There’s no denying the financial benefits of homeownership, but what’s often overlooked are the feelings of gratitude, security, pride, and comfort we get from owning a home. This year, those emotions are stronger than ever. We’ve lived through a time that has truly changed our needs and who we are, and as a result, homeownership has a whole new meaning for many of us.
“Last year, staying home became a necessity and that caused many homeowners to have renewed gratitude for the roof over their head.”
As a nation, we continue to work through the challenges of a pandemic that’s pushed us all to new limits. Over the past year and a half, we’ve spent more time than ever at home: working, eating, schooling, exercising, and more. The world around us changed almost overnight, and our homes were redefined. Our needs shifted, and our shelters became a place that protected us on a whole new level. The same study from Unison notes:
91% of homeowners say they feel secure, stable, or successful owning a home
64% of American homeowners say living through a pandemic has made their home more important to them than ever
83% of homeowners say their home has kept them safe during the COVID-19 pandemic
It’s no surprise this study also reveals that homeowners are now more emotionally attached to their homes as well:As we’ve learned throughout this health crisis, homeownership can provide the safety and security we crave in a time of uncertainty. That sense of connection and emotional stability genuinely reaches beyond just the financial aspect of owning a home. As JD Esajian, President of CT Homes, LLC, says:
“Aside from the financial factors, there are several social benefits of homeownership and stable housing to consider. It has long been thought that buying a home contributes to a sense of accomplishment. Still, most individuals fail to realize that homeownership can benefit your mental health and the community around you.”
Whether you’re thinking of buying your first home, moving up to your dream home, or downsizing to something that better fits your changing lifestyle, take a moment to reflect on what Mark Fleming, Chief Economist at First American,notes:
“Buying a home is not just a financial decision. It’s also a lifestyle decision.”
Bottom Line
If you’re considering buying a home, it’s not entirely about the dollars and cents. Don’t forget to weigh the non-financial benefits that may truly change your life when you need them most.
As we near the end of the year, more homeowners are realizing the benefits of today’s sellers’ market. Record-breaking home price appreciation, growing equity, low inventory, and competitive mortgage rates are motivating homeowners to make a move that addresses their changing lifestyles.
In fact, recent data from realtor.com shows a larger share of homeowners are planning to list their houses this winter. So, that means more homes are about to hit the market, which will lead to more choices for buyers too.
According to George Ratiu, Manager of Economic Research at realtor.com:
“The pandemic has delayed plans for many Americans, and homeowners looking to move on to the next stage of life are no exception. Recent survey data suggests the majority of prospective sellers are actively preparing to enter the market this winter.”
If you’re thinking of waiting until the spring to sell your house, know that your neighbors may be one step ahead of you by selling this winter. If you want to stand out from the crowd, this holiday season is the best time to make sure your house is available for buyers. Here’s why.
Sellers Are Still Firmly in the Driver’s Seat
Historically, a 6-month supply of homes for sale is needed for a normal or neutral market. That level ensures there are enough homes available for active buyers (see graph below):The latest Existing Home Sales Report from the National Association of Realtors (NAR) shows the inventory of houses for sale sits at a 2.4-month supply. This is well below a neutral market.
What Does That Mean for You?
When the supply of homes for sale is as low as it is today, it’s much harder for buyers to find homes to purchase. This drives up competition among buyers, who then submit increasingly competitive offers to win out against others in the home search process. As this happens, prices rise and your leverage as a seller rises too, putting you in the best position to negotiate a contract that meets your ideal terms.
And while the low housing supply we’re facing won’t be solved overnight, sellers this season should move quickly to maximize their potential. As the data shows, with more prospective sellers planning to list their homes this winter, selling sooner rather than later helps your house rise to the top of a holiday buyer’s wish list so you can close the best possible deal.
Bottom Line
Listing your home over the next few weeks gives you the best chance to be in front of buyers competing for homes this holiday season. Let’s connect today to discuss how you can benefit from today’s sellers’ market.
Home Inspections: What things they don’t inspect in your Albuquerque home
(Transcript Snippet): “Tracy: So we’ve talked about home inspections before, but today we’re going to talk about what home inspectors, the general home inspection, the one who does the full house from roof to outside of the home, what things they don’t inspect. And, you know, it’s good because the list recently came out New Mexico, um, instituted a home inspector
Tego: Licensing program.
Tracy: It’s a requirement. So home inspectors went and got licensed, which many of them were, or they were members of large national companies that made sure that they knew what they were doing. Um, but now there’s licensing in place. So along with that came a really good list of things that they don’t look at. Right. But they’re not responsible for basically
Tego: The list is, is, uh, it’s a 14 page document and it literally lists what they do and what they don’t do. But we just wanted to summarize some of the things that they don’t do, because we’ve seen that where, you know, somebody would say, well, why didn’t they look at the irrigation lines? Yeah. The sprinklers. Right,
Tracy: Right. It’s just something that they don’t look at. It’s not a part of the general home. Right. So they don’t, so let’s go through some of I’m sure. I know a big one to go without looking at the list is that they don’t necessarily do a code inspection. Right. They don’t check things to make sure they’re up to code today. Right, right, right. Because the building codes change, you know, regularly,
Tego: I think about the, just like a hot water heater, for example, let’s change so many times. And so, you know, if you have a hot water heater that was installed 10 years ago, 20 years ago, it’s going to be very different than if you’re getting installed today. So they’re not, you know, they’re not saying that that hot water heater isn’t up to the current code because when it was done, it was probably done to code or should it,
Tracy: And they can’t expect the home inspector to know every code change. So they’re looking for general, um, hazards. They’re looking for, you know, things that could be a problem, but they’re not doing code work. So to speak. The other thing I know that they don’t do because I’ve been at a lot of home inspections is they don’t usually light appliances or turn things on, um, in general, if it’s not on. So if, um, the furnace is a non and its time, the furnace should be on, they won’t light. If the, if the, uh, pilot light isn’t lit, they’re not gonna light the pilot light. Right. Correct. And fireplaces, same thing. They typically don’t inspect fireplaces. And if it’s a gas fireplace and the pilot light, isn’t lit, they’re not going to light it. You know, if it’s a switch on the wall, they’ll probably turn it on, but they’re not going to do a Fireplace.
Tego: And let me just address that. Cause you said fireplace, well, I want to get my fireplace and spec. Well, there’s people that do that right there. There’s fireplace specialists that will look at a fireplace and think about, you know, sewer lines. Right. So scoping a sewer line with a camera to see if it’s good, right? The, the standard general home inspection doesn’t do that, but you can hire somebody to do that septic tanks, another example, right. It’s a specialist that’s going to do that. Right.
Tracy: You know, you think about the fireplaces and it’s not just, if it’s a gas one or a wood-burning one, but there’s the whole chimney all the way up. And so, you know, somebody inspecting the chimney in addition to just the fireplace unit. Right. And they typically don’t do that. So the, the other things that they don’t do Tiko,
Tego: I mean, in general, it’s they in? And this is kind of covered the whole thing. They don’t take things apart. They don’t poke into walls. They don’t dismantle stuff. They don’t, they don’t do anything that could hurt the property either. Right. So it’s, you know, any of those things, they’re not gonna, you know, take, pull the dishwasher and unscrew it and take it all apart to see, you know, what’s going on in the back. Right. And then, and then they’re not gonna run or turn something on that isn’t operating in its normal sense. So, and this is an extreme example, but I’ll give it to you anyway. So there’s a garbage disposal. Right. And they flipped a switch on the wall and the garbage disposal doesn’t come on. Right. Well, they look under the sink and it’s not plugged in. Okay. They’d probably plug that in. Right. And turn it on. Right. To see if it works. But that’s an example right there that that’s a norm. Again, that’s a very extreme example, but the normal operating way to do it, as you flipped a switch on the wall or the counter and turn on the disposal, and if it doesn’t work, then they not write down. Disposal did not didn’t work. Right. They don’t change light bulbs. They don’t do anything like that as well. Another example. So totally.
Tracy: Um, so another thing that I’ve seen quite a bit, we don’t have a lot of crawl spaces here, but we have addicts in a lot of our homes and a few homes have crawl spaces, but if the space isn’t large, they’re not going to go in, they’ll maybe put their head in and shine a flashlight or something, but they’re not going to put on their coveralls and go into a crawlspace. That’s not adequately sized or they’re not going to go into a roof attic if it’s not adequately sized. So, you know, it’s, it’s a tough one, but we have seen a lot of like, especially the pest inspectors, I’ve seen them put on their coveralls and come out covered in cobwebs and say, boy, there’s a lot of, uh, black widows down there.
Tego: Yeah.
Tracy: But that’s only when there’s enough room for them to do that.
Tego: Yeah. And I think in general, Tracy, in this conversation is that, you know, the home inspection to general home inspection is intended to give a full scope of the visual, visual, you know, great way to put, they
Tracy: Do turn on things. So if there’s a dishwasher, they’ll run it. Right. Right, right. They’ll check a furnace, they’ll check an air conditioning unit if the outside temperature allows because they can’t turn it on. If it’s too cold outside for a regular refrigerated air conditioner, they, they just can’t. It could damage the unit and freeze, freeze it up. Um, so lots of, lots of things that we’re wanting to make sure that our clients, when it’s a full home, they know this is what they do. This is what they don’t do. So there’s a new 14 page document that kind of covers what they do and what they don’t do. But most home inspectors have their own disclosures too. The other thing to remember Tico about home inspections is it’s a snippet snapshot of time. That’s a good way to put it, right. This is the house, the moment that that home inspector went through it.
Tracy: And right when they leave something could break. I mean the very next day something stops working, right? So they say they don’t more into anything. They don’t provide a bunch of, um, warranties, coverage, anything they’re just saying at this time, this is what I found the house to be in the condition of. They don’t go into a bathroom and remove a tile and make sure there’s no mold behind the bath tub surround or, you know, it’s, it’s what they can see visually. And so not all things are found, you know, if somebody has a concern about mold, there’s a mold tester person. You can get out there. Right?
Tego: Yeah. Well, we have this long list of, you know, of all the different types of inspections that you can get that we go through when we’re, uh, you know, somebody who’s looking at a home to, you know, generally though you’re going to get a full home inspection. Right. And I would never recommend that somebody not get a full home inspection, even if they’re there, they’ve already agreed to accept the home as, as is meaning they’re, you know, they’re going to, they’re going to just accept it no matter what they find, you still want to know what you’re dealing with. Right? You still want to know what the condition of the property is. Um, and then the other inspection we generally see, uh, happening is a, is a wood destroying. Insect is the proper term, but basically the termite inspection we’re destroying insect and, uh, uh, possibly, uh, dry rod inspection with that. That’s just checking a wood for wood, wood damage. So anyway, there’s a long list and, you know, we, we, we, we could spend an hour going through it, but it’s, there’s, there’s a lot to look at.
Top Trends in 2022: A list of what to expect in Albuquerque’s Real Estate Market next year
(Transcript Snippet): “Tego: Tracy. I was, I saw a story that had a list of, um, top trends that are being expected for 2022 in homes in homes. Well, and just in, in real estate, in general, not in homes, I’m not talking about like design trends. And then I’m just talking about the, the real estate world, the whole, the whole, the whole world. And so there’s a list here as well as I threw a couple other in here that, that I thought were pretty interesting. Um, but, but first off, the, the, the trend is, is values, home values. Uh, everybody is expecting it. I say everybody, I should rephrase that. Most of the experts that are, you know, look at this stuff every day in the real estate world, uh, project that home prices will continue to rise, uh, across the country next year.
Tracy: And our regular listeners will know all the reasons why, right. They know, because interest rates are predicted to go up. Some, we know that we’re not expecting a lot more homes on the market, and there’s a lot of buyers still waiting for homes. There are not a lot of houses in foreclosure about to hit the market. And even if 2 million across the United States came on the market, it wouldn’t make it unhealthy. Right. So for all those reasons, home prices will continue to rise. Yeah.
Tego: The one projection is that the rate of appreciation will slow a little bit, which we need, because really this double digit, you know, annual price appreciation, it’s just not healthy. It’s, it’s not is it’s not. Um, and, and along with that, just to, to, as part of that, as home prices go up, rent are expected to continue to go, continue to go up as well. Right?
Tracy: Speaking of France, adrenal suite from our team was featured this week. She manages an apartment complex in addition to doing residential real estate. And she got featured on the news this week on TV. And it was awesome to see that. Yeah,
Tego: Yeah, no, it was, it’s interesting because [inaudible] did that story about, you know, the rent’s going up and, you know, we actually did that story last week on the radio shows K or queuing listening, uh, you know, get your, get your radio topics here, or get your topics, your TV topics here on the radio.
Tracy: Some other trends for 2020,
Tego: Some other trends, uh, is just tech tech adoption. But I think we all realize that that’s everywhere. You know, that there’s just going to be more and more tech in everything we do. Just, just so people understand in the real estate world. I think a lot of people know about the, uh, virtual tours and different ways to view homes and the way homes are marketed and shown, right. Tracy, that’s, that’s pretty popular. Um, other stuff that’s coming into real estate much stronger now is, uh, artificial intelligent things like reading, being able to actually read or, or look at photos of home for sale in and glean some data from that that’ll help, uh, a home buyer. So there was a lot going on.
Tracy: We talked about this a few years ago. Tigo is so much more, um, possible now in that’s where the computers are reading the photos that you’re lingering on the most. So when you’re doing home searching online and you’re looking at pictures and there, the artificial intelligence says, wow, you’ve looked at this house four times. I’m going to find you other houses with photos similar so that maybe the color palette or the kitchen or whatever is similar is what pops in front of you.
Tego: It’s all spooky stuff. And I’m sure people are cringing out there listening to this and it’s, but, but it’s here, it’s happening. And we know, we know that those, you know, home search website use different types of technologies to do that, to help serve you up homes that that may be, you know, uh, appeal to you.
Tracy: It’s that whole, you know, they’re following you, you know, this is off topic, but I had read an article this week about apple and they’re developing the Evie car, the electric vehicle, and it’s autonomous, you know, pilot, no, no driver driverless. And it was crazy to me that it said that within five years, they plan to have this vehicle on the road. And it said that there will not be a steering wheel, a gas pedal brake pedal, and that the seats will face each other. You won’t even be looking out the front. Yeah, I don’t think so. But you know, think about how far we’ve come in just two years since the pandemic hit, how much we’ve all embraced things and things have changed much more quickly than we ever thought possible. Anyway,
Tego: That is true. And speaking of tech, just actually, let me just make one, uh, uh, story here actually, or tell a story is in, in New Mexico, um, notarizing Tracy, you’re, you’re a certified, you know,
Tracy: Notary public notary Tego: Republic, right. And in New Mexico, uh, starting at the beginning of 2022, you will be able to do, uh, electronic notarizing of documents signing the signing, but not, but actually notarize. I mean, we’ve had either
Tracy: Notarizing. Yeah. Which is great. Um, I’ve been watching the secretary of state’s website and I, you know, you have to go back through training and get a new notary stamp to be able to do all that. And right now I haven’t been able to find that it’s even available yet for me to get trained on and get my new credentials for it, but I’m watching for it because boy, that has been so handy for us in other states and with some of our clients, when they’ve needed to sign in, they allow a notary in those states and that notaries online, they look at your ID online, they’re with you. They tell you where to sign. We’ve
Tego: Personally signed, done some of that. Tracy. And, and to me, it seemed like it was almost more secure than in, in many ways. So anyway, that’s coming, you know, again, backward we’re, we’re talking about trends in real estate for 2022. And one of the things that’s coming to New Mexico is a
Tracy: You notary notary. So one other thing Tego that I’m thinking is 2022 is the work from home is not going away. No,
Tego: No. It appears, you know, all the surveys, all the stuff, you know, like you th the, the companies that do recruiting online, like, you know, ZipRecruiter and indeed, and all of our wives hire yeah. All those, they, you know, do tons of surveys and they’re looking at, you know, what the application or what the, uh, um, what employers or job requirements are. And one of the things is, you know, work from home has gone up quite a bit and it’s going to be it’s, it’s here to stay. Basically,
Tracy: Of course, there’s lots of service jobs that you can’t work from home. Um, and a lot of businesses where you can, you know, it’s interesting because we were talking with someone who is interviewing right now, and it’s a type of position that can be done from home. And a major corporation was saying, no, we want you in office. So there may be some companies where they’re saying, Nope, we do want you coming in office, or at least in area, because right now we know there’s a lot of people who are on teams, where their teammates are all over the world now, and they don’t have to move for a job. Um, but I think, you know, maybe some will still require you to move. So you can have those occasional in-person meetings, but not every day.
Tego: And just one last thing on the work from home thing that has driven a lot, uh, in the housing market and people needing to get a different home so that they could have a home office or a place to work from. And, you know, there’s, there’s these auxiliary early auxiliary dwelling units that you can buy, you know, so you can have like a, an office in your backyard. It’s like a little tiny house office. Right. And so there’s a lot of that stuff going on and it looks like that trend is going to continue
Tracy: Off topic. Again, we were on a, um, Google meets with a really high level executive this past week. And their baby started crying and their dogs started barking. It was pretty funny. I was like, he goes, I need to step aside for a moment and close my dorm. Like, you didn’t have your door closed before. And then it was like the dog. It was sort of ironic.
Tego: Well, that’s the way it is. Yeah. Yeah, for sure. Uh, trend another trend. That’s uh, if you’ve been listening to us, we’ve been talking about it for a long time, which is the millennial buyers in, in 20, I mean, 2021. It definitely millennials that, that generation, that cohort has dominated 2021 and is probably gonna dominate it even more in 20, 22, as, as home buyers,
Tracy: 72 million in that category, they’re obviously a huge segment of who’s ready to buy a house. And I believe that the average income of the millennial cohort heart right now is about 88,000 a year, probably in their joint between two people working together to be able to be in a position to buy a house. And that’s awesome. You know, we expect a lot of them to be buying in 2022, just like they were this year.
Tego: Yeah, no, for sure. For sure. Um, one thing that I saw that I thought was interesting, and I’ve seen this in a few different places, is it the new construction? Um, we keep saying, we need more houses. We need more houses, keep building, keep building, but there are a lot of projections at the, the amount of new homes being built is going to stay pretty stagnant. That it’s not like we’re going to suddenly have this building. Boom, like we had in 2004 and five right there. There’s just so many constraints on building right now from availability of lots availability and materials, availability of labor cost of all of those things have gone up, you know? And so there’s a certain point where a buyer just says, no, I can’t, I can’t spend $500,000 on a, on a basic, you know, entry-level home. Right.
Tracy: I can’t wait 14 months or some unknown date for that house to be built.
Tego: So yeah, there there’s some projections at the new construction, single family home construction is going to stall a little bit, but there’s also projections that multifamily is going to boom a little bit because, because of the need for just housing, we just don’t have enough in this whole country. So yeah, I thought that was interesting. Um, and then the last thing that, that, uh, you know, I was thinking about is there’s going to be coming out a lot of different creative, uh, I want to say creative, but financing ways, homes, ways to purchase homes that aren’t the traditional, um, how do I want to say this? There’s going to be ways to help people buy homes and sell homes that have never existed before. And so what I mean by that is if somebody, uh, you know, Tracy, you and I were just at that conference here a few weeks ago that, uh, all the, the venture capital people in the real estate world that come together and talk about all this tech and both property technology, as well as financial technology in the mortgage world.
Tego: And there’s a ton of innovation going on there. And I know as soon as you start saying creative financing for, for real estate people cringe because they think about, you know, what happened back in the day with the subprime and all that, right? But there there’s these solutions out there where somebody can, uh, hire a company to buy their home, you know, before they sell their home. So when they go to buy the next home, they’re a cash buyer, right? That’s just one solution. There’s, there’s a bunch of different products out there for these kinds of bridge loan products, right? To allow again, somebody to buy and sell and have some sort of financing, financing in place. Um, that’s, that is booming right now. We’re going to see more and more of that. Um, the other thing is the government. And if you, you know, I follow all these stories, uh, that’s related to real estate, federal government is doing a lot of stuff.
Tego: They realize that there is a quote, air quote, housing crisis. We don’t have enough homes. Homes, prices are, are going up faster than, than is logical. And so there’s going to be programs coming out to help first time, home buyers, minority home buyers, um, you know, helping, you know, maybe distressed neighborhoods to bring those neighborhoods up. You know, there’s a lot coming, not just from the private sector in venture capital, but also expect some stuff from federal government for, for housing programs. So there it is, there’s my projections are our projections and all the experts that we follow projections for real estate in 2022, Tracy.
Last week, the average 30-year fixed mortgage rate from Freddie Mac inched up to 3.1%, and experts project rates will continue rising through 2022:
“The 30-year fixed-rate mortgage was 2.9% in the third quarter of 2021. We forecast mortgage rates to increase slightly through the remainder of the year and reach 3.0%, rising to 3.5% for full year 2022.”
If you’re thinking of buying a home, here are a few things to keep in mind so you can succeed even as mortgage rates rise.
Taking Time Off Can Be Costly
Mortgage rates play a significant role in your home search. As rates go up, your monthly mortgage payment increases if you’re buying a home, directly affecting how much you can afford. And even the smallest increase can have a large impact on your monthly payment(see chart below):With mortgage rates on the rise, you’ve likely seen your purchasing power impacted already. Instead of waiting and hoping rates will fall, today’s rates should motivate you to purchase now before rates increase more.
Smart Buyers Can Succeed by Planning Ahead
You can use your newfound motivation to energize your search and plan your next steps accordingly so you’re prepared to act no matter what happens with mortgage rates. One way to do that: take rising rates into consideration as part of your budget.
Danielle Hale, Chief Economist at realtor.com, puts it best, saying:
“Smart buyers should consider calculating a monthly payment not only at today’s rates, but also at rates that are a bit higherso that they won’t be derailed by a sudden upward move. . . .”
You should also be ready to act when you find the home that meets your needs. That means getting pre-approved with a lender so there won’t be any delays when the time arrives.
The best way to prepare is to work with a trusted real estate advisor now. An agent can connect you with a lender, help you adjust your search based on your budget, and be ready to act quickly when it’s time to make an offer.
Bottom Line
Serious buyers should approach rising rates as a motivating factor to buy sooner, not a reason to wait. Waiting will cost you more in the long run. Let’s connect today so you can better understand your budget and be prepared to buy your home even before rates climb higher.
As we’ve learned throughout this health crisis, homeownership can provide the safety and security we crave in a time of uncertainty. That sense of connection and emotional stability genuinely reaches beyond just the financial aspect of owning a home. As JD Esajian, President of CT Homes, LLC, says:
