Top Three 2022 Real Estate Investment Trends

 Today's housing market is booming and prices are continuing to rise. The National Associations of Realtors has reported that the median price of existing single-family homes has risen by double-digits in 78% of the tracked markets. Real estate investing is also increasing, and investors depend on key trends in the market. Here are the top three trends for 2022.

1. The Continuation of Historically Low-Interest Rates

Even with talk that the interest rates will rise next year, they still will be at historical record lows.  David Bianco, chief investment officer for the Americas at DWS Group, expects two quarter-point rate hikes next year. This should not be too much of a concern due to the 30-year Treasury bond is still holding at less than 2% and the 30-year fixed mortgage rates are a little above 3%. These lows will keep the housing market booming.

2. The Emergence of Alternate Property Sectors

With the expansions due to the hot market, investors are keeping an eye out for these opportunities. Investors are watching for single-family build-to-rent residential opportunities. Many homebuyers are still shying away from the cities after the pandemic scare. Due to this shift, build-to-rent properties are becoming popular. According to industry research, single-family homes built between 2019 and 2020 for rent increased 30%. "Last-mile industrial real estate has also become a big interest. Online shopping has grown especially during stay-at-home orders making warehouses a lucrative investment. Another popular opportunity currently is multi-asset real estate in the South East. Multi-family communities have steadily gained popularity.

3. The Sunbelt is Positioned for Further Appreciation

The Sunbelt includes cities that are located in the southern third of the country. The area is seeing a very strong demand for real estate. This strong demand is due to population growth, business-friendly local governments, and milder climates. Census data reports that the Sunbelt is home to 10 of the 15 fastest-growing cities in the U.S. States such as Tennessee, North Carolina, Texas, and Georgia are business-friendly which attracts higher real estate prices. A warmer climate allows for fewer maintenance expenses as well.

If you are a home buyer or an investor looking for real estate, don't do it alone. Contact a Realtor who can help you purchase a home or an investment property.

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Aldi Soon To Have Locations on the Northshore

 Aldi has already opened its first store in Louisiana earlier this year and has announced it will open three additional locations around the New Orleans area. Those locations will be Metairie, Slidell, and Covington.

Aldi is a German-based company that began to establish stores in the U.S. in 1976. Now there are over 2,100 stores in 37 states. It soon will become the country's third-largest grocery retailer in terms of location. Most stores are around 12,000 square feet and have less than a dozen employees.

The first store is located at 4510 Ambassador Caffery Parkway in
Lafayette opened in February 2022. The company purchased the old Toys "R" Us building in Slidell for $2 million which will be converted into an Aldi. They are planning a store in Marrero which will be in the Old Belle Promenade Mall. Land has also been purchased in Baton Rouge and stores are planned for Lafayette and New Iberia.

This comes as no surprise as Aldi is building a regional headquarters and distribution hub in Loxley, Alabama. The $100 million project, close to Mobile, will be completed at the end of the year. The new project will service close to 100 Gulf Coast locations which include southern parts of Louisiana, Mississippi, Alabama, and Georgia, along with the Florida Panhandle.

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St. Tammany Will Be Home to Globalstar

 Globalstar's satellite communications technology headquarters is located in Covington. The company has listed the building for sale for close to $20 million. St. Tammany will not lose the headquarters as it will stay in the St. Tammany parish building.

“We have a 10-year lease, which we fully intend to stay for,” Globalstar CEO Dave Kagan said.

Globalstar moved from Silicon Valley to Covington back in 2010. Thermo Development Corp, Globalstar's majority shareholder, says they are just in the third year of the 10-year lease and are interested in subleasing back from whoever purchases the building. During the pandemic, the company began to shift to a hybrid work model. The 66,180-square-foot-building located at 1351 Holiday Square Boulevard in Versailles Business Park is conveniently located close to the Interstate 12 and U.S. 190 interchange.

Only around 60 employees actually work in the office. The majority of the 200-plus employees work remotely. Most of the company's employees live in the St. Tammany area so the Northshore will stay Globalstar's home. “We have incredible growth in the business,” he said. “We are not going anywhere. We’re not moving anywhere.”

The building has a 250-space parking lot with electric vehicle charging stations, floor-to-ceiling dry erase conference room walls, and noise reduction features throughout. There is a workout facility on the second floor that boasts showers, a telemedicine room, a full kitchen, and breakrooms.

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Private Residential Construction Spending Up

The NAHB analysis of Census Construction Spending reported a 1.1 increase in total private residential construction spending in December 2021. November 2021 also reported an increase of 0.7%, in fact, total private residential construction spending was 15% higher than reported at the same time last year. Spending was reported at a seasonally adjusted annual rate of $810.3 billion.

The growth rates are due to the solid growth of spending on single-family and multifamily construction. Monthly gains in single-family construction rose 2.1% to a $435 billion annual pace in December 2021. As for multifamily construction, there was a 0.4% increase in December 2021. Spending was a little down because of the supply chain issues and labor shortages.

Private nonresidential construction spending stayed steady during December 2021. The data shows that the spending was 9.1% higher than a year ago. As far as the separate spending in each category was $0.49 billion in office, $0.4 billion in amusement and recreation and $0.37 billion in lodging.

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Five Financial Obligations Every Homeowner Should Know

Buying a home can be both stressful and exciting. Homeownership is an important life event, especially for first-time homebuyers. Understanding these five financial obligations can help your journey be less stressful.

1. Don’t be fooled by your mortgage pre-approval amount

Getting a pre-approval is the first step on the journey of owning a home. A pre-approval letter from a mortgage lender does not mean you have it in the bank so to speak. A mortgage pre-approval is only just assurance from a lender that the buyer is in good financial standing to take on a mortgage of a certain size.  Just because you are pre-approved for a certain amount, doesn't mean you can afford it. Your pre-approval does not equal your actual budget. For example, even though you are approved for $300,000 doesn't mean you can pay the payments for a $300,000 mortgage.

2. Closing costs can add up—and be complicated

Closing costs are out-of-pocket expenses which include title insurance, notary fees, and the cost of the deed. Buyers can ask for sellers to pay closing costs but it is not to their advantage in the current seller's market.

“Some loan programs only allow a certain percentage of the sale price to be given to the buyer as a credit,” says Joe DiRosa, a real estate agent with RealtyTopia in Pennsylvania.

That means that if you’re offering $200,000 for a house and your lender only allows you to accept 2% in closing costs, you shouldn’t ask for $5,000—that would be $1,000 down the drain since you can only accept up to $4,000 in credit. Before you make an offer, ask your lender if your loan institutes a limit on closing cost credits.

3. PMI isn’t actually the devil

PMI stands for private mortgage insurance and has been characterized as both a blessing and a curse. PMI is a safety net for mortgage lenders when homebuyers do not put 20% down. It covers the lenders if the homebuyers default on their mortgage. The PMI is an additional payment on your mortgage payment. Unlike your principal, PMI does not add to your equity. Once a homeowner does have 20% equity, you can ask to have the PMI removed.

4. You might have to make escrow payments

Escrow simply refers to the separate account where that money is held; basically, our lender sets aside the money for taxes and insurance, which acts as a safety net to ensure that we sock away enough money for those expenses.  So when you have a loan with PMI, you have to pay money into an escrow for property taxes and home insurance.

5. You need to budget for surprises (and your own mistakes)

There will definitely be unexpected expenses in homeownership. Even if you depend on your clean report from the home inspector, something could come up the next day. A home inspector gives the dishwasher an A+ but the next week after you move in and go to wash the dishes it won't start.

Homeownership is a great investment, but you have to plan ahead. A local Realtor can help you navigate and find your perfect dream home.

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Tips For A Kitchen Make-Over

 The kitchen is the heart of the home and a kitchen renovation should be planned out and budgeted to make sure it fits your wants and needs. Make sure to think about resale value when renovating. When it comes to selling a home, the kitchen is one of the most important spaces that a buyer looks over. Here are some questions and tips to consider when renovating your kitchen.

How to plan a kitchen renovation?

Remember both a small or large kitchen remodel takes thought and planning. A bad remodel can make you unhappy and a hard sell when it comes to listing your home. One of the most important aspects of any home project is the budget.

You want to plan your projected kitchen renovation cost. A small remodel costs around $10,000 to $15,000 where a big renovation can cost over $30,000. Make sure to survey your neighborhood's resale values. If you are in a high-end neighborhood, you should have a higher investment cost for your kitchen remodel.

When you have the total renovation budget, you will need to break down your budget. Breaking down your budget can give you a clearer picture. Add a little cushion to your costs. Professional agree that around 10% - 20% on top of your total renovation budget should be sufficient. There can be an increase in the cost of materials, labor, or extra expenditures.

If you are stained for finances or have a certain about you can borrow, you might want to create a priority list of what must be done and what can be skipped for now. If you have a smaller budget, try to get hands-on and do some of the labor yourself. Examples of projects that can be easy for a homeowner taking out old doors of your cabinets, securing your appliances, and repainting. As a side note, obtaining a loan to renovate your kitchen is tax-deductible.

How to update your kitchen on a budget?

Remember you can give your kitchen a nice facelift even if you have a smaller budget. Refacing or refinishing your kitchen drawers and cabinets can save some money. If your kitchen cabinets are in good shape, then re-painting and adding new hardware can them can give them a whole new look. Adding wood veneer to the drawers can also give a new design to the kitchen. If your cabinet doors are in bad shape you can also just add new doors to the existing cabinets.

Another way to save money is by purchasing discounted countertops. Countertops in your kitchen are a big focal point. Granite and quartz slabs can be expensive but purchasing countertop remnants can save money. If you cannot find any remnants that fit your project, then use porcelain, ceramic, recycled glass, Formica, or butcher blocks.

Lighting can be another alternative to help with your budget. Installing LED lighting can make a huge impact. To do this, install LEDs under your cabinets and countertops. LED lighting around the kitchen will create a modern and sleek look on a budget.

Laminate floor tiles with older designs are a great way to save on your budget. Other options are using vinyl, porcelain, and ceramic tiles for your new kitchen floor. Make sure your floors complement your walls and ceiling.

How long to redo a kitchen?

The time frame to remodel your kitchen is up to you. Having a good timetable will help you save money and time. There are two main parts of a kitchen renovation. These are pre-construction and construction.

A remodel where old things are just replaced without changing the kitchen layout will take about 6 to 8 weeks for a standard-sized kitchen. If you are doing a huge renovation where the layout is changed as well as replacing old materials, then it will take around 10 to 12 weeks.

What kitchen upgrades add value?

Renovating your kitchen in a smart way will add value to your home. Installing a kitchen island not only provides extra working space but also adds value to your resale. Refinishing or refacing your kitchen cabinets and drawers is another to add value. Installing hanging lights above the kitchen island and kitchen countertops adds beauty, functionality, and value to your kitchen and home.

A sink is very important to a renovation. There are many styles such as farmhouse, granite composite, stainless steel, and cast iron. Not only is a sink important, but an addition such as a bar sink, island sink, corner sink, or a sink with a drainboard is a must.

What is considered a minor kitchen makeover?

Typically a small kitchen remodel is budgeted under $25,000. There is no layout change and no demolition of kitchen walls or ceilings. Usually what is included is refacing and repainting cabinets and drawers, new kitchen countertops, new modern lighting, new fixtures, repainting jobs, buying smaller and greener appliances, and installing a new backsplash.

No matter the size of the job, planning ahead and budget are the key. Remember if you are using a professional, ask questions and get referrals to have peace of mind and assurance your kitchen renovation will be a success.

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Louisiana Homeowners Can Apply For $25K Grants To Help With Home Mortgage Payments

COVID-19 hit the U.S. not only with a health crisis but a financial crisis as well. Due to the pandemic, Louisiana is offering their homeowners $25,000 each in order to help catch up on late mortgage payments. Residents who are at risk of foreclosure can apply for the Lousiana Homeowner Assistance Fund.

The Lousiana Homeowner Assistance Fund is federally funded and is for Louisiana homeowners who are having a hard time paying their mortgage payment due to COVID-19 financial impacts. The program is through the Lousiana Office of Community Development under the U.S. Department of Treasury.

The program has been funded $146.7 million in federal pandemic aid. Homeowners who are earning less than 150 percent of the area median income or 100 percent of the national median income, whichever is greater.

Statewide the amount of income per household varies. For example, a three-person household in Orleans Parish who makes less than $94,650 will be eligible. A three-person household in East Baton Rouge Parish who makes less than $107,100 can get the funding.

Any homeowner in Louisiana can apply for free by submitting an application online. The application will then be assigned to a case manager. The case manager will then review for eligibility and might ask for additional documentation. Once approved the mortgage services will be paid directly on the homeowner's behalf.

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