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Lack of supply in the resale market is favorably impacting new home sales. In September 2023, the pace of new home sales was up 33.9% year over year to a seasonally-adjusted rate of 759,00 units. The median new home sale price in September was $418,800, down 12.3% compared to a year ago, largely due to builder incentives and a shift toward building slightly smaller homes. Meanwhile, existing, or pre-owned home sales sank 15.4% from the previous year, yet existing home prices rose slightly to $394,300.

New home construction is typically more expensive than existing homes of similar size, condition, and amenities, but homebuyers are flocking to new homes because the costs and benefits between existing homes and new homes has narrowed. According to NewHomeSource.com, new home buyers get numerous benefits, including:

• The ability to choose the finishes, fixtures and decor
• A “honeymoon” period when everything in the house is brand new
• Builder-supplied warranties for finishes, systems and structure
• Energy-efficient heating, ventilation, cooling and appliances that will save you money
• The latest in architecture, design, floorplans, construction techniques, and in-home automation.

In the overheated market of the past few years, shopping for a home has become wearisome to homebuyers, including some buyers’ remorse caused by unexpected issues with the home, too much maintenance and upkeep, and too many compromises simply to get into a home.

Ask Jane At The Lake, your Berkshire Hathaway HomeServices network professional to show you new homes in your area. Don’t visit builders or model homes without your agent, so they can negotiate for you.

Filed under: Blog by Jane Sullivan Horne
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In the new year, homebuyers and sellers are still facing the same challenges as they did in 2023—high interest rates, sky-high home prices, and an inadequate supply of homes. As affordability issues slow housing sales volume, low supplies are keeping home prices high.

Bankrate.com experts say that mortgage interest rates reached 8.01% in October, the highest level since 2000, but since then rates have come down. There’s no likelihood of a housing market turndown as long as lending standards remain strict, and there aren’t enough homes to meet demand. Goldman Sachs Research expects 30-year-mortgage rates to open 2024 at 7.6% and to end the year at 7.1%. Home prices will appreciate 2% in 2023, 1.9% in 2024, and 2.8% in 2025. If mortgage interest rates continue to ease, it’s likely that demand for homes will reignite, despite higher purchase prices.

The Federal Reserve’s aggressive handling of inflation by raising overnight borrowing rates to banks has had a positive effect, and further rate hikes appear unlikely as the numbers get closer to the Fed’s target of 2% inflation.

Meanwhile, help is out there for those being squeezed out of the market. FHA-guaranteed loans require as little as 3.5% down. Numerous state and local governments have increased programs for first-time and lower-income homebuyers. Many lenders offer grants, down payment assistance programs, and mortgages with no closing costs. The National Association of REALTORS® offers the Housing Opportunity Program, with resources for homebuyers.

For further advice, ask Jane At The Lake your Berkshire Hathaway HomeServices network professional.

Filed under: Blog by Jane Sullivan Horne
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It’s no secret that homebuyers prefer move-in ready homes that have been repaired and updated. The Wall Street Journal reports that fewer homebuyers want fixer-uppers because of high mortgage interest rates and construction loans. Since the seller has disclaimed the home, the cost of repairs and updates are unknown. Some mortgage guarantors like FHA and VA have certain safety and home integrity requirements, which means that if the seller doesn’t make the improvements needed, the homebuyer won’t be approved for the mortgage loan.

Yet, there are times when the seller simply doesn’t have the financial or practical means to make repairs and improvements. So, what can the seller expect from the marketplace?

Selling a home “as is” means selling the home in its current condition to relieve the seller of most of the responsibilities and costs associated with selling a home. As-is sellers still need to meet minimum state and federal disclosures, such as filling out a seller’s disclosure that declares known defects and problems in the home, but this can have a sobering effect on homebuyers. A balanced market, or one in favor of buyers can reduce the selling price of an as-is home as much as 15% to 20% below market value and takes longer to sell, exacerbated by carrying costs such as mortgage payments, HOA fees, utilities, and more.

Lower offers can also be expected from investors who pay cash, as they have purchase and resale formulas that must be met before they’re interested.

Filed under: Blog by Jane Sullivan Horne
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In August 2023, the average 30-year mortgage interest rate hit its highest level since 2000. At 7.48%, they were nearly triple where they were during the pandemic when they reached a low of 2.65% in January 2021. Meanwhile, median home prices rose for 10 consecutive quarters beginning in fall 2020, only declining for two straight quarters to $416,100, which is still 26.4% higher than the quarter just before the pandemic.

The National Association of REALTORS® reported that existing home sales volume in July 2023 slipped 16.6% from the previous year, even as home prices rose to $406,700 from $399,000 a year ago. While many markets are still robust, others have slowed considerably. How can sellers bring more homebuyers to the table?

As a concession, the seller can offer to pay discount points to the homebuyer’s lender to help the homebuyer get a lower mortgage interest rate. Called a seller-paid mortgage rate buydown, these discount points are typically 1% of the homebuyer’s loan amount and every discount point paid reduces the mortgage interest rate by 0.25 percentage points. If the mortgage amount is $400K, a discount point would be $4,000, and the monthly principal and interest payment at 7.5% would be $2,797. A seller-paid discount point would lower the interest rate to 7.25% and a monthly payment to $2,729. Over the life of the loan, the borrower would save$24,535.

Talk to your Berkshire Hathaway HomeServices network professional about seller-paid mortgage rate buydowns and see if they can benefit your transaction.

Filed under: Blog by Jane Sullivan Horne
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Home prices are still near record highs, so if you’re purchasing your next home in a cheaper or unfamiliar area, be aware of outside influences that can lower your property values.

Noise. Traffic noise, sirens, construction, and other noise pollution can impact home values. Areas to avoid include next to a freeway, on a busy thoroughfare, or across the street from a school.

Danger. Crime statistics can be found at USA.gov. You can search the Office of Justice Programs for known sex offenders living in your area.

Industrial pollution. Builders often look for land in industrial areas where the parcels are cheaper and larger to construct apartments and houses. Visit The Environmental Protection Agency and enter your address to learn how emissions and releases from industry are impacting your neighborhood.

High number of rentals. If you’re buying a condominium or house managed by a homeowner’s association, you have the right to see all governing documents and financial records. High turnover rates make it more difficult to get mortgage loans and expose you to transients who may not care about their neighbors since they don’t own the property.

Bad neighbors. You’ll have to introduce yourself to potential neighbors and ask them what the neighborhood is like, but you can also tell a lot from the state of other properties near your next home. Rundown homes around your home make it less desirable.

Your Berkshire Hathaway HomeServices network professional will be able to help you research the home and neighborhood.

Filed under: Blog by Jane Sullivan Horne
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Fall and winter can be hard on your grass, trees, and flowers, so here are five ways you can make your landscaping more attractive whether you’re selling your home, moving into a new home, or simply want to protect your landscape from fall and winter weather

According to the National Association of REALTORS®, late October to mid-November is the perfect time to plant, weed, prune, and mulch, so your yard looks nicer and your plants will be protected during the winter.

1. Trim trees of dead branches for your own and neighbors’ safety. From November to March is an ideal time to prune trees to give them a better shape and prevent branches from blowing against the house.
2. Now is the time to get rid of leggy shrubs and plant new ones. Plant new shade trees with leaves that change color. Few fall sights are as beautiful as a maple tree with flaming red leaves or a ginkgo with golden yellow leaves.
3. Clean out flower beds and re-mulch with a layer of “wood chips, tree bark, leaves or other organic material.”
4. The Oklahoma State University extension office advises that October and November are the ideal times to plant bulbs before the ground gets hard. You can also plant pansies, ornamental kale, ornamental cabbage, and other cool-season annuals.
5. Pull weeds from the lawn after a rain so they’ll be easier to remove by the roots. They’ll be less likely to crop up again in the spring.

Filed under: Blog by Jane Sullivan Horne
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Who wants to make an investment that doesn’t yield a return? Certainly not real estate investors. They have formulas to assure their success as much as possible. One favorite is the one percent rule.

Rocketmortgage.com explains that the one percent rule “measures the price of the investment property against the gross income it will generate.” That means that an investment must generate at least 1% or more in rental income based on the original purchase price. The rule continues as the investment property appreciates in value, which means the potential for profit in the form of higher rent is even greater.

To find a property that will be profitable, multiply the purchase price of the property by 1%. Another way to calculate it is to move the “comma in the purchase price to the left two spaces.” The result should be the minimum you charge in monthly rent. If the property requires any repairs, you’ll also want to factor them into the equation by adding them to the purchase price, then multiplying the total by 1%.

If you want to buy an investment home for $300,000, you should be able to collect $3,000 in rent. Ask your Berkshire Hathaway HomeServices network agent to provide a comparative market analysis of nearby similar properties so you can compare purchase prices and rental prices for those properties.

For greater accuracy, include the costs to renovate and repair the property, and to bring it up to modern building codes for safe habitation.

Filed under: Blog by Jane Sullivan Horne
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From rooftop gardens to planned community developments, neighborhood farming is having a moment. Agrihoods, or urban farms, have growing appeal, pardon the pun, for foodies who want farm-fresh produce no matter where they live. The beauty of the concept is that it combines the best of urban and rural lifestyles.

The benefits for individuals, communities and city planners are numerous. By coming together, residents of an apartment building, a neighborhood, or a town can grow free or low-cost food in containers, raised backyard beds, or in designated community gardens. Agrihoods promote healthy outdoor activity, improved health and sustainable land use. They help foster new friendships and a stronger sense of community. Community gardens teach both children and adults skills they can use for a lifetime.

While many agrihoods are started by local non-profit organizations and community volunteers, you can organize your own co-op by contacting neighbors, family and friends and choosing the best gardening opportunity for all. Once the food is harvested, it’s easy to split evenly among the participants.

Architects, builders and developers are paying attention to the trend and they report that existing single-family homes in agrihoods have a resale value as much as 28 percent higher than comparable houses in traditional suburban neighborhoods. For many developers, golf courses are expensive to design and maintain while agrihoods can be developed at one-fifth of the cost. Some are large enough to employ farm managers who do the actual farming and manage livestock, in case you don’t have a green thumb.

Filed under: Blog by Jane Sullivan Horne
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Credit scores from FICO and VantageScore, the two most prominent U.S. credit scoring companies, rely on calculations based on a range of data, including payment history (35%), amounts owed (30%), length of credit history (15%), new credit (10%) and credit mix (10%).

The total amount you owe, the number and types of accounts you have, and the amount of money owed compared to how much credit you have available compose the “amounts owed” ratio. One of the ways this figure is calculated is through credit utilization, a measure of how much available credit you’re using as it applies to revolving credit accounts, including credit cards, personal lines of credit and home equity lines of credit. These accounts are separate from mortgages or car loans which have fixed terms for repayment.

Most sources say that no revolving line of credit should be utilized more than 30% at a time, so if you have a credit line limit on a bank card of $5,000, having a balance due above $1,500 on that card will lower your credit scores. New loans that don’t have a payment history can also lower your scores, while small balances or balances that were paid off over time can raise your scores.

To calculate your credit utilization ratio, add up all the balances and then the credit limits you have on all your accounts. Then divide the total of the balances by the total of your credit limits. Multiply the result by 100 to see your percentage.

Filed under: Blog by Jane Sullivan Horne
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