Buying a property is both a big hassle and excitement, but selling one is too. If you’ve been thinking of selling your home and upgrading to a larger place, it’s essential to make arrangements and have a prepared checklist to follow. Since buying a house is one of the most important steps in one’s life, you should look for ways of getting a higher profit moving forward. After all, the goal of any property investment is to increase its value if you eventually decide to sell. So, if you are wondering how to boost the selling price of your Condo, stay tuned.
What are things that increase the value of homes?
Fortunately, there are a variety of home improvements that help in boosting the value of the property you want to sell. In addition, you can follow simple and low-cost tips and tricks to sell your house for a more significant profit. For example, you can use your social media to attract potential buyers. Engaging and creative social media content is low-cost or free (if you get self-educated), and can bring in many viewers to your property.
On the other hand, some serious investments and upgrades will definitely pay off. Therefore, we covered both areas to help you choose which improvements work best for you and your Condo.
How to boost the selling price of your Condo low-cost
Although the tips you are about to see are low-cost, they will make a massive difference in how your property looks. Therefore, following these tips will increase its value. Some of our top budget-friendly home improvements that increase the value of a home are:
deep cleaning
painting
adding a curb appeal
fixture changing
staging the property
Do a proper cleaning
A clean and tidy home will get you the best possible price. This step counts for both inside and outside.
Firstly, focus on all the commonly used and visible places, but remember to pay attention to the hidden corners you can’t always see. For example, get behind the fridge or stove and move the furniture to clean what lies underneath.
Another thing to count in this step is decluttering, which also goes a long way. Remove your personal possessions and family photos, remove the keys and medicine from the counters and make everything depersonalized and tidy.
Add a fresh coat of paint
Painting your walls is an easy DIY project that you can do on a limited budget. A fresh coat of paint makes any place look modern, fresh, and appealing.
You will be amazed by what difference a fresh coat of paint can make.
In addition, before giving your walls a new look, you should examine them for any visible signs of damage. These small improvements will make your Condo look brand new without many innovations.
Change the fixtures
A simple and sometimes neglected house innovation that definitely counts is the fixtures. You will add a new dimension to the place by replacing the doorknobs and cabinet handles, light switch covers, and light fixtures.
Stage your Condo
This step includes decluttering, which we mentioned earlier, and proper furniture arrangements. Don’t forget the amount of furniture is also crucial since you don’t want the place to feel cramped. Also, remember to make each room functional, which helps potential buyers imagine themselves in their new home.
Moderate and high-cost tips
Since the number of homes for sale is increasing, you want to make sure you make yours stand out. Investing a moderate or high sum of money in some of these renovations will undoubtedly add significant value to your property. So, if you are wondering how to boost the selling price of your Condo, these are the tips:
windows or door change
change of flooring
kitchen or bath updates
property renovation
Change doors or windows
Apart from the stylish looks, new doors and windows can make your home more energy-efficient, eventually leading to affordable household running costs.
Installing new doors or windows can help reduce noise, allow more natural light to come in, and help lower heating and cooling bills.
Replace the flooring
Another thing buyers will look at is the flooring, even if it sounds strange.
More carpets are being replaced with wooden flooring.
Hardwood floors are the all-time favorite. Any potential buyer will expect the flooring to be contemporary, durable, clean, and stylish. Therefore, it would be a good investment if you have the finances and time.
It would also be a good idea to use the renovation period for your own relocation. After all, you don’t want to be living in a home you are trying to sell while having to pack and having repairmen in it. To avoid the chaos every moving season brings, it would be good to plan your relocation process and find the best crew for the job. This way, seasonal movers will ensure everything goes smoothly and nothing is slowing down your relocation.
Kitchen or bath updates
The kitchen and bathrooms are known to leave the biggest impressions on home buyers. After all, these are the most widely used rooms and should create a good impression.
How to boost the selling price of your Condo is by investing in kitchen renovations.
You can change the hardware, the countertops, and the flooring in your kitchen to make it look flawless and brand new. Of course, buying new appliances would also be a good idea.
In the bathroom, you can change the toilet, the sink, or the bathtub. If the place allows, you can consider adding a shower too. Even changing the room layout will spruce up any bathroom.
Complete renovation
The step that requires the most significant investment and will definitely help increase the selling prices is a complete renovation of your Condo. By completely redoing it, it will have a modern design and materials, which will definitely be more appealing to your buyers.
Conclusion on how to boost the selling price of your Condo
When the time comes to sell, these home improvements will definitely answer your question of how to boost the selling price of your Condo. Remember to do your research, get answers to any of your questions, and invest in a way that will ensure you profit.
Whether you’re looking for homes for sale in Lake of the Woods VA or Waterfront property in Virginia we are your Real Estate Advisors for Stafford, Fredericksburg, Spotsylvania, Locust Grove, Central Virginia, and Greater Virginia. Thinking of selling? In any market condition, “what is my home worth?” is the #1 question asked by homeowners. If you wish to sell your home, it needs to be sold for top dollar and in a timely manner. Pricing your home accurately, Pat will partner with you to make the selling process so much easier. Get started today by calling us at (540) 388-2541 or contact Pat Licata.
To see available Lake of the Woods properties, please visit our site.
With home prices continuing to deliver double-digit increases, some are concerned we’re in a housing bubble like the one in 2006. However, a closer look at the market data indicates this is nothing like 2006 for three major reasons.
1. The housing market isn’t driven by risky mortgage loans.
Back in 2006, nearly everyone could qualify for a loan. The Mortgage Credit Availability Index (MCAI) from the Mortgage Bankers’ Association is an indicator of the availability of mortgage money. The higher the index, the easier it is to obtain a mortgage. The MCAI more than doubled from 2004 (378) to 2006 (869). Today, the index stands at 130. As an example of the difference between today and 2006, let’s look at the volume of mortgages that originated when a buyer had less than a 620 credit score.
Dr. Frank Nothaft, Chief Economist for CoreLogic, reiterates this point:
“There are marked differences in today’s run up in prices compared to 2005, which was a bubble fueled by risky loans and lenient underwriting. Today, loans with high-risk features are absent and mortgage underwriting is prudent.”
2. Homeowners aren’t using their homes as ATMs this time.
During the housing bubble, as prices skyrocketed, people were refinancing their homes and pulling out large sums of cash. As prices began to fall, that caused many to spiral into a negative equity situation (where their mortgage was higher than the value of the house).
Today, homeowners are letting their equity build. Tappable equity is the amount available for homeowners to access before hitting a maximum 80% combined loan-to-value ratio (thus still leaving them with at least 20% equity). In 2006, that number was $4.6 billion. Today, that number stands at over $8 billion.
Yet, the percentage of cash-out refinances (where the homeowner takes out at least 5% more than their original mortgage amount) is half of what it was in 2006.
3. This time, it’s simply a matter of supply and demand.
FOMO (the Fear Of Missing Out) dominated the housing market leading up to the 2006 housing bubble and drove up buyer demand. Back then, housing supply more than kept up as many homeowners put their houses on the market, as evidenced by the over seven months’ supply of existing housing inventory available for sale in 2006. Today, that number is barely two months.
Builders also overbuilt during the bubble but pulled back significantly over the next decade. Sam Khater, VP and Chief Economist, Economic & Housing Research at Freddie Mac, explains that pullback is the major factor in the lack of available inventory today:
“The main driver of the housing shortfall has been the long-term decline in the construction of single-family homes.”
Here’s a chart that quantifies Khater’s remarks:
Today, there are simply not enough homes to keep up with current demand.
Bottom Line
This market is nothing like the run-up to 2006. Bill McBride, the author of the prestigious Calculated Risk blog, predicted the last housing bubble and crash. This is what he has to say about today’s housing market:
“It’s not clear at all to me that things are going to slow down significantly in the near future. In 2005, I had a strong sense that the hot market would turn and that, when it turned, things would get very ugly. Today, I don’t have that sense at all, because all of the fundamentals are there. Demand will be high for a while because Millennials need houses. Prices will keep rising for a while because inventory is so low.”
Whether you’re looking for homes for sale in Lake of the Woods VA or Waterfront property in Virginia we are your Real Estate Advisors for Stafford, Fredericksburg, Spotsylvania, Locust Grove, Central Virginia, and Greater Virginia. Thinking of selling? In any market condition, “what is my home worth?” is the #1 question asked by homeowners. If you wish to sell your home, it needs to be sold for top dollar and in a timely manner. Pricing your home accurately, Pat will partner with you to make the selling process so much easier. Get started today by calling us at (540) 388-2541 or contact Pat Licata.
To see available Lake of the Woods properties, please visit our site.
The question of whether the real estate market is a bubble ready to pop seems to be dominating a lot of conversations – and everyone has an opinion. Yet, when it comes down to it, the opinions that carry the most weight are the ones based on experience and expertise.
Here are four expert opinions from professionals and organizations that have devoted their careers to giving great advice to the housing industry.
“… conditions today are quite different than in the early 2000s, particularly in terms of credit availability. The current climb in house prices instead reflects strong demand amid tight supply, helped along by record-low interest rates.”
“The housing market is in line with fundamentals as interest rates are attractive and incomes are high due to fiscal stimulus, making debt servicing relatively affordable and allowing buyers to qualify for larger mortgages. Underwriting standards are still strong, so there is little risk of a bubble developing.”
“It’s not clear at all to me that things are going to slow down significantly in the near future. In 2005, I had a strong sense that the hot market would turn and that, when it turned, things would get very ugly. Today, I don’t have that sense at all, because all of the fundamentals are there. Demand will be high for a while, because Millennials need houses. Prices will keep rising for a while, because inventory is so low.”
“Looking back at the bubble years, house prices exceeded house-buying power in 2006 nationally, but today house-buying power is nearly twice as high as the median sale price nationally…
Many find it hard to believe, but housing is actually undervalued in most markets and the gap between house-buying power and sale prices indicates there’s room for further house price growth in the months to come.”
Bottom Line
All four strongly believe that we’re not in a bubble and won’t see crashing home values as we did in 2008. And they’re not alone – Goldman Sachs, JP Morgan, Morgan Stanley, and Merrill Lynch share the same opinion.
Whether you’re looking for homes for sale in Lake of the Woods VA or Waterfront property in Virginia we are your Real Estate Advisors for Stafford, Fredericksburg, Spotsylvania, Locust Grove, Central Virginia, and Greater Virginia. Thinking of selling? In any market condition, “what is my home worth?” is the #1 question asked by homeowners. If you wish to sell your home, it needs to be sold for top dollar and in a timely manner. Pricing your home accurately, Pat will partner with you to make the selling process so much easier. Get started today by calling us at (540) 388-2541 or contact Pat Licata.
To see available Lake of the Woods properties, please visit our site.
As more of us become aware of the fact that we might have too much stuff laying around, decluttering has gone from an occasional chore to a lifestyle trend. This is a positive shift, especially given the global problems caused by waste, but it can be difficult to know how to go about it.
The facts are, a less cluttered house can reduce your stress and lead to a happier life according to clinical psychologist Jaime Zuckerman. Not only is it good for your mental health, it can also be good for your wallet as decluttering and taking care of cleaning and tidying projects can actually increase your home appraisal.
Some people call in “decluttering experts,” but the truth is that unless you have a hoarding situation on your hands, you don’t need this service. Courtesy of The Licata Group, here are some tips for how you can minimize and declutter on your own.
Thinking of purchasing or selling a property? The Licata Group can help you navigate the Lake of the Woods housing market. Call us today at (540) 388-2541.
Pick a Decluttering Strategy
If you don’t know where to start with decluttering, there are many existing strategies you can use. These range from the now-famous KonMari method of sorting and decluttering possessions to the Minimalist Game, where you get rid of an increasing number of things based on the day of the month. Pick one that seems doable for you, and you may find the structure of a defined method helps you actually follow through.
Make Plans for Getting Rid of Stuff
What do you do with the bags of stuff you’ve decided to get rid of? Whether you’re going to the recycling center or a charity, know exactly when, where, and how you’ll tackle things. Alternatively, arrange a pick-up from an organization that offers that service.
Additionally, if you have any large, bulky items you no longer need, consider hiring junk haulers to properly dispose of them. In addition to appliances, professional removal services will handle things like mattresses, carpeting, and furniture. What’s more, they’ll make sure these items end up where they belong, whether it’s a junkyard or a local recycling center.
Hack Your Storage Space
Some of us aren’t blessed with a lot of storage space, even post-declutter. Luckily, there are organization hacks to help you with every room in the house. Use under-bed space in the bedroom, invest in furniture and decor that doubles as storage (such as trunks and ottomans), and use narrow spaces (like the one between your fridge and cabinet) to install vertical storage. And if you want to spruce up those shelves and drawers, use removable wallpaper, which you can find in a number of modern looks. This is also a good solution since it’s easy to swap out designs whenever the mood strikes you.
Set Up a Cleaning Schedule
Now that your home is looking tidy and clutter-free, it’s time to keep it clean. Set a regular cleaning schedule — and then stick to it. For some, this could mean setting aside Sunday mornings for cleaning; for others, a weekly schedule with a couple of small daily tasks is easier. Just make sure it fits with your routine and you can actually picture yourself doing it.
Control Your Buying
According to the Atlantic, Americans bought an average of 66 garments in 2017. Are spending habits like these part of why you had to declutter in the first place? If so, you need to re-evaluate this, or you will end up with a cluttered closet again in a matter of months.
You don’t have to go full minimalist or swear to never buy anything again, but you can learn to buy less stuff. Buy good-quality items that last longer, remove temptations like email mailing lists and free delivery subscriptions, and buy only items that you have a planned, concrete use for.
The act of decluttering itself can be fun and exhilarating. It feels great to see a home that feels cleaner, tidier, and more relaxing. Realistically, the hardest part is keeping things that way. The secret to effective decluttering is not to approach it as a one-time exercise, but as a gradual change in your consumer and home maintenance habits. Over time, you will start to value the long-term comfort and ease of a clutter-free home over the intense (but brief) rush of buying and acquiring new stuff.
Whether you’re looking for homes for sale in Fredericksburg, Stafford, Orange, Locust Grove, Northern Virginia, or even Maryland or DC, we are your Real Estate team committed to finding the perfect home for you! Thinking of selling? In any market condition, “what is my home worth?” is the #1 question asked by homeowners. If you wish to sell your home, it needs to be sold for top dollar, and in a timely manner. Pricing your home accurately, one of our area expert advisors will partner with you to make the selling process so much easier. Get started today by calling us at (540) 388-2541 or contact Pat Licata.
To see available properties, please visit our website licatagroup.com
Millennial homebuyers approach home purchases very differently from their parents and grandparents. A modern generation is busy, environmentally conscious, and tech-minded. However, some current housing preferences echo past generations, such as updated bathrooms and kitchens. Still, they have many other features on their priorities list. Here are the home features that millennial homebuyers want.
Low maintenance
Nowadays, people are busier than ever before, so they don’t want to spend their free time keeping up with home issues. More and more millennial homebuyers are looking for homes that require little or no maintenance and home amenities that are quick, efficient, and long-lasting. Popular low maintenance materials are hardwood floors, granite countertops, etc. This generation requires something that looks modern and something easy to wipe up and mop down quickly. Many millennials are families with young children, so they need something convenient more than anything else. They will look for a new roof, new windows, and high-efficiency HVAC systems.
Updated kitchen and bath
Brand-new fixtures in the kitchen and bathroom are essential for millennial homebuyers. Many of them have limited budgets, so their savings will go towards a down payment and furniture. That’s why home updates are critical to them. They need a sense of comfort, but they also opt for “trendy” designs. A kitchen that fits a millennial’s needs is stylish and updated with integrated appliances. Two sinks, lots of cabinets, and a big kitchen island for food preparation and serving will catch the eyes of modern homebuyers.
Renovated kitchens and bathrooms not only catch the eye of a young homebuyer, but they are also among features that make the home sell faster, in case they decide to do it later.
Renovated kitchen and bathroom are among the home features that millennial homebuyers want.
Modern and smart amenities
Millennials look for tech-savvy homes and high-functioning amenities, such as dishwashers, washers, and dryers. Home automation and voice devices pique their interest. They are a generation that grew up with technology, and it will always be an integral part of their lives, integrated into their homes. The ability to interact with a home from a smartphone is becoming common. Automated security, smart heating and cooling, and smart lights are among the home features that millennial homebuyers want.
Energy efficiency
Millennial homebuyers focus on environmental sustainability and decreasing energy costs. That’s why green homes are so popular among modern homebuyers. Energy-efficient features are very important for an environmentally conscious generation. A Home with energy-efficient appliances, double-paned windows, LED lights and a programmable thermostat is something they wish for. They are ready to pay more because they know energy-efficient features save their money in the long run. They will eventually save a lot on utility bills.
Home office
Working from home is increasingly common, so working from the kitchen table is not good or a long-term solution. Millennial homebuyers seek designated office space, where they can be concentrated on work tasks, away from any household distractions. Professional couples who make a living from the home list a home office among their top priorities. Even if the homebuyers don’t work from home, in the well-connected world we live in, it’s good to have a nice and comfy place to sit and focus on daily chores or just relax. Some prefer to play computer games, some will pay the bills online, and everybody writes emails and video chats with their friends. That’s why a home office is a crucial part of what young professionals are looking for in a house.
A home office should also have enough adequate outlets to power up necessary mobile devices. Good wireless service and the internet are an absolute must when it comes to home features that millennial homebuyers want.
Millennial homebuyers seek designated office space as more and more people work from home.
Open concept
In recent years open spaces have become prevalent features – a kitchen well-connected with other areas instead of a formal dining room. Modern home buyers want to cook, socialize and watch TV or listen to music, all at the same time. An open concept is a trend that will continue to be popular for generations to come because of the modern way of living. Open spaces encourage family gatherings and entertaining; they are both social and practical.
Laundry Rooms
Millennials wish to have a separate, well-defined laundry room, with some shelving or a folding table. No more stumbling over piles of laundry. Home laundry is one of the top home features for 2021.
Storage matters
Millennials are looking for separate storage spaces, such as:
Spacious closets
A spacious garage
A walk-in pantry
Rooms need to have space for some creativity and expansion; they need to be multi-functional. If a millennial is not satisfied with current home conditions and has enough money for some updates, they will decide to do some basic renovations to make a new home more up to their needs and lifestyle. If the house doesn’t have as much storage space as it should, a homebuyer may decide to make some changes.
Before renovations, renting a storage unit is an excellent option to keep their belongings out of the way. No matter how minor the remodel, it will imply some dirty work and require clear space. So, they can simplify the process by doing this. While their items lay safely in a secured storage unit, the renovation process can go smoothly and stress-free.
Outdoor spaces
Functional outdoor living spaces rate high on the homebuyer’s priorities list. A simple patio may not be enough for a modern generation’s needs. Today’s homebuyers wish to have a pool, outdoor fireplace, comfy lounge chairs, and even a cozy hammock where they can take an afternoon nap or read a good book. This trend is popular both for the cities with mild weather as it is for those who have only a few precious summer months.
Homebuyers want to have functional outdoor living space for relaxing with their friends and family.
Pet-friendly home
A large number of millennials own at least one dog or a cat. They are looking for houses with backyards, sturdy fencing, and shade trees where their pets will be happy.
Enough space for a family
At the top of most millennials’ list of must-haves, you will also find – enough space for starting a family. They want their home to be comfortable, safe, and kid-friendly.
Dealbreakers
There are few dealbreakers for millennials when it comes to buying a home. Those are usually the features that come with the risk of needing more cash to fix later. A list of dealbreakers includes leaky roofs, foundation issues, or mold, pest, and insect infections. That’s why a home inspection is crucial to make the right choice when buying a home.
Conclusion
Home features that millennial homebuyers want are essential to the real estate industry. So, when marketing your home to millennials, think about all these factors. Understanding homebuyers’ needs may significantly help someone sell the house quickly, which is in everybody’s interest.
Whether you’re looking for homes for sale in Fredericksburg, Stafford, Orange, Locust Grove, Culpeper, Northern Virginia or even Maryland or DC, we are your Real Estate team committed to finding the perfect home for you! Thinking of selling? In any market condition, “what is my home worth?” is the #1 question asked by homeowners. If you wish to sell your home, it needs to be sold for top dollar, and in a timely manner. Pricing your home accurately, one of our area expert advisors will partner with you to make the selling process so much easier. Get started today by calling us at (540) 388-2541 or contact Pat Licata.
To see available properties, please visit our website licatagroup.com
Join the Licata Group team for a fun, informative, and free webinar where you will learn how to BEST prepare your home for sale for top-dollar from leading industry professionals.
Interest rates continue to stay at a historic-low with more buyers than homes that are available! You’ll learn how the current market is affecting the home selling process and how it’s often leading to multiple-offer situations.
A Q&A session will be held at the end to answer your questions.
We understand the need to sell your home for the highest market value in the least amount of time, and you’ll learn how this can be achieved in this one-hour session! Join us for a fun, interactive, and informative webinar on February 13th, 11 am. Click Here to register!
Whether you’re looking for homes for sale in Fredericksburg, Stafford, Orange, Locust Grove, Culpeper, Northern Virginia, or even Maryland or DC, we are your Real Estate team committed to finding the perfect home for you! Thinking of selling? In any market condition, “what is my home worth?” is the #1 question asked by homeowners. If you wish to sell your home, it needs to be sold for top dollar, and in a timely manner. Pricing your home accurately, one of our area expert advisors will partner with you to make the selling process so much easier. Get started today by calling us at (540) 388-2541 or contact Pat Licata.
To see available properties, please visit our website licatagroup.com
Whether you’re looking for homes for sale in Lake of the Woods VA or Waterfront property in Virginia we are your Real Estate Advisors for Stafford, Fredericksburg, Spotsylvania, Locust Grove, Central Virginia, and Greater Virginia. Thinking of selling? In any market condition, “what is my home worth?” is the #1 question asked by home owners. If you wish to sell your home, it needs to be sold for top dollar and in a timely manner. Pricing your home accurately, Pat will partner with you to make the selling process so much easier. Get started today by calling us at (540) 388-2541 or contact Pat Licata.
To see available Lake of the Woods properties, please visit our site.
As your family grows, your starter home is starting to feel awfully full. But there’s one big obstacle standing in the way of you and an upsized home: selling your house. From the crayon you gave up on scrubbing off the walls to the tornado of toys that is your kids’ playroom, there’s a lot to contend with if you’re going to get your house in show-ready condition and keep it there.
You could stay put, but why live in a cramped house if you don’t have to? Instead of avoiding a move, find your dream home and then tackle your upsize head-on with these time-saving tips.
Decide if You’ll Move Out
Moving out makes selling a house much easier, especially for parents. When you relocate while your home is on the market, you eliminate the need for constant cleaning and scrambling to leave before every showing. Before moving out, consider the average days on the market in your area. While renting an apartment or Airbnb is affordable in competitive markets, it could be costly if your home takes a long time to sell.
Sellers who move out should avoid leaving the home vacant. Instead, leave just enough furnishings for staging. Home staging improves listing photos and helps buyers imagine themselves in a home they’re thinking about purchasing.
Start Packing Now
Staging is an even bigger concern for families who don’t vacate. Clutter can kill a home sale, so it’s critical that parents have a plan for eliminating clutter while keeping their house livable. For most families, this means putting most belongings in storage and keeping only the bare necessities. Thankfully, buyers are forgiving when it comes to non-master bedrooms, so there’s no need to leave play areas barren. Instead, downsize toy collections and look for easy yet stylish storage solutions like wicker baskets.
Get Your Home in Tip-Top Shape
With clutter out of the way, you can finally see your home clearly, including all of its flaws. From the little repairs you’ve put off to the dust bunnies in the corner, it all needs to go before your home hits the market. Minor fixes like patching drywall, painting, and fixing loose knobs and cupboards are simple enough to DIY, but hire contractors for anything involving plumbing or electrical wiring. While they get your home in good repair, work your way through a deep-cleaning checklist that will make your home gleam.
Keep Up with Daily Cleaning
Right now, your home looks the best it has in years. But as a parent you know it won’t last for long. You need a plan for keeping your home clean day-in and day-out while your home is on the market. Some parents take the DIY approach, diligently following cleaning schedules to stay on top of dishes, laundry, and other hallmarks of a lived-in home, but don’t rule out hiring a housekeeping service. Letting someone else handle the house can be a huge relief when you have so many things on your plate.
Housekeeping and maid services, for example, can help with tasks such as running errands and meal prep in addition to general upkeep. These services ultimately allow parents to focus on work, parenting, and life instead of constantly tending the house.
Make Showings Fun for the Whole Family
Ask any parent who has bought and sold a home, and they’ll tell you that getting kids out of the house for showings is easily one of the most stressful aspects. Make these disruptions easier on the kids (and you!) by creating a reason to look forward to showings. Find fun places to go as a family and keep a bag in your trunk full of kid-friendly activities, snacks, and other supplies. By creating a positive association, you can eliminate the fight to get out of the house.
Moving may feel like an insurmountable feat right now. But before long, this will be just a blip in your family’s history. Instead of letting the idea of selling a house with kids overwhelm you, take charge of your move. With creative solutions (and maybe a little outside help!), you can tackle your move like a pro and settle into your new, right-sized home.
Whether you’re looking for homes for sale in Fredericksburg, Stafford, Orange, Locust Grove, Culpeper, Northern Virginia or even Maryland or DC, we are your Real Estate team committed to finding the perfect home for you! Thinking of selling? In any market condition, “what is my home worth?” is the #1 question asked by homeowners. If you wish to sell your home, it needs to be sold for top dollar, and in a timely manner. Pricing your home accurately, one of our area expert advisors will partner with you to make the selling process so much easier. Get started today by calling us at (540) 388-2541 or contact Pat Licata.
To see available properties, please visit our website licatagroup.com
As we come to the end of this four-part series, we look to examine the outcome that we will face once this is all over. With that in mind, we ask ourselves the final question; are we going to see the same outcome and devastation that we saw in 2008?
One of the key factors in buying and selling a home is the confidence that people have, and in times like these, memories of past experiences come back to us as we recall all the uncertainties that we faced. But the focus cannot be on what has occurred in the past, but rather what is occurring today and the days to come. With that, we look to see what is being said from the Federal Housing Administration.
The Federal Housing Administration indicated it is enacting an “immediate foreclosure and eviction moratorium for single family homeowners with FHA-insured mortgages” for the next 60 days. The Federal Housing Finance Agency announced it is directing Fannie Mae and Freddie Mac to suspend foreclosures and evictions for “at least 60 days.”
What we are seeing is things in 2008 that we got wrong that you are now seeing the government respond to in regard to the needs that the consumers and the industry have so that It doesn’t happen again. We are seeing how banks are going to respond individually to borrowers in those situations. Actions like this show that the way this is being handled is significantly different than back then, and there are also structural actions that we can look at that are very different now. The visuals provided below will help to better illustrate this.
This first visual shows us exactly where we were in 2008, and what you’ll notice is that there were $828 Billion in cash out refinances back then, and homes were basically being used as ATM machines to which cash was being taken out to harvest equity from their home, a lot of which was being put in depreciating assets. When we start to look at today in the last 3 years, cash out refinances are a fraction of what they were leading up to 2008. What this entails, is that people have learned their lesson and are no longer doing what they have done in the past with the equity in their homes, and today the equity position is very different than what it once was, with over 50% of homes in the united states having over 50% equity. In 2008, people were walking away from homes when they had negative equity, but that is no longer the case.
We are in a very different situation today than we were back then. Those that fail to learn from history are doomed to repeat it, and its fair to say that the government and the American people have learned their lesson.
As we started out this year, we saw a market where income is rising, and mortgage rates have been falling. What this has created is a drop for the historic norm in the payment as a % of income, as demonstrated in the visual above. Historically speaking, the norm percentage of income that has been dedicated to their mortgage has been 21.2%, and right now what we’ve seen leading into this, is that number being 14.8%. This is significantly lower than the historic norm speaking in leverage to the consumer in relative to housing.
In conclusion, what we are seeing now and, in the months/years to come is not going to be the same as we saw after the crash in 2008. Homeowners have learned from their past mistakes, and the government is taking the necessary precautions to ensure that history does not repeat itself. While the uncertainty factor remains for a lot of what is occurring in the county and the world, it can be said with confidence that we will come out of this stronger, and better than going into it.
We hope that this four-part series has shed some light into the biggest questions that you may have right now. If you have any other questions about the current market and what’s to come, feel free to give us a call at (540) 388-2541.
Moving into part three of our four part series, the next question that we need to ask is: Are we headed towards another recession, and what does that mean?
When we talk about where we are today, the reality is that we can feel the slowdown occurring across the county, and it will continue to have an impact on economic activity. When addressing this question/concern, we have to ask ourselves what a recession truly is. A recession is a slowdown in economic activity. Now when we hear the word “recession” we immediately have these ideas and thoughts of what the prior recession was. If we talk about an economic slowdown, it’s very different, and keeping that in mind as we continue to talk about it is critically important in these times. To help discuss this, we’ll turn to the experts. Bill McBride from Calculated Risk had this to say:
“With this sudden economic stop, and with many states shutting down by closing down schools, bars restaurants etc. my view is the US economy is now in a recession (started in March 2020), and GDP will decline sharply in Q2 (as Goldman Sachs is forecasting). The length of the recession will depend on the course of the pandemic.”
Now certainly we can say that we are feeling this slowdown, and it can be said that we will continue to feel this throughout the course of the pandemic. If we look at where we were in 2008 compared to today, 2008 was like a tornado that had ripped through our town and tore things that had to be slowly rebuilt over time, and what we are experiencing today is a heavy snowstorm that is shutting things down. What we do know is that as time moves on, we will start to see things open back up again. We will be able to go to bars, restaurants and sporting events with the only challenge being getting into these places as everyone is going to be out and about.
Looking at that graphically speaking, the figure above provided by Goldman Sachs begins to show a “V” of recovery, and not a “U” like we saw in 2008, being a sharp decline followed by a sharp increase displaying further strong gains as we head into 2021. When looking at what the experts have to say, Wells Fargo agrees as well, saying “We do not expect a repeat of the severe recession of 2008-2009, because the virus and oil shocks are not endemic to the financial system, but are, rather, external. Once the virus infection rate peaks, we expect a recovery to gain momentum into the final quarter of the year and especially into 2021.”
Referring back to the analogy previously used, we will not have to rebuild our financial system like in 2008. Once the snow melts from this current storm, things will kick in, and that’s why we see that “V” curve instead of the “U” curve.
So rather than use the actual word “recession” we should look to use the definition, being an “economic slowdown” and if that does happen, we need to look at our history of events that have shown similarities to what is occurring, and what we can expect to see moving forward. The visual provided below shows what has occurred with changes in home price over the last 5 recessions.
What we can see from this graphic is that in three of the last five recessions, home prices actually increased as a result. We did see a slight decrease in 1991, but what we all really remember is the significant decrease shown in 2008.
The message that needs to be taken from this is that recession does not equal a housing crisis.
