May 2020 - Bedico Creek Preserve

The Housing Market Has a Positive Influence on Bringing the Economy Back to Normal

May 30, 2020/in Local News

The whole world is looking at the current economy closely. The U.S. economy is also under the microscope with states beginning to reopen. Several economists believe that the housing market will be the driving force to help get the U.S. economy back on track.

Luckily the housing market was strong when the COVID-19 pandemic began and will only get stronger as the country begins to open back up. Many are looking at the housing market to be the tailwind to the uptick in the economy.

“Many still bear scars from the Great Recession and may expect the housing market to follow a similar trajectory in response to the coronavirus outbreak. But, there are distinct differences that indicate the housing market may follow a much different path. While housing led the recession in 2008-2009, this time it may be poised to bring us out of it”, says Mark Fleming, Chief Economist of First American.

There are other economists who also agree with Fleming. The Chief Economist for CoreLogic, Dr. Frank Nothaft, backs up Flemings’ comments by looking back to history. He recalls that after WWII the housing market led the economy out of the recession the first six decades after the war. Robert Dietz, Chief Economist for the National Association of Home Builders, also agrees with Fleming. The National Association of Home Builders believes that the housing market will play a leading role as the economy recovers. ” Based on demographics and current vacancy rates, the U.S. may have a housing deficit of up to one million units.”

The reports make sense because every time a home is sold it has a huge impact on the local economy. The real estate market is strong and will ” act as a strong tailwind to the overall national economy.”

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This four bedroom, three bathroom home is a custom built home. This home is located close to the city of New Orleans.

Steps To Take When Purchasing A Home

May 28, 2020/in Local News

Purchasing a home doesn’t have to be a daunting task. With knowledge and tools, the homebuying process can be manageable with fewer obstacles than for those who just jump in headfirst. Here is a step-by-step guide to keep the homebuying process predictable and less stressful.

Before starting the process of even searching for a home always check your credit score first. The majority of homebuyers will need a mortgage or some sort of financial assistance. Your credit score can determine how much and what terms you will be given when borrowing money for a home. The higher your credit score the lower the mortgage interest rates. Your FICO score will be a deciding factor on whether a lender will qualify you for a loan. If your score is too low to qualify there are ways you can strengthen your score. Pay all of your bills on time, keep your credit card balances low, check your credit reports, keep credit cards open and have a variety credit (credit cards, loans, diverse credit lines etc.).

Set a downpayment goal before you start your search. It is crucial to get your personal finances in order. This makes the homebuying process run much smoother. How much you can put down on a home will be a factor in how much home you can afford. A down payment is the cash you will bring to the table at closing. This cash is what you contribute to the ownership of the home being purchased. Most lenders prefer 20% of the purchase price although less will be accepted. FHA loans will allow as little as 3.5% down, VA loans and USDA loans require no down payment. Note if you do decide to put down less than 20% you will be required to purchase private mortgage insurance (PMI).

Get preapproved for a mortgage before you go on your home search. Having a preapproval from a lender lets sellers and realtors know that you are serious about purchasing a home. Not only is it a ticket in the door, but it also helps determine how much house you can afford. A mortgage preapproval is a letter from a lender stating the amount of loan you can qualify for. A lender will typically evaluate your financial history by pulling your credit report and your score to determine what you can afford.

Have all your forms in order when submitting a mortgage application. You will need to gather the following, W-2 form from the past two years, paystubs from the past 30 days, proof of other sources of income, Federal tax returns from the past two years, recent bank statements, details on long-term debts (car or student loans) and ID and Social Security number. This seems like a lot of documents to hand over but remember your lender’s there to access this information and ensure you can make your loan payments on time.

Just like a home you want to choose the best mortgage that suits your needs. There are advantages and drawbacks to each type of loan. Choosing the right mortgage for your needs can help your chances of getting approved for a loan as well as save you thousands of dollars in the long run. There are conventional loans or government-back loans (FHA, VA or USDA) to choose from as well as a fixed-rate or adjustable-rate (ARM). The length of the loan is also a deciding factor, you can decide from a 10,15,20 or 30-year loan.

Shop around for the right mortgage lender. Just like any major purchase, you always shop around for the best deal you can get. Mortgage lenders can offer different incentives to entice business. When shopping around for a lender, make sure you know the current mortgage rates, are able to compare mortgage origination fees and receive at least three loan estimates from three different lenders to compare.

Your final step will be to close on your new home. This is an exciting moment but it can also be overwhelming. In order to ease the situation, become familiar with standard closing documents before you go to closing. Remember you can always negotiate for the seller to pay some of the closing cost.

Remember that a licensed Realtor can help you along the way. Finding the perfect home is personal. Some people want a certain school district while others want access to public transportation. Figuring out the features you can and can’t live without and choosing the right neighborhood is what matters.

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Bright and open family room with recessed lighting and hardwood floors.

Hot Housing Market Through the Pandemic

May 27, 2020/in Local News

Even though the pandemic shut the country down for a while, the housing market is still going strong. During April, new listings dropped and there was a weak supply and demand but that did not detour the housing market hardiness. In fact, with loosening social distancing restrictions open houses are now occurring and there is a surge in bidding wars for homes under $1 million.

“Demand for homes has picked back up after hitting rock bottom in April, and that uptick paired with a lack of supply is a recipe for bidding wars,” said Redfin lead economist Taylor Marr. “Homebuyers are getting back out there, searching for more space as they realize using their home as an office and school may become the norm.”

According to Redfin, over 41% of listings were in a bidding war this month which is up 9% from January 2020 before COVID-19 hit. The high demand for homes combined with the limited listings on the market is a perfect receipt for bidding wars. Sellers are not rushing back into the market because of fear of the pandemic and the economy. Realtor.com reported that new listings for the week ending May 9th were 29% down annually.

As far as buyers, they are rushing to purchase a home as the mortgage rates are setting record lows. The federal regulators are currently offering the coronavirus mortgage bailout program. Compass, a real estate brokerage firm, says they have more buyer activity on their site than there are current listings.

“Buyers right now are saying to themselves, ‘I’ve been locked into my space for three months’ and they’re evaluating their — do they have enough space inside, outside? Do they have enough light? Do they have the right home office? If the answers to those questions are no, they call their agent,” said Robert Reffkin, CEO of real estate brokerage Compass. “And on top of that, you have record low interest rates. And you have a viewpoint that you’re going to get a good price right now. You’re not going to get a better price in two years.”

Across the nation, Boston saw the highest bidding wars this month. Along with Boston, San Francisco, Fort Worth, San Jose and Providence made up the top five regions for bidding wars.

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Home Permits Still in Demand Despite COVID-19

May 26, 2020/in Press Room

Even with the COVID-19 pandemic March 2020 reported higher numbers in the total of single-family permits issued year to date (YTD) across the country than were reported this time last year. Over the first three months in 2020, the total number of single-family permits issued year-to-date (YTD) nationwide hit 220,416 making this an 18.9% increase over March 2019 which was at 185,336.

Year-to-date (YTD) ending in March 2020 for single-family permits are seen in the chart. Single-family permits saw growth across the four regions in the U.S. with a range from 21.7% in the West to 14.9% in the Northeast. Data collected between March 2019 (YTD) and March 2020 (YTD) shows that 42 states saw a rise in permits while seven states and the District of Columbia experienced a decline. The highest was in Wyoming with 844 permits at 63.9% while the lowest was seen in the District of Columbia at 75.4%. The 10 highest states of single-family permits combined accounted for 64.2% of the total single-family permits issued.

Multi-family permits also saw a rise of 1.6% year-to-date of multi-family permits issued nationwide. March 2020 reported 108,977 showing an increase from March 2019 at 107,248. All four regions across the country did not see an increase. The Northeast saw a 3.8% increase, the West a 10.7% increase but the Midwest saw -9.2% and the South a -1.2% decline. March 2019 YTD to March 2020 YTD saw a growth in 23 states. North Dakota was the highest with a rise of 523.5% in multifamily permits. Maine saw the largest decline of 71.7%. The 10 states with the highest number of multi-family permits issued combined was 64.9%.