What Are Experts Saying about Home Prices?

What Are Experts Saying about Home Prices? | Simplifying The Market

Last week, a very well-respected real estate analytics firm surprised many with their home price projection for the next twelve months. CoreLogic, in their latest Home Price Index said:

“The economic downturn that started in March 2020 is predicted to cause a 6.6% drop in the HPI by May 2021, which would be the first decrease in annual home prices in over 9 years.”

The forecast was surprising as it was strikingly different than any other projection by major analysts. Six of the other eight forecasts call for appreciation, and the two who project depreciation indicate it will be one percent or less.

Here is a graph showing all of the projections:What Are Experts Saying about Home Prices? | Simplifying The MarketThere’s a simple formula to determine the future price of any item: calculate the supply of that item in ratio to the demand for that item. In housing right now, demand far exceeds supply. Last week mortgage applications to buy a home were 33% higher than they were at the same time last year. The available inventory of homes for sale is 31% lower than it was last year. Normally, these numbers should call for homes to continue to appreciate.

Bottom Line

Because of the uncertainty with the pandemic, any economic prediction is extremely difficult. However, looking at the limited supply of homes for sale and the tremendous demand for housing, it is difficult to disagree with the majority of analysts who are calling for price appreciation.

Tracking Spending with an App

Image by William Iven from Pixabay

Making and sticking to a budget is simpler with the abundance of online and mobile tools currently available. Some of these apps track how much you’re spending vs. how much you make and some even show you ways to allocate your money to pay off debt or earn more from investments.

  • Mint(free; iOS and Android) by Intuit (makers of QuickBooks and TurboTax) provides a superb real-time overview of your entire financial picture—every bank account, credit card, investment, bill, and property—in one place. Users also get free credit scores. mint.com
  • Wally (free; iOS; Wally+ on Android) is app-only (there’s no browser version yet) and specifically designed to help track expenses. Take photos of receipts to skip typing all the information, and Wally will even geo-locate the expense for you. wally.me
  • YNAB ($83.99/year; iOS and Android) stands for “You Need a Budget,” and the app teaches users to spend no more than they earn and pay off debt more quickly. YNAB says average users save $600 by the second month using the app. youneedabudget.com

In addition to these powerful tools, you may also want to add a money-sharing app like Venmo (venmo.com) or Square’s Cash App (cash.app) to your mobile arsenal. They make sending money to other people quick and easy—especially handy when splitting things like cab fare or dinner.

Buyers: Are You Ready for a Bidding War?

Buyers: Are You Ready for a Bidding War? | Simplifying The Market

With businesses reopening throughout the country and some experts indicating early signs of a much-anticipated economic recovery, more homebuyers are actively entering the housing market this summer. Today, housing is truly driving the U.S. economy forward. With so many buyers looking for homes to purchase and so few houses for sale right now, there’s a disconnect between supply and demand. This imbalance is pushing home prices upward while driving more bidding wars and multiple-offer scenarios. Danielle Hale, Chief Economist at realtor.com explains:

“People are surprised that prices are rising, not falling, because in the last recession home prices fell, the difference this time is the severe shortage of homes for sale…We are seeing bigger price increases with [a limited] number of homes…That is likely to lead to more competition and potentially multiple offers and bidding wars.”

According to the recent Realtors Confidence Index (RCI) survey conducted by the National Association of Realtors (NAR), this trend is growing:

“On average, there were about three offers on a home that closed in May, up from just about two in April 2020 and in May 2019 (2.3 offers).”

HousingWire also indicates:

“42% of homeowners who made a purchase during the January to May time period ended up in a bidding war, demonstrating the strong demand for homes amid low inventory.”

With more people returning to work we’ll continue to see the number of interested buyers increase. So, if you’re among the many people looking for a home to buy this summer, it’s important to ensure you have the right guidance from the start. This way, you make sure your offer stands out from the crowd when it really counts. Here are two tips to follow.

1. Hire a Trusted Local Expert

A trusted local real estate professional matters more than ever right now, as noted in a recent survey shared by NAR. In fact, according to respondents, 54% of buyers and 62% of sellers indicated that “Particularly during the pandemic, a real estate agent’s guidance is especially valued.”

We’re not in a normal market. We are in one of the greatest health crises our nation has ever seen. The pandemic has had a dramatic impact on the journey consumers must take to purchase a home. To successfully navigate the landscape today, you need a true expert on your side.

2. Get Pre-Approved for a Mortgage

When there are more buyers than sellers on the market, the process to find a home becomes much more challenging. One way to show you’re serious about buying a home is to work with a lender to get pre-approved for a mortgage before starting your search. With a pre-approval letter, sellers will see your true desire to buy this year, potentially helping your offer rise to the top.

Bottom Line

If this is the year you’re ready to buy, let’s connect to get the process started so you can make sure your offer is a strong one when the competition heats up.

Not All Agents Are Created Equal

Not All Agents Are Created Equal | Simplifying The Market

In today’s fast-paced world where answers are just a Google search away, there are some who may question the benefits of hiring a real estate professional when selling a house. The reality is, the addition of more information can lead to more confusion. A real estate agent can be your essential guide, but truth be told, not all agents are created equal. Finding the right agent for you and your family should be your top priority when you’re ready to sell your house.

The right agent is the person who can truly walk you through the whole process, look out for your best interest, and seamlessly lead you through all the steps along the way. In today’s complex market, the way we execute real estate transactions is changing constantly, especially as more elements can be done virtually. Making sure you have the best advice on your side is more important than ever.

So, how do you choose the perfect agent?

It starts with trust. You must trust the advice this person is going to give you, and you’ll want to begin by making sure you’re connected to a true professional. An agent can’t give you perfect advice because it’s impossible to know exactly what’s going to happen at every turn – especially in this unique market. A true professional agent can, however, give you the best advice possible based on the information and situation at hand, helping you make the necessary adjustments and best decisions along the way. The right agent – the professional – will get you the best offer available. That’s exactly what you want and deserve.

What do you need to trust your agent to do?

1. Navigate the Process

There are over 230 possible steps that take place during a successful real estate transaction. Don’t you want someone who has been there before, someone who knows what these actions are, to ensure you have a positive selling experience?

2. Negotiate on Your Behalf

Today, hiring a trusted and talented negotiator could save you thousands, perhaps tens of thousands of dollars. Each step – from the buyer submitting an original offer, to the possible renegotiation of that offer after a home inspection, to the potential cancelation of the deal based on a troubled appraisal – you need someone who can keep the deal together until it closes.

3. Price Your House Competitively

There’s so much information in the news and on the Internet about home sales, prices, and mortgage rates. How do you know what’s going on in our local area? Who do you turn to in order to competitively and correctly price your home at the beginning of the selling process?

Dave Ramsey, known as the financial guru, advises:

“When getting help with money, whether it’s insurance, real estate or investments, you should always look for someone with the heart of a teacher, not the heart of a salesman.”

Hiring a trusted professional who has a finger on the pulse of the market and is eager to help you learn will make your experience an informed and educated one. You need someone who’s going to tell you the truth, not just what they think you want to hear.

Bottom Line

Today’s real estate market is highly competitive. Having a trusted professional who’s been there before to guide you through the process is a simple step that will give you a huge advantage when you’re ready to sell your house. Let’s make it happen together.

Best Time to Sell? When Competition Is at an All-Time Low

Best Time to Sell? When Competition Is at an All-Time Low | Simplifying The Market

In a recent survey of home sellers by Qualtrics, 87% of respondents said they were concerned their home won’t sell because of the pandemic and resulting economic recession. Of the respondents, 51% said they are “seriously worried.” That concern seems reasonable considering the current condition of the economy. The data, however, is showing that home purchasers are still very active despite the disruptions American families have experienced this year.

The latest Existing Home Sales Report published by the National Association of Realtors (NAR) revealed that 340,000 single-family homes sold in this country last month. NAR’s most recent Pending Sales Report (homes going into contract) surpassed last month’s number by over 44%, which far exceeded analysts’ projections of 15%. ShowingTime reported that appointments to see homes (both virtually and in-person) have increased in every region of the country and are up 21.4% nationwide over the same time last year.

While buyer activity is surging, the number of listings has fallen to an all-time low. Zelman Associates, in their latest residential real estate report, revealed that housing inventory as a percentage of households has fallen to 1.2%, which is half of the long-term average and lower than any other time in our history.

Bidding Wars Heating Up Again

With buyer demand growing and the supply of available homes shrinking, purchasers are again finding themselves needing to outbid other buyers. NAR, in a recent blog post, revealed:

“On average, there were about three offers on a home that closed in May, up from just about two in April 2020 and in May 2019 (2.3 offers).”

Bidding wars guarantee houses sell quickly at a price near or even slightly over the listing price.

Bottom Line

If you’re thinking of selling, don’t be concerned about putting your house on the market right now. There’s no better time to sell an item than when demand for it is high and supply is low. It is exactly at that time when you will negotiate your best possible deal.

Taking Advantage of Homebuying Affordability in Today’s Market

Taking Advantage of Homebuying Affordability in Today’s Market | Simplifying The Market

Everyone is ready to buy a home at different times in their lives, and despite the health crisis, today is no exception. Understanding how affordability works and the main market factors that impact it may help those who are ready to buy a home narrow down their optimal window of time to make a purchase.

There are three main factors that go into determining how affordable homes are for buyers:

  1. Mortgage Rates
  2. Mortgage Payments as a Percentage of Income
  3. Home Prices

The National Association of Realtors (NAR), produces a Housing Affordability Index, which takes these three factors into account and determines an overall affordability score for housing. According to NAR, the index:

“…measures whether or not a typical family earns enough income to qualify for a mortgage loan on a typical home at the national and regional levels based on the most recent price and income data.”

Their methodology states:

“To interpret the indices, a value of 100 means that a family with the median income has exactly enough income to qualify for a mortgage on a median-priced home. An index above 100 signifies that family earning the median income has more than enough income to qualify for a mortgage loan on a median-priced home, assuming a 20 percent down payment.”

So, the higher the index, the more affordable it is to purchase a home. Here’s a graph of the index going back to 1990:Taking Advantage of Homebuying Affordability in Today’s Market | Simplifying The MarketThe green bar represents today’s affordability. We can see that homes are more affordable now than they have been at any point since the housing crash when distressed properties (foreclosures and short sales) dominated the market. Those properties were sold at large discounts not seen before in the housing market.

Why are homes so affordable today?

Although there are three factors that drive the overall equation, the one that’s playing the largest part in today’s homebuying affordability is historically low mortgage rates. Based on this primary factor, we can see that it is more affordable to buy a home today than at any time in the last seven years.

If you’re considering purchasing your first home or moving up to the one you’ve always hoped for, it’s important to understand how affordability plays into the overall cost of your home. With that in mind, buying while mortgage rates are as low as they are now may save you quite a bit of money over the life of your home loan.

Bottom Line

If you feel ready to buy, purchasing a home this season may save you significantly over time based on historic affordability trends. Let’s connect today to determine if now is the right time for you to make your move.

How To Recover After A Bad First Impression

Image by Sue Styles from Pixabay

While first impressions are no doubt important if you feel like you didn’t put your best foot forward when you first met someone all is not lost. Here are some steps to remedy what you think might have been a bad first impression.

  • Stop and think about what went wrong. If you can pinpoint the issue, then you stand a better chance of fixing it. Were you unprepared for a business meeting? Were you quite late? Did you make a joke before knowing the other person’s sense of humor? You won’t always know what made a meeting so awkward, but it’s always a good idea to try to figure it out.
  • Apologize and ask for another chance. We all make mistakes, and the sooner you own yours and apologize for it, the better. Don’t let things fester until the next time you happen to see the person—seek them out and offer an apology that acknowledges what you believe went wrong and how you’ll do things differently in the future.
  • Work on gaining trust. This part may take a while, but if this is a relationship that’s important to you it’s a critical step. You might be able to rectify the situation with a sincere apology, but it’s more likely you’ll need to redouble your efforts—such as being even more prepared than usual, arriving a little early, and spending a lot of time listening to understand a sense of humor before interjecting your own.

Of course, not everyone can be won over after a bad first impression. If you’re doing everything you can and still not getting anywhere, it may be time to evaluate whether the relationship is as important as you originally thought.

How To Land a Job When You’re Overqualified

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Sometimes, either because you’re looking for work to do in retirement or you’re just looking for a change, you may be overlooked by prospective employers because you’re TOO qualified. Here are some tips for tailoring your skills and resume to that job you want but might be overqualified for:

  • Customize your resume: Instead of using the executive summary to list all of your skills, just align it with the skills required for the job you’re applying for (that’s a good tip for any resume writing!). Be brief in the rest of your resume and focus on specific and transferrable skills rather than managerial experience.
  • Tailor your cover letter: Carefully research the company: look at the kinds of people they have previously employed and their areas of expertise. Identify any possible gaps of experience that you could fill. There is no harm in addressing that you’re overqualified for the job. You can use that information to your advantage: tell the employer why your experience makes you the right candidate for their job.
  • Prepare for the interview: Consider possible answers to questions about being overqualified for the job. You can reiterate the points you made in your cover letter and also explain why you’re interested in this job. For example, you could explain that while you have years of managerial experience, you’re approaching retirement and looking for less responsibility but a steady and reliable job. Or, you could explain that matching your current salary isn’t a priority for you and you’re more interested in the prospects within the organization.
  • Sell yourself: Use your research about the company and the job to sell your unique skills and experience.

Remember: employers are focused on picking people who will stick around, not someone who will take the job until something better comes along. Be prepared to change their perceptions!

Zero-Waste Items You Might Not Have Considered

There are lots more than just reusable water bottles and grocery bags available these days to help you live a greener lifestyle. Here are a few that can save money AND landfill space:

  • Ditch the zip-top baggies: Did you know you can now buy reusable storage bags for things like sandwiches, snacks, or leftovers? Try Amazon or a store like Target.
  • Produce bags: Mesh produce bags can replace all those thin produce bags at the grocery store, and they won’t dump all your carrots. You can find these at Amazon or Target, too.
  • No more cling film: There are handy wax fabrics you can replace your plastic cling wrap with now. Bonus: you just need to rinse dry to re-use, and it’s reusable AND biodegradable. Check out: beeswrap.com
  • Use your own coffee cup: Take your own cup to your favorite café and ask them to save the paper cup. Keep a clean one in your vehicle for unplanned coffee runs.
  • Skip the dryer sheets: Reusable wool dryer balls can soften and fluff your laundry without the chemicals’ commercial dryer sheets use. You can add your favorite essential oil if you want a fresh scent. You can find them at most big-box stores and: MollysSuds.com