Seller’s Checklist: A Timeline to Prep Your Home for Sale

We’re still in a seller’s market, but that doesn’t mean your home is guaranteed to easily sell.¹ (The word “easily usually equates to $$$) If you want to maximize your sale price, it’s still important to prepare your home before putting it on the market.

Start by connecting with a real estate agent, such as myself, as soon as possible. Having the eyes and ears of an insightful real estate professional on your side can help you boost your home’s appeal to buyers. What’s more, beginning the preparation process early allows you to tackle repairs and upgrades that can increase your property’s value.

Use the checklist below to figure out what other tasks you should complete in the months leading up to listing your home. While everyone’s situation is unique, these guidelines will help you make sure you’re ready to sell when the time is right. Of course, you can always call us if you’re not sure where to start or what to tackle first. I can help customize a plan that works for you.

AS SOON AS YOU THINK OF SELLING

Some home sellers want to plan their future move far in advance, while others will be required to pack up on very short notice. Whatever your circumstances, these first steps will help assure you’ll be ahead of the listing game.

• Contact Your Real Estate Agent

I go the extra mile when it comes to servicing my clients, and that includes a series of complimentary, pre-listing consultations to help you prepare your home for the market.

Some sellers make the mistake of waiting until they are ready to list their home to contact a real estate agent. But I have found that the earlier I’m brought into the process, the better the result. That often means a faster sale—and more money in your pocket after closing.

I know what buyers want in today’s market, and I can help devise a plan to maximize your property’s appeal. I can also connect you with my trusted network of contractors, vendors, and service professionals, so you’ll be sure to get the VIP treatment. This network of support can alleviate stress and help ensure you get everything done in the weeks or months leading up to listing.

• Address Major Issues and Upgrades

In most cases, you won’t need to make any major renovations before you list. But if you’re selling an older home, or if you have any doubt about its condition, it’s best to get me involved as soon as possible so I can help you assess any necessary repairs.

In some instances, I may recommend a pre-listing inspection. Although it's less common in a seller's market, a pre-listing inspection can help you avoid potential surprises down the road. We can discuss the pros and cons during our initial meeting.

This is the time to address major structural, systems, or cosmetic issues that could hurt the sale of your home down the line. For example, problems with the frame, foundation, or roof are likely to be flagged on an inspection report. Issues with the HVAC system, electrical wiring, or plumbing may cause the home to be unsafe. And sometimes outdated or unpopular design features can limit a home’s sales potential.

Remember, when you’re dealing with major repairs or renovations, it’s best to give yourself as much time as possible. Given rampant labor and material shortages, starting right away can help you avoid costly delays.² Contact me so I can guide you on the updates that are worth your time and investment. In some case, selling your home “as is” makes the most sense as the buyers today are accepting more than they have in the past.

1 MONTH (OR MORE) BEFORE YOU LIST

Once any large-scale renovations have been addressed, you can turn your attention to the more minor updates that still play a major role in how buyers perceive your home.

• Make Minor Repairs

Look for any unaddressed maintenance or repair issues, such as water spots, pest activity, and rotten siding. This is the time to take care of those small annoyances like squeaky hinges, sticking doors, and leaky faucets, too.

Many of these issues can be handled by going the DIY route and using a few simple tools. Tackle the ones you can and be sure to call a professional for the ones you’re not comfortable doing yourself. I can refer you to local service providers who can help.

Remember that it’s easy to overlook these small issues because you live with them. When you work with me, you get a fresh set of eyes on your home—so you don’t miss any important repairs that could make a big difference to buyers.

• Refresh Your Design

This is a great time to think about some simple design updates that can make a significant impression on buyers. For example, a fresh coat of paint is an easy and affordable way to spruce up your home. One survey found that interior paint offered a 107% return on investment.³ For broad appeal, opt for warm, neutral colors.

And never underestimate the importance of good curb appeal. Homes with good curb appeal sell for 7% more, on average, than similar homes with an “uninviting exterior.”⁴ If weather permits, lay fresh sod where needed, plant colorful flowers, and add some new mulch to your beds.

Even just repositioning your furniture can make a huge difference to buyers. A survey by the Real Estate Staging Association found that staged homes sold faster, and 73% sold over list price.⁵ I can refer you to a local stager or offer our insights and suggestions if you prefer the DIY route.

• Declutter and Depersonalize

Doing a little bit of decluttering every day is a lot easier than trying to take care of it all at once right before your home hits the market. A simple strategy is to do this one room at a time, working your way through each space whenever you have a bit of free time.

Start by donating or discarding items that you no longer want or need. Then pack up any seasonal items, family photos, and personal collections you can live without for the next few weeks. Bonus: This will give you a head start on packing for your move!

Remember, there is a fine line between staged and sterile. A generally agreed upon design practice is to limit the number of times the eye stops. For example:  Instead of 5 pieces of art on the walls or items on surfaces, consider limited it to 1-3 items.

1 WEEK BEFORE YOU GO TO MARKET

With just one week before your home is available for sale, all major items should be crossed off your to-do list. Now it’s time to focus on the small details that will really make your home shine. Here are a few key areas to focus on during this last week.

• Check-In With Your Agent

We’ll connect again to make sure we’re aligned on the listing price, marketing plan, and any remaining prep. I will be there every step of the way, ensuring you’re fully prepared to maximize the sale of your home.

• Tidy Your Exterior

You’ve already done the major landscaping—now it’s time to tackle the last few details. Make sure your lawn is freshly mowed, hedges are trimmed, and flower beds are weeded.

In addition, now is the time to clean your home’s exterior if you haven’t already. Power wash your siding, empty the gutters, and wash all your windows and screens.

• Deep Clean Your Interior

Your house should be deep cleaned before listing, including a thorough deodorizing of the home’s interior and steam cleaning for all carpets. Consider hiring a bonded, professional cleaning company to ensure the space smells and looks as fresh as possible.

In addition to cleaning, take some time to tidy up. Buyers will look inside your closets, pantries, and cabinets, so make sure they are neat and organized. Small appliances and toiletries should be cleared off the countertops.

DAY OF SHOWING

Now you’re all set to go and there are just a few small things you need to handle on the day of showings or open houses. Do a final walk-through and take care of these finishing touches to give potential buyers the best possible impression.

• Pre-Showing Prep

Happy and comfortable buyers are more likely to submit offers! Make them feel at home by adjusting the thermostat to a comfortable temperature. Open any blinds and curtains throughout the house, and turn on all lights so buyers can see all the potential in your home.

Then tidy up by vacuuming and sweeping floors, emptying (or hiding) trash cans, and wiping down countertops. In the bathrooms, close toilet lids and hang clean hand towels.

Don’t forget to secure firearms, jewelry, sensitive documents, prescription medications, and any other items of value in a safe or store them off-site.

Finally, it’s best to have pets out of the house during showings. If possible, you should also remove evidence of pets (litter box, dog beds, etc.), which can be a turn-off for some buyers.

DON’T WAIT TO PREP YOUR HOME FOR SELLING

If you want to get top dollar for your home, don’t put it on the market before it’s ready. The right preparation can make all the difference when it comes to maximizing the offers you get. The upgrades and changes you need to make will depend upon your home’s condition, so don’t wait to speak with an agent.

Call me if you’re thinking about selling your home, even if you’re not sure when. It’s never too early to seek the guidance of your real estate agent and start preparing your home to sell.

THE ELEPHANT IN THE ROOM: HOW WILL YOU BUY A NEW HOME IF YOU HAVE TO SELL YOURS FIRST?

This is one of the biggest reasons for the lack of inventory and is very difficult for homeowners to envision.  Often, people think they need to have a place to stay between selling and purchasing. This is not the case.  I will help you customize a plan that works for your specific situation. Preparation is key so if you are thinking of making a move, please contact me as soon as possible.

Sources:

1. Fortune -
   https://fortune.com/2022/02/08/should-i-buy-house-sellers-market-housing-real-estate-fannie-mae/
2. Forbes -
   https://www.forbes.com/advisor/home-improvement/labor-materials-shortage-impacts-renovations/
3. PR Web -
   https://www.prweb.com/releases/2012-homegain/home-improvement-survey/prweb9433460.htm
4. Realtor Magazine -
   https://magazine.realtor/daily-news/2020/01/27/how-much-does-curb-appeal-affect-home-value
5. Real Estate Staging Association -
   https://www.realestatestagingassociation.com/content.aspx?page_id=22&club_id=304550&module_id=164548

The annual inflation rate in the United States is currently around 7.5%—the highest it has been since 1982.¹ It doesn’t matter if you’re a cashier, lawyer, plumber, or retiree; if you spend U.S. dollars, inflation impacts you.

Economists expect the effects of inflation, like a higher cost of goods, to continue.² Luckily, an investment in real estate can ease some of the financial strain.

Here’s what you need to know about inflation, how it impacts you, and how an investment in real estate can help.

WHAT IS INFLATION AND HOW DOES IT IMPACT ME?

Inflation is a decline in the value of money. When the rate of inflation rises, prices for goods and services go up. Therefore, a dollar buys you a little bit less with every passing day.

The consumer price index, or CPI, is a standard measure of inflation. Based on the latest CPI data, prices increased 7.5% from January 2021 to January 2022.¹ A little bit of inflation is considered healthy for the economy, but 7.5% in a single year is high.

How does inflation affect your life? Here are a few of the negative impacts:

• Decreased Purchasing Power

We touched on this already, but as prices rise, your dollar won’t stretch as far as it used to. That means you’ll be able to purchase fewer goods and services with a limited budget.

• Increased Borrowing Costs

In an effort to curb inflation, the Federal Reserve is expected to raise the federal funds rate. Therefore, consumers are likely to pay a higher interest rate on new mortgages, car loans, and variable-rate credit cards.³

• Lower Standard of Living

Wage growth tends to be behind price increases. According to Moody Analytics, when adjusted for inflation, average weekly earnings in January were down 3.1% from a year earlier.⁴ As such, life is becoming less affordable for everyone. Inflation can force those on a fixed income, like retirees, to make lifestyle changes and prioritize essentials.

• Eroded Savings

If you store all your savings in a bank account, inflation is even more damaging. As of February 2022, the national average interest rate for a savings account is 0.06%, not nearly enough to keep up with inflation. And economists don’t expect that rate to go much higher.³

One of the best ways to mitigate these effects is to find a place to invest your money other than the bank. Even though interest rates are expected to rise, they’re unlikely to get high enough to beat inflation. If you hoard cash, the value of your money will decrease every year and more rapidly in years with elevated inflation.

REAL ESTATE: A PROVEN HEDGE AGAINST INFLATION

So where is a good place to invest your money to protect (hedge) against the impacts of inflation? There are several investment vehicles that financial advisors traditionally recommend, including:

• Stocks

Some people invest in stocks as their primary inflation hedge. However, the stock market can become volatile during inflationary times, as we’ve seen in recent months.⁵

• Commodities

Commodities are tangible assets, like oil, livestock, and minerals. The theory is that the price of commodities should climb alongside inflation. But the classic choice–gold–hasn’t risen consistently during periods of inflation since the 1970s, according to data from Morningstar Direct.⁶

• Inflation-Indexed Bonds

Treasury inflation-protected securities, or TIPS, are U.S. government-issued bonds that are indexed to the inflation rate. Bonds are considered low risk, but the returns they offer are generally low, as well.⁷

• Real Estate
  Real estate prices across the board tend to rise along with inflation and often rise faster than inflation.⁸ That’s one of the reasons demand for real estate is soaring right now.⁹

We believe real estate is the best hedge against inflation. Owning real estate does more than protect your wealth—it can actually make you money. For example, home prices rose nearly 17% from 2020 to 2021, 10% ahead of the 7% inflation that occurred in the same timeframe.¹⁰

Plus, certain types of real estate investments can help you generate a stream of passive income. In the past year, property owners didn’t just avoid the erosion of purchasing power caused by inflation; they got ahead.

TYPES OF REAL ESTATE INVESTMENTS

Though there are many ways to invest in real estate, there are three basic investment types that are recommend for beginner and intermediate investors. Remember that I can help you determine which options are best for your financial goals and budget.

• Primary Residence

If you own your home, you’re already ahead. The advantages of homeownership become even more apparent in inflationary times. As inflation raises prices throughout the economy, the value of your home is likely to go up concurrently. At the same time, you’ve locked in a set mortgage payment for the next 30 years, so you’ll be immune to rising rental costs.

If you don’t already own your primary residence, homeownership is a worthwhile goal to pursue.

Though the task of saving enough for a down payment may seem daunting, there are several strategies that can make homeownership easier to achieve. If you’re not sure how to get started with the home buying process, contact me. I can help you find the strategy and property that fits your needs and budget.

Whether you already own a primary residence or are still renting, now is a good time to also start thinking about an investment property. The types of investment properties you’ll buy as a solo investor generally fall into two categories: long-term rentals and short-term rentals.

• Long-Term (Traditional) Rentals

A long-term or traditional rental is a dwelling that’s leased out for an extended period. An example of this is a single-family home where a tenant signs a one-year lease and brings all their own furniture.

Long-term rentals are a form of housing. For most tenants, the rental serves as their primary residence, which means it’s a necessary expense. This unique quality of long-term rentals can help to provide stable returns in uncertain times, especially when we have high inflation.

To invest in a long-term rental, you’ll need to budget for maintenance, repairs, property taxes, and insurance. You’ll also need to have a plan for managing the property. But a well-chosen investment property should pay for itself through rental income, and you’ll benefit from appreciation as the property rises in value.

We can help you find an ideal long-term rental property to suit your budget and investment goals. Reach out to talk about your needs and our local market opportunities.

• Short-Term (Vacation) Rentals

Short-term or vacation rentals function more like hotels in that they offer temporary accommodations. A short-term rental is defined as a residential dwelling that is rented for 30 days or less. The furniture and other amenities are provided by the property owner, and today many short-term rentals are listed on websites like Airbnb and Vrbo.

A short-term rental can potentially earn you a higher return than a long-term rental, but this comes at the cost of daily, hands-on management. With a short-term rental, you’re not just entering the real estate business; you’re entering the hospitality business, too.

Done right, short-term rentals can be both a hedge against inflation and a profitable source of income. As a bonus, when the home isn’t being rented you have an affordable vacation spot for yourself and your family!

Contact me today if you’re interested in exploring options in either the long-term or short-term rental market. Mortgage rates are expected to rise, so you’ll want to act fast to maximize your investment return.

I’M INVESTED IN HELPING YOU

Inflation is a fact of life in the U.S. economy. Luckily, you can prepare for inflation with a carefully managed investment portfolio that includes real estate. Owning a primary residence or investing in a short-term or long-term rental will help you both mitigate the effects of inflation and grow your net worth, which makes it a strategic move in our current financial environment.

If you’re ready to invest in real estate to build wealth and protect yourself from rising inflation, contact me. My team can help you find a primary residence or investment property that meets your financial goals.

The above references an opinion and is for informational purposes only.  It is not intended to be financial advice. Consult the appropriate professionals for advice regarding your individual needs.

Sources:

1. Bloomberg -
   https://www.bloomberg.com/news/articles/2022-02-10/u-s-inflation-charges-higher-with-larger-than-forecast-gain
2. CNN -
   https://www.cnn.com/2022/01/01/economy/inflation-prices-2022-preview/index.html
3. CNBC -
   https://www.cnbc.com/2022/01/26/the-fed-sets-the-stage-for-a-rate-hike-heres-what-that-means-for-you.html
4. Reuters -
   https://www.reuters.com/business/us-consumer-prices-rise-strongly-january-weekly-jobless-claims-fall-2022-02-10/
5. NBC News -
   https://www.nbcnews.com/business/markets/market-slide-dow-falls-700-points-sp-enters-correction-territory-rcna13304
6. CNBC -
   https://www.cnbc.com/2021/12/20/gold-is-losing-its-status-as-an-inflation-hedge-two-traders-warn.html
7. Morningstar -
   https://www.morningstar.com/articles/1079158/why-are-inflation-protected-bond-funds-losing-money
8. The Washington Post -
   https://www.washingtonpost.com/business/2022/01/04/heres-how-inflation-could-affect-your-next-real-estate-move/
9. Bloomberg -
   https://www.bloomberg.com/news/articles/2022-01-24/is-real-estate-a-good-investment-hedge-against-inflation-what-the-experts-say
10. CNN -
    https://www.cnn.com/2022/01/20/homes/us-nar-home-sales-december-and-2021/index.html

There’s a lot to consider when selling your home, from the market and appraisals to where you’ll go next. Don’t forget, however, that design is also a key factor. It’s often one of the first things buyers notice when they walk into a home, and it’s also a detail that you, as a seller, can easily control.

According to Realtor.com’s 2022 housing market forecast, home for-sale inventory will increase from last year, as will the projected number of overall sales.¹ This means, if you’re looking to sell in the near future, now is the time to consider how you can stand out.

Updating your home design is one way to do that. Changes like new security features or upgraded siding can add value to your home now and be highlighted when you market it for sale later. To get the most out of your updates, focus on these popular home design features that will wow buyers in 2022.

Keep in mind, not all of these will work well in every house. If you plan to buy, list, or renovate a property, give me a call. I can help you realize your vision and maximize the impact of your investment.

Eco-Friendly Fixtures

Millennials account for the largest share of current homebuyers, according to the National Association of Realtors.² Sustainable living tops the list of priorities for this generation. A recent Deloitte survey found that nearly one-third of millennials initiate or deepen their consumer investment in products or services that help the environment—this also includes the houses they choose to live in.³

Here are a few eco-friendly design features that will be attractive to these millennial buyers in 2022. Bonus, they can net a significant return on investment (ROI) for you, as a seller, too.

• Energy-Efficient Windows: Heat gain or loss from low-performance windows drives 25–30 percent of home heating and cooling costs, according to Energy.gov.⁴ Therefore, energy-efficient windows can help homeowners save money.
• Low-Flow Water Fixtures: According to the EPA, replacing your shower head with one that’s labeled with WaterSense can save four gallons of water with each shower.⁵ Doing the same with your faucet can save 700 gallons per year. This leads to cost savings and environmental support.
• Native Landscaping:  According to the American Society of Landscape Architects, 58 percent of members report increased client demand for native trees and plants as a means to combat biodiversity loss from climate change..⁶ Enhance the eco-friendly appeal of your home with some native plants in the front yard.

Wellness Retreat Nooks

The pandemic has had a significant impact on mental health. For example, in an effort to prioritize mental health, many people are relocating to quieter, more peaceful homes, with 22 percent of city dwellers planning a move to less congested residential areas, according to the Home Improvement Research Institute’s (HIRI) 2021 Insights Summit.⁷

However, no matter where you live, you can still intrigue buyers by jumping on this trend. At-home wellness amenities, which were once viewed as luxuries, are now on many homeowners’ must-have lists. Indoor spaces that function as a retreat for wellness and self-care have become extremely popular, according to HIRI.

Improve your quality of life in your home with reading nooks, spa-inspired bathrooms, and exercise or meditation spaces. Even if your house doesn’t have the square footage to section off an entire room for relaxation, making simple tweaks to natural light, air purifiers, and indoor plants can help you feel better in your home now while enabling future buyers to see the opportunity for their own space.

Calming Paint Colors

Paint colors that produce a calming atmosphere will also be a key selling point in 2022. Soft earth tones and natural hues will prevail this year, including various shades of blue, green,  brown, and beige. Recent research suggests steering clear of trendy paint colors in favor of a more classic palette to bring the feel of nature indoors in a subtle and soothing way.⁸

In fact, the same research found that buyers are often willing to pay an extra $4,698 for a house with a light blue bathroom or an extra $1,491 for a house with a dark blue bedroom. Another crowd-pleasing hue to refresh the walls with is BEHR’s 2022 paint color of the year, known as Breezeway.⁹

This shade of green with silver undertones was created to mimic sea glass. As the BEHR website describes it, Breezeway “evokes feelings of coolness and peace, while representing a desire to move forward and discover newfound passions.” 

Home Safety Features

Buyers want peace of mind more now than ever before. According to a 2021 survey from the American Institute of Architects, members report seeing an increase in the popularity of these home safety features¹⁰:

• Emergency backup power generation
• Accommodations for multiple generations
• Wider accessible doorways and hallways
• Home security monitoring equipment
• Interior ramps and home elevator features

Consider how you can build home safety features like these into the design of your home to enhance your quality of life now and attract more buyers later. For example, you could install a backup generator in the garage and sell it with the house or update your major doorways to be wider.

Before making an investment in expensive home safety upgrades, contact me so I can help you determine what will deliver the greatest ROI for your location and goals.

Designated Work Spaces

It may come as no surprise that after the pandemic, 63 percent of homebuyers want their next house to feature room for a designated office, according to the National Association of Home Builders.¹¹ In addition, 70 percent of these buyers want the office to be at least 100 square feet (or a 10x10 room).   

If you can, consider turning a bedroom or a den into a work-from-home office. When designing the space, make it both functional and aesthetically pleasing. Position a desk near the window for natural light, install a bookshelf unit, arrange a few succulents on the work surface, and hang a few framed posters or a cork bulletin board on the wall. You want the space to foster productivity as well as be a place in your home you enjoy spending time.

When you get ready to sell, I can help you highlight your designated work space. Given the high demand for this design feature, it can help you interest more buyers and attract more competitive offers—if marketed creatively.

Luxury Kitchen Retouches

The kitchen has always been a main focal point of interior design, and that’s no different in 2022. Families will always need this space to come together in their own homes.

This year’s buyers want a kitchen with new upgrades and retouches, but you don’t have to renovate the entire kitchen to make an impact. If you’re not sure where to start, here are a few tips on how to create a kitchen that buyers will love without spending too much money on renovations:

• Repaint the kitchen, keeping the calm and nature-inspired colors in mind that are most popular right now. Taking a kitchen from dark to light by painting cabinets and walls can make all the difference.
• Update the hardware. These kitchen “accessories” stand out and add personality to an otherwise standard kitchen.
• Update light fixtures to bring in more light while also adding a fresh look and feel to the space.

Unique Accent Walls

I'm not too sure about this one!  However, in a recent interview with the National Association of Realtors, Brian Santos, the director of education for Fresh Coat Painters, explains that bold, unique accent walls are trendy right now.¹² An accent wall gives a home character while maintaining the calming feel of natural- and neutral-colored walls.

Santos also explains that this is part of a design aesthetic that draws inspiration from the Roaring Twenties, and it’s likely to remain a sought-after home feature in 2022. Here are some bold colors to consider for your home’s accent walls:

• Solid black
• Jewel or metallic tones
• Textured wallpaper
• Painted ceilings
• Built-in shelves

If you’re planning to sell in the next year, talk to me before adding an accent wall. Depending on your target buyer, it may be a design feature that actually hurts your home’s value. I can run a free Comparative Market Analysis on your home to help you understand what would resell best in your neighborhood.

Exterior Siding Updates

A new exterior siding refresh is one of the most affordable renovation projects you can do to help increase a home’s resale value. The average cost is just $12 per square foot, but higher-end material options can push costs closer to  $50 per square foot.¹³ What’s more, there are many siding materials available, from fiber-cement, brick, and wood to vinyl, metal, and stone.

While all these options can infuse the exterior with character and add curb appeal, fiber-cement and vinyl deliver the highest ROI. In fact, according to a 2021 Cost vs. Value Report, a vinyl siding replacement can boost resale value by $11,315 (68.3 percent cost recoup), and a fiber-cement siding replacement can boost resale value by $13,618 (69.4 percent cost recoup).¹⁴

Before you give your home this simple, affordable, and attractive facelift, give me a call to determine if the the expense is necessary and help you determine an estimated and localized return on investmen. 

Keep These Home Design Features on Your Radar in 2022

These design features can infuse personality into your home while helping to close the deal if you plan to sell in 2022. The average buyer knows just what they’re looking for in a space they plan to call home, so with some investment and foresight, you can give your house an edge over the competition—and boost resale value in the process.

However, you don’t need to make all these changes to attract more buyers. I can help you determine which design features you should add to your home by sharing insights and tips on how to maximize the return on your investment. I can also run a Comparative Market Analysis on your home to find out how it compares to others in the area, which will help us decide what changes need to be made. Contact me to schedule a free consultation!

Sources:

1. Realtor -
   https://www.realtor.com/research/2022-national-housing-forecast/
2. National Association of Realtors -
   https://www.nar.realtor/research-and-statistics/research-reports/home-buyer-and-seller-generational-trends
3. Deloitte -
   https://www2.deloitte.com/content/dam/Deloitte/global/Documents/2021-deloitte-global-millennial-survey-report.pdf
4. Energy.gov -       
   https://www.energy.gov/energysaver/update-or-replace-windows
5. EPA.gov -
   https://www.epa.gov/watersense/about-watersense
6. American Society of Landscape Architects -
   https://www.asla.org/NewsReleaseDetails.aspx?id=60427
7. Home Improvement Research Institute -
   https://www.hiri.org/blog/4-major-home-wellness-trends-from-hiri-summit-speaker-dr-jie-zhao
8. Zillow -
   http://zillow.mediaroom.com/2021-07-15-Homes-With-Light-Blue-Bathrooms,-Dark-Blue-Bedrooms-Could-Sell-for-Up-to-4,698-More-Than-Expected

Behr -
https://www.behr.com/colorfullybehr/behr-announces-2022-color-of-the-year-and-trends-palette/

A Return to ‘Normal’? The State of Real Estate in 2022

Last year was one for the real estate history books. The pandemic helped usher in a buying frenzy that caused home prices to soar nationwide by a record 19.9% between August 2020 and August 2021.¹

However, there were signs in the fourth quarter that the red-hot housing market was beginning to simmer down. In the month of October, only 60.3% of sales involved a bidding war—down from a high of 74.5% in April.² While this trend could be attributed to seasonality, it could also be a signal that the real estate run-up may have passed its peak.

So what’s ahead for the U.S. housing market in 2022? Here’s where industry experts predict the market is headed in the coming year.

MORTGAGE RATES WILL CREEP UP

Most economists expect to see mortgage rates gradually rise this year after hitting record lows in late 2020 and early 2021.³

Freddie Mac forecasts the 30-year fixed-rate mortgage will average 3.5% in 2022, up from around 3% in 2021.⁴

The Mortgage Bankers Association predicts that rates will tick up to 4% by the end of the year. "Mortgage lenders and borrowers should expect rising mortgage rates over the next year, as stronger economic growth pushes Treasury yields higher," said Mike Fratantoni, chief economist for the Mortgage Bankers Association at their 2001 Annual Convention & Expo in October.⁵

However, it’s important to keep in mind that even a 4% mortgage rate is low when compared to historical standards. According to industry trade blogThe Mortgage Reports, “Between 1971 and December 2020, 30-year mortgage rates averaged 7.89%.”⁶

What does it mean for you? Low mortgage rates can reduce your monthly payment and make homeownership more affordable. Fortunately, there’s still time to lock in a historically-low rate. Whether you’re hoping to purchase a new home or refinance an existing mortgage, act soon before rates go up any further. We’d be happy to connect you with a trusted lending professional in our network.

THE MARKET WILL BECOME MORE BALANCED

In 2021, we experienced one of the most competitive real estate markets ever. Fears about the virus and a shift to remote work triggered a huge uptick in demand. At the same time, many existing homeowners delayed their plans to sell, and supply and labor shortages hindered new construction.

This led to an extreme market imbalance that benefitted sellers and frustrated buyers. According to George Ratiu, director of economic research at Realtor.com, “Prices and sellers reached for the moon [last] year. It looks like we are now about to move back to earth.”⁷

Data from Realtor.com released in November showed that listing price reductions had more than doubled since February 2021. And the average days on market (an indicator of how long it takes a home to sell) has been slowly creeping up since June.⁷

What’s causing this change in market dynamics? The real estate market typically slows down in the fall and winter. But economists also suspect a fundamental shift in supply and demand.

At the National Association of Realtors’ annual conference last November, the group’s chief economist, Lawrence Yun, told attendees that he expects increased supply to come from an uptick in new construction—which is already underway—and an end to the mortgage forbearance program. “With more housing inventory to hit the market, the intense multiple offers will start to ease,” he said.⁸

Demand is also predicted to wane slightly in the coming year. Rising mortgage rates and record-high prices have made homeownership unaffordable for a growing number of Americans. And in a recent Reuters poll, nearly 80% of property analysts said they expect housing affordability to worsen over the next several years.⁹

What does it mean for you? If you struggled to buy a home last year, there may be some relief on the horizon. Increased supply and softening demand could make it easier to finally secure the home of your dreams. If you’re a seller, it’s still a great time to cash out your big equity gains! And with more inventory on the market, you’ll have an easier time finding your next home. Reach out for a free consultation so we can discuss your specific needs and goals.

HOME PRICES LIKELY TO KEEP CLIMBING, BUT AT A SLOWER PACE

Nationally, home prices rose an estimated 16.8% in 2021.⁸ But the average rate of appreciation is expected to slow down in 2022.

Danielle Hale, chief economist at Realtor.com, told Yahoo! News, “Home asking prices have decelerated in the second half of 2021, with median listing price growth slipping from a peak of 17.2% in April to just 8.6% in October.”¹⁰

But experts disagree about how much more property values can continue to climb this year. Goldman Sachs predicts that home prices will rise by 13.5%, while Fannie Mae and Freddie Mac are forecasting a 7.9% and 7% rate of appreciation, respectively.²

However, not all analysts are as bullish. The National Association of Realtors predicts a 2.8% rate of appreciation for existing homes and 4.4% for new homes, while the Mortgage Bankers Association expects the average home price to decrease by 2.5% by the end of the year.^10,2

According to Hale, “With prices near all-time highs and mortgage rates expected to rise, we expect this slowdown in prices to continue.”¹⁰

What does it mean for you? If you’re a buyer who has been waiting on the sidelines for home prices to drop, you may be out of luck. Even if home prices dip slightly (and most economists expect them to rise) any savings are likely to be offset by higher mortgage rates. The good news is that decreased competition means more choice and less likelihood of a bidding war. We can help you get the most for your money in today’s market.

RENTS WILL CONTINUE TO RISE

Along with home, gasoline, and used vehicle prices, rent prices rose dramatically last year. According to CoreLogic, in September, rents for single-family homes were up 10.2% nationally year over year.¹¹ And economists at Realtor.com expect them to climb another 7.1% in 2022.¹²

“Homes are expensive now...but for most people, the comparison that is most important is how that cost of homeownership is going to compare to the cost of renting,” Zillow Senior Economist Jeff Tucker told CNBC in November.¹³

Tucker also pointed out that rent is less predictable than a mortgage—and more likely to go up along with inflation.¹³

Real assets, like real estate, are often used as a hedge against inflation. That’s because property values typically rise with inflation.¹⁴ And when a homeowner takes out a mortgage, they lock in a set housing payment for the next 30 years.

In contrast, renters are at the mercy of the market—and they don’t gain any of the benefits of homeownership, like tax deductions, equity, or appreciation.

George Ratiu of Realtor.com told CNBC that he advises buyers to consider their budget and time frame. If they plan to stay in the home for at least three to five years, he believes it often makes sense to buy.¹³

Fortunately, it’s shaping up to be a better year for buyers. “I think 2022 has the promise of providing less competition, a lot more homes to choose from, and, as a result, a lot more approachable prices,” Ratiu said.¹³

What does it mean for you? Both property and rent prices are expected to continue rising. But when you purchase a home with a fixed-rate mortgage, you can rest assured knowing that your monthly mortgage payment will never go up. Whether you’re a first-time homebuyer or a real estate investor, I can help you make the most of today’s real estate market.

I’M HERE TO HELP YOU

While national real estate numbers and predictions can provide a “big picture” outlook for the year, real estate is local. And as a local market expert, I can guide you through the ins and outs of our market and the local issues that are likely to drive home values in your particular neighborhood.

If you’re considering buying or selling a home in 2022, contact me now to schedule a free consultation. I’ll work with you to develop an action plan to meet your real estate goals this year.

Sources:

1. Fortune - https://fortune.com/2021/11/04/us-home-prices-real-estate-forecast-2022-outlook/
2. Fortune - https://fortune.com/2021/11/29/housing-market-real-estate-predictions-2022-forecast/
3. Freddie Mac - http://www.freddiemac.com/pmms/pmms30.html
4. Freddie Mac - https://freddiemac.gcs-web.com/news-releases/news-release-details/freddie-mac-strong-housing-market-will-continue-even-rates-and
5. Mortgage Bankers Association - https://www.mba.org/2021-press-releases/october/mba-annual-forecast-purchase-originations-to-increase-9-percent-to-record-173-trillion-in-2022
6. The Mortgage Reports - https://themortgagereports.com/61853/30-year-mortgage-rates-chart
7. Realtor.com - https://www.realtor.com/news/trends/has-housing-market-peaked/
8. National Association of Realtors - https://www.nar.realtor/newsroom/nars-yun-says-housing-market-doing-well-may-normalize-in-2022
9. Reuters - https://www.reuters.com/world/us/rise-us-house-prices-halve-next-year-affordability-worsen-2021-12-07/
10. Yahoo! News - https://www.yahoo.com/now/where-home-prices-headed-2022-130012748.html
11. CNBC - https://www.cnbc.com/2021/11/16/inflation-rent-for-single-family-homes-surged-10percent-in-september.html
12. Realtor.com - https://www.realtor.com/news/trends/what-to-expect-in-2022-housing-market/
13. CNBC - https://www.cnbc.com/2021/11/23/rising-inflation-hot-housing-market-what-you-need-to-know-about-buying-a-home.html
14. Money - https://money.com/inflation-2021-stocks-bitcoin-gold-reits-commodities/

9 Tips for Buying and Selling Your Home at the Same Time

Selling your home when you still need to shop for a new one can feel daunting to even the most seasoned homeowner––especially when the demand for new homes keeps rising, but the supply feels like it's dwindling.¹ You're not alone either if you're already feeling drained by the complex logistics of trying to sell and buy a new home all at once.

Searching for a new home can be exciting, but many homebuyers admit that it can also be stressful, especially if you live in an unpredictable market with plenty of competitors. Unfortunately, waiting out a competitive housing market isn’t always the best idea either since listings are expected to remain limited in the most coveted neighborhoods for some time.²

That doesn't mean, though, that you should just throw up your hands and give up on moving altogether. In fact, as a current homeowner, you could be in a better position than most to capitalize on a seller’s market and make a smooth transition from your old home to a new one.

We can help you prepare for the road ahead and answer any questions you have about the real estate market. For example, here are some of the most frequent concerns we hear from clients who are trying to buy and sell at the same time.

“WHAT WILL I DO IF I SELL MY HOUSE BEFORE I CAN BUY A NEW ONE?”

This is an understandable concern for many sellers since the competitive real estate market makes it tough to plan ahead and predict when you'll be able to move into your next home. But chances are, you will still have plenty of options if you do sell your home quickly. It may just take some creativity and compromise.

Here are some ideas to make sure you're in the best possible position when you decide to list your home:

Tip #1: Flex your muscles as a seller.

In a competitive market, buyers may be willing to make significant concessions in order to get the home they want. In some cases, a buyer may agree to a rent-back clause that allows the seller to continue living in the home after closing for a set period of time and negotiated fee.

This can be a great option for sellers who need to tap into their home equity for a downpayment or who aren’t logistically ready to move into their next home. However, many lenders limit the duration of a rent-back to 60 days, and there are liability issues to consider before entering into an agreement. A contract and security deposit should be in place in case of any property damage or unexpected repairs that may be needed during the rent-back period.³

Tip #2: Open your mind to short-term housing options.

While it can be a hassle to move out of your old home before you’re ready to move into your new one, it’s a common scenario. If you’re lucky enough to have family or generous friends who offer to take you in, that may be ideal. If not, you’ll need to find temporary housing. Check out furnished apartments, vacation rentals and month-to-month leases. If space is an issue, consider putting some of your furniture and possessions in storage.

You may even find that a short-term rental arrangement can offer you an opportunity to get to know your new neighborhood better—and lead to a more informed decision about your upcoming purchase.

Tip #3: Embrace the idea of selling now and buying later.

Instead of stressing about timing your home sale and purchase perfectly, consider making a plan to focus on one at a time. Selling before you’re ready to buy your next home can offer a lot of advantages.

For one, you’ll have cash on hand from the sale of your current home. This will put you in a much better position when it comes to buying your next home. From budgeting to mortgage approval to submitting a competitive offer, cash is king. And by focusing on one step at a time, you can alleviate some of the pressure and uncertainty.

“WHAT IF I GET STUCK WITH TWO MORTGAGES AT THE SAME TIME?”

This is one of the most common concerns that we hear from buyers who are selling a home while shopping for a new one, and it’s realistic to expect at least some overlap in mortgages. To make sure you don't get into a situation where you are carrying dual mortgages for longer than you can afford, examine your budget and calculate the maximum number of months you can afford to pay both.?

If you simply can’t afford to carry both mortgages at once, then selling before you buy may be your best option. (See Tip #3 above.) But if you have some flexibility in your budget, it is possible to manage both a home sale and purchase simultaneously. Here are some steps you can take to help streamline the process:

Tip #4: As you get ready to sell, simplify.

You can condense your sales timeline if you only focus on the home renovations and tasks that matter most for selling your home quickly. For example, clean and declutter all of your common areas, refresh your outdoor paint and curb appeal, and fix any outstanding maintenance issues as quickly as possible.

But don't drain unnecessary time and money into pricey renovations and major home projects that could quickly bog you down for an unpredictable amount of time. We can advise you on the repairs and upgrades that are worth your time and investment.

Tip #5: Prep your paperwork.

You'll also save valuable time by filing as much paperwork as possible early in the process. For example, if you know you'll need a mortgage to buy your next home, get pre-approved right away so that you can shorten the amount of time it takes to process your loan.

Similarly, set your home sale up for a fast and smooth transition by pulling together any relevant documentation about your current home, including appliance warranties, renovation permits, and repair records. That way, you're ready to provide quick answers to buyers' questions should they arise.

Tip #6: Ask us about other contingencies that can be included in your contracts.

Part of our job as agents is to negotiate on your behalf and help you win favorable terms. For example, it’s possible to add a contingency to your purchase offer that lets you cancel the contract if you haven't sold your previous home.

This tactic could backfire, though, if you're competing with other buyers. We can discuss the pros and cons of these types of tactics and what’s realistic given the current market dynamics.

“WHAT IF I MESS UP MY TIMING OR BURN OUT FROM ALL THE STRESS?”

When you're in the pressure cooker of a home sale or have been shopping for a home for a while in a competitive market, it's easy to get carried away by stress and emotions. To make sure you're in the right headspace for your homebuying and selling journey, take the time to slow down, breathe and delegate as much as possible. In addition:

Tip #7: Relax and accept that compromise is inevitable

Rather than worry about getting every detail right with your housing search and home sale, trust that things will work out eventually––even if it doesn't look like your Plan A or even your Plan B or Plan C. Perfecting every detail with your home decor or timing your home sale perfectly isn't necessary for a successful home sale and compromise will almost always be necessary. Luckily, if you've got a good team of professionals, you can relax knowing that others have your back and are monitoring the details behind the scenes.

Tip #8: Don't worry too much if your path is straying from convention

Remember that rules-of-thumb and home-buying trends are just that: they are estimates, not facts. So if your home search or sale isn't going exactly like your neighbor’s, it doesn't mean that you are doomed to fail.

It's possible, for example, that seasonality trends may affect sales in your neighborhood. So a delayed sale in the summer or fall could affect your journey––but not necessarily. According to the National Association of Realtors, the housing market tends to be more competitive during the summer and less competitive during the winter.? But it's not a hard and fast rule, and every real estate transaction is different. That's why it's important to talk to a local agent about your specific situation.

Tip #9: Enlist help early.

Which leads us to our final tip: If possible, call us early in the process. We'll not only provide you with key guidance on what you should do ahead of time to prepare your current home for sale, we'll also help you narrow down your list of must-haves and wants for your next one. That way, you'll be prepared to act quickly and confidently when it’s time to list your house or make an offer on a new one.

It's our job to guide you and advocate on your behalf. So don't be afraid to lean on us throughout the process. We’re here to ease your burden and make your move as seamless and stress-free as possible.

BOTTOMLINE: COLLABORATE WITH A REAL ESTATE PROFESSIONAL TO GET TAILORED ADVICE THAT WORKS FOR YOU

Buying and selling a home at the same time is challenging. But it doesn't have to be a nightmare, and it can even be fun. The key is to educate yourself about the market and prepare yourself for multiple scenarios. One of the best and easiest ways to do so is to partner with a knowledgeable and trustworthy agent.

A good agent will not only help you evaluate your situation, we will also provide you with honest and individually tailored advice that addresses your unique needs and challenges. Depending on your circumstances, now may be a great time to sell your home and buy a new one. But a thorough assessment may instead show you that you're better off pausing your search for a while longer.

Contact us for a free consultation so that we can help you review your options and decide the best way forward.

Sources:

1. Board of Governors of the Federal Reserve System, FEDS Notes - https://www.federalreserve.gov/econres/notes/feds-notes/housing-market-tightness-during-covid-19-increased-demand-or-reduced-supply-20210708.htm
2. Federal Reserve Bank of St. Louis, FRED Economic Data -https://fred.stlouisfed.org/series/MSPUS
3. Realtor.com - https://www.realtor.com/advice/sell/what-is-a-rent-back-agreement/
4. Bankrate.com - https://www.bankrate.com/real-estate/sell-your-house-while-buying-another/
5. National Association of REALTORS - https://www.nar.realtor/blogs/economists-outlook/seasonality-in-the-housing-market