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Date Archives: March 2020

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March
30

Are you planning on selling your home this spring, maybe even summer? Or just looking to make touch-ups to certain areas of your home? Well, there's no better time than now! Cora Bett Thomas Realty loves to see before and after photos so, first things first, pick a few places in your home that you know need some love and snap a few photos. Next, plan to focus on one area each month this season, and know that we have suggestions for you in all seasons. 

We've jotted down some of the best touch-ups you can make, both inside and outside, to make your home pop, without breaking the bank.

Exterior Touch-Ups

  1. Repaint the front door. The focal point of your home is your front door, so of course you want it to look good. Grab a gallon of paint and a couple paintbrushes and boost your curb appeal. Design experts say inviting, bright colors are trending now. Consider a bright blue or teal, a coolish gray, a stately red, or even a cheerful yellow. A premium one-coat exterior house paint is best as it needs no priming.
  2. Primp the porch. April showers bring May flowers, but you've got to have those flowers planted to see the pops of color and blooms! Add a pot of flowers and greenery to either side of your front door. No porch, no worries. Plant some fresh spring flowers around your mailbox. Those that have a porch, be sure your guests aren't greeted with a dingy entry. Wash away the pollen, clean off the porch cushions, and replace your porch lights. Get the whole family involved on this project!
  3. Replace your house numbers. Experts suggest you should choose numbers that are 5 inches or taller. Go to the front of your property and pretend to be a visitor searching for your home... Where is the most eye-catching place to put them? This is an easy project for your kids to be a part of too.

Interior Touch-Ups

  1. Refresh a room with paint. Bring a room from drab to fab, by painting the walls a light and airy color. Think long-term. Gray or beige neutral colors seem to be the most popular, and much easier to sell your home when the time is right.
  2. Add backsplash. Does your kitchen need some updating? What about adding a nice tile or shiplap backsplash that's easy to clean. No serious carpentry skills are needed. You can find adhesives for this project, or easily install wood paneling here.
  3. Embrace your inner interior designer. Think small items such as patterned pillows on the couch, new curtains in the bedroom, turning a blank wall into a photo collage of framed family photos, or adding a fun rug to a room that needs some love.
  4. Neaten up your closet. You don't have to spend a fortune. Start with a little spring cleaning. Go through and get rid of things you haven't recently worn. Wired shelving is easy to install and durable for all your stuff. Think about the things you wear and use most often and hang or fold those in a place that's easy to access.
  5. A fireplace facelift. Do you have a beautiful brick fireplace at the center of your family room that seems boring and dated? Give it a modern makeover with a coat of paint. Clean the gunk first, then apply a stain-blocking primer to help cover any soot stains still there. A couple coats of white paint and you'll feel like you've renovated the main room in your home.

The great thing about these projects, and many others, is they are all DIY! You don't have to be a handyman. Once you've made your home improvements, don't forget to capture an after photo too. Then post the before and after photos on social media and tag us at @corabettthomasrealty. We'd love to share some of your touch-ups for inspiration to others!

 

We have a feeling you'll agree the work is worth it. Even small, affordable touch-ups make the world of difference in your home sweet home!

March
27

Written by: Associate Broker Graham Sadler 

A number of clients have asked my opinion on the short- and long-term impact of the COVID-19 situation on the housing market, particularly affecting property at the upper end of the price spectrum. Obviously, stocks, bonds, equities and commodities have endured intense sell-offs, and their value has decreased precipitously. Could real estate values suffer the same fate and plummet, as they did in 2008?

 

House prices have not been affected as yet, based on MLS statistics, they remain at the relatively high 2019 levels across the board. However, Lendingtree Chief Economist Tendayi Kapfidze predicts a shutdown in the housing market, pointing to travel restrictions, limited showings and cancelled open houses. High tech solutions such as virtual house tours will give buyers unprecedented access, but the ingenuity of the tech sector will not keep sales from falling in the second quarter. As housing is an emotional investment, as well as a financial one, potential buyers have other priorities.

Next month's housing report will be brutal – for the reasons stated above as well as a surge in unemployment. However, most economists who focus on real estate don't believe that a drop in sales will translate into a collapse in prices. National Association of Realtors Chief Economist, Lawrence Yun, stated that prices are likely to hold steady in an environment with fewer listings and an overall housing shortage.

There are other factors which differentiate today's market from that of the 2008 crash:

  1. Mortgage standards are nothing like pre-2008, when it was so easy to obtain a loan with poor credit.
  2. Prices have not been soaring out of control; the increase for the past 2 years has been 4.8% and 4.7% - this compares to 12.5% and 11.4% in the runup to the crash.
  3. There is no housing surplus; a stable market has about 6 months of inventory, and currently we are at 3.1 months.
  4. Mortgage rates are currently at 3.5% compared to 6% in 2008.
  5. American homeowners currently have $18.7 trillion in home equity, insulating the market from a drag due to negative equity and the resulting foreclosure sales.

CBRE Chief Economist, Richard Barkham, predicts a V-shaped recession and rebound with positive growth for the 3rd and 4th quarters. Government bailouts, interest rate cuts, and a rebounding Chinese market are cited as positive indicators. He does warn that a wave of loan defaults, or a second Covid-19 outbreak, are possible downside risks.

In Savanah we can also look at a strong rental market underpinning real estate values. We should continue to be an attractive second home market, perhaps with more appeal as those stuck at home in major markets consider where would be the next best place to live.

 

Graham Sadler

CBT Commercial

GSadler@cbtcommercial.com

March
25

Is Now a Good Time to Refinance My Home? | MyKCM

With  hitting all-time lows over the past few weeks, many homeowners are opting to refinance. To decide if refinancing your home is the best option for you and your family, start by asking yourself these questions:

Why do you want to refinance?

There are many reasons to refinance, but here are three of the most common ones:

1. Lower Your Interest Rate and Payment: This is the most popular reason. Is your current interest rate higher than what's available today? If so, it might be worth seeing if you can take advantage of the current lower rates.

2. Shorten the Term of Your Loan: If you have a 30-year loan, it may be advantageous to change it to a 15 or 20-year loan to pay off your mortgage sooner rather than later.

3. Cash-Out Refinance: You might have enough equity to cash out and invest in something else, like your children's education, a business venture, an investment property, or simply to increase your cash reserve.

Once you know why you might want to refinance, ask yourself the next question:

How much is it going to cost?

There are fees and closing costs involved in refinancing, and The Lenders Network explains:

"As an example, let's say your mortgage has a balance of $200,000. If you were to refinance that loan into a new loan, total closing costs would run between 2%-4% of the loan amount. You can expect to pay between $4,000 to $8,000 to refinance this loan."

They also explain that there are options for no-cost refinance loans, but be on the lookout:

"A no-cost refinance loan is when the lender pays the closing costs for the borrower. However, you should be aware that the lender makes up this money from other aspects of the mortgage. Usually charging a slightly higher interest rate so they can make the money back."

Keep in mind that, given the current market conditions and how favorable they are for refinancing, it can take a little longer to execute the process today. This is because many other homeowners are going this route as well. As Todd Teta, Chief Officer at ATTOM Data Solutions notes about recent mortgage activity 

"Refinancing largely drove the trend, with more than twice as many homeowners trading in higher-interest mortgages for cheaper ones than in the same period of 2018."

Clearly, refinancing has been on the rise lately. If you're comfortable with the up-front cost and a potential waiting period due to the high volume of requests, then ask yourself one more question:

Is it worth it? 

To answer this one, do the math. Will it help you save money? How much longer do you need to own your home to break even? Will your current home meet your needs down the road? If you plan to stay for a few years, then maybe refinancing is your best move.

If, however, your current home doesn't fulfill your needs for the next few years, you might want to consider using your equity for a  on a new home instead. You'll still get a lower interest rate than the one you have on your current house, and with the equity you've already built, you can finally purchase the home you've been waiting for.

Bottom Line

Today, more than ever, it's important to start working with a trusted real estate advisor. Whether you connect by phone or video chat, a real estate professional can help you understand how to safely navigate the housing market so that you can prioritize the health of your family without having to bring your plans to a standstill. Whether you're looking to refinance, buy, or sell, a trusted advisor knows the best protocol as well as the optimal resources and lenders to help you through the process in this fast-paced world that's changing every day.

March
23

Finding and purchasing can be complicated and stressful. However, it doesn't have to be. In this guide we cover everything from what's happening in the market to what to expect when buying a home! 

 

March
20

Three Reasons Why This Is Not a Housing Crisis | MyKCM

In times of uncertainty, one of the best things we can do to ease our fears is to educate ourselves with research, facts, and data. Digging into past experiences by reviewing historical trends and understanding the peaks and valleys of what's come before us is one of the many ways we can confidently evaluate any situation. With concerns of a global recession on everyone's minds today, it's important to take an objective look at what has transpired over the years and how the housing market has successfully weathered these storms.

1. The Market Today Is Vastly Different from 2008

We all remember 2008. This is not 2008. Today's market conditions are far from the time when housing was a key factor that triggered a recession. From easy-to-access mortgages to skyrocketing home price appreciation, a surplus of inventory, excessive equity-tapping, and more – we're not where we were 12 years ago. None of those factors are in play today. Rest assured, housing is not a catalyst that could spiral us back to that time or place.

According to Danielle Hale, Chief Economist at Realtor.com, if there is a recession:

"It will be different than the Great Recession. Things unraveled pretty quickly, and then the recovery was pretty slow. I would expect this to be milder. There's no dysfunction in the banking system, we don't have many households who are overleveraged with their mortgage payments and are potentially in trouble."

In addition, the Goldman Sachs GDP Forecast released this week indicates that although there is no growth anticipated immediately, gains are forecasted heading into the second half of this year and getting even stronger in early 2021.Three Reasons Why This Is Not a Housing Crisis | MyKCMBoth of these expert sources indicate this is a momentary event in time, not a collapse of the financial industry. It is a drop that will rebound quickly, a stark difference to the crash of 2008 that failed to get back to a sense of normal for almost four years. Although it poses plenty of near-term financial challenges, a potential recession this year is not a repeat of the long-term housing market crash we remember all too well.

2. A Recession Does Not Equal a Housing Crisis

Next, take a look at the past five recessions in U.S. history. Home values actually appreciated in three of them. It is true that they sank by almost 20% during the last recession, but as we've identified above, 2008 presented different circumstances. In the four previous recessions, home values depreciated only once (by less than 2%). In the other three, residential real estate values increased by 3.5%, 6.1%, and 6.6% (see below):Three Reasons Why This Is Not a Housing Crisis | MyKCM

3. We Can Be Confident About What We Know

Concerns about the global impact COVID-19 will have on the economy are real. And they're scary, as the health and wellness of our friends, families, and loved ones are high on everyone's emotional radar.

According to Bloomberg,

"Several economists made clear that the extent of the economic wreckage will depend on factors such as how long the virus lasts, whether governments will loosen fiscal policy enough and can markets avoid freezing up."

That said, we can be confident that, while we don't know the exact impact the virus will have on the housing market, we do know that housing isn't the driver.

The reasons we move – marriage, children, job changes, retirement, etc. – are steadfast parts of life. As noted in a recent piece in the New York Times, "Everyone needs someplace to live." That won't change.

Bottom Line

Concerns about a recession are real, but housing isn't the driver. If you have questions about what it means for your family's homebuying or selling plans, connect with us today to discuss your needs.

March
18

Impact of the Coronavirus on the U.S. Housing Market | MyKCM

The Coronavirus (COVID-19) has caused massive global uncertainty, including a U.S. stock market correction no one could have seen coming. While much of the news has been about the effect on various markets, let's also acknowledge the true impact it continues to have on lives and families around the world.

With all this uncertainty, how do you make powerful and confident decisions in regard to your real estate plans?

The National Association of Realtors (NAR) anticipates:

"At the very least, the coronavirus could cause some people to put home sales on hold."

While this is an understandable approach, it is important to balance that with how it may end up costing you in the long run. If you're considering buying or selling a home, it is key to educate yourself so that you can take thoughtful and intentional next steps for your future.

For example, when there's fear in the world, we see lower mortgage interest rates as investors flee stocks for the safety of U.S. bonds. This connection should be considered when making real estate decisions.

According to the National Association of Home Builders (NAHB):

"The Fed's action was expected but perhaps not to this degree and timing. And the policy change was consistent with recent declines for interest rates in the bond market. These declines should push mortgage interest rates closer to a low 3% average for the 30-year fixed rate mortgage."

This is exactly what we're experiencing right now as mortgage interest rates hover at the lowest levels in the history of the housing market.

Bottom Line

The full impact of the Coronavirus is still not yet known. It is in times like these that working with an informed and educated real estate professional can make all the difference in the world. If you have question, please contact us today!

March
2

The best and highest use of a property always prevails in determining market value. In a city like Savannah, with over 200 years of history, many historic buildings have endured multiple uses and transformations based on social, economic, and political changes.

Rentals are nothing new, as there is evidence significant Savannah homes were constructed as early as the mid 1800s with the distinct purpose of stacking apartments.  It wasn't until the late 1990s that utilizing one's personal home or a second home for nightly or weekly stays grew in popularity with the emergence of websites like VRBO (Vacation Rental by Owner) and later Airbnb. Property management companies jumped in and hence came the strong emergence and era of Shortterm Vacation Rentals (STVRs). 

The city of Savannah responded in 2017 with proposed ordinances to cap the number of STVRs permitted. Advocates of the cap were hoping to preserve resident's quality of life by preventing neighborhoods from being overrun with additional visitors in homes and cars on streets. They limited the area in which STVR could operate to certain parts of the historic district and required owners get a permit indicating whether they'd be occupying part of the home as their primary residence. Quickly, owners scrambled to seek permits and within little time many of the wards were capped.  Supply and demand prevailed. Properties with STVR permits became sought after by investors and homeowners seeking to off-set expenses by renting all or a portion of their home. 

One might ask, does a STVR or the resulting income add value to a property?  The answer is not uniform. Valuation of an income property can be complex. It can be based on a comparable approach to similar properties (with or without the same use), based on an income approach considering return or similar measures or based on a cost approach considering the replacement cost of a property. Historic homes bode additional consideration on how to factor in intrinsic features such as pocket doors, fireplace mantels, medallions and transoms.

When considering how to diversify one's portfolio and whether a STVR will offer a competitive rate of return, it's important to consider factors such as vacancy rates, management fees, property taxes, and other likely expenses. In some cases, executive or longterm rentals yield equal or higher returns due to lower expenses and fewer upfront costs, such as furnishings.

Negotiating if items such as whether future reservations, existing marketing and advertising, furnishings, reviews, etc., convey with a sale is complex and can be closely tied to the type of financing that can be secured. Multi-family properties with more than one unit, especially if they hold multiple STVR permits are in high demand and the valuation and financing considerations become increasingly complex.

If you are interested in learning more about the STVR potential in your life, reach out an agent today!

 

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