In the most recent Profile of Home Buyers and Sellers from the National Association of Realtors, married couples once again topped the first-time homebuyers statistics in 2018 at 54% of all buyers.  This is very understandable as buying

One of the biggest challenges sellers face when getting their house ready to go on the market is decluttering.  Clearing out some of your more personal decorating choices allows buyers to imagine themselves living in the house.

Those homeowners who plan on selling their house this year may want to consider following KonMari Method of Tidying Up.  Marie Kondo, the inventor of the method has gained a lot of popularity with her new Netfix series.  She gives some great tips for sorting through the years of accumulated possessions that we all collect in our homes, especially if you will be downsizing to a smaller place.

The price for residential real estate, like the price of most items, is determined by the theory of “Supply and Demand”.  If many people are looking to buy real estate and the supply of real estate is limited, the price of real estate increases.

The supply of homes for sale dramatically increases every spring, according to the National Association of Realtors.  

As an example, here is what happened to housing inventory at the beginning of 2018:

If you are thinking of selling your house this year or buying a new one, I'm sure today's real estate headlines can be a bit confusing...perhaps even concerning.  Are home prices dropping or are they just rising at a slower rate?  What is really happening with interest rates?  What impact will this economy really have on the housing market?

As a seller or buyer, or both, in today's market, it is important for you to know what all of this will mean to you and your family if you go ahead with the move.  So here are three things that will be important for you to understand if you are selling or buying a home this year:

A long time ago, a gallon of milk used to be $0.30.  Gas was $0:12 a gallon.  But not anymore.  Houses were also much less expensive than they are now.  It was inflation that raised the price of all three of these items, along with the price of almost every other item we purchase.

The reason we can still afford to purchase items that we want or need, is because our wages have also risen over time.  The better measure of whether an item is more expensive than it was before is what percentage of our income it takes to purchase that item today compared to an earlier time.  Let’s look at buying a home.

The cost of a home is determined by three major components:

Every homeowner I speak to wants to make sure they maximize their financial gain when they sell their home.  But how do you ensure that you receive the maximum value for your house?

I recommend these two steps to homeowners who want to ensure they get the highest price possible:

1. Price the house at market value or a little lower

This may seem counterintuitive, but let’s look at this concept for a moment.  Many homeowners think that pricing their home a little over market value will leave them with room for negotiation.  In actuality, this just dramatically lessons the demand for their house as shown in this chart:

Instead of the homeowner trying to “win” the negotiation with one buyer, they should price it so that demand for their house is maximized.  By doing this, the homeowner will not be fighting with a buyer over the price but will instead have multiple byers fighting with each other over the house.

HGTV gives this advice: “First impressions are everything when selling your house.  Studies have shown that the first two weeks on the market are the most crucial to your success.  During these initial days, your house will be exposed to all active buyers.  If your price is perceived as too high, you will quickly lose this initial audience and find yourself relying only on the trickle of new buyers entering the market each day.  Markets are dynamic, and your price has an expiration date.  You have one chance to grab attention.  Make sure your pricing helps you stand out on the shelf – in a positive way.”

2. Use a Real Estate Professional

This, too, may seem counterintuitive.  The homeowner may believe that he or she will make more money without having to pay a real estate commission, but studies have shown that houses typically sell for more money when handled by a real estate professional.  

Research by the National Association of Realtors in their 2018 Profile of Home Buyers and Sellers revealed that, “the median selling price for all For Sale by Owners was $200,000 last year.  However, houses that were sold with the assistance of an agent had a median selling price of $264,900 – nearly $65,000 more for the typical house sale.”

So to ensure that you maximize the money you get for your house, be sure to price your house at or slightly below the current market value and hire a professional.

If you are thinking about selling your home this year and want to talk more about the proper price point for your house, feel free to reach out to me.

All the indicators that I have looked at are pointing to a great Real Estate Market in our area this year!  It looks like home sales will out pace 2018.  Interest rates are projecting to increase steadily throughout 2019, but buyers will still be able to get a rate lower than their parents and grandparents.  Home prices will appreciate in our area but the rate of appreciation will start to slow down.

Here is a look at how the National Real Estate Market is shaping up for 2019:

One of the most common home loans is a 30-year fixed rate mortgage.  If the thought of it taking 30 years to pay off your mortgage seems frightening, here are some easy ways to shorten that term and also end up saving you thousands of dollars over the life of your loan.

Any additional payments to the principal amount, the original sum of money borrowed in a loan, helps to lower the amount of interest that you will pay over the lie of your loan and can also help to shave years off the loan as well.

When you make extra payments toward your loan, the key is to let your lender know that you want the extra funds to go toward your principal balance as they will not necessarily do this for you automatically.  I recommend that you contact your lender to see what you need to do if you want to make an extra payment either by check or online.  Some lenders may require a note on your check or have you submit 2 checks.

The good news is you don't have to double your mortgage payment to make a big difference.  If you have a 30 year mortgage on a median-priced home in our area of $250,000 with a 5% interest rate, you will have a mortgage payment of $1,342.05 for the monthly principal and interest payment.  Over the course of the loan, if you pay just your monthly mortgage payment , you will have paid $244,133.89 in interest!

To help save on the amount of interest you pay over the life of the loan, here are three options you may want to consider:

First, pay an additional 1/12th of your mortgage payment every month.  In the example above, adding $111.84 to your monthly mortgage payment might not seem like a lot, but each year you will have paid one extra month's of payments which will shorten the term of your loan by 4 years and 8 months while saving you $42,000 in interest.

Second, pay an additional $50 per month towards your mortgage.  That might not seem like enough to make a big difference but that extra $50 will save you over $21,000 in interest and will take over 2 years of the end of your loan. 

And third, make a one-time lump sum payments whenever you can.   If whenever you find yourself with a little extra money, paying that money towards the principle can save you thousands of extra dollars on interest and shave off time on the length of the loan.

Now, before you apply any extra money towards your principal, I recommend that you first pay of higher interest rate loans such as credit cards, car loans, etc.  You also need to evaluate if there will be an advantage to paying off additional principal if you intend to stay in a home less than about 11 years.

If you are wondering what options would make sense for you to save thousands of dollars in interest and shorten the term of your loan, feel free to reach out to me.

The forecast for Home Sellers in our area looks very good for 2019.  Home values have been increasing throughout most of our region and buyers are being prodded to buy a home by rising interest rates.  So this winter promises to be an unusually strong real estate market throughout the Philadelphia region.

If you are considering selling your home in 2019, here are 5 reasons to consider selling your home this winter rather than waiting for the spring or later in the year.

First, the latest Buyer Traffic Report from the National Association of Realtors (NAR) shows that buyer demand remains strong throughout the vast majority of the country.  At this time of year in our area, you will find many home buyers who are motivated to by a new home for a fresh start to the New Year and you have a large supply of couples who will get married in the spring and want to buy a home before they get married.  These buyers are ready, willing and able to purchase…and are in the market right now.  More often than not, multiple buyers are competing with each other to buy a home.

Second, housing inventory is still under the 6-month supply that is needed for a normal housing market.  This means that in most of the areas in our region, that are not enough homes for sale to satisfy the number of buyers in the market.  This is good news for homeowners who have gained equity as their home values have increased.  However, additional inventory could be coming to the market soon.

Historically, the average numbers of years a homeowner stayed in their home was six but has hovered between nine and ten years since 2011.  There is a pent-up desire for many homeowners to move, as they were unable to sell over the last few years because of a negative situation.  As home values continue to appreciate, more and more homeowners will be given the freedom to move.

The choices buyers have will continue to increase.  Don’t wait until the other inventory comes to market before you decide to sell.

Third, you will find that the home selling process is a lot quicker.  Today’s competitive market has forced home buyers to do all they can to stand out from the crowd, including getting pre-approved for their mortgage financing.  This makes the entire selling process much faster and simpler as buyers know exactly what they can afford before home shopping.  According to Ellie Mae’s latest Origination Insights Report, the time to close a loan has dropped to 46 days and I am finding more and more loans to close within 30 days.

Fourth, there will never be a better time to move up.  If your next move will be into a premium or luxury home, now is the time to move up!  The inventory of homes for sale at these higher price ranges has forced these markets into a buyer’s market.  This means that if you are planning on selling a starter or trade-up home, your home will sell quickly, and you’ll be able to find a premium home to call your own!

Prices are projected to appreciate by 4.8% over the next year according to CoreLogic and interest rates are on the rise.  If you are moving to a higher priced home, it will wind up costing you more in raw dollars, both in down payment and mortgage payment, if you wait.

Fifth, it’s time to move on with your life.  Look at the reason you decided to sell in the first place and determine whether it is worth waiting.  Is money more important that being with family?  Is money more important than your health?  Is money more important than having the freedom to go on with your life the way you think you should?

Only you know the answers to the question above.  You have the power to take control of the situation by putting your home on the market this winter.  Perhaps the time has come for you and your family to move on and start living the life you desire.  That is what is truly important, isn’t it.

If you think you are ready to move forward and want to talk more about the benefits of selling your home this winter or getting an idea of what your home would sell for right now, feel free to reach out to me.

As a buyer in today’s market, you need to be very concerned about the “long-term cost” of the home.  With home prices expected to appreciate on average by 4.8% over the next 12 months and interest rates predicted to be in the 5.25% and 5.5% range in the next 12 months, waiting to buy a home no longer makes financial sense. 

Here is a simple demonstration of the financial impact that an increase in interest rate and appreciation would have on the mortgage payment of a home selling for $250,000 today if you were to wait a year:

As you can see, the difference in the monthly payment between buying the home today versus buying it at the end of next year is calculated to be $143.24 which is $1,718.8 annually.  Over a 30 year period, the total long-term cost of buying the home a year from now instead of today would be an additional $51,566.

So if buying a home is in your plan for this coming year, doing it sooner rather than later could save you thousands of dollars over the term of your loan.  If you would like to talk more about your ability to buy a home now instead of a year from now at a higher long-term cost to you, feel free to reach out to me.