How Is Remote Work Changing Homebuyer Needs?

How Is Remote Work Changing Homebuyer Needs? | Simplifying The Market

With more companies figuring out how to efficiently and effectively enable their employees to work remotely (and for longer than most of us initially expected), homeowners throughout the country are re-evaluating their needs. Do I still need to live close to my company’s office building? Do I need a larger home with more office space? Would making a move to the suburbs make more sense for my family? All of these questions are on the table for many Americans as we ride the wave of the current health crisis and consider evolving homeownership needs.

According to George Ratiu, Senior Economist for realtor.com:

“The ability to work remotely is expanding home shoppers’ geographic options and driving their motivation to buy, even if it means a longer commute, at least in the short term…Although it’s too early to tell what long-term impact the COVID-era of remote work will have on housing, it’s clear that the pandemic is shaping how people live and work under the same roof.” 

Working remotely is definitely changing how Americans spend their time at home, and also how they use their available square footage. Homeowners aren’t just looking for a room for a home office, either. The desire to have a home gym, an updated kitchen, and more space in general – indoor and outdoor – are all key factors motivating some buyers to change their home search parameters.

A recent realtor.com-HarrisX survey indicates:

“In a June poll of 2,000 potential home shoppers who indicated plans to make a purchase in the next year, 63% of those currently working from home stated their potential purchase was a result of their ability to work remotely, while nearly 40% [of] that number expected to purchase a home within four to six months and 13% said changes related to pandemic fueled their interest in buying a new home.

Clearly, Americans are thinking differently about homeownership today, and through a new lens. The National Association of Home Builders (NAHB) notes:

“New single-family home sales jumped in June, as housing demand was supported by low interest rates, a renewed consumer focus on the importance of housing, and rising demand in lower-density markets like suburbs and exurbs.”

Through these challenging times, you may have found your home becoming your office, your children’s classroom, your workout facility, and your family’s safe haven. This has quickly shifted what home truly means to many American families. More than ever, having a place to focus on professional productivity while many competing priorities (and distractions!) are knocking on your door is challenging homeowners to get creative, use space wisely, and ultimately find a place where all of these essential needs can realistically be met. In many cases, a new home is the best option.

In today’s real estate market, making a move while mortgage rates are hovering at historic lows may enable you to purchase more home for your money, just when you and your family need it most.

Bottom Line

If your personal and professional needs have changed and you’re ready to accommodate all of your family’s competing priorities, let’s connect today. Making a move into a larger home may be exactly what you need to set your family up for optimal long-term success.

Why Homeowners Have Great Selling Power Today

Why Homeowners Have Great Selling Power Today | Simplifying The Market

We’re sitting in an optimal moment in time for homeowners who are ready to sell their houses and make a move this year. Today’s homeowners are, on average, staying in their homes longer than they used to, and this is one factor driving increased homeowner equity. When equity grows, selling a house becomes increasingly desirable. Here’s a breakdown of why it’s a great time to capitalize on equity gain in today’s market.

As average homeowner tenure lengthens and home prices rise, equity, a form of forced savings, can be applied forward to the purchase of a new home. CoreLogic explains:

“Over the past 10 years, the equity position of homeowners has positively changed as a result of more than eight years of rising home prices. As the economy climbed out of the recession in the first quarter of 2010, 25.9% or 12.1 million homes were still underwater, compared to the first quarter of 2020 when the negative equity share was at 3.4%, or 1.8 million properties. Borrowers have seen an aggregate increase of $6.2 trillion in home equity since the first quarter of 2010 and the average homeowner has gained about $106,100 in equity.”

Increasing equity is enabling many homeowners who are ready to sell their current houses today to sell for an increased profit, and then reinvest their earnings in a new home. According to the Q2 2020 U.S. Home Sales Report from ATTOM Data Solutions, in the second quarter of 2020:

Home sellers nationwide realized a gain of $75,971 on the typical sale, up from the $66,500 in the first quarter of 2020 and from $65,250 in the second quarter of last year. The latest figure, based on median purchase and resale prices, marked yet another peak level of raw profits in the United States since the housing market began recovering from the Great Recession in 2012.”

If you’ve been taking a closer look at your house recently and are thinking it might be time for you to make a move, determining your equity position is a great place to start. Understanding how much equity you’ve earned over time can be a key factor in helping you realize the potential profits in your real estate investment and move toward your next homeownership goal.

Bottom Line

With average home sale profits growing, it’s a great time to leverage your equity and make a move, especially while the inventory of houses for sale and mortgage rates are historically low. If you’re considering selling your house, let’s connect today so you can better understand your home equity position and take one step closer to the home of your dreams.

Today’s Buyers Are Serious about Purchasing a Home

Today’s Buyers Are Serious about Purchasing a Home | Simplifying The Market

Today’s homebuyers are not just talking about their plans, they’re actively engaged in the buying process – and they’re serious about it. A recent report by the National Association of Home Builders (NAHB) indicates:

“…. Of American adults considering a future home purchase in the second quarter of 2020, about half (49%) are not simply planning it, they are actively engaged in the process to find a home. That is a significantly higher share than the comparable figure a year ago (41%), which suggests that the COVID-19 crisis and its accompanying record-low mortgage rates have converted some prospective buyers into active buyers.”

Today’s Buyers Are Serious about Purchasing a Home | Simplifying The MarketIt’s no surprise that buyers are out in full force today. Many Americans now need more space to work from home, and the current low mortgage rates are providing an extra boost of motivation to enter the housing market.

If you’re considering selling your house, know that today’s buyers are serious about making a move. Your opportunity to sell your house in a market with high demand is growing, especially as more millennials enter the housing market too. The same report also notes:

Of Millennials planning a home purchase in the next year, 57% are already actively searching for a home.”

Odeta Kushi, Deputy Chief Economist at First American, explains:

“When breaking down house-buying power by educational attainment for millennials in 2019, we find that the higher the education, the higher the household income, and the higher the house-buying power. In 2019, median house-buying power for millennials increased 16 percent relative to 2018.”

As demand for homes to buy grows and more millennials enter the market with growing buying power, the opportunity to sell your house grows too.

Bottom Line

Today’s buyers are serious ones and more millennials are helping to fuel that charge. So, if you’re considering selling your home, let’s connect today to determine your next steps in the process while buyers are actively looking.

Experts Weigh-In on the Remarkable Strength of the Housing Market

Experts Weigh-In on the Remarkable Strength of the Housing Market | Simplifying The Market

America has faced its share of challenges in 2020. A once-in-a-lifetime pandemic, a financial crisis leaving millions still unemployed, and an upcoming presidential election that may prove to be one of the most contentious in our nation’s history all continue to test this country in unimaginable ways.

Even with all of that uncertainty, the residential real estate market continues to show great resilience. Here’s a look at what the experts have said about the housing market over the past few weeks.

Ivy Zelman, CEO of Zelman & Associates:

“Whether in terms of pending contract activity or our proprietary buyer demand ratings, the various measures of demand captured in this month’s survey can only be described as shockingly strong, in spite of the resurgence in COVID-19 cases.”

Logan Mohtashami, Lead Housing Analyst at HousingWire:

“Existing home sales are still down year over year by 11.3%, but as crazy as this might sound, we have a shot at getting positive year-over-year growth…We may see an existing home sales print of 5,510,000 in 2020.”

Matthew Speakman, Zillow Economist:

“In a remarkable show of resilience, the housing market has stared the pandemic right in the eye and hasn’t blinked.”

Todd Teta, Chief Product Officer for ATTOM Data Solutions:

“The housing market across the United States pulled something of a high-wire act in the second quarter, surging forward despite the encroaching economic headwinds resulting from the Coronavirus pandemic.”

Ali Wolf, Chief Economist of Meyers Research:

“The housing recovery has been nothing short of remarkable. The expectation was that housing would be crushed. It was—for about two months—and then it came roaring back.”

Clare Trapasso, Senior News Editor of realtor.com:

“Despite the crippling and ongoing coronavirus pandemic, millions out of work, a recession, a national reckoning over systemic racism, and a highly contentious presidential election just around the corner, the residential real estate market is staging an astonishing rebound.”

Bill Banfield, EVP of Capital Markets at Quicken Loans:

“The pandemic has not stopped the consistent home price growth we have witnessed in recent years.”

Economic & Strategic Research Group at Fannie Mae:

Recent home purchase measures have continued to show remarkable strength, leading us to revise upward our home sales forecast, particularly over the third quarter. Similarly, we bumped up our expectations for home price growth and purchase mortgage originations.”

Mark Fleming, Chief Economist at First American:

“It seems hard to deny that when one looks at many of the housing market statistics, a “V” shape is quite apparent.”

Bottom Line

The experts seem to agree that residential real estate is doing remarkably well. If you’re thinking of jumping into the housing market (whether buying or selling), this may be the perfect time.

Repair or Replace Your Car?

Image by Ryan McGuire from Pixabay
Image by Ryan McGuire from Pixabay

Is your car worth fixing up? Or is it time to trade it in and get a new one?        

Repair if your answers to these questions are mostly “YES”:

  • Look your vehicle up on KBB.com. Is the cost of the repair is significantly less than what the car is worth?
  • Will repairing it gives you more time to save up for a new car?
  • Does it make more sense for your current financial situation to pay your older vehicle’s lower insurance and registration costs?
  • Ask your mechanic about the cost of anticipated near-future repairs. Are they affordable, and do you think you can get enough time out of the car to be worth the cost?

If you do decide to get a new car, think about these bonuses:

  • A new car generally comes with a certified warranty for three years, meaning no investment in repairs during that time.
  • It’ll be equipped with newer safety features, which insurers like.
  • Fuel economy has improved in recent years. If you’re putting a lot of miles on your vehicle, you can have significant gas savings too!

How to be HSA Savvy

Image by Rudy and Peter Skitterians from Pixabay

They may be only one letter apart, but an HSA (health savings account) and FSA (flexible spending account) are different animals that need different care—and an HSA offers so much more than most people realize.

People with high-deductible health insurance plans may qualify for a health savings account, which allows you to put pre-tax income into a savings account to be put toward medical care costs down the road. Unlike an FSA, there’s no deadline for using the money—you could save it for years, even past retirement—and it’s not tied to a specific employer. You take it with you no matter where you work. And as long as the expense is a qualifying medical cost, you get to choose when it gets spent.

  • The list of what qualifies is long, including: prescriptions, eyeglasses, crutches, counseling, and regular trips to the doctor or dentist, as well as things like travel costs for treatment and braces for the kids. The full list of what’s included can be found at: irs.gov/forms-pubs/about-publication-502
  • This is money that can only be spent on healthcare costs, so it’s not a replacement for other retirement investments—but expenses on those qualifying medical costs are withdrawn with no taxes. Not only that, if you still have money in your HSA after age 65, but the tax rate on non-medical withdrawals also drops to whatever your current tax rate is—effectively turning the HSA into an IRA at that point. Withdrawing money from an HSA for non-qualified expenses before age 65 is costly (there’s a tax on the withdrawal plus a penalty), however, so try to avoid doing so.
  • Talk with your employer about signing up for an HSA if you haven’t already—you can often contribute monthly through payroll deductions—and try to contribute the maximum amount each year. Check-in with your tax preparer to find out if you can add anything to your HSA before you file your taxes.

Hidden Fees You Didn’t Know You Were Paying

Photo by Andrea Piacquadio from Pexels

It’s no fun to read the fine print. But, increasingly, not doing so means losing more and more money in “hidden” fees. Here are some common “hidden” fees you probably don’t realize you’re paying:

  • Cable Bills: Special cable TV networks like regional sports channels cost extra, so if you’re not watching those channels be sure to negotiate a package that doesn’t include them (or their fees). Also, compare the rental price of your cable internet modem with one you could buy to replace it. Chances are very good you could save money by owning rather than renting.
  • Banking: Even so-called “free” checking accounts often have a monthly fee if you go below a certain balance. In addition to “out of network” fees your bank attaches to using certain ATMs, you may get dinged with a second fee—one from your bank and one from the bank that owns the ATM you’re using. Bank machines will inform you of the charges on their end before you proceed, so pay attention.
  • Event tickets: Buying tickets to concerts or sporting events online usually means paying a hefty fee per ticket. Even tickets you print at home often have a “delivery fee” charge. Buy directly from venue box offices when possible.
  • Resort fees: Extra hotel fees are incredibly common. Not only will you pay for anything you take from the minibar, you may also get charged extra for additional towels or on-site parking. You may not be able to avoid the fees, but be sure to ask in advance so you’re informed before you book.
  • Car rentals: If you’re flying in to a city and renting a car, there may be hidden fees (look for ‘facility charges or ‘concession recovery’ fees) when you rent a car at the airport. See if you can rent a vehicle without those fees somewhere else in town, and take a taxi or rideshare service to get there.

Check the Consumer Reports “What the fee?” site for more information about hidden fees and how to avoid them, including success stories from Consumer Reports users: action.consumerreports.org/whatthefee/

Does Your Home Have What Buyers Are Looking For?

Does Your Home Have What Buyers Are Looking For? | Simplifying The Market

There’s great opportunity for today’s homeowners to sell their houses and make a move, yet due to the impact of the ongoing health crisis, some sellers are taking their time coming back to the market. According to Javier Vivas, Director of Economic Research at realtor.com:

“Sellers continue returning to the market at a cautious pace and further improvement could be constrained by lingering coronavirus concerns, economic uncertainty, and civil unrest.”

For homeowners who need a little nudge of motivation to get back in the game, it’s good to know that buyers are ready to purchase this season. After spending several months at home and re-evaluating what they truly want and need in their space, buyers are ready and they’re in the market now. Lawrence Yun, Chief Economist at the National Association of Realtors (NAR) explains:

“A number of potential buyers noted stalled plans due to the pandemic and that has led to more urgency and a pent-up demand to buy…After being home for months on end – in a home they already wanted to leave – buyers are reminded how much their current home may lack certain desired features or amenities.”

The latest Market Recovery Survey from NAR shares some of the features and amenities buyers are looking for, especially since the health crisis has shifted many buyer priorities. The most common home features cited as increasingly important are home offices and space to accommodate family members new to the residence (See graph below):Does Your Home Have What Buyers Are Looking For? | Simplifying The MarketThe survey results also show that among buyers who indicate they would now like to live in a different area due to COVID-19, 47% have an interest in purchasing in the suburbs, 39% cite rural areas, and 25% indicate a desire to be in small towns.

As we can see, buyers are eager to find a new home, but there’s a big challenge in the market: a lack of homes available to purchase. Danielle Hale, Chief Economist at realtor.com explains:

“The realtor.com June Housing Trends Report showed that buyers still outnumber sellers which is causing the gap in time on market to shrink, prices to grow at a faster pace than pre-COVID, and the number of homes available for sale to decrease by more than last month. These trends play out similarly in the most recent week’s data with the change in time on market being most notable. In the most recent week homes sat on the market just 7 days longer than last year whereas the rest of June saw homes sit 2 weeks or more longer than last year.”

In essence, home sales are picking up speed and buyers are purchasing them at a faster rate than they’re coming to the market. Hale continues to say:

“The housing market has plenty of buyers who would benefit from a few more sellers. If the virus can be contained and home prices continue to grow, this may help bring sellers back to the housing market.”

Bottom Line

If you’re considering selling and your current house has some of the features today’s buyers are looking for, let’s connect. You’ll likely be able to sell at the best price, in the least amount of time, and will be able to take advantage of the low interest rates available right now when buying your new home.

Mortgage Rates Hit Record Lows for Three Consecutive Weeks

Mortgage Rates Hit Record Lows for Three Consecutive Weeks | Simplifying The Market

Over the past several weeks, Freddie Mac has reported the average 30-year fixed mortgage rate dropping to record lows, all the way down to 3.03%. Last week’s reported rate reached the lowest point in the history of the survey, which dates back to 1971 (See graph below):
Mortgage Rates Hit Record Lows for Three Consecutive Weeks | Simplifying The Market

What does this mean for buyers?

This is huge for homebuyers. Those currently taking advantage of the increasing affordability that comes with historically low interest rates are winning big. According to Sam Khater, Chief Economist at Freddie Mac:

“The summer is heating up as record low mortgage rates continue to spur homebuyer demand.”

In addition, move.com notes:

“Summer home buying season is off to a roaring start. As buyers flooded into the market, realtor.com® monthly traffic hit an all-time high of 86 million unique users in June 2020, breaking May’s record of 85 million unique users. Realtor.com® daily traffic also hit its highest level ever of 7 million unique users on June 25, signaling that despite the global pandemic buyers are ready to make a purchase.”

Clearly, buyers are capitalizing on today’s low rates. As shown in the chart below, the average monthly mortgage payment decreases significantly when rates are as low as they are today.Mortgage Rates Hit Record Lows for Three Consecutive Weeks | Simplifying The MarketA lower monthly payment means savings that can add up significantly over the life of a home loan. It also means that qualified buyers may be able to purchase more home for their money. Maybe that’s a bigger home than what they’d be able to afford at a higher rate, an increasingly desirable option considering the amount of time families are now spending at home given today’s health crisis.

Bottom Line

If you’re in a position to buy a home this year, let’s connect to initiate the process while mortgage rates are historically low.