clearing out the clutter, getting rid of dust and adding some shine. That’s why spring cleaning is such an intuitive activity for so many Americans.  We clean things that might not otherwise get cleaned all year long, and we feel happy and satisfied with the results.” 

But don’t wait for spring.  Any winter home cleaning you do is beneficial, and may reduce the load during your spring cleaning.  Additionally, cleaning tasks you do during the winter may also positively affect your health and wellbeing. 

One of the best ways to clean is to prevent winter weather dirt and debris from entering your home.  Having a large enough heavy-duty entrance mat can help with removing dirty/wet shoes and boots at the door.  Consider placing a shoe tray near the front door to place dirty/wet shoes to dry. 

Rather than letting dust build up, schedule periodic dusting.  Focus on a “healthy home” during your winter home cleaning. Experts recommend removing dust to relieve allergy and sinus symptoms.  Dust can build up around door jambs, window sills, hanging pictures, under furniture and appliances.  Vacuuming carpets will remove dust and dirt from carpets.  Don’t forget to dust hanging fixtures, such as chandeliers and ceiling fans.  Don’t forget to change/clean your bed linens to reduce dust mites. 

Think hygiene during winter cleaning.  Even though it may not be used often, consider deep cleaning the guest bathroom.  Odors can remain in trash cans (especially in the kitchen), sanitizing trash cans may eliminate odors and reduce bacterial growth. 

We to spend more time indoors during the winter months, and our inertia allows us to collect things.  But rather than letting clutter build up for spring, consider beginning your decluttering early.  Decluttering is one of those tasks that can be overwhelming and easily put off for another time.  But if you think about decluttering logically and create a reasonable plan, your winter decluttering can save you time in the spring.  Decluttering is one of those tasks that can be life changing.  Some experts believe that decluttering is somewhat of a portal to better health, as it can promote feelings of wellbeing and energy.

Original article is published at https://dankrell.com/blog/2019/12/29/winter-home-cleaning/

By Dan Krell
Copyright© 2019

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Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.

More Homes for Buyers?

more homes for buyers
Strength of the housing market

If you’ve been following the housing market, you know that housing experts have been declaring a home sale inventory shortage since 2013.  In NAR’s November 27th Pending Home Sales Index release, NAR chief economist Lawrence Yun partly blamed October’s 1.7 percent decline to “inadequate levels of inventory across the country.”  He stated “There is no shortage of buyers seeking homes, but a lack of available units continues to drag down the nation’s housing market and overall economy.” Essentially, there needs to be more homes for buyers.

However, if reporting holds true, the home sale shortage may be ending soon.  The most recent housing permits report indicates that more new homes will be built, while media attention to a “silver tsunami” suggest more homes for buyers will hit the market.

October’s increased housing permits suggest an increase in new homes to be built next year.  According to a recent report, housing permits reached a post-recession high (Housing Permits Surge to Postrecession High; magazine.realtor; November 20, 2019).  Although permits are just an estimate for future construction, it is nonetheless relevant because, like pending home sales, it gives a hint of the potential for future home sales.  Single family permits reached 1.46 million units during October, which is an increase of about 5 percent.  October was the second-best month for housing starts this year.

Lawrence Yun, NAR chief economist, stated, “At 1.46 million units on an annualized basis, housing permits are nearly to the level needed for the country over the long haul.  Since new-home construction kicks off the chain reaction of people trading up and trading down by buying new and selling their existing homes, more housing inventory will surely show up in the market next year.” 

Robert Dietz, the National Association of Homebuilders chief economist, commented about demand for new homes, “The increase in buyer demand is also being driven by lower mortgage rates, which has been helping to lift the pace of single-family permits since April. Solid wage growth, healthy employment gains, and an increase in household formations are also contributing to the steady rise in home production.”

What about existing homes?  According to Zillow Research, there will be about twenty million additional existing homes that will be for sale through the mid-2030’s (The Silver Tsunami: Which Areas will be Flooded with Homes once Boomers Start Leaving Them; Zillow.com; Nov. 22, 2019).  These home owners are 60 years-old or older, and will eventually sell their home because of health, retirement, relocation, and death.  There will be regional differences depending on the number of senior home owners.  Zillow indicates that the Tampa and Tucson markets are likely to be affected most.

The “silver tsunami” is not a new concept.  It was postulated in a 2012 NAR article The Boomer Effect.  The article surmised that since Baby Boomers began turning 65 on January 1, 2011, there would more homes for buyers and that the inventory would overwhelm the market.  However, we are still waiting for the tsunami. As it turned out, the post-recession economy significantly changed, as did attitudes toward housing.  Multi-generational households increased, and seniors are aging in place.

Will the anticipated increased number of new and existing homes to be sold provide the boost to home sales numbers?  Maybe, if the added inventory is attractive to home buyers.  It has been clear that home buyers will opt for value in a turn-key home.  Home sellers need to keep in mind that home buyers are looking for affordable quality homes.

Original article is published at https://dankrell.com/blog/2019/12/20/more-homes-for-buyers/

By Dan Krell
Copyright© 2019

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Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.

New Home or Resale for You?

new home or resale
First time home buyers (infographic from nar.realtor)

No matter what items a home buyer has on their wish list, they are typically constrained by the home price.  As a result, the buyer is often limited in their choices.  Accordingly, buyers prioritize home features and benefits when comparing homes. Deciding between a new home or resale becomes a part of the buying process.

Nonetheless, home buyers often have a choice between a new home or resale.  Besides the allure of contemporary design and modern building materials, the benefit of new construction is the minimal maintenance during the first year of ownership.  Although many home buyers desire to buy new construction, the combination of their budget and criteria lead them to a resale home. 

A resale refers to a home that is being sold by a home owner, rather than the builder.  The average age of a resale home can vary depending on the location.  It’s not uncommon to find a resale in a new home development.  However, when resale comes to mind, most think of homes where they grew up.

Although the home buying budget is a main consideration, there are other reasons why home buyers decide to purchase a resale rather than new construction.  One of the main reasons, as stated above, is that the resale fits their criteria for price, location, size, etc.  It’s typical to get more house and yard when purchasing an older home, when compared to a new home of similar price.  Resale homes tend to be located in established neighborhoods, whereas new home developments’ amenities are often not yet completed. 

Regardless, some home buyers are attracted to older homes.  It seems as if there is a correlation between a home’s age and the charm it exudes.  The older the home, the more likely a home buyer is captivated by its charm.  When explaining a home’s “charm,” buyers usually describe a combination of style and craftsmanship.  They often refer to the saying “they don’t build them the way they used to.” 

Although most home buyers want a turn-key home, some buyers find opportunity in older homes that are in need of repair or updating.  These buyers feel they can create a home that meets their needs and lifestyle without breaking their budget. 

When buying a resale, don’t expect the home to be perfect, even if the home is relatively new or has been renovated.  There is no getting around the fact that living in a home promotes wear-and-tear.  Consider that a home is made of many components each having a limited life span.  Regular maintenance can prolong a home’s life.  However, you will eventually have to replace components and systems. 

Resale homes are not maintenance free, and deferring maintenance creates costlier repairs.  Experts recommend that you have a repair budget.  You shouldn’t just budget for regular maintenance and repairs, you should also budget for future updating.  Ask your agent about a home warranty that can help you with repairs on a fixed service-call fee.  Get a thorough home inspection.  Home building has changed dramatically over the last one-hundred years, so make sure you hire a licensed inspector that is knowledgeable with the engineering and materials in your home.  (Keep in mind that home inspectors are not perfect, so there may be a chance of finding conditions that eluded the inspection.)  Even if the home appears to be in good condition, the inspection is likely to find items in need of repair.  You and your agent can decide on the best negotiating strategy of inspection repairs. 

Original article is published at https://dankrell.com/blog/2019/12/15/new-home-or-resale-for-you/

By Dan Krell
Copyright© 2019

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Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.