Will the Housing Market Maintain Its Momentum?

Last weeks Existing Home Sales Report from the National Association of Realtors (NAR) shows sales have dropped by 3.7% compared to the month before. This is the second consecutive month that sales have slumped. Some see this as evidence that the red-hot real estate market may be cooling. However, there could also be a simple explanation as to why existing home sales have slowed there aren't enough homes to buy. There are currently 410,000 fewer single-family homes available for sale than there were at this time last year.

Lawrence Yun, Chief Economist at NAR, explains in the report:

“The sales for March would have been measurably higher, had there been more inventory. Days-on-market are swift, multiple offers are prevalent, and buyer confidence is rising.”

Yuns insight was supported the next day when the Census Bureau released its Monthly New Residential Sales Report. It shows that newly constructed home sales are up 20.7% over the previous month.

Buyer demand remains strong. With more of the adult population becoming vaccinated and job creation data showing encouraging signs, existing-home inventory is expected to grow in the coming months.

What will this mean for home sales going forward?

Fannie Mae, Freddie Mac, and the Mortgage Bankers Association (MBA) have all forecasted that total home sales (existing homes and new construction) will continue their momentum both this year and next. Here's a graph showing those projections:

Bottom Line

Living through a pandemic has caused many to re-evaluate the importance of a home and the value of homeownership. The residential real estate market will benefit from both as we move forward.

 

 

Garden Walkway Lighting Basics

There’s not much that makes as big of an impact on a garden or other outdoor space as some mood lighting. Although your garden or walkway lighting won’t shine quite as brightly in the daytime, the lighting you choose can make a huge difference to the functionality and look of the space where you install it. There are several different options when it comes to outdoor lighting, so how do you begin to choose the right lighting for your space?

What’s Your Lighting Goal?

Before you so much as shop for lighting, it’s important to determine what it is that you want your lighting to do. Should it simply illuminate a path? Is it going to highlight a particular garden element like a nice plant or a fountain? Do you need to brighten stairs to help prevent falls? There are so many different types of garden and walkway lighting available today that identifying your needs can help to narrow your focus before you begin. That way you won’t waste a lot of time poring over options that will never be suitable for the job at hand.

Next, your lighting location should be considered. There are plenty of benefits to choosing a wired lighting system, but if your garden is far from your home, you may need to bring an electrician onto the project to properly run the wiring to the location in question. If that’s not an option, you’ll need to seriously consider solar lighting kits. Although a freestanding solar panel can be installed to power all your lights, there are many lighting kits made of lights fitted with individual tiny solar panels.

Solar Versus Wired Lighting

Solar garden walkway lighting is undoubtedly a convenient option, but it won’t work for every space or every need. Because solar lighting is powered by the sun, the location of your solar panels is vital. Bright, direct sunlight is best for charging these lights, so if you live in a location that tends to have a lot of cloud cover or your vegetation is dense, you’re going to lose a lot of potential lighting hours. Generally, solar-powered lights need to be recharged daily, making them difficult to rely on during the darker, colder months of the year, even if they’re in an ideal location.

Low voltage landscape lighting, on the other hand, receives continuous power from your electrical system, allowing them to work on demand. Some homeowners worry this means they’ll run all day long and create expensive electricity bills, but most lighting systems are designed to come on at or near dark and turn off at sunrise, or on demand, or both, depending on the system you’re using. On-demand systems come in pretty handy when there’s a weird noise outside and you need to go chase a raccoon out of the trash.

Many solar systems are also built to be disposable, so if that’s the way you’re leaning, be prepared to spend quite a bit more than you might expect for a low-end plastic solar light. There are solar lighting kits made to last much longer, but you should be looking for light sets made with metal bodies that allow you to change the bulb, should it need replacement.

Need Help Selecting the Right Outdoor Lighting?

There are a whole host of professionals who can help you make these important lighting decisions, based on your specific situation. For example, if you want to know if your site is suitable for solar lighting or needs a permanently powered lighting solution, calling an electrician into the project can get the right answers quickly. If you already know the type of system you’d prefer but aren’t quite sure about how to configure your lighting system to meet your goals, a landscape professional may be an excellent investment.

The good news is that no matter who you’d like to bring into your project, you can find them with the help of your HomeKeepr community! Just look for a recommendation for your situation or specific professional need, and before you know it, you’ll be well on your way to lighting the neighbors will envy.

Patience Is the Key to Buying a Home This Year

The question many homebuyers are facing this year is, Why is it so hard to find a house? Were in the ultimate sellers market, which means real estate is ultra-competitive for buyers right now. The National Association of Realtors (NAR) notes homes are getting an average of 4.8 offers per sale, and that number keeps rising. Why? Its because there are so few houses for sale.

Low inventory in the housing market isn't new, but its becoming more challenging to navigate. Danielle Hale, Chief Economist at realtor.com, explains:

The housing market is still relatively under supplied, and buyers cant buy what's not for sale. Relative to what we saw in 2017 to 2019, March 2021 was still roughly 117,000 new listings lower, adding to the pre-existing early-year gap of more than 200,000 fresh listings that would typically have come to market in January or February. Despite this weeks gain from a year ago, were 19 percent below the new seller activity that we saw in the same week in 2019.

While many homeowners paused their plans to sell during the height of the pandemic, this isn't the main cause of todays huge gap between supply and demand. Sam Khater, Vice President and Chief Economist at Freddie Mac, Economic Housing and Research Division, shares:

The main driver of the housing shortfall has been the long-term decline in the construction of single-family homes . . . That decline has resulted in the decrease in supply of entry-level single-family homes or, starter homes.

When you consider the number of homes built in the U.S. by decade, the serious lack of new construction is clear (See graph below):The number of newly built homes is disproportionately lower than the rate of household formation, which, according to the U.S. Census Bureau, has continued to increase. Khater also explains:

Even before the COVID-19 pandemic and current recession, the housing market was facing a substantial supply shortage and that deficit has grown. In 2018, we estimated that there was a housing supply shortage of approximately 2.5 million units, meaning that the U.S. economy was about 2.5 million units below what was needed to match long-term demand. Using the same methodology, we estimate that the housing shortage increased to 3.8 million units by the end of 2020. A continued increase in a housing shortage is extremely unusual; typically in a recession, housing demand declines and supply rises, causing inventory to rise above the long-term trend.

To catch up to current demand, Freddie Mac estimates we need to build almost four million homes. The good news is builders are working hard to get us there. The U.S. Census Bureau also states:

Privately-owned housing units authorized by building permits in March were at a seasonally adjusted annual rate of 1,766,000. This is 2.7 percent (1.7 percent) above the revised February rate of 1,720,000 . . . Privately-owned housing starts in March were at a seasonally adjusted annual rate of 1,739,000. This is 19.4 percent (13.7 percent) above the revised February estimate of 1,457,000. . . .

What does this mean? Lawrence Yun, Chief Economist at NAR, clarifies:

The March figure of 1.74 million housing starts is the highest in 14 years. Both single-family units and multifamily units ramped up. After 13 straight years of underproduction the chief cause for todays inventory shortage this construction boom needs to last for at least three years to make up for the part shortfall. As trade-up buyers purchase newly constructed homes, their prior homes will show up in MLSs, and hence, more choices for consumers. Housing starts to housing completion could be 4 to 8 months, so be patient with the improvement to inventory. In the meantime, construction workers deserve cheers.

Bottom Line

If you're planning to buy this year, the key to success will be patience, given todays low inventory environment. Lets connect today to talk more about what's happening in our area.

Note: The original version of this blog included a graph showing total number of housing units built, which included houses and apartment units. The revised graph, shown here, includes only single-family homes, which more accurately explains the current situation.

 

Is Home Price Appreciation Accelerating Again?

At the beginning of the year, industry forecasts called for home price appreciation to slow to about half of the double-digit increase we saw last year. The thinking was that inventory would increase from record-low levels and put an end to the bidding wars that have driven home prices up over the past twelve months. However, that increase in inventory has yet to materialize. The National Association of Realtors (NAR) reports that there are currently 410,000 fewer single-family homes available for sale than there were at this time last year.

This has forced those who made appreciation forecasts this past January to amend those projections. The Mortgage Bankers Association, Fannie Mae, Freddie Mac, the National Association of Realtors, and Zelman & Associates have all adjusted their numbers upward after reviewing first quarter housing data. Here are their original forecasts and their newly updated projections:Even with the increases, the updated projections still don't reach the above 10% appreciation levels of 2020. However, a jump in the average projection from 5.3% to 7.7% after just one quarter is substantial. Demand will remain strong, so future appreciation will be determined by how quickly listing inventory makes its way to the market.

Bottom Line

Entering 2021, there was some speculation that we might see price appreciation slow dramatically this year. Today, experts believe that wont be the case. Home values will remain strong throughout the year.

 

Getting Started With Epoxy Cabinet Refinishing Kits

What do you do when your kitchen needs a facelift? Those cabinets are solid, they’re functional, but man, are they dated! One option many homeowners are turning to is cabinet refinishing kits. Many of these pre-built kits use a water-based epoxy coating to ensure that the cabinets get the most rock-solid finish possible without investing in a lot of professional grade equipment. But there’s a lot more to refinishing cabinets with these materials than opening the can and getting to work.

Prepping for an Epoxy Finish

If you’ve never heard it before, take this away with you: The biggest predictor of success for your DIY project is how well you prep your surfaces and work area. It’s really that simple, even though prep work can be pretty involved. Creating a clean, smooth, ready to coat cabinet door takes a lot of effort, but yields magnificent results. This is the number one secret of the pros, besides having all that fancy painting equipment.

So how do you prep for an epoxy cabinet refinish? There are steps.

1. Remove all the cabinet doors, drawer fronts, and hardware. Label each and store them where they won’t get lost or damaged. Using sticky notes to track cabinet doors can be a really good trick, since doors may look alike but not actually fit the same.
2. Fill any cracked surfaces with a compatible filler and sand it smooth. You can’t simply paint away problems in your cabinetry.
3. Clean your cabinet fronts, cabinet doors, and exposed finish on cabinet bases thoroughly to remove oils, spills, and other messes that will interfere with paint adherence.
4. Cover any surface that you don’t want paint on. This includes your backsplash and your countertops, and even your work area. This is not a material that you can necessarily just peel off should you have a drip.
5. Set up areas for your doors and drawer fronts to cure. Curing can take several days per painted side, so ensure the area is super clean and free of any drafts that could deposit dust and other debris.

Only once you’ve fully prepped your area should you begin the task at hand. Taping your cabinet bases can help keep the paint lines sharp, but remember to remove the tape while the paint is wet for the best results. It’s not always necessary to paint the insides of your cabinets, but should you choose to, remember that the pre-built kits are only designed to cover outer surfaces, so you’ll need extra coating material.

The Right Equipment Matters

Another important thing to know about using an epoxy cabinet refinishing kit is that the right equipment really does matter. Buy the right tools, and don’t just settle for a single brush or a single roller; they come in a variety of options for different jobs. Because rollers and brushes both create different textures depending on their design, it’s going to be really important to make the right choices here. Ask experts if you’re not sure. Rollers are not all the same, and there are lots of differences in naps and roller density. And brushes made of natural material are very different from synthetics.

The size and shape of your rollers or brushes also matter big time. Brushes in particular come in tons of different shapes, each meant to do specific jobs. For example, an angle brush will help you get into corners better, though they can also be used on the flat, open areas too, if you’re careful. Rollers vary dramatically in width, and bigger isn’t always better.

Whatever you do, though, don’t mix brushes with foam applicators of any sort. The resulting texture won’t be consistent and will likely drive you to refinish your cabinets yet again long before the epoxy coating is in need of refreshing.

For a Faster, Harder Coating…

If you’re not sure you want to live with the excitement that is refinishing your cabinets, you’ve got another option: you can call in a painter. Professional painters often use harder coatings like lacquers and oil-based epoxies, as well as paint sprayers to ensure a smooth and even finish. Because they can take your cabinet doors away to their shop, it’ll also minimize the mess you have to live with.

Not sure where to find a painter? Just look in HomeKeepr for a recommendation! Make sure to choose a painter who has cabinet-refinishing experience, since there are often specialized tools and racks involved in the process.

Should I Buy Now or Wait?

Some Highlights

• If you're thinking that waiting a year or two to purchase a home might mean you'll save some money, think again.
• Mortgage interest rates are currently very low, but experts across the board are forecasting increases in both home prices and interest rates.
• Buying a home now means you'll spend less in the long run. Lets connect to put your homebuying plans in motion before home prices and mortgage rates climb even higher.

 

How Much Time Do You Need To Save for a Down Payment?

One of the biggest hurdles homebuyers face is saving for a down payment. As you're budgeting and planning for your home purchase, you'll want to understand how much you'll need to put down and how long it will take you to get there. The process may actually move faster than you think.

Using data from the U.S. Department of Housing and Urban Development (HUD) and Apartment List, we can estimate how long it might take someone earning the median income and paying the median rent to save up for a down payment on a median-priced home. Since saving for a down payment can be a great time to practice budgeting for housing costs, this estimate also uses the concept that a household should not pay more than 28% of their total income on monthly housing expenses.

According to the data, the national average for the time it would take to save for a 10% down payment is right around two and a half years (2.53). Residents in Iowa can save for a down payment the fastest, doing so in just over one year (1.31). The map below illustrates this time (in years) for each state:

What if you only need to save 3%?

What if you're able to take advantage of one of the 3% down payment programs available? Its a common misconception that you need a 20% down payment to buy a home, but there are actually more affordable options and down payment assistance programs available, especially for first-time buyers. The reality is, saving for a 3% down payment may not take several years. In fact, it could take less than a year in most states, as shown in the map below:

Bottom Line

Wherever you are in the process of saving for a down payment, you may be closer to your dream home than you think. Lets connect to explore the down payment options available in our area and how they support your plans.