Why Buying a Vacation Home Beats Renting One This Summer

      For many of us, visiting the same vacation spot every year is a summer tradition that’s fun, relaxing, and restful. If that sounds like you, now’s the time to think about your plans and determine if buying a vacation home this year makes more sense than renting one again. According to Forbes:  “. . . if the idea of vacationing at the same place every year makes you feel instantaneously relaxed, buying a vacation home might be a wise move.”   To help you decide if making a move like this is right for you, let’s explore why you may want to consider purchasing a vacation home today.  Benefits of Owning Your Vacation Home You don’t have to worry about finding a place to stay. It can be a challenge to find a rental where you want, when you want. Some summer vacation destinations are more popular than others, meaning your favorite place may be booked up in advance. Bankrate explains why owning your vacation home means you don’t have to worry about that sort of inconvenience:  “. . . a second home can offer a place to have quality time with your family and ensures that you always have a vacation destination.”   It’s an investment. Home values typically appreciate over the long haul. That holds true for your vacation home as well, especially if it’s in an area with growing market demand. This can help grow your net worth with time.   Vacation homes may provide tax benefits. If you own a vacation home, you may be eligible for tax deductions based on where it is. However, before buying, you’ll want to consult with a tax professional to discuss first as taxes can vary by location. It could potentially turn into a retirement location. If you love the location of your vacation home, you could potentially sell your primary residence and retire there in the future. How a Pro Can Help You Find Your Perfect Match As you’re preparing for summer vacation, remember, you could potentially visit your second home instead of another rental unit or hotel. If that sounds appealing to you, a local real estate agent is your best resource. They have the knowledge and resources to help you understand the area and what vacation homes are available in your budget. Plus, these agents can explain the perks of how owning a second home can benefit you.  Bottom Line If any of these reasons for owning a vacation home resonate with you, let’s connect. You still have time to enjoy spending the summer in your vacation home.

How Homeowners Win When They Downsize

      Downsizing has long been a popular option when homeowners reach retirement age. But there are plenty of other life changes that could make downsizing worthwhile. Homeowners who have experienced a change in their lives or no longer feel like their house fits their needs may benefit from downsizing too. U.S. News explains: “Downsizing is somewhat common among older people and retirees who no longer have children living at home. But these days, younger people are also looking to downsize to save money on housing . . .” And when inflation has made most things significantly more expensive, saving money where you can has a lot of appeal. So, if you’re thinking about ways to budget differently, it could be worthwhile to take your home into consideration. When you think about cutting down on your spending, odds are you think of frequent purchases, like groceries and other goods. But when you downsize your house, you often end up downsizing the bills that come with it, like your mortgage payment, energy costs, and maintenance requirements. Realtor.com shares: “A smaller home typically means lower bills and less upkeep. Then there’s the potential windfall that comes from selling your larger home and buying something smaller.” That windfall is thanks to your home equity. If you’ve been in your house for a while, odds are you’ve developed a considerable amount of equity. Your home equity is an asset you can use to help you buy a home that better suits your needs today. And when you’re ready to make a move, your team of real estate experts will be your guides through every step of the process. That includes setting the right price for your house when you sell, finding the best location and size for your next home, and understanding what you can afford at today’s mortgage rate. What This Means for You If you’re thinking about downsizing, ask yourself these questions: Do the original reasons I bought my current house still stand, or have my needs changed since then? Do I really need and want the space I have right now, or could somewhere smaller be a better fit? What are my housing expenses right now, and how much do I want to try to save by downsizing? Once you know the answers to these questions, meet with a real estate advisor to get an answer to this one: What are my options in the market right now? A local housing market professional can walk you through how much equity you have in your house and how it positions you to win when you downsize. Bottom Line If you’re looking to save money, downsizing your home could be a great help toward your goal. Let’s connect to talk about your goals in the housing market this year.

The Three Factors Affecting Home Affordability Today

      There’s been a lot of focus on higher mortgage rates and how they’re creating affordability challenges for today’s homebuyers. It’s true that rates climbed dramatically since the record-low we saw during the pandemic. But home affordability is based on more than just mortgage rates – it’s determined by a combination of mortgage rates, home prices, and wages. Considering how each one of these factors is changing gives you the full picture of home affordability today. Here’s the latest. 1. Mortgage Rates While mortgage rates are higher than they were a year ago, they’ve hovered primarily between 6% and 7% for nearly eight months now (see graph below): As the graph shows, mortgage rates have experienced some volatility during that time. And even a small change in mortgage rates impacts your purchasing power. That’s why it’s so important to lean on your team of real estate professionals for expert advice to stay up to date on what’s happening in the market. While it’s hard to project where mortgage rates will go from here, many experts agree they’ll likely continue to remain around 6%-7% in the immediate future.  2. Home Prices Over the past few years, home prices appreciated rapidly as the record-low mortgage rates we saw during the pandemic led to a surge in buyer demand. The heightened buyer demand happened while the supply of homes for sale was at record lows, and that imbalance put upward pressure on home prices. However, today’s higher mortgage rates have slowed down price appreciation. And, the truth is, home price appreciation varies by market. Some areas are seeing slight declines while others have prices that are climbing. As Selma Hepp, Chief Economist at CoreLogic, explains: “The divergence in home price changes across the U.S. reflects a tale of two housing markets. Declines in the West are due to the tech industry slowdown and a severe lack of affordability after decades of undersupply. The consistent gains in the Southeast and South reflect strong job markets, in-migration patterns and relative affordability due to new home construction.” To find out what’s happening with prices in your local market, reach out to a trusted real estate agent. 3. Wages The most positive factor in affordability right now is rising income. The graph below uses data from the Bureau of Labor Statistics (BLS) to show how wages have grown over time:  Higher wages improve affordability because they reduce the percentage of your income it takes to pay your mortgage since you don’t have to put as much of your paycheck toward your monthly housing cost. Home affordability comes down to a combination of rates, prices, and wages. If you have questions or want to learn more, reach out to a real estate professional who can explain what’s happening locally and how these factors work together. Bottom Line If you’re planning to buy a home, knowing the key factors that impact affordability is important so you can make an informed decision. To stay up to date on the latest on each, let’s connect today.

We're in a Sellers' Market. What Does That Mean?

  We’re in a Sellers’ Market. What Does That Mean?   Even though activity in the housing market has slowed from the frenzy we saw over a year ago, today’s low supply of homes for sale is still a sellers’ market. But what does that really mean? And why are conditions today so good if you want to list your house? It starts with the number of homes available for sale. The latest Existing Home Sales Report from the National Association of Realtors (NAR) shows housing supply is still astonishingly low. Today, we have a 2.6-month supply of homes at the current sales pace. Historically, a 6-month supply is necessary for a ‘normal’ or ‘neutral’ market in which there are enough homes available for active buyers (see graph below): What Does This Mean for You? When the supply of homes for sale is as low as it is right now, it’s much harder for buyers to find one to purchase. That creates increased competition among purchasers and keeps upward pressure on prices. And if buyers know they’re not the only one interested in a home, they’re going to do their best to submit a very attractive offer. As this happens, sellers are positioned to negotiate deals that meet their ideal terms. Lawrence Yun, Chief Economist at NAR, says: “Inventory levels are still at historic lows. Consequently, multiple offers are returning on a good number of properties.” Right now, there are still buyers who are ready, willing, and able to purchase a home. If you list your house right now in good condition and at the right price, it could get a lot of attention from competitive buyers. Bottom Line Today’s sellers’ market holds great opportunities for homeowners ready to make a move. Listing your house now will maximize your exposure to serious, competitive buyers. Let’s connect to discuss how to jumpstart the selling process.