We continue to hear that the housing market is unbalanced—that there are more buyers than sellers. There is no single reason for the situation we are in today. Rather, the situation has developed this way because of several combined factors that suggest that the market will not return to equilibrium any time soon. Although this varies widely by location and price range, here are some reasons that this might be happening.
Reason #1: Demographics.
The first reason for the shortfall is purely demographic. As “Boomers” age, they are not following the trends of previous generations. Many are staying in the workforce far longer than their predecessors, and because of their postponed retirement, they don’t feel compelled to downsize their living situation. In fact, almost two-thirds of Boomers plan to age in place and do not plan to move even after retirement. Without this anticipated supply of homes from downsizing Boomers, there aren’t enough homes for move-up buyers. This limits the supply of homes for first-time buyers.
Reason #2: We don’t move as often as we used to.
As an overall nation, people aren’t moving as often. After experts have analyzed mobility, it’s clear that people aren’t required to relocate as frequently for work that matches their skillset. Because there has been a drop in geographic-specific jobs, are simply moving with less frequency.
Reason #3: Builders aren’t building as many homes.
Many builders are not building as many homes as they were in the past, because of three main factors: land supply/regulation, labor, and materials. The costs related to building a home have risen rapidly since the Great Recession, and this is keeping many builders from building to their potential. In addition, to justify the additional costs, many of the homes that are being built are larger and more expensive, which makes it difficult for many first-time home buyers that cannot afford the price of a newly constructed home.
So, what should you do in this kind of market? My advice is to focus on what works for your specific needs and if you want to explore what your options are, give me a call. I’m always up for a discussion about which approach might be right for you.
**Content an excerpt from blog posted 8/2017 by Mathew Gardner, Chief Economist for Windermere Real Estate
Last week we discussed the basic steps in the mortgage process. There is a lot of complicated detail in a new home loan. Reading the fine print can be overwhelming if you’re not sure what it all means. Here are a few things to de-mystify the information coming your way.
#1: Choosing a good mortgage company and experienced loan officer.
An experienced loan officer will sort through all the financial complexities: the mortgage type of mortgage, closing costs, and monthly payment requirements. It’s in your best interest to meet with your loan officer before you make an offer—the purchase contract requires you declare your mortgage company within five days of agreement.
#2: Reviewing loan documents.
The multitude of documents you’ll be reviewing is quite daunting, but your loan officer will wade through them with you. At the onset, your loan disclosure will lay out all the details, and keep you from being surprised with closing costs. These costs generally include lender fees, closing fees, prepaid interest/insurance, prorated taxes, and HOA dues. There is a lot to create confusion! This is why a good working relationship with a lender is essential.
#3: Lock in your interest rate.
It’s important when your loan professional advises you to commit, that you lock in your rate ASAP—they can change by the hour! Most lending institutions are bound by the same guidelines, meaning that though one lender might offer a better rate, the quote can be manipulated by changing fees, especially the “loan origination fee.” If you want to shop around for rates, be sure that you’re comparing apples to apples. Rates are constantly in flux, so what might look good from one lender today could change tomorrow.
#4: Understand the terminology.
Feel free to ask your loan officer to define specific terminology that you should know. For example, what is APR? This is a universally term that defines the actual cost of your loan. It rolls lender fees into the cost, then recalculates the annual percentage rate—not to be confused with the “note rate” on which your payments are based. The general rule of thumb: the greater difference between the APR and the note rate, the more the lender is charging you for services.
Feeling confused? You’re not alone. You can see that a trusted mortgage professional is essential to understanding what you’re committing to. I have long-standing recommendations for competent, accessible, trustworthy mortgage professionals—seeing firsthand how they have worked with clients’ best interest in mind. Choosing one will serve as a major ally as you navigate financial details, paperwork, and terminology.
This is the last post in my most recent blog series that covers some of the top home trends predicted for 2015. This week, I’ll be covering the last 4 trends that home buyers can expect to see in homes on the market.
- Grandiose garages.
Grand garage spaces are very desirable right now. The new trends include bringing the driveway material into the garage, as well as adding sleek designs and modern conveniences into it, including temperature controls, glass doors, or large sinks for outdoor use or washing pets.
- Luxurious master bedrooms.
The bedrooms are some of the most important rooms in your home – they are where you can really rest and unwind at the end of a long day. As the demands of work and society increase and people become more and more stressed, people begin recognizing the importance of getting great sleep and how it will affect their mood and their overall productivity throughout the day. So, homebuyers today are not only looking for bedrooms that they can turn into their oasis, but they are looking for ways to transform them into a luxurious retreat. They’re doing this by buying top of the line mattresses, luxurious bedding, comfortable pillows, and having calming scents throughout the room.
- White kitchens.
There are thousands of options for kitchen colors, backsplashes, cabinets, and flooring, but one of the hottest trends this year is the focus on all-white kitchens. It’s common to see white cabinetry with dark gray or black countertops and white walls. The white trend gives the space a clean, fresh look to it that many homeowners desire.
- Enhanced outdoor living.
Outdoor enthusiasts will rejoice at some of the 2015 trends in outdoor living. This year, enhancing outdoor space is very popular. Some of the things you might see include adding an outdoor covered kitchen equipped with a sink, carving station, and grill, adding a hot tub with an adjacent outdoor shower, or providing an outside wash station for your dog. Being outside during the spring and summer months is very enjoyable in the Pacific Northwest, so expect to see people investing in bigger and better outdoor living spaces this year.
Home design trends are fun and interesting to watch, no doubt! Be sure, however, that you are mindful of what budget you need to stick to, as well as what style preferences you prefer. Consider what ideas and concepts you’ll like or will work well for your home for years to come – not just what the passing interests are.
Well, after hours of searching and a lot of different house showings, you’ve finally found the home you want. With a home sale, there are a lot of different things that need to happen. Paperwork needs to be signed, loans need to be cleared, and a home inspection needs to be done. You might have wondered why you need a home inspection. Even though the house might appear to be perfect, there are often hidden problems that can be diagnosed when a reputable home inspector comes to take a thorough look at the property.
Benefit #1: Peace of mind.
Buying a home is arguably one of the largest and most important purchases that you will ever make in your lifetime. Because of this, you should make sure that there aren’t any hidden issues that could have been spotted with a home inspection. When it comes to buying a home, you need peace of mind, knowing that you’re getting a fair price for the home.
Benefit #2: Hidden problems can be discovered.
A home inspection will include a full report of the condition of the home, both interior and exterior, as well as those harder to see areas such as the crawlspace, chimney, or attic. The report is designed to point out any major problems as well as some minor ones that can be fixed with simple improvements. No one likes surprises when it comes to home repairs, so knowing what you are getting into before you move in is important.
Benefit #3: Saves you money in the long run.
If you don’t have a home inspection and you decide to go ahead with the purchase of the home, there may be costly issues that pop up after you move in. This could be avoided by simply having a home inspection done during the purchasing process. It’s very common that the seller will fix issues before the sale goes through. This means the seller is responsible and you’re off the hook for those repairs – that can save you big bucks down the road!
Your home is a big investment and in order to be protected and know the exact condition of the home, a home inspection is a definite must-have.