5 Strategies Millennials Can Use To Buy Homes

Posted in Real Estate by Michigan Real Estate Expert on November 16th, 2018

5 Strategies Millennials Can Use To Buy HomesMillennials face numerous challenges when buying their first homes. 55% of young adults between 25 and 34 years old don’t own homes as compared to 80% in 1967, according to data from the Census Bureau. 

Buying a home is tough with the $1.4 trillion student loan debt, growing childcare expenses and rising rental costs. However, hope is not lost. Millennials can realize the quintessential dream of owning a home. 

Millennials can employ several strategies to plan for home ownership without selling their kidneys. Here are five ways to do just that. 

Develop A Realistic Budget 

Now is a great time to examine your finances and create a budget for a house you can really afford. Lenders may be able to approve you for a larger loan amount than what you thought possible. Therefore, it’s imperative to be realistic when deciding on the amount of home mortgage payment you can afford comfortably per month.   

Make Sacrifices 

Not long ago, someone said (and probably regretted) Millennials can’t save enough to buy homes because they are spend extravagantly. Well, saving thousands of dollars for down payment isn’t easy, but it’s not impossible either. And there are many low to no down payment programs available if you check with your trusted mortgage professional first.

You may have to sacrifice and cut unnecessary expenditures such as buying new outfits and even getting a new car. Living minimally can help pad your personal savings to propel you into owning a house. 

Consider The Suburbs 

Although it’s vital to stay near family and a lively social location, consider purchasing a house in a suburban area, where houses are typically more affordable. Plus, if you have pets they will love the larger lots and yards giving them space to play.

You can choose a less populated state where you will probably have a higher chance of affording a home. Although this may not be ideal, if owning your own place tops your list, then location will not stand in the way. 

Use State And Federal Programs 

The Federal Housing Administration (FHA) gives home buyers the chance to purchase houses with a very low down payment. This lower amount is quite attainable if you save toward this goal.  Some states also offer supplemental programs beyond the FHA program. Find out whether you can access extra grants and subsidies. 

Get Your Hustle In Gear 

Although most millennials struggle with unemployment, if you have one job, look for other ways to make extra dollars. You may consider driving for rideshare services, freelance gigs and running errands for people as a way to temporarily boost your earning potential.

Owning a place to call home is great. Like anyone else millennials can buy homes. Talk to a home finance expert and your trusted real estate agent for more information on how you can make your best investment. 

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5 Tips To Price Your Home To Sell For Top Dollar

Posted in Real Estate by Michigan Real Estate Expert on November 6th, 2018

5 Tips To Price Your Home To Sell For Top DollarMany home sellers are confused about how to price their home to sell. It’s definitely challenging to try and find that sweet spot between pricing it low enough so it flies off the market without undercutting the home’s value. Emotions play into the decision, too. If the seller has a lot of sweat equity in the home, or the property is the only place the children have ever called home, owners may tend to place a higher value on the house.

Here’s how to correctly price a home to sell in any market.

Rely On Your Real Estate Agent

Your Realtor is an expert in all matters related to home buying and selling. They have a vested interest in selling your home within a reasonable time frame. As such, they provide a valuable, objective perspective that you should closely pay attention to in order to correctly price your home to sell.

Look At Comps In Your Neighborhood

One thing that your real estate agent does is analyze the comparable properties in your neighborhood. Remember, what a home sells for in a nearby city doesn’t impact how to price your home in a neighborhood far removed. Your prospective buyers will also compare your home’s price to others they could buy in the same neighborhood.

Consider Special Features

Don’t discount special features that your home has, such as built-in shelving units, out buildings, a home movie theater, etc. These give you an advantage in that you can safely set your price a little higher than comparable homes without those features. Be sure your real estate agent mentions them on your MLS listing so buyers understand the higher asking price.

Be Prepared To Make Price Adjustments

Remember that you might have to come down from your asking price, so keep that in mind when you and your real estate agent set that number. Don’t expect that you’ll get exactly what you’re asking for unless you’re in a high demand area. When you give yourself some margin, you gain negotiating power you can use to make a sale happen.

Consider Your Own Finances

Pricing your home to sell is only one factor to consider. The larger equation takes your entire financial picture into account. Figure out how much you owe, how much commission you’ll pay and any sales concessions, if any, you’d be willing to offer a prospective buyer. This due diligence ensures you’ll be satisfied with the outcome after all the money has changed hands.

Pricing your home to sell correctly is a critical part of making the transaction happen. Remember that your real estate agent is the best judge of the best price point, but you can always point out the reasons why you’d like it higher or lower.

 

 

 

 

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Case-Shiller: Home Price Growth Slows to 20-Month Low

Posted in Real Estate by Michigan Real Estate Expert on October 31st, 2018

Case-Shiller Home Price Growth Slows to 20-Month LowHome price growth slowed to its lowest rate in 20 months according to the 20-City Home Price Index issued by Case-Shiller. After years of dismal readings, Las Vegas, Nevada led the cities included in the index.

Top three cities for August included Las Vegas, Nevada where year-over-year home prices grew by 13.90 percent. San Francisco, California saw home prices increase by 10.60 percent year-over-year and Seattle, Washington home prices rose by 9.60 percent year-over-year. August’s 20-City Home Price Index overall reading fell below six percent for the first time in a year.

Cooling Home Price Growth Helps Balance Housing Markets

Cooling home prices have been forecast for months, but August’s reading indicated that home prices have peaked and that current home price growth rates may ease pressure on overheated real estate markets, where high home prices, limited inventories of homes for sale and rising mortgage rates have limited buying opportunities. Home price growth remained above current rates of wage growth and inflation, but slower appreciation of home values will help balance the housing market from an extreme sellers’ market to more moderate market conditions.

Rising Mortgage Rates Not Sole Cause of Easing Home Prices

Dallas Federal Reserve President Robert Kaplan recently said that rising mortgage rates were not the only cause of slowing growth of home prices. Mr. Kaplan said that multiple factors including rising building costs, labor shortages and rising mortgage rates combined to ease record demand for home; Mr. Kaplan said that the Fed is closely monitoring the economy and housing markets and mentioned that he had previously forecast slower housing markets as 2019 approaches.

Recent stock market sell-offs boosted the 10-year Treasury note price, but this momentum appears to be settling. Fixed mortgage rates are connected to yields on 10-year Treasury notes. Yields rise as note prices decline. Mortgage rates rise as the 10-year Treasury yield rises. While nothing is set in stone, this situation indicates that mortgage rates could continue to rise.

Rising mortgage rates and strict mortgage lending requirements have barred home buyers concerned with affordability and less than perfect credit profiles. As prospective home buyers abandon their home searches, demand for homes should ease and may further reduce gains in home prices.

If you are interested in buying a new property or selling your current property, contact your trusted real estate agent to discuss market specifics in your area.

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4 Reasons To Buy Or Sell A Home This Winter

Posted in Real Estate by Michigan Real Estate Expert on October 30th, 2018

4 Reasons To Buy Or Sell A Home This WinterThe winter real estate market tends to be significantly different from other seasons. Buyers and sellers alike are often driven by different reasons than at other times of the year. That can be a win-win for both motivated buyers and sellers in the right climate.

Many homeowners list their property during spring and early summer hoping to maximize their return on investment during the competitive seasons. Families with school-aged children tend to be highly motivated buyers because they prefer not to take a child out of school mid-term.

Given the nationwide housing shortage, those seasons were hot seller’s market with Millennials scooping up listings quickly at or near asking price. But since the dog days of summer, the housing industry has changed substantially.

These are four meat-and-potatoes reasons to buy or sell property this winter.

  • Inventory Shortage: During the first six months of 2018, the national housing shortage stood at a 20-year worst. That was great news for sellers who enjoyed higher prices and fewer days on the market. It wasn’t great for buyers who were in heated competition for homes. A shortage is expected during the winter months. That could be good news for sellers. But there is likely to be less competition, and that may allow buyers a little wiggle room in negotiations.
  • Interest Rates: The Fed announced that interest rates would inch up in four increments by the end of 2018. While that may seem like bad news, it could be helpful for motivated buyers and sellers this winter. The rate increases will likely result in listing prices leveling off, and that could help buyers from being priced out of the market. The Fed also announced that rates would likely increase further by the end of 2019, which should motivate people to buy sooner rather than later. Simply put, the winter market forecast looks hot.
  • Tax Cuts: The Tax Cuts and Jobs Act helped many Americans keep more of their own money and ratchet up the economy. A recent announcement from the White House says a middle-class tax cut of 10 percent is expected to be pushed through Congress. Rates may eek up but keeping another 10 percent of your money can provide a great deal of mortgage bandwidth.
  • Employment Opportunities: As mentioned above, spring and summer markets are often driven by family considerations. The winter market tends to be driven by others. One of the key reasons buyers and sellers relocate during the winter is driven by jobs. It is common for large and mid-sized companies to hire for the first of the year. Given the tremendous opportunities in this robust economy, higher salaries and dream jobs may present themselves. This winter could be a carpe diem homes market.

Although winter housing markets may have been sluggish in some years, it’s been a long time since everyday Americans were immersed in a thriving economy. With unemployment at a near 50-year low and wages rising, this winter could be a winner for buyers and sellers.

Whether you are buying or selling, your trusted real estate agent is available to help you navigate the market any time of the year in your area.

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Inexpensive Updates That Will Appeal To Buyers

Posted in Real Estate by Michigan Real Estate Expert on October 25th, 2018

Inexpensive Updates That Will Appeal To BuyersWhile you could spend tens of thousands of dollars or more completing a home makeover, there are more than a few budget-minded ideas that you may consider.

Add Color To Molding And Trim

One cool idea in home décor and interior design is to get rid of the standard white trim and molding and to add color to these areas. Neutral hues like grays and browns have universal appeal, or you can give your space a more contemporary look by adding black to these areas. Generally, you will want a more neutral color like a creamy beige on the walls when executing a look with colored trim.

Another idea is utilizing a color consistent with your wall color as opposed to a contrasting or complimentary color. This helps the trim blend in and almost disappear. This is an especially effective concept when used in small rooms, narrow halls with several doorways or in rooms with low ceilings.

Update Light Fixtures

If you have a little more money to spend, you may consider updating your light fixtures. There are rather affordable yet stylish fixtures available in a wide range of finishes. When your rooms are empty or staged to perfection, the light fixtures can easily set the tone of the room and may be focal points. Outdated fixtures may have limited appeal to buyers who are looking for a home that is modern and current with today’s trends.

When thinking about lighting, don’t forget to consider updating your outdoor lighting. The right fixtures may add an additional element of curb appeal that many buyers appreciate.

Redefine Outdated Spaces

In some older homes, some of the rooms may have originally been built with outdated uses in mind. Today’s savvy buyers may be looking for a home with an exercise room, a media room or a study rather than a formal living or dining area. With this in mind, you may consider how you can stage your home to show that it can be used for modern purposes.

This may simply mean moving your formal dining room set into storage, adding French doors and investing in an affordable desk and side chairs for staging purposes. Murphy beds that offer space for guests that can be hidden away when not in use are a clever way to show dual purpose. Turning a closet or the area under the stairs into a small office is also a clever use of space. 

Your trusted real estate agent should be able to offer additional suggestions to help update your home and get it ready for market.

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3 Key Advantages Of Listing Your House This Fall

Posted in Real Estate by Michigan Real Estate Expert on September 26th, 2018

3 Key Advantages Of Listing Your House This FallHomeowners looking to maximize their return on investment often want to know what season best achieves that goal. Getting near or full asking price can be influenced by a wide range of factors, including market trends, inventory and interest rates to name a few.

It will come as good news to know there are strong indicators that this fall has unique listing advantages. That means listing a home this fall could help sellers get the price they want.

1: Inventory Remains Very Tight

The rules of supply and demand apply equally to the housing market and there are not enough homes to go around.

The single-family housing shortage has been driven by multiple factors. A large population of Millennials have entered the real estate market at a time when new home construction had been stifled for years. Simply put, the supply of new homes has significantly fallen behind the demand.

Although builders are starting to ramp up construction, the economic boom continues to position first-time buyers more quickly than the lagging supply. The real estate wild card may be how quickly construction outfits put more homes in play.

Should the building sector pivot to take advantage of higher prices, inventory could loosen in 2019. That makes this fall a prime time to maximize profitability and avoid the risk of improving supply.

2: Fall Looks Like A Seller’s Market

Although summer was once again a popular time to sell, it appears home sales did not satisfy the high demand. With fewer listings available and plenty of active buyers jumping on properties, listing this fall could put sellers in the driver’s seat.

One interesting caveat is a recent study that says buying a home is currently less expensive than renting in 35 percent of American counties. Talk about motivated buyers. By listing a property now, the odds are on the seller’s side that the home will close at a desirable price.

3: Homes Move Quickly

Market data shows that homes are selling at a fast clip across the country. According to a report by realtor.com, the median days on the market rate continues to decline.

From 2012 to 2017, the number of days a home spent on the market declined by nearly one-third in some comparable months. This year, homes are selling at a staggering rate in traditionally high-priced metropolitan markets. According to research, homes in San Jose, California, were only on the market an average of 28.6 days. In Seattle, Washington, homes sold at an average rate of 34.1 days and Nashville, Tennessee, saw a short 40.6 window. While these areas may be considered hot, they show that homes are moving quickly even in high-end areas.

Sellers may find the elixir they are looking for by listing this fall. Economic and market indicators point to a vibrant seller’s market flush with motivated buyers.

Whether you are ready to sell your current home or look for a new property, be sure to contact your trusted real estate professional.

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Tips For Selling Your Home In The Fall

Posted in Real Estate by Michigan Real Estate Expert on August 23rd, 2018

Tips For Selling Your Home In The FallFootball season has kicked off, temperatures are cooling and pumpkin spice everything is for sale in the stores. Yes, fall is here. While most people associate the spring and summer months as the ideal times of year to buy or sell, fall is still a great time to put your home on the market.

Families tend to want to get into their new homes prior to the holiday season, so buyers are typically still very active during the fall months. That said, there are plenty of ways that you can ready your home for a fast fall sale.

Here’s a look at several tried and true tips to increase your curb appeal and move your property this autumn:

Keep The Yard Free Of Debris

Chances are your yard is full of leaves in the fall. But because temperatures are cooler and the days are shorter, fall is also a time of the year when your lawn looks its greenest and most lush. Make sure your leaves are cleaned up to show off the true potential of your yard (not to mention create the impression that your home is well maintained and cared for). Rake daily if you have to. If you don’t like raking, set the lawn mower to a low setting and bag the mulched leaves.

Autumn Curb Appeal

Buy some mums, a haystack and perhaps even some pumpkins or gourds to decorate your home with. These are perfect fall decor and can really help make your home stand out to potential buyers.

Hit The Lights

The days are shorter in the fall, which means that the natural light inside of your home may be waning during show times. That said, make sure all of the lights in the home are turned on prior to showings to create a well-lit, welcoming environment. 

Clean The Fireplace

With the nights getting cooler, fall is the perfect time of the year to start up the fireplace. If you have a gas fireplace, make sure that this is mentioned in the listing. Also make sure that the fireplace is clean and looks inviting in case the buyer wants to turn it on. If you have a natural fireplace, don’t fret. Even if you don’t use it, make sure that it’s cleaned out and looks ready to use.

Clean Your Gutters

In addition to making sure your yard is leaf-free, make sure that your gutters are also clean. You don’t want to give buyers the impression that your home isn’t well cared for. Plus, gutters overflowing with leaves can make the buyer think that the home requires excessive maintenance, which can be a turn off.

Your trusted real estate agent is ready to help you with these tips and more to make sure your home is a must-see listing this fall.

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Big Second Quarter GDP Numbers Impact Housing Market

Posted in Real Estate by Michigan Real Estate Expert on August 10th, 2018

Big Second Quarter GDP Numbers Impact Housing MarketPositive economic growth numbers are always cause for celebration and the second quarter GDP just went vertical. After nearly four years of sub-par growth, the real GDP hit 4.1 percent in the second quarter.

While that economic news has everyday Americans excited that we may be entering a new age of prosperity, drawing a concrete link to the real estate market may be difficult. But by looking long and hard at this uptick and its potential impact on housing, you may get a better idea about buying, selling or standing pat on residential and commercial property.

GDP Report Points To Demand

Among the positive measures from the recent economic report, consumption enjoyed a positive increase. The first quarter numbers were disappointingly sluggish in this area at a modest 0.5 percent. The second quarter took off like a rocket, by comparison, at 2.25 percent.  

Although that figure shows an upwardly mobile economy, some experts are calling it discouraging given the extraordinary consumer confidence that has risen to record highs of more than 101.0 since November 2017. This opinion begs the question: why are economy gurus disappointed?

The first part of that answer has to do with the implementation of the Tax Cuts and Jobs Act that is putting more money in American paychecks and rolled back income tax liability. Many economists forecast that this personal wealth growth would turn into solid consumption. While working families have enjoyed a breather in terms of scratching from paycheck to paycheck, home purchases have not gone through the roof.

Home availability remains relatively low. With Millennials scooping up many of the starter-home listings and Baby Boomers downsizing, a significant housing shortfall exists. If you have ever heard the term “seller’s market,” this is it.

Inventory Shortage Means Buy Quickly

There are always naysayers that point to lower than expected consumption and claim the economy is weak. The facts in the GDP report clearly dispute any such ideas.

Business investment spiked to a powerful 11.5 percent and then 7.3 percent in the first two quarters. Fixed business investment is on fire based on deregulation, soaring profits and confidence.

That’s why real estate resources are saying that the only thing holding the market back is inventory. Home sale data is not keeping pace with other sectors of the economy because there simply is not enough inventory to keep up with demand. For first-time buyers, this means get prequalified and act swiftly if you find a dream home. It won’t stay on the market long.

Prospective homebuyers may be relieved to know that positive construction indicators are trending. New homes are expected to improve the inventory shortage heading into 2019. Still, demand is likely to stay ahead of inventory.

Whether you are buying or selling, your trusted real estate professional can be one of your very best assets in this fast-paced market.

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3 Generations Top Housing Market Trends

Posted in Real Estate by Michigan Real Estate Expert on July 13th, 2018

3 Generations Top Housing Market TrendsHistorians like to say that those who do not learn the lessons of the past are doomed to repeat them. In the real estate industry, the chances of that happening are slim because agents and other professionals follow market trends closely.

That being said, a careful examination of 2017 market trends and other factors can help highlight where the housing market is headed. Consider these top trends when deciding about whether to buy or sell a property.

Millennials Scooping Up Homes

According to resources such as Zillow, the low inventory and emergence of Millennials in the home-buying market helped break records last year. Millennials comprised upwards of 34 percent of the market and about two-thirds of them were reportedly first-time home buyers.

Given the shortage of entry-level homes for this demographic, 2018 and 2019 should have them in the driver’s seat in terms of buying trends. Although home prices are expected to rise in the single digits during the foreseeable future, the second wave of Millennial home buyers are likely to take a big bite of listed properties. As this group moves into their mid-30s, expectations are that last year’s 34 percent turns into about 43 percent of homes purchased. Millennials appear to be setting the pace.

Gen Z Home Buyers Expect Smarter Homes

Consider those born between 1995 and 2001 are adults or on the cusp of becoming adults. The front end of Generation Z is graduating college and looking for starter homes. This group is bound and determined to be different and they were basically weaned on technology.

Tech-friendly kitchens, lights and home-integrated devices have been trending and this demographic is likely to make them a priority when buying a home. Homeowners who are considering updating to a so-called “Smart Home” could be rewarded with resale value once Gen Z enters their collective mid-30s. Smart homes are trending and could go vertical with Gen Z buyers.

Generation X Returns From Great Recession

The housing crisis of 2007-09 put upwards of 10 million Americans out of their homes. Forced into foreclosure and bankruptcy, the financial aftermath of that catastrophe is coming to an end.

Those that filed for bankruptcy during the crash are in position to put their rebuilt credit to work. According to reports, approximately 1.5 million people could become eligible to re-enter the housing market in 2019.

A large portion of these potential returning homebuyers fall into the Gen X age group. They are likely to be savvier than the first time out. Many of these 50-somethings are expected to be frugal and cautious value buyers that could target properties that are traditionally considered starter homes. Regardless of how the trend plays out, Gen X is coming to a housing market near you.

If these emerging trends indicate anything, it’s that the shortage of homes on the market will only get tighter. Several large emerging demographics and returning buyers are going to speed an already fast-selling market. The trending idea may be to buy a home in today’s market and save money.

Your trusted real estate agent is sure to keep up to date on all the trends. Be sure to contact them as soon as you are ready to list your current home or find the new home of your dreams.

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What’s Ahead For Mortgage Rates This Week – May 29th, 2018

Posted in Financial Reports by Michigan Real Estate Expert on May 29th, 2018

What’s Ahead For Mortgage Rates This Week – May 29th, 2018Last week’s economic reports included readings on sales of new and previously-owned homes along with weekly readings on mortgage rates and new jobless claims.

Home Sales Lower in April

Sales of new and previously-owned homes were lower in April. The Commerce Department reported sales of new homes at a seasonally-adjusted annual rate of 662,000 sales. New home sales were 1.50 percent lower than for March, but were11.60 percent higher year-over-year.

Analysts expected new home sales to rise to 682,000 sales based on the March reading of 672,000 new homes sold.  Sales of new homes are calculated based on a small sample of sales and are typically subject to adjustment. Year-to date sales were 8.40 percent higher year-over-year.

New home sales were downwardly revised for the past three months, which could indicate a slowing in the market. Higher interest rates and rising home prices may be taking a toll on buyer enthusiasm. Fewer buyers caused the inventory of homes for sale to increase to a 5.40month supply. Real estate pros typically consider a six-month supply of available homes a normal inventory of homes for sale.

Sales of previously owned homes were also lower in April; the National Association of Realtors® reported seasonally-adjusted annual sales of 5.46 million homes as compared to expected sales of 5.50 million and March sales pace of 5.60 million sales of previously-owned homes. While fewer sales can relieve demand and ease rising home prices, it appeared that potential buyers are waiting for more options.

Sales of pre-owned homes were 2.50 percent lower than for March and were 1.40 percent lower year-over-year; this was the second consecutive month for a lower year-over-year sales reading. The inventory crunch of pre-owned homes for sale has reduced the average sales period to decrease to 26 days.

Mortgage Rates Rise, Sideline Buyers and Sellers as New Jobless Claims Rise

Freddie Mac reported the highest average mortgage rates in seven years. 30-year mortgage rates averaged 4.66 percent; rates for a 15-year fixed rate mortgage averaged 4.15 percent and rates for 5/1 adjustable rate mortgages averaged 3.87 percent.

Discount points averaged 0.40 percent for fixed rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages. Mortgage rates have not risen so fast at the beginning of the year for 40 years. Analysts at Freddie Mac said that home sellers, as well as buyers, may be sidelined as inventories of homes shrink and mortgage rates rise. This could mean that sellers as well as buyers will wait until market conditions and mortgage rates ease.

First-time home buyers accounted for 33 percent of existing home sales; this was lower than the average of 40 percent. First-time buyers are important to real estate markets as their purchases of pre-owned homes enable homeowners to buy their next homes.

New jobless claims rose to 234,000 claims filed as compared to expectations of 219,000 new claims filed. 223,000 new claims were filed the prior week.

Whats Ahead

This week’s scheduled economic releases include readings from Case-Shiller on home prices, construction spending and pending home sales. ADP and Non-Farm payrolls and the national unemployment rate will also be released.

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