Your Carolina Home
Margaret Sapp
Your Carolina Home Real Estate Broker
“Guided by integrity, experience, and tireless effort to achieve your real estate goals,” Margaret is a REALTOR® at Fonville Morisey Realty. She is also N.C. Certified Paralegal with experience in both real estate and personal injury law, and a past personal injury insurance claims negotiator. Margaret has purchased and lived in 7 homes in the Triangle giving her the inside perspective into some very desirable neighborhoods. From working with her many clients to those 13 transactions where Margaret had “skin in the game,” she knows how to handle any twists and turns that the process could bring. As your real estate broker, you will get a dedicated, experienced professional who will walk with you every step of the way, a seasoned negotiator, and someone to help calm any stressful situations that may arise. This is what her clients have said about her:
“We chose Margaret Sapp to list our home because she initially because she respected our opinions. She was so professional and knowledgeable. She kept us appraised and was available at the drop of a hat. She was a great advocate because she got us our list price and negotiated around the repair issues well. We will call Margaret again when we have any future real estate needs and we will recommend her wholeheartedly!”
–Stacey and Mark S.
“I’ve purchased 6 houses in my days and Margaret has been the best realtor I’ve yet to work with. She is very knowledgeable about the area and current market and has provided excellent guidance for my ability to present a winning offer on a home. She went out of her way to help us and even offered to drive my wife (disabled) to homes/banks or whatever was needed. The other positive about Margaret is she made us feel like we were her only clients, being extremely responsive to any inquiries and providing immediate updates on bids we made.
–Dale B.
“Margaret Sapp is not only a fantastic agent, but a wonderful person that was just so thoughtful and so thorough. From initial meeting to closing, she was always very responsive and very knowledgeable. She guided us though the process and was always looking out for our best interests, and helped us with items even outside of the sale of the house. What a terrific experience we had, and it was due to Margaret! Our sincere thanks to her.”
–Bill & Allison M.
“Margaret was perfect! She was always available, quick to show us a potential house or answer questions, and is literally the only reason we have our house. She made the house finding and buying process as painless and easy as something this complicated could be. 10/10 would recommended her to friends and family.”
–Brian Y.
Blog Posts
February 9, 2022
Report: Raleigh will be No. 3 hottest housing market, prices to soar 24%
Source: Pixabay
RALEIGH – Raleigh’s real estate market is already red hot with prices at record highs but they are going to get even higher in 2022 and the Raleigh market will be the third hottest market in the U.S. this year, a new study says.
Home values are forecasted to soar nearly 24% in the capital city’s real estate market, pushing a typical home value to well over $450,000 from the current average price of $391,444, an analysis from real estate company Zillow finds.
“All of the top ten markets are in the Sunbelt,” said Nicole Bachaud, an economist for Zillow. “That’s been a really hot region over the past year and it’s going to continue into 2022 as well.”
Only Tampa, Fla. and Jacksonville, Fla. are forecast to see higher home value appreciation through November 2022, the Zillow analysis finds. The report was released early Tuesday and forecasted the home value appreciation in the Tampa market to climb nearly 25%
Tampa was the only top five city to stay hot from 2021. Bachaud explains that most of the cities that were featured in Zillow’s 2021 analysis are seeing a pullback in demand because those areas are just no longer affordable.
Chrlotte, meanwhile, came in ranked fifth in the analysis, which studied the top 50 metropolitan areas of the country by population size.
(Durham is not one of the top 50 metros, according to the Poynter Institute.)
Triangle prices, especially in Wake County, are already soaring. Across the region he median sale price for a home was $369,000 in November, up from the median sale price of $365,000 in October, with 4,073 transactions closed in November compared to 4,007 transactions in October, according to the latest reports from Triangle Multiple Listing Service.
The median price of all real estate transactions in Wake County increased in November to a record high of $405,000, according to an analysis of public records conducted by the Wake County Register of Deeds.
“Home buyers are attracted to markets in the Sun Belt that offer relative affordability, fast-growing economies and weather that allows them to enjoy the outdoors year round,” says Zillow economist Alexandra Lee in a statement. “Across the board, sellers will remain in the driver’s seat, but especially so in the hottest markets. Buyers should be ready for strong competition for homes, which means bidding wars and homes flying off the market only days after they are listed.”
“The most important thing is having cash available,” said Michael Martin, a branch manager at Fairway Independent Mortgage in Raleigh.
He said rising prices make it tougher for first-time buyers to make it into the market.
“Kind of the sweet spot that I’m seeing is if they have 10% to put down, that gives us enough room that if the appraisal comes in a little short, we’ve got some room.”
The study covers real estate trends in the 50 largest U.S. markets in it hottest housing markets of 2022.
The top 10:
-
Tampa
-
Jacksonville
-
Raleigh
-
San Antonio
-
Charlotte
-
Nashville
-
Atlanta
-
Phoenix
-
Orlando
-
Austin
The predictions from Zillow are based on:
-
Forecasted home value growth
-
A thriving job market
-
Relative scarcity within markets
-
Fast-moving inventory
-
Demographics that indicate a good number of potential buyers
The economists from Zillow do predict that housing prices will “back off just a bit” from a tidal wave of price increases in 2021, forecasting 11% increase in home value nationwide for 2022. But Zillow believes housing remains a “seller’s market … especially so in these hottest markets.”
The forecast is based on the following data:
-
Forecasted annual home value appreciation in Nov. 2022
-
Forecasted acceleration in home value appreciation, Nov. 2021-Nov. 2022
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Standardized listing days per home, Jan. 2021-Nov. 2021
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2-year change in total non-farm employment per 2-year residential building permit total
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Projected change in owner households, 2021-2022
July 25, 2020
6 Reasons Why This Is Actually the Best Time in Years To Sell a House
Talk about a strange summer. Between the continued threat of the novel coronavirus, a wobbly economy, and layoffs happening left and right, it’s no surprise that many who may have hoped to sell their home this season are wondering whether to put those plans on hold—or they’ve already thrown in the towel.
Such hesitancy is understandable. Yet the irony is that, after closely examining the current housing market conditions, many real estate experts believe this summer could be one of the best times to sell a home in years.
“Given the pandemic and uncertainty it’s caused, the general sentiment [among some owners] is that now is not a good time to sell your home,” says Danielle Hale, chief economist at realtor.com®. “Yet so far, the data suggest the opposite—that buyers outnumber sellers in the housing market, which means it’s better to be a seller than a buyer.”
So if you’re a home seller who assumed they should write off this summer’s home-selling season as a lost cause, it’s time for a reality check! Here are a few reasons why the market could actually be moving strongly in your favor.
1. Home buyer demand is back with a vengeance
Granted, in the spring, when COVID-19 was spurring many states to enforce quarantine and ban open houses, home selling understandably went dormant for a while. But now that lockdown restrictions are loosening up in some states, home buyers are out with a vengeance—and many of them are eager to make up for lost time.
Indeed, the real estate market is already seeing strong signs of a rebound, according to the National Association of Realtors®‘ Pending Home Sales Index (a forward-looking indicator of home sales based on contract signings). In May, after two months of decline, pending home sales shot up 44.3%—the highest month-over-month jump since 2001, when the index began.
“There’s very significant demand,” says Matthew Gardner, chief economist at Windermere Real Estate. He adds that demand is strongest right now in the suburbs and in smaller, cheaper cities—as buyers look to escape the biggest metros and more companies follow tech titans like Google, Amazon, and Microsoft in allowing employees to work remotely for the foreseeable future.
“If we continue to see an increase in working from home, people can move farther away, where they can get more bang for their buck,” Gardner says.
2. Home inventory remains low
Yet amid this glut of home buyers, the number of homes for sale to actually meet this pent-up demand is at an all-time low.
“There was insufficient supply last year,” says Lawrence Yun, chief economist of the NAR. “This year during the pandemic, the shortage has intensified.”
According to realtor.com’s market outlook, housing inventory in June was 27% lower than a year earlier.
And some reasons for the shortage of available homes have little to do with the recent coronavirus crisis. The number of homes for sale is at a “generational low,” says Gardner, because people are living in their homes longer than they used to. In fact, NAR data shows that Americans are spending an average of 13 years in their homes before moving.
The lower inventory is also the result of fewer distressed properties on the market, “due to the massive government stimulus support, including mortgage forbearance and generous unemployment benefits,” Yun explains.
3. Home prices are up
With demand for homes up and inventory down, the conditions are perfect for home sellers to get high prices.
“Many sellers can get top dollar in the current market conditions,” says Yun.
According to NAR , single-family home prices increased in most markets during the first quarter of 2020, with the national median single-family home price increasing 7.7%, to $274,600.
This good news may come as a surprise to sellers, since it was expected that the housing market would take a hit and home prices would drop because of the pandemic. That’s quite the contrary.
“Home asking price growth is actually higher now than it was before the pandemic,” Hale explains.
4. Mortgage interest rates are low, too
Another factor pushing home buyers to shop are the historically low mortgage interest rates.
According to Freddie Mac’s July 2 report, average interest rates recently reached a new record low of 3.07% for a 30-year fixed-rate mortgage. Given this means homes could cost potentially tens of thousands less over the lifetime of the loan, it’s understandable that mortgage purchase applications have jumped since last year.
5. The economy is showing slow signs of recovery
While the pandemic led to record high unemployment rates in March, these levels have recently fallen slightly, which could be a good sign that people are still eager and able to buy a home.
Continuing spikes in COVID-19 infection rates may have a negative impact on employment numbers in some areas going forward, but for now the national trends are heading in the right direction.
“The pandemic sharply curtailed economic production and consumer spending in March, April, and part of May. As a result, joblessness soared,” Hale explains. “But data from May and June suggests that businesses are adding back jobs as consumers get back to spending, and some companies are now scrambling to keep up demand. Some speculated that we’d see a sharp bounce back in activity, and I think it’s fair to say that’s what we’re seeing so far.”
6. Home buyers’ needs have changed
Along with working remotely, people have been spending more time at home in general—and this, in turn, has sparked a fresh deluge of home buyers whose current homes no longer seem as comfortable or roomy as they were pre-COVID-19. That is, if your dining table now doubles as your “office,” you might be tempted to trade in your short commute for another room or two so all can work from home in peace.
“People are looking at their existing home and saying, ‘If I have to work from home, then maybe my house just doesn’t work,’” Gardner says.
“Spending three months locked up at home taught a lot of people that where they live is important,” agrees Jed Kliman, managing broker at Windermere Real Estate in Seattle. “Clients I’ve been working with recently are trading up because they’ve spent more time in their homes and realized it didn’t meet their needs.”
Home offices, more privacy, outdoor spaces, and just more room are becoming more important to homeowners. Kliman says playing up these features and amenities when you sell your home can attract buyers. Home staging and visually appealing listing photos, though always important, are especially crucial in today’s market.
“Staging, professional photos, even video and 3D virtual tours—those are all really important because people start their home search online, and they have to be moved and captivated to go see a house,” Kliman says.
In addition to understanding market conditions, home sellers will want to know that the process from offer to closing may work a little differently today.
For example, social distancing may mean home inspections and repairs take a little longer. Kliman says some of his sellers have been doing their own pre-inspections and making reports available to interested buyers to speed up the process.
The bottom line: “You want to make it as easy as possible for a buyer to make an offer,” he says.
Just be prepared for the unexpected, Hale says.
“The time it takes to sell a home does seem to be shrinking, as states lift restrictions on business and consumers feel more confident and comfortable,” she says. “But depending on how infection rates evolve, this could change. This doesn’t mean we’re out of the woods completely.”
Credit: Erica Sweeney is a writer whose work has appeared in the New York Times, Parade, HuffPost, and other publications
May 15, 2020
Top Loan Types for Unique Situations
As you begin your home-shopping journey, you might hear a lot about the 30-year conventional fixed-rate mortgage. And there’s no doubt it’s a great product for many buyers. But not all. In fact, there other mortgage options that could be better for your needs, perhaps offering a short-term solution (and super low rate) if you know you’re only going to live in an area for a couple of years.
We’ve compiled information about some common and unique mortgage types to guide you in talking with lenders about loan options. And remember, your loan could be a combination of several types discussed here — a low down payment loan with a fixed rate, for example.
When you plan to stay for the long haul
Fixed-rate loans are popular with those planning to stay put in their home for a while because they offer payment stability. These loans offer the same interest rate for the entire repayment term, normally 10, 15, 20, or 30 years. The shorter the loan term, the lower the interest rate. For example, a 15-year fixed will have a lower interest rate than a 30-year fixed. Of course, your monthly payments could fluctuate if your property tax and insurance rates change, but the interest rate itself remains the same. And should rates drop significantly, you could refinance. The fixed-rate mortgage is the workhorse of the mortgage world and is a good choice for many buyers who plan to live in their homes for a long time.
When you know you’ll be moving in a few years
An ARM is a “hybrid” loan product — meaning not entirely fixed — so named because its interest rate sets out fixed, and can then fluctuate, moving higher or lower based on the benchmark interest rate. For instance, a 5/1 ARM loan would have a fixed rate of interest for the first five years, after which it begins to adjust every one year, or annually. Likewise, the 7/1 ARM would have a fixed rate for seven years, and then adjust. Although the rates can rise, they typically start off lower than those available for fixed-rate mortgages. An ARM is a good option if you know you’ll only be in an area for a few years, such as for a job relocation or during grad school.
Mortgages for first responders and teachers
HUD’s Good Neighbor Next Door program encourages homeownership among certain professionals such as police officers and teachers who they’d like to have buy a home in certain communities. The program offers a 50% discount from the list price of the home. In return buyers commit to living in the property for 36 months. Eligible single-family homes located in revitalization areas are listed exclusively for sale through the Good Neighbor Next Door Sales program. Properties are available for purchase through the program for seven days.
When you’re buying big (or in the big city)
Buyers with their eyes on an expensive home can get in the door with a jumbo loan, which is a loan that allows higher amounts that a conforming loan. Or buyers looking for homes in pricey housing markets such as New York City, Los Angeles, or the Bay Area may require one just to buy an average house. A jumbo loan will typically come with more demanding requirements than a conforming mortgage, such as a higher down payment, higher credit score, and two appraisals instead of one.
The jumbo loan threshold is $424,100 in most of the United States, although in the highest-cost areas they start at $636,150.
When you can’t save for a down payment
For buyers who have enough income to make their monthly mortgage payments but don’t have a down payment saved up, there are two 100% financing options backed by the federal government.
First, the United States Department of Agriculture (USDA) offers USDA loans, which are zero-down mortgages for rural borrowers who meet certain income requirements. The program is managed by USDA’s Rural Housing Service to target “rural residents who have a steady, low or modest income, and yet are unable to obtain adequate housing through conventional financing.” Income must be no higher than 115% of the adjusted area median income, which varies by county.
Second, the U.S. Department of Veterans Affairs (VA) offers VA loans, a zero-down loan program to military service members and their families.
Because these programs are backed by the government, banks are more likely to qualify applicants with limited incomes and savings.
When you have some, but not a lot, to put down
Fannie Mae and Freddie Mac both offer 3% down loan products through participating lenders. Buyers must meet certain credit and income requirements, and generally have a FICO credit score of 620 or higher, or purchase property in certain areas. These loans may offer the option to cancel mortgage insurance once home equity reaches 20%. Homebuyer education or one-on-one counseling is required for these products.
Low-down payment loans can help borrowers buy much sooner － even years sooner － than they would have been able to if they needed to put 10%, 15%, or even 20% down.
When you’re struggling with low credit
Let’s face it, a lot of us have less-than-perfect credit scores. The good news is you still may be able to qualify for a loan backed by the Federal Housing Administration (FHA). Through private lenders, FHA offers fixed-rate and adjustable-rate mortgages with 3.5% down to borrowers with qualifying FICO credit scores over 580.
Borrowers with FICO credit scores lower than 580, but at least 500, may qualify for an FHA loan, too, but be asked to put more down. In all cases, FHA borrowers will pay for a mortgage insurance premium (MIP) as well as an upfront mortgage insurance premium (UMIP).
It’s also worth noting that USDA and VA loans have no minimum FICO credit score requirement.
When student debt is a factor
Fannie Mae and Freddie Mac allow “flexibilities” in some loan products lenders can use to help borrowers with student debt qualify for a mortgage and help those with equity refinance and use all or a portion of the proceeds to pay off their own student debt or debt they have co-signed for.
Ask a lender for information on these products if you think you won’t qualify because of your student loan debt, or want to help someone get a fresh start by paying off their debt.
When you’re buying a fixer-upper
One way to economically ease into homeownership is to purchase a “fixer upper,” a home that needs some work before you move in. There are two programs targeting those with renovation in mind, FHA’s 203(k) mortgage and Fannie Mae’s HomeStyle Renovation mortgage. FHA requires 3.5% down, while Fannie Mae requires 5%. With FHA, the homeowner hires a specialist to determine the feasibility of the renovation and oversee the project. Fannie Mae’s lenders that offer HomeStyle also oversee the project. Because these loans are riskier for lenders, you’ll pay a higher interest rate (typically one-eighth to one-quarter of a percentage rate higher than for a conventional mortgage) but you’ll also have that dream kitchen or extra bedroom.
——Credit Zillow for this article——
March 25, 2020
Could this relatively new therapy help cut mortgage defaults?
America’s housing market is booming with home prices nationwide now back to where they were a decade ago, just before the financial crisis
Money is a trigger for many arguments and is often a root cause of breakdowns in relationships – both business and personal.
And when the arguments include missed mortgage payments, or result in a breakdown of the relationship, it can begin a downward spiral for finances and mortgage performance.
But a relatively new form of relationship counselling is gaining interest which could help couples avoid money-related disputes. Financial therapy combines the emotional support of a counsellor with the money mindset of a financial advisor.
“Money is a big thing and ignoring it is impeding satisfaction in relationships,” said Megan Ford, a couples and financial therapist at the University of Georgia who studies money and relationship satisfaction. “Therapists need to work together to solve problems that occur around financial behaviours of couples and learn how to connect to all of their emotions.”
The therapy aims to help couples address money concerns and financial conflicts before they break up the relationship.
Ford – along with John Grable, a financial planner and Athletic Association Endowed Professor of Family and Consumer Sciences – are working together to assess the influence that financial therapy can have on the outcomes of relationships.
They are also examining how it can provide insights into decisions of couples to ask a financial planner for help.
In sessions with couples, the duo asked participants to share their financial goals, feelings towards money, and financial behaviours.
“One woman was close to tears listening to her husband explain an early memory in their relationship about money that she didn’t understand at the time,” Grable said. “The story helped explain his odd behavior that she always thought of as just being mean. They left clearly closer emotionally and financially feeling more powerful.”
More therapists required
Grable says that there should be far more people trained in financial therapy.
“I’m a financial planner; I love money,” said Grable. “But the last thing I want to happen is a couple coming in crying or yelling. I’m uncomfortable with that, it makes me nervous. That’s why we need therapists trained in this area.”
The study was published in Contemporary Family Therapy.
February 18, 2020
Common Repairs Needed After a Home Inspection: What Must Sellers Fix?
If you’re selling your home, you might wonder if there are common repairs needed after a home inspection. Most buyers, after all, won’t commit to purchasing a place until there’s been a thorough inspection by a home inspector—and rest assured, if there are problems, this professional will find them!
So if your home inspection turns up flaws that your home buyer wants fixed, what then? To be sure, repair requests after an inspection are a hassle, and liable to cut into your profits. So for starters, make sure to read your inspection contract carefully to make sure you don’t get locked into mending something you don’t want to fix.
“As a seller, you should never sign an inspection contract until you fully understand its obligations, particularly where it concerns your responsibility for fixing things,” says Michele Lerner, author of “Homebuying: Tough Times, First Time, Any Time: Smart Ways to Make a Sound Investment.”
And rest assured, there’s no need for you to fix everything a home inspector thinks could stand for improvement; a home inspection report is not a to-do list. Basically inspection repairs fall into three categories: ones that are pretty much required, according to the inspector; ones that typically aren’t required; and ones that are up for debate. Here’s how to know which is which.
Common repairs required after a home inspection
There are some fixes that will be required by lenders before they will release funds to finance a buyer’s home purchase. Typically these address costly structural defects, building code violations, or safety issues, sometimes in the attic, crawl spaces, and basement, and those related to the chimney or furnace.
An inspector will also check whether your septic system and heater are in good condition and verify whether there’s a possible radon leak or the presence of termites (homeowners tend to have many questions on these topics). Other conditions of the home that an inspector may report on include those related to the roof, electrical systems, and plumbing lines and the condition of your HVAC system.
If a home inspection reveals such problems, odds are you’re responsible for fixing them. Start by getting some bids from contractors to see how much the work will cost. From there, you can fix these problems or—the more expedient route—offer the buyers a credit so they can pay for the fixes themselves. This might be preferable since you won’t have to oversee the process; you can move out and move on with your life.
Home inspection repairs that aren’t required
Cosmetic issues and normal wear and tear that’s found by the inspector usually don’t have to be fixed.
“Some inspection contracts will expressly state that the buyers cannot request any cosmetic fixes to be made and can only ask that structural defects, building code violations, or safety issues be addressed,” says Lerner. Furthermore, “state laws may also impact your liability as a seller for any issues uncovered during an inspection.”
Be sure to check your local ordinances to know which fix-its that are found during an inspection legally fall in your realm of responsibility.
Home inspection repairs that are negotiable
Between fixes that are typically required and those that aren’t is a gray area that’s up for grabs. How you handle those depends in part on the market you’re in. If you’re in a hot seller’s market, you have more power to call the shots.
“While buyers are always advised to have a home inspection so they know what they are buying, when there are a limited number of homes for sale and buyers need to compete for homes, they are more likely to waive their inspection right to ask a seller to make repairs,” says Lerner.
In fact, “the best contract for a seller would be for the buyer to agree to purchase your home as is or to request an ‘information only’ home inspection, thus absolving you of any need to pay for any fixes found by the inspector,” she adds.
However, in a normal market, you won’t be able to draw such a hard and fast line related to an inspection.
Work with your real estate agent to understand what items you should inspect and then tackle—and where you might want to push back. Don’t have an agent yet? Here’s how to find a real estate agent in your area.
Just remember: you’ll want to be reasonable when it comes to repairs because you may have already put a lot of time into the selling process, and it’s likely in your best interest to accommodate some fixes rather than allowing the buyer to walk away. Also, depending on the magnitude of the requested fix, it’s not likely to go away. Now that it’s been uncovered by the home inspector, you’ll need to disclose the issue to the next buyer.
How to negotiate home fixes
Here are two sneaky but totally effective ways to handle this home hurdle that’s been uncovered by your inspector:
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Offer a home warranty. “I sometimes keep a $500 one-year home warranty in my back pocket as a token to ease concerns found during a home inspection,” says Kyle Springer, a Realtor® with Coldwell Banker in Bowling Green, KY. That can come in handy if there is an element that doesn’t truly need fixing but is still worrying the buyers, such as an aging HVAC unit.
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Barter for something of value to the buyer. Often sellers will suggest their real estate agent ask the buyer’s agent if the buyers want appliances or furniture if they have no plans to move them. Springer advises sellers to wait to make that offer until after they get the list from the inspector, because they may be able to beg off certain fixes in exchange for items such as the washer and dryer.
A home inspection can turn up all kinds of issues, but nearly all can be addressed quickly, pleasing buyers and sellers alike.
January 8, 2020
Will 2020 be a good year to buy a home? Here’s what the experts say:
Last year, economists expected mortgage rates to rise — but then they fell
Getty Images/iStockphotoGood news for Americans looking to buy a home in 2020: Prices likely won’t increase much. (The bad news is that it’ll be hard to find homes for sale.)
Economists say that 2020 will be a positive — though not exactly stellar — year for the housing market.
And that could be good news for renters and home buyers alike.
But that’s assuming experts’ forecasts are right.
“If interest rates go up 100 basis points, we’ll be off,” Doug Duncan, chief economist at Fannie FNMA, -2.03% said. “When you sign on the bottom line your willingness to be a forecaster, that’s what you’re signing up for.”
If the past year is any indication, predicting the housing market’s trajectory a year or more out can be something of a fool’s errand. At this point in 2018, mortgage rates had just hit their highest level in years and seemed poised to crack the 5% threshold in 2019
‘Forecasts usually start positive and upbeat at the beginning of the year, and then you’ll see them moderate by the end of it.’
—Nela Richardson, investment strategist at Edward Jones
As a result, many economists expected something of a repeat of the “taper tantrum” of 2013. Back then, Federal Reserve President Ben Bernanke indicated that the central bank would buy fewer bonds and hike rates, which caused the 10-year Treasury TMUBMUSD10Y, +2.21% and mortgage rates both to jump and home sales to fall precipitously.
Forecasts Fannie Mae and the Mortgage Bankers Association made this time last year, for instance, expected housing activity including sales and new construction to drop year-over-year during the first quarter of 2019 in response to higher mortgage rates, but then to improve as the year went on and Americans acclimated to higher rates.
“Housing people are the most optimistic people, but it takes a lot of optimism to buy a house and tie up your income for 30 years,” said Nela Richardson, investment strategist at Edward Jones.
“Forecasts usually start positive and upbeat at the beginning of the year, and then you’ll see them moderate by the end of it,” Richardson, who previously was the chief economist at national real-estate brokerage Redfin RDFN, +0.23%, told MarketWatch.
Also see: This is where rents have increased the most over the last decade. Hint: It’s NOT New York or San Francisco
The forecasters were only partly right: in the first half of 2019, mortgage rates remained high by recent historical standards, and that did cause a slowdown in sales — one that was more pronounced than experts projected. But mortgage rates dropped through most of the year until September when they reached a nearly three-year low.
While the drop in rates did give home sales a boost, current estimates suggest they will still fall short of economists’ 2018 predictions. Home construction activity, however, is poised to exceed what experts had projected.
Here is what the experts predict will happen in the housing market in 2020:
Here’s what experts are predicting for 2020 in the U.S. housing market |
|||||
Source |
30-year fixed mortgage rate |
Change in home prices |
Housing starts |
Total home sales |
Change in sales |
National Association of Realtors panel consensus forecast |
3.80% |
3.6% |
1.31 million |
N/A |
N/A |
Fannie Mae (December forecast) |
3.60% |
4.1% |
1.35 million |
6.17 million |
1.90% |
Freddie Mac FMCC, -1.27% (December forecast) |
3.80% |
2.8% |
N/A |
6.20 million |
3.33% |
Mortgage Bankers Association (December forecast) |
3.70% |
3.1% |
1.30 million |
6.26 million |
3.73% |
Zillow |
N/A |
2.8% |
N/A |
N/A |
N/A |
Realtor.com |
3.85% |
0.8% |
N/A |
N/A |
-1.80% |
Mortgage rates should stay below 4%, but don’t expect them to decrease much
The vast majority of housing economists project that mortgage rates will remain below 4% in 2020.
The Federal Reserve has indicated that it will be in a holding pattern for the foreseeable future. While the Fed’s view on the state of the U.S. economy has improved since it cut rates back in October, Chairman Jerome Powell signaled that the central bank will not hike rates until there is a sustained increase in inflation. (While the Fed does not directly control interest rates for home loans, the mortgage market tends to price in the central bank’s expected moves.)
Further making an increase in interest rates unlikely is the fact that globally, central banks have been cutting rates rather than raising them, said Doug Duncan, chief economist at Fannie Mae. “That takes a while to work its way through the system,” he said, adding that “nobody is talking about tightening.”
Continued low mortgage rates would be good news for renters, according to Skylar Olsen, director of economic research at Zillow ZG, +0.97% . More people will be able to afford to buy a home if mortgage payments remain affordable – in turn reducing competition for rental units. “Low rates will encourage more renters to pursue homeownership, further boosting overall homeownership rates that have been on the rise since 2016,” Olsen wrote in her 2020 forecast.
However, a potential trade deal between the U.S. and China presents some upside risk to rates. Were the two countries to ink a substantial deal early next year, markets could improve. That in turn could fuel increased inflation, which might prompt the Federal Reserve to hike rates as it attempted to do earlier in 2019. If that were to happen mortgage rates could go up — and depending on how much they increase, that could alter economists’ other projections.
Home builders will keep on constructing…
Home builders are poised to close out 2019 on a high. The National Association of Home Builders reported that builder confidence has reached the highest level since 1999. And housing starts and permitting activity continued to increase through November, the latest month for which data is available. Low mortgage rates are a major factor working in favor of increased construction.
Another contributor: Baby boomers. As this generation retires, many are looking to downsize to retirement communities, prompting more construction activity in that space. At the same time, as many boomers choose to “age in place” and stay in their existing homes, a significant share of the inventory of existing homes remains tied up.
‘Were we to have a recession, I’d argue housing would provide a cushion.’
—Doug Duncan, chief economist at Fannie Mae
“Were we to have a recession, I’d argue housing would provide a cushion because the shortage of supply at the entry-level suggests builders could actually continue to build,” Duncan said.
One bit of good news for buyers: Builders are starting to shift more and more toward building fewer luxury homes and more entry-level properties.
“Homebuilders are getting smart about how to delight millennials in order to reduce pain points,” wrote Ken Leon, director of equity research at CFRA Research. “The industry is shifting to entry-level homes with more open space.”
Read more: These housing markets will feel the biggest impact from the ‘Silver Tsunami’
…but the supply of homes for sale will remain seriously low
“Historically when you look at homebuilding we’ve needed about 1.1 to 1.2 million new homes to keep up with demand,” said George Ratiu, senior economist at Realtor.com. “We’re well below that.”
Research has suggested more inventory could open up in certain parts of the country as baby boomers pass away or downsize in the years to come. But that additional inventory isn’t necessarily where the jobs are. Indeed, many companies in cities like San Francisco and Seattle have invested significant resources into affordable-housing initiatives to help their employees afford housing near their jobs.
“The median tenure of people staying in their homes has doubled or tripled depending on where you look,” Richardson said. “People are staying in their homes longer, which is leading to less inventory.”
(Realtor.com is operated by News Corp NWSA, +0.72% subsidiary Move Inc., and MarketWatch is a unit of Dow Jones, which is also a subsidiary of News Corp.)
Home sales activity and prices will moderate – depending on where you live
In the end, the low supply of homes will prevent 2020 from being a breakout year for the housing industry, Duncan said. “It’s not going to be gangbusters because there’s not enough supply for it to be gangbusters,” he said.
Some economists project modest growth in home sales and home prices alike – with low mortgage rates offsetting the negative effects of the inventory crisis.
Realtor.com has projected that the total volume of home sales will fall in 2020.
But Realtor.com has projected that sales will actually drop in 2020 in spite of robust buyer demand. They expect that the low supply of homes for sale may actually worsen because of moderating home price growth. With home prices reaching new highs in many markets and home price appreciation outpacing inflation and wage growth, many people simply cannot afford to buy homes currently. As a result, some economists expect that home prices will remain flat or even drop in some parts of the country, particularly along the coasts.
In turn, some people may decide to hold off on selling their homes in the hopes that home prices resume their upward climb, Ratiu said.
Away from the coasts though, some housing markets are poised to see more explosive growth in 2020, including Boise, Idaho, and Tuscon, Ariz.
Don’t miss: This is exactly how much housing speculation can affect household income and employment
More homes will be sold directly to real-estate companies
In recent years, one of the most significant trends in the housing industry has been the rise of so-called iBuyers. These companies — including Zillow Offers Z, +1.18% , RedfinNow, Opendoor and Offerpad — use technology to make instant offers on homes, which they then buy directly from sellers before turning them around for a profit.
The model is meant to appeal to home sellers who want more flexibility (while creating a profit for the iBuyer itself.) “If the iBuyer makes an offer and you accept it, the company buys the house, fixes it up and sells it — on your schedule,” wrote Holden Lewis, Nerdwallet’s housing expert, in his 2020 projections round-up. “You don’t have to clean up and clear out for buyer showings. You pick a closing date that matches up with the purchase of your next home.”
There’s a drawback for consumers who do choose to go this route though: There’s a decent chance that the seller will offload their home for less than they would have gotten by offering it on the open market.
Nevertheless, a recent report from Redfin found that in nine markets across the Sunbelt region, iBuyers were the purchaser in 3% or more of all home sales. (Nationally, iBuyers are responsible for a fraction of a percent of all sales.)The iBuying companies are continuing to invest in their programs — Zillow announced recently that it had expanded to Los Angeles, the country’s second largest city and its 22nd iBuying market.
Analysts have argued that as this trend continues it could have a negative effect on the quality of certain housing metrics that rely on multiple-listing services for data collection, because iBuyer sales bypass those platforms entirely.
By
JACOBPASSY
November 26, 2019
6 Home Renovations that Return the Most at Resale
Renovations can make us happier in the places we call home, but some updates can add real value when it’s time to sell or refinance.Because some renovations — think an updated kitchen, new deck or remodeled bathroom — can get pricey, it’s helpful to know what kind of return you might expect before you decide to take on a remodeling project.
Why to consider a home renovation
Remodeling your home adds to your enjoyment, but it can also boost your home’s value over time, too. When you refinance your home, for instance, renovations will be taken into account when a property appraiser assesses your home’s current market value. A higher home value means you’ll have more equity, a lower loan-to-value ratio. You might even be able to cancel private mortgage insurance payments earlier than anticipated.When you go to sell your home, buyers will want to see a clean, well-kept home with modern updates that’s move-in ready. Plus, if you live in a competitive housing market, your listing might be competing with other upgraded homes for buyers’ attention.
How much you should invest in home renovations
Before you shell out big bucks for custom updates in your home, having a solid understanding of what renovations yield the highest return for the money is key. You also have to take into account your budget and your renovation goals.“Budget is the number one pain point for most remodeling professionals when they meet with potential clients,” says Clayton DeKorne, chief editor of the JLC Group, which publishes Remodeling, a magazine for the construction industry. The publication produces the annual Cost vs. Value report, which examines the cost of popular home renovations versus the return on investment (ROI) at resale.The 2019 Cost vs. Value report compares the average cost of 22 remodeling projects with the value those projects retain at resale in 136 U.S. markets, based on a survey of 3,000 real estate agents and firms. It’s important to note, however, that costs can vary greatly by region based on the cost of labor and materials, as well as the level of service offered by individual remodelers.“There’s no project on the list that returns lower than 50 percent,” DeKorne explains. “On the lower end of the ROI spectrum are the bigger-ticket projects that have a whole lot of personal selection involved, such as choosing finishes in a bathroom remodeling project. They may or may not translate from one buyer to the next, but there is value in those personal finishes. A homeowner is going to get enjoyment in those things while they’re living there.”
Best home renovations
Whether you plan to stay in your house for a long time or just a few years, it’s smart to know which home renovations add the most value. Here are the six home remodeling projects that deliver the highest returns, according to the Cost vs. Value report.
1. Garage door replacement
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Average cost: $3,611
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Average resale value: $3,520
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Cost recouped: 97.5 percent
A good-looking garage door tops the list when it comes to getting cash back on your investment when you decide to sell your house. The estimate for this job is based on the cost of removing and disposing of an existing 16-by-7-foot garage door (or two-car garage door) and replacing it with a new four-section garage door with heavy-duty galvanized steel tracks, assuming the motorized garage door opener is compatible. This curb-appeal enhancer will get you back almost every dollar you spent on it when you sell your house.
2. Manufactured stone veneer
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Average cost: $8,907
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Average resale value: $8,449
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Cost recouped: 94.9 percent
Replacing vinyl siding with stone veneer on part of your home, such as an entryway, is a big curb-appeal upgrade for your home. For this project, existing vinyl siding is replaced with adhered manufactured stone veneer. This average cost estimate is based on installing 36 linear feet (LF) of sills, 40 LF of corners and one address block, with materials including two layers of a water-resistant barrier, corrosion-resistant lath and fasteners and more. This cosmetic improvement and accent design element is likely to catch the eye of a potential buyer and can allow you to recoup nearly 95 percent of your renovation costs.
3. Minor kitchen remodel
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Average cost: $22,507
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Average resale value: $18,123
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Cost recouped: 80.5 percent
Creating a modern-looking and functional kitchen can add more than just value to your home: it can boost your enjoyment of everyday activities like cooking, entertaining friends and sharing meals with your family. However, potential buyers see the intrinsic value of this kind of upgrade. On average, you’ll recoup a little more than 80 percent of the cost of a minor kitchen remodel. In a remodeling project of this kind, you might replace appliances with new, more energy-efficient models, reface cabinets with new shaker-style wood panels, install new countertops, replace hardware, install a new sink and faucet, add new flooring and repaint.
4. Deck addition (wood)
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Average cost: $13,333
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Average resale value: $10,083
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Cost recouped: 75.6 percent
If you’re lucky enough to own a house with a big yard, having a wooden deck can be an extra enhancement to enjoy the outdoors around your home. The average cost of adding a wooden deck from scratch (estimated based on a 16-by-20-foot deck, including a railing system with pressure-treated wood posts, railings and balusters) is approximately $13,333. But the good news is that this feature, which also includes a built-in bench and planter, can hold more than 75 percent of its value come sale time.
5. Siding replacement
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Average cost: $16,036
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Average resale value: $12,119
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Cost recouped: 75.6 percent
Old, dilapidated siding can make even the nicest house look worn-out. For the average home, replacing 1,250 square feet of old siding will cost you just over $16,000 and you’ll get back roughly three-quarters of that investment upon resale. This upgrade includes the factory trim at the openings and corners.
6. Entry door replacement (steel)
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Average cost: $1,826
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Average resale value: $1,368
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Cost recouped: 74.9 percent
You will recoup nearly 75 percent of your cost by replacing your main entry door with a 20-gauge steel door, complete with clear dual-pane half-glass panel, jambs and an aluminum threshold with composite stop. These doors come factory finished with the same color on the front and back sides.
ARTICLE CREDIT TO:
November 18, 2019
LOOK INSIDE TAYLOR SWIFT’S 8 INCREDIBLE HOMES
Her real estate portfolio is almost as impressive as her music career.
Taylor Swift may be best known for her impressive music career, though with eight homes across four states she may be adding “real estate mogul” to her repertoire pretty soon. The 28-year-old superstar is reported to own $84 million in real estate, with diverse pads ranging from a $20 million penthouse in Tribeca to an 11,000-square-foot historical landmark in California. See below for a closer look at the star’s properties.
-August 29, 2019-
30-Year Fixed Interest Rates Graph (1972-2019)
The red line is 4.0%. We are below 4% TODAY. Other years rates
dropped below 4% were 2012 and 2016.
Now would be a great time to consider your new home!
– August 9, 2019-
