Over the past year, mortgage rates have fallen more than a full percentage point, hitting a new historic low 15 times. This is a great driver for homeownership, as today’s low rates provide consumers with some significant benefits. Here’s a look at three of them.
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1. Move-up or Downsize: One option is to consider moving into a new home, putting the equity you’ve likely gained in your current house toward a down payment on a new one that better meets your needs – something that’s truly a perfect fit, especially if your lifestyle has changed this year.


2. Become a First-Time Homebuyer: There are many financial and non-financial benefits to owning a home, and the most important thing is to first decide when the time is right for you. You have to determine that on your own, but know that now is a great time to buy if you’re considering it. Just take a look at the cost of renting vs. buying.


3. Refinance: If you already own a home, you may decide you’re going to refinance. It’s one way to lock in a lower monthly payment and save more over time. However, it also means paying upfront closing costs, too. If you want to take this route, you have to answer the question: Should I refinance my home?

Why 2020 Was a Great Year for Homeownership
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Last year, the average mortgage rate was 3.93% (substantially higher than it is today). If you waited for a better time to make a move, market conditions have improved significantly. Today’s low mortgage rates are a huge perk for buyers, so it’s a great time to get more for your money and consider a new home.


The chart below shows how much you would save per month based on today’s rates compared to what you would have paid if you purchased a home exactly one year ago, depending on how much you finance:
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​Bottom Line

If you’ve been waiting since last year to make your move into homeownership or to find a house that better meets your needs, today’s low mortgage rates may be just what you need to get the process going. Let’s connect today to discuss how you may benefit from the current rates.

Homeownership is one of the best ways to invest in your financial future, especially as your home equity grows. Home equity is a form of forced savings that can work to your advantage as the value of your home appreciates. Across the country, home equity was increasing before the health crisis swept our nation, and it continues to grow throughout the year, giving sellers powerful options in this market.
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According to the just-released Q2 Homeowner Equity Insights Report by CoreLogic:

What Does This Mean for Sellers? 

​When equity is rising, as it is today, you may have more invested in your home than you realize. Mark Fleming, Chief Economist at First American, notes:

If you’ve been considering making a move – whether that’s to get into a bigger home or to downsize to a smaller one – it’s a great time to reach out to a real estate professional to learn how to put your equity to work for you. You may be in a position to pay that equity forward toward your next home purchase and afford it sooner rather than later.

Bottom Line
​If you’re thinking of selling, let’s connect so you can take advantage of what the current market has to offer today.

Today, Americans are moving for a variety of different reasons. The current health crisis has truly re-shaped our lifestyles and our needs. Spending extra time where we currently live is enabling many families to re-evaluate what homeownership means and what they find most important in a home.

​According to Zillow:

With a new perspective on homeownership, here are some of the top reasons people are reconsidering where they live and making moves this year.

1. Working from Home
​Remote work is becoming the new norm in 2020, and it’s continuing on longer than most initially expected. Many in the workforce today are discovering they don’t need to live close to the office anymore, and they can get more for their money if they move a little further outside the city limits. Lawrence Yun, Chief Economist for the National Association of Realtors (NAR) notes:

If you’ve tried to convert your guest room or your dining room into a home office with minimal success, it may be time to find a larger home. The reality is, your current house may not be optimally designed for this kind of space, making remote work and continued productivity very challenging.

2. Virtual Schooling
With school about to restart this fall, many districts are beginning the new academic year online. Education Week is tracking the reopening plans of schools across the country, and as of August 21, 21 of the 25 largest school districts are choosing remote learning as their back-to-school instructional model, affecting over 4.5 million students.

With a need for a dedicated learning space, it may be time to find a larger home to provide your children with the same kind of quiet room to focus on their schoolwork, just like you likely need for your office work.

3. A Home Gym
​Staying healthy and active is a top priority for many Americans. With various levels of concern around the safety of returning to health clubs across the country, dreams of space for a home gym are growing stronger. The Home Builders Association of Greater New Orleans explains:

Having room to maintain a healthy lifestyle at home – mentally and physically – may prompt you to consider a new place to live that includes space for at-home workouts.

4. Outdoor Space
​Especially for those living in an apartment or a small townhouse, this is a new priority for many as well. Zillow also notes the benefits of being able to use yard space throughout the year:

You may, however, not have the extra square footage today to have these designated areas – indoor or out.

Moving May Be Your Best Option
If you’re clamoring for extra space to accommodate your family’s changing needs, making a move may be your best bet, especially while you can take advantage of today’s low mortgage rates. Low rates are making homes more affordable than they have been in years. According to Black Knight:

It’s a great time to get more home for your money, just when you need the extra space.

Bottom Line
​People are moving for a variety of different reasons today, and many families’ needs have changed throughout the year. If you’ve been trying to decide if now is the time to buy a new home, let’s connect to discuss your needs.

In 2018, the National Association of Landscape Professionals (NALP) and the National Association of REALTORS (REALTORS) issued the Remodeling Impact Report: Outdoor Features. NALP reported the typical cost of 13 outdoor projects and REALTORS ranked each project by its appeal to buyers and estimate how much homeowners can recover the cost of the project if they choose to sell their home.  I’ll share the top five projects as they are ranked according to the most likely to add value to resale.

1. Landscape Maintenance Services.
Annual mulch application, mowing of 2,835 square feet of lawn, pruning of shrubs, and planting of approximately 60 perennials or annuals.
NALP cost estimate $3,000
REALTORS cost recovery estimate $3,000
ROI 100%


2. Overall Landscape Upgrade.
An overall upgrade includes the installation of a front walkway of natural flagstone 3 feet wide and 30 feet long. Add two stone planters six feet long and two feet wide. Install five flowering shrubs and one deciduous 15 foot tall tree. Mulch with landscaping bark.
NALP cost estimate $6,000
REALTORS cost recovery estimate $5,000
ROI 83%


3. Standard Lawn Care. 
Standard lawn care service includes six applications of fertilizer and weed control on 2,835 square feet of lawn.  
NALP cost estimate: $375
REALTORS cost recovery estimate: $1,000
ROI 267%

4. New Patio.
Install a backyard 18 foot by 16 foot concrete paver patio, dry set over compacted grave, and sand base.
NALP cost estimate: $7,200
REALTORS cost recovery estimate $5,000
ROI 69%

5. New Wood Deck.
Build a 14 foot deep by 18 foot wide wood deck attached to the house with a ledger. Decking, railing, and stair treads constructed with cedar lumber. All cedar is finished with a clear deck sealer.
NALP cost estimate: $10,000
REALTORS cost recovery estimate $8,000
ROI 80%

The majority of homeowners surveyed after completing these projects have a greater desire to be home, have an increased sense of enjoyment when they are at home, and feel a major sense of accomplishment when they think of the projects. So not only are you adding value to your home, you’re also increasing your own personal enjoyment of your home, even if you aren’t quite ready to sell. 

Below are the other 7 outdoor projects in the report.

6. Tree Care. Three applications of tree fertilizer, regular spraying, trimming and pruning, and the removal of one 30 foot tall tree by professional.

7. Landscape Lighting. Installation of a standard 600w transformer and 20 LED lights.

8. Statement Landscape. Unique features such as serenity gardens, created spaces for hobbies like yoga, and activity areas for croquet or bocce ball. This feature has 0% ROI.

9. Irrigation System. Installation and management of irrigation system for a lawn that is 2,835 square feet. No boring required. ROI 86%.

10. Outdoor Kitchen. Install one inset grill, stainless steel drawers, ice chest, sink, 60 square feet of concrete counter top, made from veneered masonry stone.

11. Fire Feature. Install dry stacked natural stone kits, gas burner with 10 foot diameter flagstone patio. ROI 67%.

12. Water Feature. 

13. New Pool.  Install an 18 foot by 36 foot in-ground pool with gunite walls, 3 foot to 7 foot depth, standard filtration system. Include 3 foot by 4 inch thick concrete perimeter surround.  Nationally this project has a 43% ROI, however it is much lower for us here in the Northeast.

Copyright ©2018 “2018 Remodeling Impact: Outdoor Features” NATIONAL ASSOCIATION OF REALTORS®. All rights reserved. Reprinted with permission. July 15, 2020, https://www.nar.realtor/sites/default/files/documents/2018-05-remodeling-impact-outdoor-features-05-23-2018.pdf.

While the nation quarantines from the COVID-19/coronavirus pandemic, many buyers are worried about shopping for homes right now. However, these are things home buyers can do while quarantining so that you are fully prepared to make an offer once we come out of quarantine.

1. Improve Your Credit Score.
2. Get Preapproved for a loan.
3. Fill Out the Buyer Needs Analysis.
4. Research Neighborhoods.

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With the housing crash of 2006-2008 still visible in the rear-view mirror, many are concerned the current correction in the stock market is a sign that home values are also about to tumble. What’s taking place today, however, is nothing like what happened the last time. The S&P 500 did fall by over fifty percent from October 2007 to March 2009, and home values did depreciate in 2007, 2008, and 2009 – but that was because that economic slowdown was mainly caused by a collapsing real estate market and a meltdown in the mortgage market.
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This time, the stock market correction is being caused by an outside event (the coronavirus) with no connection to the housing industry. Many experts are saying the current situation is much more reminiscent of the challenges we had when the dot.com crash was immediately followed by 9/11. As an example, David Rosenberg, Chief Economist with Gluskin Sheff + Associates Inc., recently explained:

Since the current situation resembles the stock market correction in the early 2000s, let’s review what happened to home values during that time.The S&P dropped 45% between September 2000 and October 2002. Home prices, on the other hand, appreciated nicely at the same time. That stock market correction proved not to have any negative impact on home values.

Bottom Line
​If the current situation is more like the markets in the early 2000s versus the markets during the Great Recession, home values should be minimally affected, if at all.

In times of uncertainty, one of the best things we can do to ease our fears is to educate ourselves with research, facts, and data. Digging into past experiences by reviewing historical trends and understanding the peaks and valleys of what’s come before us is one of the many ways we can confidently evaluate any situation. With concerns of a global recession on everyone’s minds today, it’s important to take an objective look at what has transpired over the years and how the housing market has successfully weathered these storms.

1. The Market Today Is Vastly Different from 2008

We all remember 2008. This is not 2008. Today’s market conditions are far from the time when housing was a key factor that triggered a recession. From easy-to-access mortgages to skyrocketing home price appreciation, a surplus of inventory, excessive equity-tapping, and more – we’re not where we were 12 years ago. None of those factors are in play today. Rest assured, housing is not a catalystthat could spiral us back to that time or place.
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According to Danielle Hale, Chief Economist at Realtor.com, if there is a recession:

Both of these expert sources indicate this is a momentary event in time, not a collapse of the financial industry. It is a drop that will rebound quickly, a stark difference to the crash of 2008 that failed to get back to a sense of normal for almost four years. Although it poses plenty of near-term financial challenges, a potential recession this year is not a repeat of the long-term housing market crash we remember all too well.

2. A Recession Does Not Equal a Housing Crisis

​Next, take a look at the past five recessions in U.S. history. Home values actually appreciated in three of them. It is true that they sank by almost 20% during the last recession, but as we’ve identified above, 2008 presented different circumstances. In the four previous recessions, home values depreciated only once (by less than 2%). In the other three, residential real estate values increased by 3.5%, 6.1%, and 6.6% (see below):

3. We Can Be Confident About What We Know

Concerns about the global impact COVID-19 will have on the economy are real. And they’re scary, as the health and wellness of our friends, families, and loved ones are high on everyone’s emotional radar.

​According to Bloomberg,

That said, we can be confident that, while we don’t know the exact impact the virus will have on the housing market, we do know that housing isn’t the driver.

​The reasons we move – marriage, children, job changes, retirement, etc. – are steadfast parts of life. As noted in a recent piece in the New York Times, “Everyone needs someplace to live.” That won’t change.

Botton Line
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That said, we can be confident that, while we don’t know the exact impact the virus will have on the housing market, we do know that housing isn’t the driver.

The reasons we move – marriage, children, job changes, retirement, etc. – are steadfast parts of life. As noted in a recent piece in the New York Times, “Everyone needs someplace to live.” That won’t change.

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:

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.