What is an Electrostatic Filter?

Air filters serve a wide range of purposes in your home. They remove dust and dander from the air, eliminate other allergens, keep some odors under control, and even reduce the wear and tear that your HVAC system experiences throughout the year. Depending on the filters you use, you may even be able to remove some viruses and bacteria from the air to keep the people in your house healthier. With all of the benefits that good air filters provide, the only real downside is that you have to replace them every few months to keep your home’s filtration system filtering at its best.

There are a few other options available when it comes to filter types, however. One air filter that’s increasingly popular with homeowners is the electrostatic filter, which not only provides excellent filtration but is also cleanable and reusable. If you’re not familiar with electrostatic filters or how they differ from the disposable filters that you’re used to, here’s the basics of what you need to know.

How Electrostatic Filters Work

Traditional air filters work by putting pleated material that’s made of a lot of material fibers in the way of air moving through your system, allowing the air itself to pass through but catching dust and other unwanted material on those fibers. It’s fairly effective, but if there aren’t any fibers in the way of any given particle then the particle will pass through without resistance. Electrostatic filters work differently, actually attracting those particles even if they would otherwise be able to pass through the filter unimpeded.

This attraction is caused by static electricity, which is the same thing that causes socks to stick to your clothes in the dryer and can make balloons stick to the wall if you rub them in your hair. These filters carry a slight static charge, allowing them to attract even microscopic particles that would normally be too small for a filter to stop. Particles passing through the filter become ionized, meaning that they pick up a charge themselves which causes them to have a natural attraction that pulls them toward a collecting layer in the filter. Once the particles are attracted to the filter, they become stuck, just like that proverbial sock or balloon.

Cleaning and Maintenance

One positive of traditional pleated filters is that they become more efficient as they build up more dust and other particles; because the stuff filtered out of the air clogs up holes that small particles could pass through in the filter, it becomes less likely that additional particles will pass through. Unfortunately, this isn’t an advantage that electrostatic filters share. As electrostatic filters attract dirt and other particles out of the air, the available attractive material becomes covered up and they actually become less efficient. The good news is that this can be taken care of simply by cleaning the filter.

Cleaning an electrostatic filter is a pretty straightforward process. After turning off the HVAC system and removing the filter, simply take it outdoors and spray it with a hose in the opposite direction that the air would normally flow. Keep rinsing until the water comes out clean, then allow the filter to air dry. Once it’s dried, simply reinstall the filter and it’s ready to start filtering fine particles out of the air again. Repeat this process once a month or whenever the filter appears dirty.

Should You Upgrade Your Home’s Filtration?

Though electrostatic filters cost more up front, the ability to clean them and the greater efficiency that they show when clean means that you can actually save money on filters in the long run. Making the switch is definitely worth considering, and might be worth discussing with an HVAC professional when you schedule a maintenance check before switching on the heat this winter.

Why 2021 Is Still the Year To Sell Your House

If you're trying to decide whether or not to sell your house, this is the time to think seriously about making a move. Fannie Maes recent Home Purchase Sentiment Index (HPSI) reveals the number of respondents who say its a good time to sell is higher now than it was over the past few summers (see graph below). Today, the majority of consumers, 75 percent, say its a good time to sell a house.

Why is sellers sentiment up year-over-year?

The higher good time to sell sentiment has to do with todays market conditions, specifically low housing supply and high buyer demand. In the simplest terms, we don't have enough houses available for sale to meet buyer demand.

According to the latest data from the National Association of Realtors (NAR), were still firmly in a sellers market because housing supply is well below a balanced norm (shown in the graph below). Clearly, the scales are tipped in a sellers favor today. But while housing supply is undeniably low, the right side of the graph shows how the inventory situation is improving little by little each month as more sellers list their homes for sale.

As a seller, that means each month, buyers have more options to pick from. By extension, that means your house may get less buyer attention with time. Danielle Hale, Chief Economist for realtor.com, explains it like this:

More homeowners continue to list homes for sale compared to a year ago Notably, while new listings continue to lag behind a more normal 2019 pace, the gap is shrinking. Even though homes continue to sell quickly thanks to high demand and limited supply, new listings are subtly shifting the balance of market conditions in favor of buyers.

So, what's that mean for you?

If you've been waiting for the perfect time to sell, there may not be a better chance than right now. Inventory is gradually increasing each month, so selling sooner rather than later will help you maximize your homes potential.

Bottom Line

If you're planning to sell your house, 2021 is still the year to do it. The unique mix of low supply and high demand wont last forever. Lets connect to discuss what you need to do now to sell your house and take advantage of this sellers market.

 

If Housing Affordability Is About the Money, Don't Forget This

There are many non-financial benefits of buying your own home. However, todays headlines seem to be focusing primarily on the financial aspects of homeownership specifically affordability. Many articles are making the claim that its not affordable to buy a home in todays market, but that isn't the case.

Todays buyers are spending approximately 20% of their income on their monthly mortgage payments. According to The Essential Guide to Creating a Homebuying Budget from Freddie Mac, the 20% of income that purchasers are currently paying is well within the 28% guideline suggested:

Most lenders agree that you should spend no more than 28% of your gross monthly income on a mortgage payment (including principal, interest, taxes and insurance).

So why is there so much talk about challenges regarding affordability?

Its Not That Homes Are Unaffordable Its That They're Less Affordable.

Since home prices are rising, its true that homes are less affordable than they have been since the housing crash fifteen years ago. Headlines making these claims aren't incorrect; they just don't tell the whole story. To paint the full picture, you have to look at how today stacks up with historical data. A closer analysis of affordability going further back in time reveals that homes today are more affordable than any time from 1975 to 2005.

Despite that, the chatter about affordability is pushing some buyers to the sidelines. They don't feel comfortable knowing someone else got a better deal a year ago.

However, Are Homes Really Less Affordable if We Consider Equity?

In a recent post, Odeta Kushi, Deputy Chief Economist at First American, offers a different take on the financial components of housing affordability. Kushi proposes we should at least consider the impact equity build-up has on the affordability equation, stating:

For those trying to buy a home, rapid house price appreciation can be intimidating and makes the purchase more expensive. However, once the home is purchased, appreciation helps build equity in the home, and becomes a benefit rather than a cost. When accounting for the appreciation benefit in our rent versus own analysis, it was cheaper to own in every one of the top 50 markets.

Lets look at an example. In the above-mentioned post, Kushi examines the rent versus buy situation in Dallas, Texas. Kushi chose Dallas because home prices there sit near the median of the top 50 markets in the nation.

Kushi first calculates the monthly mortgage payment on a median-priced home with a 5% down payment and a mortgage rate of 3% (see chart below):Kushi then takes the monthly cost and subtracts the appreciation the home had over the previous twelve months. The average house price in Dallas increased 17.5% in the second quarter of 2021 compared to last year (this is in line with the national pace). That equates to an equity benefit of approximately 3,550 each month if the pace remains the same (see chart below):We can see the equity gained each month was greater than the monthly mortgage payment, resulting in a negative cost to own. The buyer could build their net worth by 1,830 each month after paying their mortgage.

Kushi then compares the monthly cost of owning to the cost of renting (see chart below):When adding equity build-up into the equation, the cost of renting is 3,140 more expensive than owning. Again, the First American analysis shows that its less expensive to own in each of the top 50 markets in the country when including the equity component.

Bottom Line

If you're on the fence about whether to buy or rent right now, lets connect so we can determine if the equity increase in our local market should impact your decision.

 

Your Checklist To Get Ready To Sell

Some Highlights

• When it comes to selling your house, you want it to look its best inside and out.
• Its important to focus on tasks that can make it inviting, show its cared for, and boost your curb appeal for prospective buyers.
• Lets connect to make sure your house shows well and catches a buyers eye.

 

A Look at Home Price Appreciation and What It Means for Sellers

When you hear the phrase home price appreciation, what does it mean to you? Through context clues alone, chances are you know it has to do with rising home prices. And as a seller, you know rising home prices are good news for your potential sale. But lets look past the dollar signs and dive deeper into the concept. To truly understand home price appreciation, you need to know how it works and why it matters to you.

Investopedia defines appreciation like this:

Appreciation, in general terms, is an increase in the value of an asset over time. The increase can occur for a number of reasons, including increased demand or weakening supply, or as a result of changes in inflation or interest rates. This is the opposite of depreciation, which is a decrease in value over time.

When we consider this definition and how it applies to real estate, a few words stick out: supply and demand. In todays real estate market, were experiencing high buyer demand and very few sellers listing their homes for sale (see maps below):No matter the industry, anytime there's more demand than supply, prices naturally rise. It happens because buyers are willing to pay more to secure the scarce product or service they're looking for. That's exactly what's happening in todays real estate market. Buyers are competing with one another to purchase a home, leading to bidding wars that drive prices up. For sellers, the rising prices mean that opportunity is knocking.

According to Quicken Loans, the national average home price appreciation rate is between 3-5% in a typical year. Today, home prices are appreciating well beyond the norm thanks to high demand. Here are the latest expert projections on the rate of home price appreciation for this year (see chart below):

Compared to the normal pace of 3-5% appreciation per year, the current average forecast of nearly 11.5% is significant.

For sellers, this means that with the current rise in prices, your house may be worth more than you realize. That price appreciation helps give your equity a boost. Equity is the difference between what you owe on the home and its market value based on factors like price appreciation. It works like this (see chart below):You can use your built-up equity to power a move into your dream home, or you can put it toward life-changing goals like funding an education or opening a business.

But don't wait. While price appreciation is strong now, those same experts say it'll start to appreciate at a more normalized pace next year. If you list your house sooner rather than later, you'll be in a better position to capitalize on the higher-than-average home price appreciation were seeing today.

Bottom Line

If you're thinking of selling your house, there really is no time like the present. Lets connect so you can get an expert market analysis of your home and its potential.

What Does Being in a Sellers Market Mean?

Whether or not you've been following the real estate industry lately, there's a good chance you've heard were in a serious sellers market. But what does that really mean? And why are conditions today so good for people who want to list their house?

It starts with the number of houses available for sale. The latest Existing Home Sales Report from the National Association of Realtors(NAR) shows housing supply is still astonishingly low. Today, we have a 2.6-month supply of homes at the current sales pace. Historically, a 6-month supply is necessary for a normal or neutral market in which there are enough homes available for active buyers(see graph below):When the supply of houses for sale is as low as it is right now, its much harder for buyers to find homes to purchase. That creates increased competition among purchasers which leads to more bidding wars. And if buyers know they may be entering a bidding war, they're going to do their best to submit a very attractive offer. As this happens, home prices rise, and sellers are in the best position to negotiate deals that meet their ideal terms.

Right now, there are many buyers who are ready, willing, and able to purchase a home. Low mortgage rates and the ongoing rise in remote work have prompted buyers to think differently about where they live and they're taking action. If you put your house on the market while supply is still low, it will likely get a lot of attention from competitive buyers.

Bottom Line

Todays ultimate sellers market holds great opportunities for homeowners ready to make a move. Listing your house now will maximize your exposure to serious buyers who will actively compete against each other to purchase it. Lets connect to discuss how to jumpstart the selling process.

Real Estate: Its Still a Lack of Supply, Not a Lack of Demand

One of the major questions real estate experts are asking today is whether prospective homebuyers still believe purchasing a home makes sense. Some claim rapidly rising home prices are impacting demand and, by extension, leading to the recent slowdown in sales activity.

However, demand isn't the real issue. Instead, its the lack of supply (homes available for sale). An article from the Wall Street Journal shows this is true for new home construction:

Home builders have sold more homes than they can build. Now they are limiting their sales in an effort to catch up.

The article quotes David Auld, CEO of D.R. Horton Inc. (the largest homebuilder by volume in the United States since 2002), explaining how they don't have enough homes for the number of buyers coming into their models:

Through our history, to have somebody walk into our models and to tell them, We don't have a house for you to buy today, is something that is foreign to us.

Danielle Hale, Chief Economist for realtor.com, also explains that, in the existing home sale market, the slowdown in sales was a supply challenge, not a lack of demand. Responding to a recent uptick in listings coming to market, she notes:

. . . if these changing inventory dynamics continue, we could see a wave of real estate activity heading into the latter part of the year.

Again, the buyers are there. We just need houses to sell to them.

If the slowdown in sales was the result of demand waning, we would start to see home prices beginning to moderate but this isn't the case. As Mark Fleming, Chief Economist for First American, explains:

There's

 a lot of conversation around rising prices and falling quantity in the housing market, and there's this concept, or this idea, that it’s a demand-side problem . . . . But, if demand were falling dramatically, we would actually see less price pressure, less home price growth.

Instead, were seeing price appreciation accelerate throughout this year, as evidenced by the year-over-year percentage increases reported by CoreLogic:

• January: 10%
• February: 10.4%
• March: 11.3%
• April: 13%
• May: 15.4%
• June: 17.2%

(July numbers are not yet available)

There's a shortage of listings, not buyers, and there are three very good reasons for purchasers to still be interested in buying a home this year.

1. Affordability isn't the challenge some are claiming it to be.

Though home prices have risen dramatically over the last 18 months, mortgage rates remain near historic lows. Because of these near-record rates, monthly mortgage payments are affordable for most buyers.

While homes are less affordable than they were last year, when we adjust for inflation, we can see they're also more affordable than they were in the 1970s, 1980s, 1990s, and much of the 2000s.

2. Owning is a better long-term decision than renting.

A recent study shows renting a home takes up a higher percentage of a households income than owning one. According to the analysis, here's the percentage of income homebuyers and renters should expect to pay now versus at the end of the year.While the principal and interest of a monthly mortgage payment remain the same over the lifetime of the loan, rents increase almost every year.

3. Owners build their wealth. Renters build their landlords wealth.

Whether you're a homeowner or an investor, real estate builds wealth through growing equity year-over-year. If you own, your household is gaining the benefit of that wealth accumulation. Fleming says:

The major financial advantage of homeownership is the accumulation of equity in the form of house price appreciation . . . . We have to take into account the fact that the shelter that youre owning is an equity-generating or wealth-generating asset.

Odeta Kushi, Deputy Chief Economist at First American, elaborates in a recent article:

. . . once the home is purchased, appreciation helps build equity in the home, and becomes a benefit rather than a cost. When accounting for the appreciation benefit in our rent versus own analysis, it was cheaper to own in every one of the top 50 markets, including the two most expensive rental markets, San Francisco and San Jose, Calif.

Today, that equity buildup is substantial. The National Association of Realtors (NAR) reports:

The median sales price of single-family existing homes rose in 99% of measured metro areas in the second quarter of 2021 compared to one year ago, with double-digit price gains in 94% of markets.

In 94% of markets, there was a greater than 10% increase in median price. That means if you bought a 400,000 home in one of those markets, your net worth increased by at least 40,000. If you rented, the landlord was the recipient of the wealth increase.

Bottom Line

For many reasons, housing demand is still extremely strong. What we need is more supply (house listings) to meet that demand.