Wednesday, January 27, 2021

Five Things a First-Time Homebuyer Can Do To Boost Their Chances in a Hot Housing Market

 Buying a home is an exciting yet stressful life event. The current housing market is definitely a seller's market with tons of buyers and limited inventory. 



"Buyers walk in a home and say, 'This is it!' Then, they see all the business cards [from other agents] on the table and start panicking," says Georgia Stevens, president of the Seattle King County Realtors and managing broker of the Compass Washington agency.

If you are a first-time home buyer have no fear about the competition. Here are five tips to follow when shopping for your first house.

Start with an authentic budget

You will want to know how much home you can afford before you start house shopping. Get on solid financial ground from the beginning. Decide what your price range will be by looking at how much you can borrow and what your monthly budget will be.

A mortgage lender will be one of your first contacts during the home buying process. A mortgage lender can give you a preapproval letter. Getting preapproved on a mortgage will allow you and your realtor to get a gauge on what exactly you can afford. In this day in age with the current housing market, you have to have a preapproval letter from a lender to show real estate agents and sellers that you are a serious buyer.

"I always caution borrowers not to stretch for a home, and to establish a realistic budget that will afford a financial cushion for the future," Scott Lindner, national sales director for mortgage lending at TD Bank, said in an email. "This is even more important in the current uncertain environment."

Learn what to expect before you shop

An experienced real estate agent can help you with the process step by step along with verbiage you might not be familiar with. It is best to be familiar with the process before you start.

"Right now, the emotion is lowest and logic is highest," Alicia Holdaway, president of the Salt Lake Board of Realtors in Utah and an agent with Summit Sotheby's International Realty. says. "As soon as we look at homes, those are going to swap."

Emotions can take over and logic can go out the door. A Realtor will be your logic no matter how much you love a home. Holdaway says she will not take a buyer to see a home without first discussing what a real estate contract says and what terms can be put in place along with negotiations. A Realtor can stay grounded through this roller coaster of a ride.

Be firm on your needs, flexible on the rest

Make a list of the features you need in a home versus those amenities that would be nice to have. Spend a good bit of time thinking about the reasons you want to purchase a home to help distinguish between needs and wants.

Once you have your list you want to stick to those must-have items. You might love a home but it has only one full bathroom. You do not want to settle for something that does not tick off your must-have items.

There is a difference in compromising on cosmetic characteristics and amenities that you do not need in a home. A kitchen might have your must-haves but you hate the paint color. This is something that should not detour you from purchasing a home. Paint color can be easy and fairly budget-friendly to change.

"A house may not be HGTV-ready, but it can be something that can be improved over time," says Stephen Medeiros, president-elect of the Massachusetts Association of Realtors and an associate broker at Keller Williams Realty in Dartmouth.

Don't let negative emotions get the upper hand

Searching for a home, especially in a hot market, can be frustrating. You find a home you like and before you can even discuss it or think about an offer, it is already under contract.

According to Josh Harris, a certified financial planner and lecturer in finance at Clemson University, you do not want anxiety to make you rush into a bad decision. Before you get too worked up, take a break and think about why you are so anxious. He says to get a reality check from your real estate agent.

Holdaway says a good way to prevent this frustration is to not look at too many homes. First-time homebuyers are making this mistake a lot she confides. Doing this will lead to exhaustion and wears you down making you just want to make a decision to get the process over with. "They're sick of looking, and they say, 'I'll make it work. I just need a house,'" Holdaway says.

Stick to your price range and priorities

Buyers want to please a seller so they can seal the deal but this is not always the wisest way to go about the process. In a hot market, buyers are under pressure to make these concessions. Before you make any concessions make sure you completely understand the risks.

Many homes in the current market are in bidding wars. Potential homebuyers must compete with their offer to win the war. A good example is to offer above the listing price. Before doing this, make sure you can afford the higher price and still be comfortable financially.

"You don't want to live for your home," Medeiros says.

"There's always another great house," Stevens says. "This isn't the only one."

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Home Prices Soaring the Fastest Seen In Over Six Years

 Cnbc.com reports that U.S. home prices rose the most the country has seen in more than six years October 2020. The price jump is stemmed from a pandemic-fueled buying rush that drives the number of available properties for sale to record lows.


The S&P CoreLogic Case-Shiller 20-city home price index showed that home prices jumped 7.9% in October 2020 from the same time in October 2019. The strong demand for housing and limited housing inventory caused the largest annual increase seen since June 2014.

As has been the case for the last 10 months the pandemic caused a great deal of Americans to work from home. People are not going out to eat, or socializing outside of the home. This has put more value on the size and design of the home. Many Americans are now looking for bigger rooms or more rooms such as a home office or space to workout.

The 19 cities that were mentioned in the report all had larger year-over-year price spikes in October 2020. Phoenix had the largest gain by 12.7% in October, this was the 17th straight month of gains for the city.

“The data from the last several months are consistent with the view that COVID has encouraged potential buyers to move from urban apartments to suburban homes,” said Craig Lazzara, Managing Director at S&P Dow Jones Indices.

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Tips To Shorten Days on Market for Sellers

 Days on Market (DOM) is an important term when it comes to selling a home. DOM is defined as the number of days a home has been listed for sale basically the time from the date a home is listed for sale to the date it closed.

The lower DOM the better the housing market in that certain area. The longer a home stays up for sale, the more detrimental it can be for the listing. Higher days on market can raise a red flag to buyers who will question why it hasn’t sold yet.  Here are some tips to follow to help ensure a fast sale of your home.

Understand your local housing market

Today's market in almost every location across the country is a seller's market. It comes as no surprise that there are more buyers than sellers with such low inventory in today's housing market. When it is a seller's market, homes stay on the market for a shorter period than if it is a buyer's market. This can vary from the location in the country and even by neighborhood. Get to know your local housing market to get a better understanding of buyer demand for your house.

Check your price

Listing for the right price can be very important to your listing. If you price your home out of the local market you can potentially cause a high DOM and make it harder to sell your home. The goal is to list your home for a price that reflects an accurate and realistic value of your home. A smart move is to list your home with a licensed agent who knows the local market.

Prep your home

Staging your home is a must. You want your home to look move-in ready for buyers. A staged home will appeal more to a buyer than a home that is not staged. It is very important this day in age because many buyers are viewing your home online. Small things you can do such as a fresh coat of paint or decluttering.

Remember listing your home with a Realtor can be a smart move. A local Realtor knows the current and local market so they can help you along the way.

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Existing Home Inventory Hits An All-Time Low

Realtor.com's December Housing Report shows that existing home inventory hit an all-time low. Existing home inventory has been low for a while but has been hit even harder since the pandemic. The December Housing Report reveals that homes for sale hit below 700,000 for the first time. This is a drop of 39.6% year over year with 449,000 fewer existing homes for sale than December 2019.

Newly listed homes have bounced back a little from the 8.7% decrease in November. December reported newly listed homes only being down 0.8% year over year. The country is seeing different improvements across the board. The Western and Northeastern regions are having the strongest improvements while the Midwest and South are lagging behind. The largest dip seen in new listings were in Nashville at -19.9%, Memphis at -18.5% and Charlotte at -16%.

As far as home prices, they continue on an upward trend into 2021. The report shows that the median listing price has increased 13.4 percent YoY to $340,000—though it’s just below the peak of $350,000. And within the nation’s 50 largest metros, prices increased by 8.8 percent—nearly the same as the month prior. The largest price gains were seen in Austin with a 20% increase, Riverside-San Bernardino with a 17.2% increase and New Orleans with a 16.8% increase.

“The shortage of homes for sale has been an ongoing issue for the last couple of years, but in December the combination of the holiday inventory slowdown and the pandemic buying trend caused it to dip to its lowest level in history,” said Realtor.com® Chief Economist Danielle Hale. “Looking forward, we could see new lows in the next couple of months as buyers remain relatively active, but a surge of new COVID cases may slow the number of sellers entering the market. Newly listed properties have shown mixed trends. While December’s data points to possible relief on the horizon, this figure has been impacted the most in areas with large COVID surges, and consistent improvement will be key in order to get out of this extreme shortage. We eventually expect to see improvements in the supply of homes for sale, especially in the second half of the year. Until then, finding a home will continue to be a top challenge for buyers across all price ranges.”

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Challenges With St. Tammany Zoning for Medline Distribution Center

 Medline had plans to build a medical equipment distribution company south of Covington. Many homeowners are up in arms about the prospect of such a project being in their community. Judge Reginald Badeaux of the 22nd Judicial District has thrown out the lawsuit filed by a group of residents.

January 12, 2021, the judge upheld the council's vote to rezone the property for the distribution center. The 70 acres between Interstate 12 and Ochsner Boulevard will be the first project of its kind in the area. Residents are concerned that the project will cause traffic and drainage issues. There is also concern that the project will need its own comprehensive zoning plan.

Many in the parish are hopeful that the original plan to build a 1-million-square-foot center in St. Tammany will still happen. Bruce Wainer of All State Financial Company owns the property and feels the judge made the right decision. He states the decision was "a matter of fact and a matter of law — I think the judge ruled correctly." St. Tammany Parish Council Chairman Mike Lorino is also in agreement with the judge's decision and feels the Parish Council did everything correctly in its handling of the rezoning and acted reasonably.

Not all leaders in the community are for the judges ruling. Nancy Wagner, president of the Flower Estates Civic Association is part of those who appeal the ruling. "We have said from the beginning when the council approved the...rezoning without following the law that we would continue to pursue all legal options," Wagner said in a text message. "We are disappointed that the ruling today mistakenly denies residents a full judicial review of our factual and legal arguments."

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Possible New Senior Center In Folsom

As Baby Boomers are now seniors, Council on Aging St. Tammany (COAST) believes there is a need for a new senior center in the village. COAST Executive Director Julie Agan and board member Bill Magee explain that the organization has several temporary locations that are not really working that they have been operating out of. COAST lost its permanent location six years ago.



The Folsom Board of Aldermen and Mayor Lance Willie opened a discussion with COAST at their latest meeting. During the meeting, both Agan and Magee proposed that COAST builds a permanent facility on village property. In return for its investment in the building, COAST would have primary use of it on weekdays for at least 30 years. The village would in turn own the building and the land and have use of it at other times when COAST is not using the facility.

The draft cooperative endeavor agreement between COAST and the Folsom Board, would be funded by COAST and possibly funded by the Northshore Community Foundation, the Northshore Homebuilders Association and the St. Tammany Parish Sheriff’s Office. Mayor Willie believes that the village-owned lot on Railroad Ave across from the first station would be the proposed location. The village attorney, Roy Burns, will work on a draft agreement between the village and COAST.

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