For seniors who have modest incomes, paying for housing- whether a home they own, a rental, or a room in a facility that provides additional senior care assistance- can feel nearly impossible. According to the National Council on Aging, in 2019 over 25 million Americans 60 and older were living on $31,225 or less per year, a status recognized as “economically insecure.” For those who rent, have housing debt, or need some form of assisted living, such an income is often inadequate for their housing needs.
These questions will help you decide whether you’re ready for a home that’s larger or in a more desirable location. If you answer yes to most of the questions, you may be ready to move.
Have you built substantial equity in your current home?
Check your annual mortgage statement or call your lender to find out how much you’ve paid down. Usually you don’t build up much equity in the first few years of your mortgage, as monthly payments are mostly interest. But if you’ve owned your home for five or more years, you may have significant, unrealized gains.
Has your income or financial situation changed?
If you’re making more money, you may be able to afford higher mortgage payments and cover the costs of moving. If your income has decreased, you may want to consider downsizing.
Have you outgrown your neighborhood?
The neighborhood you pick for your first home might not be the same one in which you want to settle down for good. You may have realized that you’d like to be closer to your job or live in a better school district.
Are there reasons why you can’t remodel or add on?
Sometimes you can create a bigger home by adding a new room or building up. But if your property isn’t large enough, your municipality doesn’t allow it, or you’re simply not interested in remodeling, then moving to a bigger home may be your best option.
Are you comfortable moving in the current housing market?
If your market is hot, your home may sell quickly and for top dollar, but the home you buy will also be more expensive. If your market is slow, finding a buyer may take longer, but you’ll have more selection and better pricing as you seek your new home. Ask your real estate professional what they see happening locally.
Are interest rates attractive?
Low rates help you buy “more” home, and also make it easier to find a buyer for your current place.
Is the effort and cost of maintaining your current home becoming difficult to manage?
Roby Robertson, A REALTOR ® can help you decide whether a smaller house, condo, or rental would be appropriate.
Carolina Living Real Estate your Realtor’s For Life
With all of the volatility in the stock market and uncertainty about the Coronavirus (COVID-19), some are concerned we may be headed for another housing crash like the one we experienced from 2006-2008. The feeling is understandable. Ali Wolf, Director of Economic Research at the real estate consulting firm Meyers Research, addressed this point in a recent interview:
“With people having PTSD from the last time, they’re still afraid of buying at the wrong time.”
There are many reasons, however, indicating this real estate market is nothing like 2008. Here are five visuals to show the dramatic differences.
1. Mortgage standards are nothing like they were back then.
During the housing bubble, it was difficult NOT to get a mortgage. Today, it is tough to qualify. The Mortgage Bankers’ Association releases a Mortgage Credit Availability Index which is “a summary measure which indicates the availability of mortgage credit at a point in time.” The higher the index, the easier it is to get a mortgage. As shown below, during the housing bubble, the index skyrocketed. Currently, the index shows how getting a mortgage is even more difficult than it was before the bubble.
2. Prices are not soaring out of control.
Below is a graph showing annual house appreciation over the past six years, compared to the six years leading up to the height of the housing bubble. Though price appreciation has been quite strong recently, it is nowhere near the rise in prices that preceded the crash.There’s a stark difference between these two periods of time. Normal appreciation is 3.6%, so while current appreciation is higher than the historic norm, it’s certainly not accelerating beyond control as it did in the early 2000s.
3. We don’t have a surplus of homes on the market. We have a shortage.
The months’ supply of inventory needed to sustain a normal real estate market is approximately six months. Anything more than that is an overabundance and will causes prices to depreciate. Anything less than that is a shortage and will lead to continued appreciation. As the next graph shows, there were too many homes for sale in 2007, and that caused prices to tumble. Today, there’s a shortage of inventory which is causing an acceleration in home values.
4. Houses became too expensive to buy.
The affordability formula has three components: the price of the home, the wages earned by the purchaser, and the mortgage rate available at the time. Fourteen years ago, prices were high, wages were low, and mortgage rates were over 6%. Today, prices are still high. Wages, however, have increased and the mortgage rate is about 3.5%. That means the average family pays less of their monthly income toward their mortgage payment than they did back then. Here’s a graph showing that difference:
5. People are equity rich, not tapped out.
In the run-up to the housing bubble, homeowners were using their homes as a personal ATM machine. Many immediately withdrew their equity once it built up, and they learned their lesson in the process. Prices have risen nicely over the last few years, leading to over fifty percent of homes in the country having greater than 50% equity. But owners have not been tapping into it like the last time. Here is a table comparing the equity withdrawal over the last three years compared to 2005, 2006, and 2007. Homeowners have cashed out over $500 billion dollars less than before:During the crash, home values began to fall, and sellers found themselves in a negative equity situation (where the amount of the mortgage they owned was greater than the value of their home). Some decided to walk away from their homes, and that led to a rash of distressed property listings (foreclosures and short sales), which sold at huge discounts, thus lowering the value of other homes in the area. That can’t happen today.
Bottom Line
If you’re concerned we’re making the same mistakes that led to the housing crash, take a look at the charts and graphs above to help alleviate your fears.
The Coronavirus (COVID-19) has caused massive global uncertainty, including a U.S. stock market correction no one could have seen coming. While much of the news has been about the effect on various markets, let’s also acknowledge the true impact it continues to have on lives and families around the world.
With all this uncertainty, how do you make powerful and confident decisions in regard to your real estate plans?
“At the very least, the coronavirus could cause some people to put home sales on hold.”
While this is an understandable approach, it is important to balance that with how it may end up costing you in the long run. If you’re considering buying or selling a home, it is key to educate yourself so that you can take thoughtful and intentional next steps for your future.
For example, when there’s fear in the world, we see lower mortgage interest rates as investors flee stocks for the safety of U.S. bonds. This connection should be considered when making real estate decisions.
“The Fed’s action was expected but perhaps not to this degree and timing. And the policy change was consistent with recent declines for interest rates in the bond market. These declines should push mortgage interest rates closer to a low 3% average for the 30-year fixed rate mortgage.”
This is exactly what we’re experiencing right now as mortgage interest rates hover at the lowest levels in the history of the housing market.
Bottom Line
The full impact of the Coronavirus is still not yet known. It is in times like these that working with an informed and educated real estate professional can make all the difference in the world.
The start of each year provides an opportunity for setting new goals and resolutions to accomplish. And what better resolution is there than boosting the safety and security of your home? That’s why we’ve put together this list of solutions to consider that can make 2020 the safest year yet for you and your family:
Getting
a New Furnace
We’ll start with one factor that most families
don’t think about until there’s an obvious problem: the furnace. This year,
have a professional come out and look at your furnace to make sure it’s in good
condition. If your home’s furnace is old or malfunctioning in some way, it can
pose a number of dangers for your household.
The most significant threat is carbon monoxide
poisoning, as this invisible, odorless gas can cause serious—potentially
fatal—health issues. A bad furnace can also lead to an increase of pathogens, mold, and dust circulating in your
home, which can cause breathing problems for people in your household.
Furthermore, if a furnace is not working properly, it can become a fire hazard.
HomeAdvisor notes the average cost of
installing or replacing a furnace is currently between $2,543 and $6,121. Whether you pay
within this range or pay more or less will depend on what type of furnace is
installed. For instance, an electric furnace can run you anywhere from $1,700
to $7,000, while a gas furnace typically costs $2,000 to $10,000.
When you’re shopping for different types of
furnaces, remember that labor will usually cost $500 to $2,000, depending on
the furnace you choose and the scope of the work involved.
Having
Your Roof Inspected
The roof is your home’s first line of defense
against the elements. As Medium explains, it’s also a critical structural
component, and if it’s compromised in any way, it can lead to severe structural
problems which can pose safety concerns for you and your
family. Call a professional inspector to look your roof over for any issues. If
your roof is getting old, has missing or damaged shingles, or displays any
other problems, you should have it repaired or replaced appropriately.
Upgrading
Your Security System
One of the most effective ways to protect your
family and property is to invest in a quality home security system. There are
many smart security systems on the market that can reduce the likelihood of
your home falling victim to burglary or other property crimes.
Go for a security package that includes features
like surveillance cameras, door and window sensors, and a doorbell camera. Many
systems can be installed DIY-style,
and monitoring runs from free to $59.99 per month, depending on the service and
features selected.
Taking
Additional Safety Precautions
A lot of maintaining a safe home comes down to
the people living in it. To keep your family safe and secure, consider these
precautions:
Make sure your entry doors are
stable, and replace the door or add support if necessary.
Trick burglars when no one is home
by setting timers to turn your lights on and/or by using a fake TV simulator.
Ask a neighbor to pick up your
mail and park their car in your driveway when you’re on vacation.
Keep your valuables well-hidden
from outside observers.
Add motion sensors and warning signs to
your front yard and backyard.
Nothing is more important than ensuring the
safety of your family and property. Get professionals out to look at your
furnace and roof, and have them repaired or replaced accordingly. Also,
research the many types of home security options on the market, and choose what
will work best for your family’s needs. Finally, be sure to follow essential
protocols that will help protect your home, both when you’re at home and away.
Carolina Living Real Estate Can Help with homes of all sizes and prices!
Movies, tv shows, and celebrities often have us dreaming of owning large homes, but the reality for most people is quite different.
Since 2015, the square footage of newly built houses has been shrinking, according to Yahoo Finances. This is not projected to change as we continue into the beginning of the year.
“We expect this downsizing trend to continue in 2020, driven by a confluence of economic and demographic trends.”
Why are smaller homes trending now?
As noted in the article, there are a few main reasons for this demand:
“Many of today’s younger, millennial home buyers have expressed a preference for denser, more urban homes that are more walkable to shared amenities.”
“Today’s older homeowners are expressing a desire for smaller, less maintenance-heavy and more accessible (read: less stairs) homes as they age and move into newer homes.”
With these two demographic groups surging through the market, the demand for this type of home is rising. If you’re a homeowner with a smaller-scale house, now may be a great time to sell, as the demand for this end of the market is surely on the rise.
Bottom Line
The demand for smaller houses will continue to rise throughout 2020. Let’s get together to discuss what the housing inventory looks like in your neighborhood. It might be time for you to take advantage of this trend!
Contact Your Carolina Living Real Estate Agent to help your plans!
When closing out another year, it’s normal to wonder what’s ahead for the housing market. Though there will be future inventory issues, we expect interest rates to stay low and appreciation to continue.
Here’s what three experts are saying we’ll likely see in 2020:
“I think the biggest surprise from the forecast is how long the market is staying in this low inventory environment, especially as Millennials are in a major home-buying phase…sellers will contend with flattening price growth and slowing activity with existing home sales down 1.8%. Nationwide you can look to flat home prices with an increase of less than 1%.”
“If current trends hold, then slower means healthier and smaller means more affordable. Yes, we expect a slower market than we’ve become accustomed to the last few years…consumers will continue to absorb available inventory and the market will remain competitive in much of the country.”
As we can see, we’re still going to have a healthy market. It is forecasted to be a more moderate (or normal) market than the last few years, but strong enough for Americans to continue to believe in homeownership and to capitalize on the opportunities that come with low interest rates.
Bottom Line
If you’re wondering what’s happening in our local market, let’s get together today.
Call Carolina Living Real Estate for Comprehensive Review of Your Real Estate Needs!
This coming year the housing market will be defined by 3 things- inventory, interest rates, and appreciation. But the biggest issue the housing market will face in 2020 is an inventory shortage. There aren’t enough homes on the market for buyers, especially on the lower end of the market. This is a topic that has come up frequently within the past several months.
Based on what is forecasted, we know that interest rates are projected to remain low and that appreciation is expected to continue as we move into 2020. Additionally, the upcoming election will provoke many unique perspectives on the health of the US housing market. The challenge will be understanding what is actually happening and how you can best position yourself if you are thinking of buying or selling your home.
Here are several perspectives to consider on the inventory issue facing housing next year:
“Despite increases in new construction, next year will once again fail to bring a solution to the inventory shortage that has plagued the housing market since 2015. Inventory could reach a historic low as a steady flow of demand, especially for entry level homes, and declining seller sentiment combine to keep a lid on sales transactions.”
“Inventory has been falling annually for five straight months, after it recovered slightly toward the end of last year, due to a spike in mortgage rates. Rates began falling again by spring of this year. Homebuilders have been increasing production slowly, but it’s not enough to meet the increasingly strong demand.”
“As millennials — the largest cohort of buyers in U.S. history — embrace homeownership and take advantage of this year’s unexpectedly low mortgage rates, demand is outstripping supply, causing inventory to vanish. The housing shortage is felt acutely at the entry-level of the market, where most millennials are looking to break into the market for their first home.”
Bottom Line
The most important thing you can do is understand what is happening in your local market. You may not be able to avoid some of the issues brought on by low inventory, but you can be educated and prepared. Let’s connect and discuss the options that make the most sense for you and your family.
The world of insurance is often a confusing one. There are a lot of things to consider, and there is typically a lot of jargon involved that does little to clear things up. However, one thing we can all agree on is that insurance is necessary, and also that it can be expensive.
Beyond that, though, there are still a lot of questions.
One of the most common questions we find people ask about insurance, especially homeowners insurance, deals with the deductible. What is it? How does it work? How does it affect your premium? And, perhaps most importantly, when you’re choosing a policy, which deductible should you go for?
Answering all these questions will help you not only make a smart decision when it comes time to selecting a deductible, but it will also help you better understand homeowners insurance in general, which will make you a smarter shopper who is more capable of finding the best deal.
As Always, contact Carolina Living Real Estate for comprehensive real estate advice and assistance. We are professional, experienced, patient and knowledgeable.
If
you are in need of a home office space, consider a garage conversion. Atypical garage is a great size for
a nice home office where you can have some peace to get some work done. So,
follow these tips to convert your garage to an incredible home office.
What If You Don’t Have a
Garage?
If
you don’t have a garage (or your garage is just too full), but you have space
on your property for a small structure, you should consider erecting a
building. When building a structure to accommodate your dream office, you can
choose from a variety of different materials, the most popular choices being
wood and steel. Wood is definitely beautiful, and it’s also an energy-efficientnatural insulator. Wood also
absorbs sound rather than amplifying it, so it can minimize echo in office
spaces. On the other hand, rain and snow can cause wood to warp and rot. Also,termites, carpenter ants, and other
insects can damage wood frames.
Steel
is extremely strong and can withstand earthquakes, strong winds, and torrential
rains. When wet, it doesn’t warp, expand, or attract fungus. Steel is also not
flammable, and it’s resistant to insects. Steel buildings are typically faster and easier to erect than
wood structures because the steel parts are pre-cut and ready to assemble.
Whether
you are using your existing garage space or erecting a new building, these tips
will help you create a beautiful home office space.
Pick Your Flooring
Your
garage probably has a concrete floor, and you can just clean it, polish it, and
be done with it — or you can go a completely different route. Engineered wood,vinyl flooring, carpeting, and
ceramic tile are all suitable options for your home office. If you are
upgrading to one of these choices, you may need toinstall a subfloor before laying
down your new flooring.
Insulate and Drywall
If
the walls of your space aren’t finished, you’ll want to add insulation and
drywall. This is a great DIY project that most anyone who is handy can do.
You’ll need to fill in any cracks and gaps with expanding foam, add the fiberglass insulation, and then
screw and glue the drywall.Dumpsters.com offers detailed
instructions on how to insulate your garage.
Add Electrical Outlets and
Lighting
Your
garage may not be equipped with enough outlets for your home office. If you
need more outlets, call in the pros; electricity is not something you want to
mess around with if you don’t really know what you are doing. An electrician
can add additional overhead lighting to the space as well as a circuit to your
breaker panel if necessary.
Put in Heating and Cooling
The
pricey option would be to extend your existing HVAC system to an attached
garage space or add a new separate system to your detached building. The more
reasonable choice would simply be to use aspace heater in the winter and
portable air conditioner in the summer. Fortunately, you can find affordable
options at your home improvement store.
Get WiFi
Your
office definitely needs reliable internet service. Your home WiFi might work well
if you are converting an attached garage, but you may need to move the router
closer to the garage. However, if your home WiFi is too weak to reach your new
office space, you can buy a stronger router, a WiFi network extender, or a
powerline network adapter toget a better signal.
Converting
a garage to an office space doesn’t have to be time-consuming or expensive. And
now for the fun part: decorating. Check local furniture stores, estate sales,
and online shops to find furniture that fits your needs and your design style.
From modernstand-up desks to classic, stately
pieces, you are sure to find something you love. Add a cozy couch, fun wall décor,
and other accent furniture to make the space your own.
