One thing helping homeowners right now is price appreciation, especially in the entry-level market. In the latest Home Price Insights report, CoreLogic reveals how home prices increased by 4% year-over-year and projects prices will rise 5.2% by December 2020.
Why is this good news for the homeowners?
When prices appreciate, homeowners gain equity. In addition, those planning to sell this year, especially in the entry-level market, can potentially earn a substantial profit.
Dr. Frank Nothaft, Chief Economist at CoreLogic, says:
“Moderately priced homes are in high demand and short supply, pushing up values…Homes that sold for 25% or more below the local median price experienced a 5.9% price gain in 2019, compared with a 3.7% gain for homes that sold for 25% or more above the median.”
As Dr. Nothaft indicates, the lack of inventory continues to drive home price growth. This means there’s a high demand for homes in this tier of the market, making it a great time to consider using your equity to move up to a bigger or more premium home.
When you upgrade your home, you may be able to find the amenities or features you’ve dreamed of – such as a yard to plant or garden in with your family this spring, or more outdoor space for entertaining this summer. Maybe it’s the master bath you’ve always hoped for, or a garage to finally park your car inside.
Whatever you choose, if you’re moving out of an entry-level house, you’re likely going to be in the driver’s seat as a seller.
Bottom Line
If you’d like to own a bigger home, let’s get together to discuss your situation. You may be surprised by the current value of your home and the equity you’ve gained.
In a market where current inventory is low, it’s normal to think buyers might be willing to give up a few desirable features in their home search in order to make finding a house a little easier. Don’t be fooled, though – there’s still an interest in the market for some key upgrades. Here’s a look at the two surprising things buyers seem to be searching for in today’s market, and how they’re impacting new home builds.
Homebuyers Are Not Giving Up Their Garages
The National Association of Home Builders (NAHB) recently released an article showing the percentage of new single-family homes completed in 2018. The data reveals,
64% of new homes offer a 2-car garage
21% have a garage large enough to hold 3 or more cars
7% have a 1-car garage
7% do not include a garage or carport
1% have a carport
The following map represents this breakdown by region:Evidently, a garage is something homebuyers are looking for in their searches, but that’s not all.
Homebuyers Are Not Giving Up Their Patios
Patios are on the radar for buyers as well. Community areas are often common amenities in new neighborhoods, but as it turns out, private outdoor spaces are quite desirable too. NAHB also found that,
“Of the roughly 876,000 single-family homes started in 2018, 59.4% came with patios…This is the highest the number has been since NAHB began tracking the series in 2005.”
As shown in the graph below, the number of new homes built with patios has been increasing for the past 9 years. Clearly, they’re a desirable feature for new homeowners too.
Bottom Line
Homebuyers are looking for garage space and outdoor patio living. If you’re a homeowner thinking of selling a house with these amenities, it appears buyers are willing to spring for those key features. Let’s get together today to determine the current value and demand for your home.
In 1963, Martin Luther King, Jr. led and inspired a powerful movement with his famous “I Have a Dream” speech. Through his passion and determination, he sparked interest, ambition, and courage in his audience. Today, reflecting on his message encourages many of us to think about our own dreams, goals, beliefs, and aspirations. For many Americans, one of those common goals is owning a home: a piece of land, a roof over our heads, and a place where our families can grow and flourish.
If you’re dreaming of buying a home this year, the best way to start the process is to connect with a Real Estate professional to understand what goes into buying a home. Once you have that covered, then you can answer the questions below to make the best decision for you and your family.
1. How Can I Better Understand the Process, and How Much Can I Afford?
The process of buying a home is not one to enter into lightly. You need to decide on key things like how long you plan on living in an area, school districts you prefer, what kind of commute works for you, and how much you can afford to spend.
Keep in mind, before you start the process to purchase a home, you’ll also need to apply for a mortgage. Lenders will evaluate several factors connected to your financial track record, one of which is your credit history. They’ll want to see how well you’ve been able to minimize past debts, so make sure you’ve been paying your student loans, credit cards, and car loans on time. Most agents have loan officers they trust that they can refer you to.
“Financial planners recommend limiting the amount you spend on housing to 25 percent of your monthly budget.”
2. How Much Do I Need for a Down Payment?
In addition to knowing how much you can afford on a monthly mortgage payment, understanding how much you’ll need for a down payment is another critical step. Thankfully, there are many different options and resources in the market to potentially reduce the amount you may think you need to put down up front.
If you’re concerned about saving for a down payment, start small and be consistent. A little bit each month goes a long way. Jumpstart your savings by automatically adding a portion of your monthly paycheck into a separate savings account or house fund. AmericaSaves.orgsays,
“Over time, these automatic deposits add up. For example, $50 a month accumulates to $600 a year and $3,000 after five years, plus interest that has compounded.”
Before you know it, you’ll have enough for a down payment if you’re disciplined and thoughtful about your process.
3. Saving Takes Time: Practice Living on a Budget
As tempting as it is to settle in each morning with a fancy cup of coffee from your favorite local shop, putting that daily spend toward your down payment will help accelerate your path to homeownership. It’s the little things that count, so start trying to live on a slightly tighter budget if you aren’t doing so already. A budget will allow you to save more for your down payment and help you pay down other debts to improve your credit score. A survey of Millennial spending shows,
“70 percent of would-be first-time homebuyers will cut spending on spa days, shopping and going to the movies in exchange for purchasing a home within the next year.”
While you don’t need to cut all of the fun out of your current lifestyle, making smarter choices and limiting your spending in areas where you can slim down will make a big difference.
Bottom Line
If homeownership is on your dream list this year, take a good look at what you can prioritize to help you get there. Let’s get together today to discuss the best steps you can take to start the process.
Whether capitalizing on job opportunities, affordability, or warm-weather places to retire, Americans are making moves to these top cities to take advantage of the strength in the current housing market.
A strong economy and lower mortgage rates have made it easier for many would-be buyers to get into the market. According to realtor.com, it just depends on which market.
To find the top market in our area, let’s get together.
The real estate market is expected to do very well this year as mortgage rates remain at historic lows. One challenge to the housing industry is the lack of homes available for sale. Last week, move.com released a report showing that 2020 is beginning with the lowest available housing inventory in two years. The report explains:
“Last month saw the largest year-over-year decline of housing inventory in almost three years with a dramatic 12 percent decline, pushing the number of homes for sale in the U.S. to the lowest level since January 2018.”
The report also revealed that the decline in inventory stretches across all price points, as shown in the following graph:George Ratiu, Senior Economist at realtor.com, explains how this drop in available homes for sale comes at a time when more buyers are expected to enter the market:
“The market is struggling with a large housing undersupply just as 4.8 million millennials are reaching 30-years of age in 2020, a prime age for many to purchase their first home. The significant inventory drop…is a harbinger of the continuing imbalance expected to plague this year’s markets, as the number of homes for sale are poised to reach historically low levels.”
The question is: What does this mean to you?
If You’re a Buyer…
Be patient during your home search. It may take time to find a home you love. Once you do, however, be ready to move forward quickly. Get pre-approved for a mortgage, be ready to make a competitive offer from the start, and understand that a shortage in inventory could lead to the resurgence of bidding wars. Calculate just how far you’re willing to go to secure a home, if you truly love it.
If You’re a Seller…
Realize that, in some ways, you’re in the driver’s seat. When there is a shortage of an item at the same time there is a strong demand for that item, the seller of that item is in a good position to negotiate. Whether it is price, moving date, possible repairs, or anything else, you’ll be able to demand more from a potential purchaser at a time like this – especially if you have multiple interested buyers. Don’t be unreasonable, but understand you probably have the upper hand.
Bottom Line
The housing market will remain strong throughout 2020. Understand what that means to you, whether you’re buying, selling, or doing both.
There’s a current narrative that owning a home today is less affordable than it has been in the past. The reason some are making this claim is because house prices have substantially increased over the last several years.
It’s not, however, just the price of a home that matters.
Homes, in most cases, are purchased with a mortgage. The current mortgage rate is a major component of the affordability equation. Mortgage rates have fallen by over a full percentage point since December 2018. Another major piece of the affordability equation is a buyer’s income. The median family income has risen by approximately 3% over the last year.
The National Association of Realtors (NAR) releases a monthly Housing Affordability Index. The latest index shows that home affordability is better today than at almost any point over the last 30 years. The index determines how affordable homes are based on the following:
“A Home Affordability Index value of 100 means that a family with the median income has exactly enough income to qualify for a mortgage on a median-priced home. An index of 120 signifies that a family earning the median income has 20 percent more than the level of income needed pay the mortgage on a median-priced home, assuming a 20 percent down payment so that the monthly payment and interest will not exceed 25 percent of this level of income (qualifying income).”
The higher the index, therefore, the more affordable homes are. Here is a graph showing the index since 1990:Obviously, affordability was better during the housing crash when distressed properties – foreclosures and short sales – sold at major discounts (2009-2015). Outside of that period, however, homes are more affordable today than any other year since 1990, except for 2016.
The report on the index also includes a section that calculates the mortgage payment on a median priced home as a percentage of the median national income. Historically, that percentage is just above 21%. Here are the percentages since June of 2018:Again, we can see that affordability is much better today than the historical average and has been getting better over the last year and a half.
Bottom Line
Whether you’re thinking about buying your first home or moving up to the home of your dreams, don’t let the false narrative about affordability prevent you from moving forward. From an affordability standpoint, this is one of the best times to buy in the last 30 years.
By the end of last year, many homeowners found themselves with more equity than they realized, and at the same time their wages were increasing. When those two factors unite, it can spark homeowners to think about making a move to a larger or more expensive home in the luxury space. That said, now is a perfect opportunity to take a look at the forecast for the 2020 luxury market.
Three Things to Think About in the 2020 Luxury Housing Market
1. Prices
The U.S. economy is strong today, with buying opportunities throughout the luxury end of the market. Thomas Veraguth, Strategist at UBS Global Wealth Management,says in Barrons.com,
“There’s a good link between luxury real estate prices and [economic] growth.”
Available inventory is a key element that can impact home prices. At the upper range, the inventory is greater in comparison to the entry-level market, making moving up to a luxury home a growing reality for many buyers right now.
2. Activity in the Market
With more buying opportunities at the higher end, we should start to see an increase in activity. The same article states,
“Affluent homebuyers will start to come out of the woodwork as they find rising luxury rents less appealing and sellers get even more negotiable on price.”
Buyers looking in the luxury market are taking the opportunity to negotiate on price in a segment where there are more choices, too. According to the Luxury Market Report, homes sold for an average of 96.94% of the list price in December.
Buyers are also getting more for their money with greater purchasing power due to the current low interest rates.
3. Buyers Are Coming Back
Keep in mind, buyers are often sellers too, especially those looking to move up. Homeowners with an entry-level home can take advantage of the inventory shortage at the lower end of the market, thus driving higher sales prices for their current homes. Combined with growing equity in the homes they’re listing, it’s a great time for those who are ready to make a luxury move.
The extra equity and greater purchasing power are bringing many buyers back to the market. The same article mentioned that,
“We’ve already seen buyers who’ve been on the sidelines for two years tread back into the market.”
Bottom Line
If you’re considering entering the luxury market, 2020 is shaping up to be a great year for those who are ready to make that move. Let’s get together to set your real estate plan for the year.
“The dream of homeownership is alive and well within “Generation Z,” the demographic cohort following Millennials.
Our survey…finds that Gen Z views homeownership as an important goal. They estimate that they will attain this goal by the time they turn 30 years old, three years younger than the current median homebuying age (33).”
If these aspiring homeowners purchase at an early age, the Urban Institute study shows the impact it can have.
Based on this data, those who purchased their first homes when they were younger than 25 had an average of $10,000 left on their mortgage at age 60. The 50% of buyers who purchased in their mid-20s and early-30s had close to $50,000 left, but traditionally purchased more expensive homes.Although the vast majority of Gen Zers want to own a home and are somewhat confident in their future, “In terms of financial awareness, 65% of Gen Z respondents report that they are not confident in their knowledge of the mortgage process.”
Bottom Line
As the numbers show, you’re not alone. If you want to buy this year but you’re not sure where to start the process, let’s get together to help you understand the best steps to take from here.
On January 10th of each year, “National Cut Your Energy Costs Day” encourages consumers to reduce their overall energy costs by improving home efficiency.
According to Freddie Mac, a typical U.S. family spends $2,200 per year on energy bills. By making energy efficient upgrades, you could reduce your energy bills by up to 30%.
To assess the energy efficiency of your home and see how it measures up, take a moment to check out Home Energy Yardstick to calculate your estimated opportunity. Don’t forget to have your energy bills nearby!
My name is John Bendele and these are words to live by.
“What is the biggest challenge you are facing in life right now and how can I help?”
I believe when you are able to help others in their struggles, it will always bring a since of joy and accomplishment that is like no other. I enjoy bringing opportunities to people in real estate and in life. To be a lifting hand and a beacon of knowledge. It brings me great joy to guide and support others when making exciting and difficult choices. I have been a licensed realtor for over 7 years in Minnesota. Coming from a construction background, I will provide a wealth of knowledge about homes. Knowing homes allows me to a better negotiator with facts and details some may not. I enjoy working with sellers, investors and buyers.
I grew up in Southwest Texas and moved to Minnesota in 2015. I have lived in the White Bear Lake area until making a move over the lake to Willernie, MN where I now reside. I love spending quality time with my teenage boys who nicknamed me “JoJo”. My favorite things to do are being outdoors on or in the water, BBQing (TX style) and going on any adventure.
I want to bring knowledge, growth, excitement and wealth to the clients I encounter through being a realtor. I look forward to assisting you in your amazing journey in real estate.
Thank you,
John A Bendele
Meet Brittany
Brittany is a mama of three kiddos, a wife of a firefighter and added more love to her home with three dogs and two cats. Outside of the fun she has as an agent and her roles at home she enjoys doing any DIY projects she can get her hands on!
Brittany fell in love with the Real Estate gig in 2019. She grew up in Apple Valley, and now owns her childhood home. I guess you could say she is a south metro pro!
You!
Hey! If you’re looking for your next role as an agent let us know! This could be you!
Meet Shea Amundson
Hey, I’m Shea and I love helping people find a beautiful home that sets their soul on fire!
Meet Katie
Katie comes from the busy world of entertainment and being a Traveling Operations Manager. She transitioned to Real Estate back in 2018 and has been hooked ever since! Katie thrives on training, developing new systems, and helping agents grow! Katie joins Voila with the determination to help every agent and client make their dream a reality whether it be building their business or finding that dream home!
When Katie isn’t working, she is a full-time student at Metropolitan University. She enjoys cooking foods from all over the world, traveling, and has a habit of getting a new tattoo wherever she goes. She is huge into animal conservation and spending time with her dog Sawyer who often joins her on travels!
Meet Sarah Beth Lindstrom
Sarah wants to live in a world filled with innovative businesses daring enough to break the mold…monthly auto-shipments of Laffy Taffy’s, and lots and lots of laughter!!!
Having been in the real estate industry since 2005, her go to role has always been supporting her teams in any way that she can! She has gone from Listing and Transaction Management, to Team Manager, and now Director of Support! She is an ‘introverted extrovert’ that finds the, ‘behind the scenes’ with a hint of showing homes – to be a perfect blend.
When she’s not supporting her Voila Family, she is out getting one more rep in at the gym, finding new healthy recipes to attempt (and then trick her teenager into eating somehow), and enjoying quick road trips to…well, anywhere! She also plays on a competitive volleyball team in the winter, sand volleyball in the summer and softball in the spring and fall.
“Two things define you. The patience you have when you have nothing and the attitude when you have everything.”
Meet Jessi Andersen
In June of 2020 Jessi joined team of Voila…and…it’s that easy!
Ha! No really, it did all begin in June. New to this side of Real Estate, Jessi joined in hopes to take her chatty, outgoing self and bring some good of it! Her natural tendencies of networking and love of growth and goals, have been set in direction – expanding Voila!
Where is Jess when she isn’t nurturing the growth of Voila? Adventuring with her family outside in nature. Or perhaps baking up a new recipe while dancing the day away – and of course cheering for her little athletes at home, as well as the MN Vikings/Twins!
“In the end it is not the years in your life that count. It’s the life in your years” ~ Abe Lincoln
Meet Wyatt Lemon
Wyatt is a Real Estate Extraordinaire, and a Loving Husband, and a Lover of Life and a PAW-rent to 3 awesome dogs. Huge believer in the idea that life is what you make of it, so with that being said I guess you could say the glass is half full! Things I enjoy outside of work are Yoga, being a big time Foodie, and spending time with my family. I grew up in Hugo MN and have been a local resident my whole life. I studied Marketing at Century College as well as St. Cloud State University. I got into Real Estate in October of 2018 and have loved every minute of it!
Meet James Andersen
James Andersen is a human being who believes that the best in others is a reflection of the energy we bring.
Magnanimous behavior is the standard not the exception.
10+ years Army Career
5+ years Married
5+ years Father of Calendar Crushers
5+ years Real Estate Career
30+ years Life Experience
Let’s learn and grow together.
Meet Joey Torkildson
You are writing your own story in life! Is what you are doing right now supposed to be in that story? I hope so!
That’s why my goal is to always sign up, get uncomfortable, inspire through doing, shoot, then aim. We don’t have enough time on this planet to stay mundane and there are too many experiences to be doing one thing for too long! It’s all about the short term experiments!
Quick background: 19+ year US Army Master Sergeant vet; 10+ year transformer of lives through ownership (AKA: Realtor) ; 2+ year CEO of an Expansion Team with Hergenrother Realty Group ; Director of Agent Training with that same organization; Self employed for 12+ years; starting in late 2019 CoFounded a new disruptive real estate brokerage, Voila; Contagiously energetic teacher who loves helping people discover they can accomplish anything; Dad of two extremely crazy and loving boys; Husband of an amazingly supportive and ultimate gardener wife.
Let’s be curious explorers together! I love connecting with people and helping them achieve their goals and I’m a firm believer in the fact that you are one introduction away from your entire life changing!
Two quotes I live by: Amazing things rarely happen in your comfort zone and only those who attempt the absurd achieve the impossible!
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