On the Fence about Buying in 2022?

 

Why Inflation Shouldn’t Stop You from Buying a Home in 2022

If you’re following along with the news today, you’re probably hearing a lot about record-breaking home prices, rising consumer costs, supply chain constraints, and more. And if you’re thinking about purchasing a home this year, all of these inflationary concerns are likely making you wonder if you should wait to buy. Investopedia explains that during a period of high inflation, prices rise across the board. And while home prices aren’t immune from this increase, here’s why inflation shouldn’t stop you from buying a home in 2022.

Homeownership Offers Stability and Security

Home prices have been increasing for quite some time, and experts say they’re going to continue to climb throughout 2022. So, as a buyer, how can you protect yourself from rising costs for things like food, shelter, entertainment, and other goods and services? The answer lies in housing.

Buying a home allows you to lock in your monthly mortgage payment for the foreseeable future. That means as other prices rise, your monthly payment will be consistent thanks to your fixed-rate mortgage. This gives you the peace of mind that the bulk of your housing costs is shielded from inflation.

James Royal, Senior Wealth Management Reporter at Bankrate, says:

“A fixed-rate mortgage allows you to maintain the biggest portion of housing expenses at the same payment. Sure, property taxes will rise and other expenses may creep up, but your monthly housing payment remains the same.”

If you rent, you don’t have that same benefit and you won’t be protected from rising housing costs. As an added incentive to buy, consider that today’s mortgage interest rates are lower than they have been in decades. While inflation decreases what your dollars can buy, low mortgage rates help counteract it by boosting your purchasing power so you can get more home for your money. They also help keep your monthly payments down. This is especially important during an inflationary period because you’ll want to protect yourself from the impact of inflation as much as possible.

Ali Wolf, Chief Economist at Zonda, explains:

“If you have cash and are expecting inflation, you want to think through where you can put your money so it does not lose value. Housing is commonly looked at as a good inflation hedge, especially with interest rates so low.”

Bottom Line

The best hedge against inflation is a fixed housing cost. That’s why you shouldn’t let it stop you from buying a home this year. Not sure where to start? Let’s connect so you have expert advice and help throughout every step of the homebuying process.

If you have a home to sell - the time to prepare for a "spring market" is already underway. Contact me for a free consultation and I can walk you through everything. Want a quick home value estimate? Enter your address HERE.

 

2022 Housing Market Forecast [INFOGRAPHIC]

Some Highlights

• What does the coming year hold for the housing market? Here’s what experts project for 2022.
• Mortgage rates are projected to rise and so are home prices. Experts are forecasting buyer demand will remain strong as people try to capitalize on rates and prices before they climb, creating another strong year for home sales.
• Let’s connect so you can make your best move in the new year.

Referrals are greatly appreciated - know someone thinking of a move? Please share my information with your friends and family.

For Sale By Owner, and Discount Services

 

Don’t Tackle Selling Your Home on Your Own – an Agent Can Help

For Sale By Owner and Discount Services are, on the surface, two separate topics, but the reasons for avoiding these options when you sell your home are largely the same. This week, Inman published an article that touched on a few things out there that are hurting the Real Estate profession and one in particular struck me, and that is the concept of the "marginal agent". I am not sure if he coined the term, but in this article, Kalama Kim, a senior vice president of Hawaii-based Coldwell Banker Pacific Properties discussed this concept of the "marginal agent" - referring to agents who don't give quality service and who therefore bring down the reputation of other agents and lower our perceived value.

If you’re looking to maximize your sale and minimize your effort, you need to work with a real estate professional. In a sellers’ market like today’s, it can be tempting to list your house on your own – known as For Sale By Owner (FSBO). But the truth is, a real estate professional can save you time and money by managing every step of the process, from pricing your home to reviewing documents and handling negotiations. Even if you go with a discount agent, you are knowingly, or unknowingly giving up the benefits of having a quality agent represent you in one of your most important transactions. (and if you don't think that discount broker is skimping on services that could end up costing you more than your discount is "saving" you, make sure you read the fine print)

Before you decide to sell your house on your own, here are five reasons why working with a full-service agent is your best bet to maximize the sale of your home.

1. First impressions are everything – and an agent knows how to make a great one.

Prepping a house for sale requires a significant amount of time and effort, even though it may seem simple at first glance. Doing it right so it stands out takes expertise and an understanding of what buyers are looking for. An agent considers things like:

• Should you take down any personal art or pictures?
• How much landscaping should you invest in to boost your house’s curb appeal?
• What wall colors are most appealing to buyers?

An expert real estate advisor relies on their experience to answer these questions and more so you don’t invest in the wrong things. Your time and money are important – you shouldn’t waste either.

2. Agents have tools to maximize the number of views your home gets.

Put plainly, the more buyers that view your house, the better your return will be. In our current market, homes are receiving 3.8 offers on average per sale, according to recent data from the National Association of Realtors (NAR). While that’s promising for the sale of your home, it’s important to understand your agent’s role in bringing buyers in.

Agents have multiple tools at their disposal – from social media to agency resources – to ensure your home is viewed by more prospective buyers. Leveraging the tools available to your agent and your agent’s expertise may help boost your sale price as well.

3. An agent won’t miss anything in the fine print.

Your agent can also save you time by taking any guesswork out of navigating the required documentation. Today, more disclosures and regulations are mandatory, meaning the number of legal documents you need to juggle is growing. Why would you want to trust all of that to the agent who represents the other side?

Because there’s so much to take care of, it can be hard to truly understand all of the requirements and the fine print. That’s where an expert advisor can truly shine. They’ve been through the process before and can be your guide to avoid any costly missteps.

4. Expert advisors know the market and how to price your home.

 Another way your agent maximizes the sale of your home is by making sure it’s priced right. You can get a Free Internet Estimate on your home's value, but only use that information as one of multiple sources of data. Until that real estate app develops the ability to walk inside your home (and all the properties it's comparing you to), these programs use algorithms that are not completely accurate and can really mess with seller expectations. Real estate professionals have the experience to compare your house to recently sold homes in your area. They also understand the market at large and can factor in any upgrades you’ve completed to your home. Combining these factors is the key to making sure your home is priced to move quickly – and at a competitive price. 

When you FSBO, you’re operating without this expertise. Even with your own research, you may not find the most up-to-date information and could risk setting a price that’s inaccurate or unrealistic. That neighbor who sold their home 3 months ago negotiated their contract 4 or 5 months ago. Their experience could be very different from the one you find yourself in when you decide to sell. The market changes month to month, season to season. If you price your house too high, you could turn buyers away before they’re even in the front door. This could also cause problems when it’s time for the appraisal.

5. Your agent will be an expert negotiator.

In addition to their experience navigating sales, real estate professionals understand how to negotiate every aspect of a deal. They also know all the parties that will be involved with the sale, including:

• The buyer, who wants the best deal possible.
• The buyer’s agent, who will use their expertise to advocate for the buyer.
• The inspection company, which works for the buyer and will almost always find concerns with the house.
• The appraiser, who assesses the property’s value to protect the lender.

An agent relies on their experience and training to make the right moves during the negotiation. They’ll know what levers to pull, how to address each individual’s concerns, and when you may want to get a second opinion. Selling your house as a FSBO means you’ll need to be prepared to have these conversations on your own. Buying and selling a home can be a very stressful process and emotions can run high on both sides. It can be invaluable to have that representative who can take on the headaches for you, see things from the outside looking in, and can protect you from costly mistakes.

Bottom Line

Selling a house takes time, effort, and expertise – don't go at it alone. Let’s connect to make sure you have an expert on your side to make the most of your sale

Waiting to Buy a Home WILL Cost You

 

Are you waiting until this "crazy market" cools down?

Some Highlights

• If you’re thinking of buying a home but wondering if waiting a few years will save you in the long run, think again.
• The longer the wait, the more you’ll pay, especially when mortgage rates and home prices rise. Even the slightest change in the mortgage rate can have a big impact on your buying power no matter your price point.
• If you have a home to sell, now is the perfect time to market it.
• Don’t assume waiting will save you money. Let’s connect to set the ball into motion today while mortgage rates are hovering near historic lows.

If you have been thinking of buying or selling in Maryland and have any questions, please don’t hesitate to reach out for a consultation. Want to stay put but refinance to a better rate? I have a mortgage advisor on my Weichert team who would be happy to talk with you as well.

The Number ONE Question to Ask before Hiring an Agent to Sell Your Home

 Everyone loves to talk real estate. If you own a home, it is probably your biggest asset and well, it’s a good idea to keep tabs on what it’s worth. The year 2020 has been a difficult year for everyone, but with interest rates and inventory plummeting, the Maryland real estate market has gotten pretty interesting. I am constantly asked about the current state of things – what homes in the neighborhood sold for, how much over list price are people willing to pay, how long is this going to last? The other thing I hear frequently is that people would love to sell their home in this market. With inventory so low, I love to hear that. We need more homes for the thousands of buyers who are searching. It is easy to believe that in this market, all you have to do is stick a sign in the yard and it’ll sell, right? Yep, there’s a good chance it will, but will you be getting the best price for your home if that is all you do? Doubtful. I’ll save my speech on “For Sale By Owners” and the huge legal risks they are taking when trying to sell their own property for another time and focus on the big topic of interest. Money.

There is only ONE reason homes are selling over list price by thousands of dollars. Competition. Supply and demand is the oldest business concept in the book and it is not a secret. It is as simple as that. There are more buyers than homes for sale right now, and there will be for a while longer. So how do you take advantage of this market as a seller? You have to get the most people possible to SEE your property. If no one is seeing it, no one is buying it, and they certainly aren’t competing over it. If you are not in the MLS (multiple listing service utilized by agents), you are missing out on serious buyers working with agents who are ready and more importantly, prequalified to buy. What you might not realize is that this is just the tip of the marketing iceberg, and if putting a sign on your property and throwing it up on the MLS is all your agent is going to do to market your property, you are not going to get the highest and best price for your home, period. An overwhelming percentage of people start their homebuying search online – but if they aren’t moved to get in their car and come see your home in person, they aren’t buying it. There have always been agents who take a listing, plop a sign in the yard, toss some iphone photos up on the MLS and move on. (I expect I will write another blog solely on my feelings on smart phone property photos). In this market, many who used to provide premium service have stopped doing what they typically do because the offers will come without it. So, what is the question that is more important than what is your commission? What question will actually help you decide who to hire? Here it is: “What are you going to do to market my home?”

If you or someone you know is interesting in selling a home, please contact me at meredith.salita@gmail.com to find out what I do for every client to make sure you get the highest and best price for your home.

Contract Negotiation in a Crazy Market

 Well, it's really not news at this point. The current market is extremely competitive. The inventory is low and we have a backlog of homebuyers that will last months if not years. What we are witnessing is not a covid induced bubble, but a simple business concept - supply & demand. When supply goes down, prices goes up. However, in real estate, price is not always the deciding factor! There are so many other things in a transaction to be factored in! Contingencies: Home Inspection, Financing, Appraisal, Radon, Home Sale to name the most common - and then there are other elements - rent-back, settlement date, taxes. Every transaction is unique because people are unique and homes are tied to the people who are buying and selling them.

I believe we still have months and months of fierce competition ahead. It's a sellers market for sure, but buyers are still winning and moving in to their dream homes! Rates are still low, but we'll see them go up and what you can afford now will be different than what you can afford then. In the Real Estate game, only one buyer wins per house. You can't win if you don't play and there are definitely ways to play to win! One thing is for sure, having an agent you trust who can get you through these important decisions is paramount.

If you are thinking of selling or buying and have any questions, please don’t hesitate to reach out for a consultation. Want to stay put but refinance to a better rate? I have a mortgage advisor on my team who would be happy to talk with you as well.

Will Moving Make You Happy?

 

Recently realtor.com put out an article about this question and it made me pause. If you know me and my husband, we are always thinking about moving – we have only moved twice in 20 years, but we are always talking about it and have come close to moving a couple of times since our last move. We call ourselves “long-term flippers”. Both homes we have purchased have required top-to-bottom re-imagining. We are for some reason really drawn to houses in sad shape but with great bones – it makes us happy to imagine how to bring neglected homes back to life. So, this happens to be a key question for me. There are a lot of factors to look at in making that decision and it does boil down to net happiness (meaning how much happiness is left after the financial stress, time and effort are spent!). As an agent, my number one goal for my clients is that they are happy – happy with me, happy with the process of selling, happy with the home they purchase.

The article makes the point, and I’m paraphrasing: that if you aren’t satisfied in life, you might be projecting that onto your home, so maybe it’s not the home that is the problem. I think this is absolutely valid. It’s so important to examine what the impetus is for deciding to move. General dissatisfaction might not be the best reason. Moving is time consuming and stressful no matter how smooth it goes. Perhaps the old adage “the grass is always greener…” is also at play?  OR Has it been part of your 5 or 10 year plan all along, do you need more space, less space? How about commute time? Do you even commute anymore? Commute time has always been a big deciding factor as people think about moving, but now, does it matter for you? Are you going to be working from home more? Well perhaps that means you need a more professional workspace in your home. A good friend of mine has been commuting over an hour every day for years, and she actually still has to go to work as she’s in the medical profession – rather than moving, she made the decision to change jobs. When asked how she was liking her new job? “Life changing!”

Maybe you have kids? How much longer will they need extra space at home for virtual learning? Has the pandemic refocused anything else for you? Do you wish you had more usable outdoor space? Do you wish you were closer to walking/biking trails? Before Covid, a pool in this area was not necessarily a selling feature, but post-covid, they are in high demand! Houses are selling really fast right now, but houses with pools are scooped up, well, faster than fast. I would argue that if these things are contributing to your quality of life (or lack thereof), moving might actually make you happier because quality of life is where it’s at.

Have you heard this phrase yet? “Money is on Sale!” In my business, I’ve been hearing it a lot in the past six months. The mortgage market right now is making it so easy to “move-up” with the ability to buy more house because of how low the rates are right now. The flip side to that is that for those people who have already taken advantage of purchasing a home at 2.5% or 2.75%– those people are going to want to hold on to those mortgages because in all likelihood we won’t be seeing these rates again. (historic lows people!) This could cause people to stay in their homes longer than the 5-7 year average contributing to continuing low inventory. If you are trying to downsize, now might be the perfect time to cash out of your home. Inventory is low, making it a great time to offer a property for sale. With the rules of supply and demand in play, we are seeing homes appreciate at amazing rates.

 

If you are thinking of selling or buying and have any questions, please don’t hesitate to reach out for a consultation. I’d be happy to help you figure out if moving would make you happy! Want to stay put but refinance to a better rate? I have a mortgage advisor on my Weichert team who would be happy to talk with you as well.