Find out about the latest news in Madisonville, Louisiana as well as St. Tammany Parish. We will keep you “tuned in” to all of the information about Southeast Louisiana as well as the real estate industry in general. Many new home buyers are concerned about the market, mortgage information, and builder trends. We plan on keeping you as up to date as possible on these and many more topics. There is a lot going on in the Greater New Orleans area, so you will have plenty to read!

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

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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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Steps To Take When Purchasing A Home

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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

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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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St. Tammany Golf Courses Are Still Going Strong

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The coronavirus pandemic has definitely given everyone a lot of time on their hands. St. Tammany’s beautiful weather makes all residents want to enjoy the outdoors and the areas many golf courses provide a perfect space to do so.

St. Tammany golf course owners and golf teaching professionals have seen a spike in business during the pandemic. The wide-open spaces of a golf course is a great place for people to get outdoors and social distance.

“Golf is having an uptick in terms of play across the state and the country,” Pinewood Golf Pro Ted Elliot said. “It’s really the ultimate way to play and still social distance. People are able to enjoy nature and be safe at the same time. Honestly, I think some people forgot how fun it is to play golf. I think that some of it will stick, I really do. I think people will pick up some new hobbies, and stick with it even when things start to open back up.”

Money Hill, close to Abita Springs, has seen an uptick in rounds played as well as Pinewood Golf Club and Oak Harbor Golf Club in Slidell and Beau Chene Country Club in Mandeville. In fact, Pinewood Golf Club has seen a 55% increase since this time last year.

There has not only been an uptick in players, but also a big increase in the diversity of players. Golf owner Chris Smith has seen a lot of new visitors this spring. He says there have been more women and children taking up the sport. Justin Lotz, Oak Harbor Golf Club owner, says he enjoys seeing so many first time golfers.

Residents need not worry about safety measures at the golf courses. Tee times are booked only online and players check-in once they arrive which is a contactless process. Only one person can ride in a golf cart at a time and no player can touch or remove flagsticks. The bunker rakes and sand bottles have also been removed.

“Golf fits in line with what the governor says (about getting) outside and enjoying nature,” said Greg Klemp, general manager and COO at Money Hill Golf and Country Club near Abita Springs. “We’re happy to see our members taking advantage of that, and everyone has been very generous to our staff. Golf is an activity where you can still socially distance.”

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How St. Tammany Plans to Reopen After Shelter-In-Place Orders Are Lifted

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The country is still reeling from the onset of the coronavirus pandemic that has spread throughout the world. Fortunately, in many states across the country, the cases of the virus are beginning to decline. Parish President Mike Cooper has announced his plans on how St. Tammany will reopen commerce. St. Tammany will slowly restore shopping, working and other activities “based on two-week intervals of continued decline in cases of coronavirus.”

Gov. John Bel Edwards has the state under a shelter-in-place order until May 15, 2020. Governor Edwards will allow certain elective surgeries, outside seating at restaurants and some non-essential retail businesses to open as long as there are only 10 people present this Friday. Cooper, who appointed an advisory council last month, has been working with the advisory council to develop a plan for reopening.

The St. Tammany parish’s “reopening plan” consists of four phases. The first phase will be the opening of movie theaters, sit-down dining, sporting venues and places of worship but there will be required social distancing and sanitation requirements. Next will be exercise facilities and bars but patrons will have strict social distancing and sanitation protocols. Close-contact services such as hair, nail and tanning salons, barbershops and massage studios will be a part of the final phase as well as visits to hospitals and senior care facilities.

The advisory board developed the plan alongside the recommendations made by the White House. The Governer will revisit the plan if cases trend upward again. If this happens, the plan phases will possibly be delayed, and restrictions might have to be implemented again. If the federal or state governments change any restrictions or policies, this can also affect the subsequent phases.

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Home-builders See A Jump In New Home Sales

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Huge kitchen island that is painted in gray to stand out in the all white kitchen.Everything ground to halt when the shelter-in-place order took effect. Home sales by the end of March were down with the impact of the coronavirus pandemic. In the first four weeks of the pandemic, newly built homes were down 85%. April is seeing a change with an uptick in home sales. Buyers are still buying according to Zillow and Redfin. Both have seen an increase in overall search traffic and buyer inquiries to agents. According to John Burns Real Estate Consulting (JBRC), which tracks builders’ inventory across the nation, they have seen the numbers starting to climb.

“We’re still down roughly 65%, but more positive news is coming out of the new home market, particularly for builders who are targeting the first time and entry level buyers,” said Devyn Bachman, manager of research at JBRC.

JBRC found that new construction homes are rebounding, especially in young couples with a dual income. Stephen Paul,
executive vice president at Mid-Atlantic Builders, a small company that has communities in Maryland and Northern Virginia, has seen an increase in business. He has had several spec homes that have sold recently.

Many believe that builders will recover first from the economic downturn. There is a lot more new home inventory out there right now than resales. Sellers are holding off because they do not want people to come through their homes.

“It’s safe, it’s clean, it’s new, and it’s easy to show at this point,” said Bachman. “Lots of the builders have set up virtual tours on their websites, the sales agents are setting appointments for consumers to come in and tour models in a safe distance manner. They’re actually able to show the new home, wherein several markets it’s very difficult to see resale listings at this point.”

Incentives are also an attractive feature for a home buyer. Builders can easily add incentives such as specific amenities and finishings, and an increase in real estate commissions. Many builders also have in-house mortgage services which makes the process easier and faster.

“I do think consumers are hungry for a deal, especially the first-time buyers,” said Bachman. “If you’re working on a quick move-in or one of the speculative inventory sales, you might be able to get some sort of discount in the new home market at this point, which is very attractive to that group.”

Proximity and size have also played a factor in many first time homebuyers taking the leap. A good chunk of first-time homebuyers rent apartments. During the shelter-in-place, apartment dwellers have much less space and have no outdoor areas such as a private backyard. Companies that do not normally offer work from home opportunities are allowing employees to work from home during the pandemic. Once people start to go back to work, their view toward a long commute might not be as tolerable. This might push many to reconsider how far they live from where they work.

Homebuilders are still building through the pandemic, the Department of Homeland Security has designated single- and multi-family housing construction as essential business, and hopefully once the shelter-in-place orders are lifted the housing market will boom throughout the country.

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