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Don't Believe Everything You Read: The Truth Many Headlines Overlook

(Published on - 11/28/2021 6:11:06 PM)

There are a lot of questions right now regarding the real estate market as we head into 2022. The forbearance program is coming to an end and mortgage rates are beginning to rise.

With all of this uncertainty, anyone with a megaphone – from the mainstream media to a lone blogger – has realized that bad news sells. Unfortunately, we’ll continue to see a rash of troublesome headlines over the next few months. To make sure you aren’t paralyzed by a headline, turn to reliable resources for a look at what to expect from the housing market next year.

There are already alarmist headlines starting to appear. Here are two recent topics you may have seen in the news.

1. Foreclosures Are Spiking Today

There are a number of headlines circulating that call out the rising foreclosures in today’s real estate market. Those stories focus on an overly narrow view on that topic: the current volume of foreclosures compared to 2020. They emphasize that we’re seeing far more foreclosures this year compared to last.

That seems rather daunting. However, though it’s true foreclosures have been up over the 2020 numbers, it’s important to realize that there were virtually no foreclosures last year because of the forbearance plan. If we compare this September to September of 2019 (the last normal year), foreclosures were down 70% according to ATTOM.

Even Rick Sharga, an Executive Vice President of the firm that issued the report referenced in the above article, says:

“As expected, now that the moratorium has been over for three months, foreclosure activity continues to increase. But it’s increasing at a slower rate, and it appears that most of the activity is primarily on vacant and abandoned properties, or loans in foreclosure prior to the pandemic.”

Homeowners who have been impacted by the pandemic are not generally the ones being burdened right now. That’s because the forbearance program has worked. Ali Haralson, President of Auction.comexplains that the program has done a remarkable job:

“The tsunami of foreclosures many feared in the early days of the pandemic has not materialized thanks in large part to the swift and decisive foreclosure protections put in place by government policymakers and the mortgage servicing industry.”

And the government is still making sure homeowners have every opportunity to stay in their homes. Rohit Chopra, the Director of the Consumer Financial Protection Bureau (CFPB), issued this statement just last week:

“Failures by mortgage servicers and regulators worsened the impact of the economic crisis a decade ago. Regulators have learned their lesson, and we will be scrutinizing servicers to ensure they are doing all they can to help homeowners and follow the law.”

2. Rising Mortgage Rates Will Slow the Housing Market

Another topic that’s generating frequent headlines is the rise in mortgage rates. Some people are expressing concern that rising rates will negatively impact the housing market by causing home sales to dramatically decline. The resulting headlines are raising unneeded alarm bells. To counteract those headlines, we need to take a look at what history tells us. Looking at data over the last 20 years, there’s no evidence that an increase in rates dramatically forces sales to come to a halt. Nor does home price appreciation come to a screeching stop. Let’s look at home sales first:Don't Believe Everything You Read: The Truth Many Headlines Overlook | Keeping Current Matters

The last three times rates increased (shown in the graph above in red), sales (depicted in blue in the graph) remained rather consistent. It’s true that sales fell rather dramatically from 2007 through 2010, but mortgage rates were also falling at the time. The next two instances showed no meaningful drop in sales.

Now, let’s take a look at home price appreciation (see graph below):Don't Believe Everything You Read: The Truth Many Headlines Overlook | Keeping Current Matters

Again, we see that a rise in rates didn’t cause prices to depreciate. Outside of the years following the crash, prices continued to appreciate, just at a slower rate.

Bottom Line

There’s a lot of misinformation out there. If you want the best advice on what’s happening in the current housing market, contact your local real estate agent.

Source: Keeping Current Matters

Realty Executives Midwest
1310 Plainfield Rd. Ste 2 | Darien, IL 60561
Office: 630-969-8880

Retirement May Be Changing What You Need in a Home

(Published on - 11/21/2021 5:56:40 PM)

Retirement May Be Changing What You Need in a Home

The past year and a half brought about significant life changes for many of us. For some, it meant entering retirement earlier than expected. Recent data shows more people retired this year than anticipated. According to the Schwartz Center for Economic Policy Analysis, 2021 saw a retirement boom:

“At least 1.7 million more older workers than expected retired due to the pandemic recession.”

If you’ve recently retired, your home may not fit your new lifestyle. The good news is, you’ve likely built-up significant equity that can fuel your next move. According to the latest Homeowner Equity Insights report from CoreLogichomeowners gained more than $50,000 in equity over the past 12 months alone. That, plus today’s sellers’ market, presents a great opportunity to sell your house and address your evolving needs.

You Can Move Closer to the Ones You Love

The 2021 Home Buyers and Sellers Generational Trends report from the National Association of Realtors (NAR) provides a look at the reasons people buy homes. For those reaching retirement age, the number one reason to buy is the opportunity to be closer to loved ones, friends, or relatives.

If you find yourself farther from your loved ones than you’d like to be, retirement and the equity you’ve built in your home may enable you to move closer to the people in your life who matter most.

You Can Find the Right Home for Your Needs

Not only can your equity power a move to a new location, but it can also help you purchase the right size home. Lawrence Yun, Chief Economist at NAR, says many homebuyers 55 and older choose to downsize – or buy a smaller home – when they make a purchase:

“Clearly from the age patterns, young people want to upsize, and the older generation is looking to downsize. . . .”

Whatever your home goals are, a trusted real estate advisor can help you to find the best option for your situation. They’ll help you sell your current home and guide you as you buy your next one while you move into this new phase of life.

Bottom Line

If you’ve recently retired and your needs are changing, you’re not alone. Talk to a local real estate professional to get a better sense of how to find a home that will match your situation.

Source: Keeping Current Matters

Realty Executives Midwest
1310 Plainfield Rd. Ste 2 | Darien, IL 60561
Office: 630-969-8880

Things to consider before renting your property!

(Published on - 11/14/2021 6:35:19 PM)

If you’ve decided that you want to rent out your home or investment property, you may think that all you need to do is publish a listing and, voila! You’ve got a new tenant! Well… renting out your property may not be as simple as it seems. Before creating a listing online, there are a few things you need to consider.

Renting out Your Home: 5 Tips

Look into Rental Rates

Choosing an amount of rent that is both fair and competitive is important to securing a tenant. First, make sure to research how much landlords are charging per square foot in your area. This will help you get a rough estimate of what you should charge for your property based on its size and the number of rooms.

Next, consider the advantages and disadvantages of your property to adjust the rental price. Some key aspects to review include:

1. The condition of your rental. Are there any rooms that require renovation? Are there urgent repairs to be made?

The general condition of the property determines the overall opinion of the potential tenants. Therefore, rental units with improvements or those that have undergone repairs are more attractive and have significantly higher prices.

Often times, newly constructed rental properties are preferred by the tenants. Modern housing construction is distinguished by high quality, use of selected materials, and better functionality.

2. The location. Is the property near the city center or is it located on the outskirts? Is it close to schools or shopping? In the current market, the location has the most influence on a residential property’s market attractiveness and price.

Location is becoming more and more important for tenants. Being in proximity to reliable public transportation, parks, and public institutions like schools and universities make a property more desirable and are an incredible advantage when it comes to finding tenants.

3. The elevation of the property. Is your rental unit a top-floor apartment with a great view, or is it located on the lower floors where it is easier to access? Does your home have stairs? Tenants have different requirements and preferences, but make sure to accurately describe your property while emphasizing the perks.

By taking all these factors into account, you will be able to come up with a rent amount that is both competitive and fair.

Increase the Value Proposition

As a landlord, you must put yourself in the shoes of a potential tenant and think about what would make you want to pay a certain price for a rental, and what would cause you to pass. Consider investing money in improving the aspects of your rental unit that most tenants value. Focusing on improvements that appeal to a small demographic will likely not raise the value of your rental.

After you’ve carefully analyzed the condition of your property, you may want to address some of the disadvantages that it has or enhance some of its key selling points. For example, you may decide that the kitchen is in desperate need of improvement or the bathroom should be retiled. Research the investment to estimate the return on investment that you can expect- some renovations may not make financial sense to undertake.

Screen Possible Tenants

You wouldn’t invite a complete stranger to your house, would you? You can (and should) apply the same logic when it comes to renting out your rental unit. The more you know about your tenants, the better. Proper tenant screening lets you learn about your applicants’ financial, criminal, and rental history, helping you make a more informed decision and thus greatly increasing your chance of rental success.

Tenant screening reports will often help you notice any red flags in the applicant’s application. For example, you will know if they have been sued in the past by their landlord for past-due payments or if they have a long criminal record. Additional red flags could include a long track record of evictions, a low credit score, legal problems with previous landlords, damages, etc.

Having more information about your potential tenants lets you objectively evaluate and compare applicants. In addition, it guarantees that you are handing over legal possession of your property to qualified tenants that are likely to pay their rent on time and keep your property in good condition.

Create a Comprehensive Lease

Before renting out your property, you need to ensure that the lease you will sign with your new tenants covers everything that might come under dispute later down the line. In addition, you need to consider that as a landlord, you can be held accountable for everything not strictly outlined in the lease. Here are some things you should add to your lease:

1. Document the state of the furniture and the rooms of your rental thoroughly. This will ensure that you will be compensated if your tenants happen to leave your property in poor condition.

2. Include areas for the names of all of the occupants as well as an occupancy limit. This will help you prevent any unauthorized visitors from staying on your property.

3. Specify the amount of rent, acceptable payment methods, due dates, and late fees. For example, you likely do not want to receive rent payment in cryptocurrency.

4. Clearly state if you allow pets on the property and if you do, what types and sizes. For example, for smaller rentals, you may allow small pets like parrots, turtles, and fish that aren’t capable of damaging your furniture.

5. Make sure to specify who pays the utility bills as well as the repercussions for late payments.

After you have drafted the lease, make sure that it is signed by all parties.

In Conclusion

Deciding to rent out a property is a major choice, and there are several factors that you should consider before finalizing your decision.  Take the time to research the local rental market, potential improvements, and the return on the investment.  While leasing out properties can be a great opportunity for some owners, it may not make sense for everyone

Realty Executives Midwest
1310 Plainfield Rd. Ste 2 | Darien, IL 60561
Office: 630-969-8880

Sellers Have Incredible Leverage in Today’s Market

(Published on - 11/7/2021 7:31:01 PM)

Buying-Leverage - KW Utah - KW Utah

With mortgage rates climbing above 3% for the first time in months, serious buyers are more motivated than ever to find a home before the end of the year. Lawrence Yun, Chief Economist for the National Association of Realtors (NAR), puts it best, saying:

“Housing demand remains strong as buyers likely want to secure a home before mortgage rates increase even further next year.”

But the sense of urgency they feel is complicated by the lack of homes for sale in today’s market. According to the latest Existing Home Sales Report from NAR:

“From one year ago, the inventory of unsold homes decreased 13%. . . .”

What Does This Mean for Sellers Today?

With buyers eager to purchase but so few homes available, sellers who list their houses this fall have a tremendous advantage – also known as leverage – when negotiating with buyers. That’s because, in today’s market, buyers want three things:

  • To be the winning bid on their dream home.
  • To buy before rates rise
  • To buy before prices go even higher.

Your Leverage Can Help You Negotiate Your Best Terms

These three buyer needs give homeowners a leg up when selling their house. You might already realize this leverage enables you to sell at a good price, but it also means you can negotiate the best terms to suit your needs.

And since buyer demand is still high, there’s a good chance you’ll get offers from multiple buyers who are willing to compete for your house. When you do, look closely at the terms of each offer to find out which one has the best perks for you.

If you have questions about what’s best for your situation, your trusted real estate advisor can help. They have the expertise and are skilled negotiators in all stages of the sales process.

Bottom Line

Today’s buyers are motivated to purchase a home this year, and that’s great news if you’re thinking of selling. Connect with a real estate professional today to discuss how much leverage you have as a seller in today’s market. 

Source: Keeping Current Matters

Realty Executives Midwest
1310 Plainfield Rd. Ste 2 | Darien, IL 60561
Office: 630-969-8880

Real Estate Market Snapshot

(Published on - 10/31/2021 3:17:20 PM)
 Article Source: MRED



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