The Shorey Realty Group
The Shorey Realty Group

The Shorey Realty Group
shoreyrealestate@gmail.com
781.962.4028

Essex County March Housing Report 3/14/2023

Between Friday, March 10 and Monday, March 13, the second and third largest US Bank failures occurred, #2 Silicon Valley Bank (SVB) and #3 Signature Bank, arising from the Fed’s rapid rise in interest rates which dramatically reduced the value of all banks long term investment bonds / notes. These bank failures resulted in a flight to safety by investors to US Treasuries and drove down their interest rates. The odd beneficiary was the 30 year fixed rate mortgage which fell from 7% on Friday to 6.57% on Monday. Rates rose Tuesday, March,14, to 6.75% as the banking crises eased ( Mortgagee rates per Mortgage News Daily).

Federal Reserve conundrum: Keep fighting inflation by increasing rates and possibly generating more bank failures or backing off on their rate increases for now. The Consumer Price Index today was up 0.5% in February and 6% for the year. The Federal Reserve’s goal of 2% inflation.

Today’s Bottom Line for Singles, Condos and Multies:

Units Sales and Active Listings continue to fall both year over year and month over month as mortgage rates rise. Prices softened from Jan to Feb.

 

Housing Market Forecast 2023

What To Expect From the Housing Market in 2023


The 2022 housing market has been defined by two key things: inflation and rapidly rising mortgage rates. And in many ways, it's put the market into a reset position.

As the Federal Reserve (the Fed) made moves this year to try to lower inflation, mortgage rates more than doubled – something that’s never happened before in a calendar year. This had a cascading impact on buyer activity, the balance between supply and demand, and ultimately home prices. And as all those things changed, some buyers and sellers put their plans on hold and decided to wait until the market felt a bit more predictable.

But what does that mean for next year? What everyone really wants is more stability in the market in 2023. For that to happen we’ll need to see the Fed bring inflation down even more and keep it there. Here’s what housing market experts say we can expect next year.

What’s Ahead for Mortgage Rates in 2023?

Moving forward, experts agree it’s still going to be all about inflation. If inflation is high, mortgage rates will be as well. But if inflation continues to fall, mortgage rates will likely respond. While there may be early signs inflation is easing as we round out this year, we’re not out of the woods just yet. Inflation is still something to watch in 2023.

Right now, experts are factoring all of this into their mortgage rate forecasts for next year. And if we average those forecasts together, experts say we can expect rates to stabilize a bit more in 2023. Whether that’s between 5.5% and 6.5%, it’s hard for experts to say exactly where they’ll land. But based on the average of their projections, a more predictable rate is likely ahead (see chart below):

What To Expect from the Housing Market in 2023 | MyKCM

That means, we’ll start the year out about where we are right now. But we could see rates tick down if inflation continues to drop. As Greg McBride, Chief Financial Analyst at Bankrateexplains:

“. . . mortgage rates could pull back meaningfully next year if inflation pressures ease.

In the meantime, expect some volatility as rates will likely fluctuate in the weeks ahead. If we see inflation come back under control, that would be good news for the housing market.

What Will Happen to Home Prices Next Year?

Homes prices will always be defined by supply and demand. The more buyers and fewer homes there are on the market, the more home prices will rise. And that’s exactly what we saw during the pandemic.

But this year, things changed. We’ve seen home prices moderate and housing supply grow as buyer demand pulled back due to higher mortgage rates. The level of moderation has varied by local area – with the biggest changes happening in overheated markets. But do experts think that will continue?

The graph below shows the latest home price forecasts for 2023. As the different colored bars indicate, some experts are saying home prices will appreciate next year, and others are saying home prices will come down. But again, if we take the average of all the forecasts (shown in green), we can get a feel for what 2023 may hold.

What To Expect from the Housing Market in 2023 | MyKCM

The truth is probably somewhere in the middle. That means nationally, we’ll likely see relatively flat or neutral appreciation in 2023. As Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), says:

After a big boom over the past two years, there will essentially be no change nationally . . . Half of the country may experience small price gains, while the other half may see slight price declines.”

Bottom Line

The 2023 housing market is going to be defined by mortgage rates, and rates will be determined by what happens with inflation. The best way to keep a pulse on what experts are projecting for next year is to lean on a trusted real estate advisor. Let’s connect.

Essex County Housing Report December 14, 2022

Essex County December Housing Report 12/14/2022

Inflation is slowing, but is way above the Federal Reserve’s target of 2%.  
November CPI (Consumer Price Index) fell to 7.1% from 7.7% in October.
November PPI (Producer Price Index) fell to 7.4% from 8.1% in October. PPI measures wholesale Prices
To fight inflation, the Federal Reserve continues to raise interest rates and sell off their Balance Sheet Assets to tighten credit (Quantitive Tightening).  
Federal Funds Rate increased +0.5% to 4.25% - 4.5% 
Mortgage Rates are trending down; Conforming 30 Year Fixed now 6.33%.

Bottom Line:
Housing Listing and Sales activity continues to moderate as the Fed fights inflation.
Year over Year price increases are slowing, +6.3%, Units Sales fell -26%, Active Listings fell -16%.  Months of Inventory rose +21% as Unit Sales fell more the Active Listings.  

Month Over Month, November 2022 vs October 2022

  • Median Sold Prices:
    Single Families +4.4%;  Condos -1.1%;  Multi-Families  -1.5%
  • Unit Sales:
    Single Families -4.2%, Condos +29.3%, Multi-Families +1.9%
  • Active Listings:
    Single Families -14.2%, Condos -6.3%, Multi-Families -10.6% 
  • Current Months of Inventory:
    Single Families 1.6, Condos 1.4, Multi-Families 2.4

Year Over Year, November 2022 vs November 2021

  • Median Sold Prices: 
    Single Families +6.6%; Condos +6.0%;  Multi-Families +2.2% 
  • Unit Sales:
    Single Families -23.1% , Condos -34.0%, Multi-Families -44.8%.
  • Active Listings:
    Single Families -4.3%; Condos -23.9%; Multi-Families -16.0% 
  • Change in Months of Inventory:
    Single Families +23.1%, Condos  16.7%, Multi-Families +50.0%.

    Terry Sullivan

Hedge Against Inflation With These 3 Real Estate Investment Types

 

Hedge Against Inflation With These 3 Real Estate Investment Types

 The annual inflation rate in the United States is currently around 7.5%—the highest it has been since 1982.1 It doesn’t matter if you’re a cashier, lawyer, plumber, or retiree; if you spend U.S. dollars, inflation impacts you. 

Economists expect the effects of inflation, like a higher cost of goods, to continue.2 Luckily, an investment in real estate can ease some of the financial strain. 

Here’s what you need to know about inflation, how it impacts you, and how an investment in real estate can help.

WHAT IS INFLATION AND HOW DOES IT IMPACT ME?

Inflation is a decline in the value of money. When the rate of inflation rises, prices for goods and services go up. Therefore, a dollar buys you a little bit less with every passing day.

The consumer price index, or CPI, is a standard measure of inflation. Based on the latest CPI data, prices increased 7.5% from January 2021 to January 2022.1 A little bit of inflation is considered healthy for the economy, but 7.5% in a single year is high. 

How does inflation affect your life? Here are a few of the negative impacts

  • Decreased Purchasing Power

We touched on this already, but as prices rise, your dollar won’t stretch as far as it used to. That means you’ll be able to purchase fewer goods and services with a limited budget.

  • Increased Borrowing Costs

In an effort to curb inflation, the Federal Reserve is expected to raise the federal funds rate. Therefore, consumers are likely to pay a higher interest rate on new mortgages, car loans, and variable-rate credit cards.3

  • Lower Standard of Living 

Wage growth tends to lag behind price increases. According to Moody Analytics, when adjusted for inflation, average weekly earnings in January were down 3.1% from a year earlier.4 As such, life is becoming less affordable for everyone. Inflation can force those on a fixed income, like retirees, to make lifestyle changes and prioritize essentials.

  • Eroded Savings 

If you store all your savings in a bank account, inflation is even more damaging. As of February 2022, the national average interest rate for a savings account is 0.06%, not nearly enough to keep up with inflation. And economists don’t expect that rate to go much higher.3

One of the best ways to mitigate these effects is to find a place to invest your money other than the bank. Even though interest rates are expected to rise, they’re unlikely to get high enough to beat inflation. If you hoard cash, the value of your money will decrease every year and more rapidly in years with elevated inflation.

REAL ESTATE: A PROVEN HEDGE AGAINST INFLATION

So where is a good place to invest your money to protect (hedge) against the impacts of inflation? There are several investment vehicles that financial advisors traditionally recommend, including:

  • Stocks
    Some people invest in stocks as their primary inflation hedge. However, the stock market can become volatile during inflationary times, as we’ve seen in recent months.5
  • Commodities
    Commodities are tangible assets, like oil, livestock, and minerals. The theory is that the price of commodities should climb alongside inflation. But the classic choice–gold–hasn’t risen consistently during periods of inflation since the 1970s, according to data from Morningstar Direct.6
  • Inflation-Indexed Bonds
    Treasury inflation-protected securities, or TIPS, are U.S. government-issued bonds that are indexed to the inflation rate. Bonds are considered low risk, but the returns they offer are generally low, as well.7
  • Real Estate
    Real estate prices across the board tend to rise along with inflation and often rise faster than inflation.That’s one of the reasons demand for real estate is soaring right now.9

 We believe real estate is the best hedge against inflation. Owning real estate does more than protect your wealth—it can actually make you money. For example, home prices rose nearly 17% from 2020 to 2021, 10% ahead of the 7% inflation that occurred in the same timeframe.10

 Plus, certain types of real estate investments can help you generate a stream of passive income. In the past year, property owners didn’t just avoid the erosion of purchasing power caused by inflation; they got ahead. 

TYPES OF REAL ESTATE INVESTMENTS

Though there are myriad ways to invest in real estate, there are three basic investment types that we recommend for beginner and intermediate investors. Remember that we can help you determine which options are best for your financial goals and budget. 

  • Primary Residence

If you own your home, you’re already ahead. The advantages of homeownership become even more apparent in inflationary times. As inflation raises prices throughout the economy, the value of your home is likely to go up concurrently. At the same time, you’ve locked in a set mortgage payment for the next 30 years, so you’ll be immune to rising rental costs.

If you don’t already own your primary residence, homeownership is a worthwhile goal to pursue.

Though the task of saving enough for a down payment may seem daunting, there are several strategies that can make homeownership easier to achieve. If you’re not sure how to get started with the home buying process, contact us. Our team can help you find the strategy and property that fits your needs and budget.

Whether you already own a primary residence or are still renting, now is a good time to also start thinking about an investment property. The types of investment properties you’ll buy as a solo investor generally fall into two categories: long-term rentals and short-term rentals. 

  • Long-Term (Traditional) Rentals 

A long-term or traditional rental is a dwelling that’s leased out for an extended period. An example of this is a single-family home where a tenant signs a one-year lease and brings all their own furniture.

Long-term rentals are a form of housing. For most tenants, the rental serves as their primary residence, which means it’s a necessary expense. This unique quality of long-term rentals can help to provide stable returns in uncertain times, especially when we have high inflation. 

To invest in a long-term rental, you’ll need to budget for maintenance, repairs, property taxes, and insurance. You’ll also need to have a plan for managing the property. But a well-chosen investment property should pay for itself through rental income, and you’ll benefit from appreciation as the property rises in value.

We can help you find an ideal long-term rental property to suit your budget and investment goals. Reach out to talk about your needs and our local market opportunities.

  • Short-Term (Vacation) Rentals

Short-term or vacation rentals function more like hotels in that they offer temporary accommodations. A short-term rental is defined as a residential dwelling that is rented for 30 days or less. The furniture and other amenities are provided by the property owner, and today many short-term rentals are listed on websites like Airbnb and Vrbo.

A short-term rental can potentially earn you a higher return than a long-term rental, but this comes at the cost of daily, hands-on management. With a short-term rental, you’re not just entering the real estate business; you’re entering the hospitality business, too. 

Done right, short-term rentals can be both a hedge against inflation and a profitable source of income. As a bonus, when the home isn’t being rented you have an affordable vacation spot for yourself and your family!

Contact us today if you’re interested in exploring options in either the long-term or short-term rental market. Mortgage rates are expected to rise, so you’ll want to act fast to maximize your investment return.

WE’RE INVESTED IN HELPING YOU

Inflation is a fact of life in the U.S. economy. Luckily, you can prepare for inflation with a carefully managed investment portfolio that includes real estate. Owning a primary residence or investing in a short-term or long-term rental will help you both mitigate the effects of inflation and grow your net worth, which makes it a strategic move in our current financial environment.

If you’re ready to invest in real estate to build wealth and protect yourself from rising inflation, contact us. Our team can help you find a primary residence or investment property that meets your financial goals. 

The above references an opinion and is for informational purposes only.  It is not intended to be financial advice. Consult the appropriate professionals for advice regarding your individual needs.

Sources: 

  1. Bloomberg -
    https://www.bloomberg.com/news/articles/2022-02-10/u-s-inflation-charges-higher-with-larger-than-forecast-gain
  2. CNN -
    https://www.cnn.com/2022/01/01/economy/inflation-prices-2022-preview/index.html
  3. CNBC -
    https://www.cnbc.com/2022/01/26/the-fed-sets-the-stage-for-a-rate-hike-heres-what-that-means-for-you.html
  4. Reuters -
    https://www.reuters.com/business/us-consumer-prices-rise-strongly-january-weekly-jobless-claims-fall-2022-02-10/
  5. NBC News -
    https://www.nbcnews.com/business/markets/market-slide-dow-falls-700-points-sp-enters-correction-territory-rcna13304
  6. CNBC -
    https://www.cnbc.com/2021/12/20/gold-is-losing-its-status-as-an-inflation-hedge-two-traders-warn.html
  7. Morningstar -
    https://www.morningstar.com/articles/1079158/why-are-inflation-protected-bond-funds-losing-money
  8. The Washington Post -
    https://www.washingtonpost.com/business/2022/01/04/heres-how-inflation-could-affect-your-next-real-estate-move/
  9. Bloomberg - 
    https://www.bloomberg.com/news/articles/2022-01-24/is-real-estate-a-good-investment-hedge-against-inflation-what-the-experts-say
  10. CNN -
    https://www.cnn.com/2022/01/20/homes/us-nar-home-sales-december-and-2021/index.html

Essex County Q1, 2021 Housing Report

 Essex County Q1, 2021 Housing Report 4/10/2021 - Covid 19

 Quarter 1, 2021 vs Q4, 2020: Sold Prices were soft and Sold Units and Active Listings plunged. 

Year Over Year, Inventory fell to record low levels but prices up strongly.

Quarter 1, 2021 vs Quarter 4, 2020 

  • Median Sales Prices rose only for Multies:
    Single Families -1.8%;  Condos +0.0%;  Multi-Families +3.7%
  • Unit Sales Plunged for Singles, Condos and Multis:
    Single Families -62.3%, Condos -54.1%, Multi-Families -44.2%.
  • Active Listings Plunged to record lows:
    Single Families -46.9%, Condos -38.4%, Multi-Families  -29.9% 

 Year Over Year, Q1 2021 vs Q4 2020

  • Median Sales Prices Up Double Digit: 
    Single Families +10.4%; Condos +10.6%;  Multi-Families +12.5% 
  • Unit Sales Mixed:
    Single Families -4.0% , Condos +8.8%, Multi-Families +12.4%.
  • Number of Active Listings Plunged to Record Lows:
    Single Families -51.6%; Condos -39.4%; Multi-Families -28.0% 

 

Could Rising Home Prices Impact Your Net Worth?

 

Could Rising Home Prices Impact Your Net Worth?

Learn how to determine your current net worth and how an investment in real estate can help improve your bottom line.

Among its many impacts, COVID-19 has had a pronounced effect on the housing market. Low home inventory and high buyer demand have driven home prices to an all-time high.1 This has given an unexpected financial boost to many homeowners during a challenging time. However, for some renters, rising home prices are making dreams of homeownership feel further out of reach.

If you’re a homeowner, it’s important for you to understand how your home’s value contributes to your overall net worth. If you’re a renter, now is the time for you to figure out how homeownership fits into your short-term goals and your long-term financial future. An investment in real estate can help you grow your net worth, build wealth over time, and gain a foothold in the housing market to keep pace with rising prices.

What is net worth?

Net worth is the net balance of your total assets minus your total liabilities. Or, basically, it is what you own minus what you owe.2

Assets include the cash you have on hand in your checking and savings accounts, investment account balances, salable items like jewelry or a car and, of course, your home and any other real estate you own. 

Liabilities include your total debt obligations like car loans, credit card debt, the amount you owe on your mortgage, and student loans. In addition, liabilities would include any other payment obligations you have, like outstanding bills and taxes.

How do I calculate my net worth?

To calculate your net worth, you’ll want to add up all of your assets and all of your liabilities. Then subtract your total liabilities from your total assets. The balance represents your current net worth. 

 

Total Assets – Total Liabilities = Net Worth

 

Ready to calculate your net worth? Contact us to request an easy-to-use worksheet and a free assessment of your home’s current market value!

Keep in mind that your net worth is a snapshot of your financial position at a single point in time. Your assets and liabilities will fluctuate over both the short term and long term. For example, if you take out a loan to buy a car, you decrease your liability with each payment. Of course, the value of your asset (the car) will depreciate over time, as well. An asset that is invested in stocks or bonds can be even less predictable, as it’s subject to daily fluctuations in the market.

As a homeowner, you enjoy significant stability through your monthly real estate investment, also known as your home mortgage payment. While the actual value of your home can fluctuate depending on market conditions, your mortgage payment will decrease your liability each month. And unlike a vehicle purchase, the value of your home is likely to appreciate over time, which can help to grow your net worth. Right now, your asset may be worth significantly more than it was this time last year.3

If you’re a homeowner, contact us for an estimate of your home’s market value so that you can factor it into your net worth calculation. If you’re not a current homeowner, let’s talk about how homes in our area have appreciated over the last several years. That way, you can get an idea of how a home purchase could positively affect your net worth.

How can real estate increase my net worth?

When you put your real estate dollars to work, it’s possible to grow your net worth, generate cash flow, and even fund your retirement. We can help you realize the possibilities and maximize the return on your investment.

Property Appreciation

Generally, property appreciates in one of two ways: either through changes to the overall market or through value-added modifications to the property itself.

  1. Rising prices

This type of property appreciation is the one that many homeowners are enjoying right now. Buyer demand is at an all-time high due to a combination of record-low interest rates and limited housing inventory.At other times, rising home prices have been attributed to different factors. Certain local conditions—like a new commercial development, influx of jobs, or infrastructure project—can encourage rapid growth in a community or region and a corresponding rise in home values. Historically, home prices have been shown to experience an upward trend punctuated by intermittent booms and corrections.5

  1. Strategic home improvements

Well-planned and executed home improvements can also impact a home’s value and increase homeowner equity at the same time. The type of home improvement should be appropriate for the home and in tune with the desires of local buyers.

For example, a tasteful exterior remodel that is in keeping with the preferences of local home buyers is likely to add significant value to a home, while remodeling the home to look like the Taj Mahal or a favorite theme park attraction will not. A modern kitchen remodel tends to add value, while a kitchen remodel that is overly expensive or personalized may not provide an adequate return on investment.

  Investment Property

You may be used to thinking of investments primarily in terms of stocks and bonds. However, the purchase of a real estate investment property offers the opportunity to increase your net worth both upon purchase and year after year through appreciation. In addition, rental payments can have a positive impact on your monthly income and cash flow. If you currently have significant equity in your home, let's talk about how you could put that equity to work by funding the purchase of an investment property.

 1. Long-term or traditional rental

A long-term rental property is one that is leased for an extended period and typically used as a primary residence by the renter. This type of real estate investment offers you the opportunity to generate consistent cash flow while building equity and appreciation.6

As an owner, you don’t usually have to worry about paying the utility bills or furnishing the property—both of which are typically covered by the tenant. Add to this the fact that traditional tenants translate into less time and effort spent on day-to-day property management, and long-term rentals are an attractive option for many investors.

 Short-term or vacation rental 

Short-term rentals are often referred to as vacation rentals because they are primarily geared towards recreational travelers. And as more people start to feel comfortable traveling again, the short-term rental market is poised to become a more popular option than ever. In 2020 alone, in the thick of widespread travel bans, the short-term rental platform Airbnb’s market share of the hospitality industry reached as high as 41 percent.6

Investing in a short-term rental offers many benefits. If you purchase an investment property in a top tourist destination, you can expect steady demand from travelers while taking advantage of any non-rented periods to enjoy the home yourself. You can also adjust your rental price around peak demand to maximize your cash flow while building equity and long-term appreciation. 

To reap these benefits, however, you’ll need to understand the local laws and regulations on short-term rentals. We can help you identify suitable markets with investment potential.

WE’RE HERE TO HELP

Ready to calculate your personal net worth? Contact us for an easy-to-use worksheet and to find out your home’s current value. And if you want to learn more about growing your net worth through real estate, we can schedule a free consultation to answer your questions and explore your options. Whether you’re hoping to maximize the value of your current home or invest in a new property, we’re here to help you achieve your real estate goals.

The above references an opinion and is for informational purposes only.  It is not intended to be financial advice. Consult the appropriate professionals for advice regarding your individual needs.

Sources: 

 

  1. National Association of Realtors -
    https://www.nar.realtor/newsroom/housing-market-reaches-record-high-home-price-and-gains-in-march
  2. Forbes -
    https://www.forbes.com/advisor/investing/what-is-net-worth/
  3. The Washington Post -
    https://www.washingtonpost.com/business/on-small-business/your-net-worth-is-americas-secret-economic-weapon/2020/08/20/70df5b92-e2d4-11ea-82d8-5e55d47e90ca_story.html
  4. Bloomberg -
    https://www.bloomberg.com/news/articles/2021-04-09/home-prices-soar-in-frenzied-u-s-market-drained-of-supply
  5. Federal Reserve Economic Data -
    https://fred.stlouisfed.org/series/MSPUS
  6. Propmodo -
    https://www.propmodo.com/what-the-growing-short-term-rental-market-means-for-multifamily-real-estate/

 

Essex County Housing Report June 2021

One year after Covid-19 decimated our economy & jobs,  May median prices up an astounding 29.6% for Single Families, 20.9% for Condos and 26.5% for Multis from last May.  Year over Year Active listings continue to plunge.

          Month Over Month, May 2021 vs April 2021

  • Median Sales Prices Up Strongly:
    Single Families +5.7%; Condos +10.2%; Multi-Families +1.1%

  • Unit Sales Up for Singles and Condos Down for Multis: 
 Single Families +14.3%, Condos +8.1%, Multi-Families -4.8%.

  • Active Listings Still Falling:
    Single Families -0.2%, Condos -12.4%, Multi-Families -10.0%

    Year Over Year, May 2021 vs May 2020 Up Sharply from Depressed Covid Sales - not sustainable

  • Median Sales Prices Sharply Higher: 

    Single Families +29.6%; Condos +20.9%; Multi-Families +26.5%

  • Unit Sales Hot: 

    Single Families +18.2% , Condos +70.9%, Multi-Families +46.3%.

  • However, Active Listings Continue to Plunge:

    Single Families -49.9%; Condos -41.0%; Multi-Families -22.5%

To view data for every Essex County town, go to:  http://www.sullivanteam.com/Properties/Reports/Public/Charts.php

To Download the full housing report go to:  http://sullivanteam.com/pages/EssexCountyHousingReports

 

Finding the Right Home for Right Now

 

Finding a New Home for Your Next Stage of Life

Imagine the first place you lived as a young adult. Now imagine trying to fit your life today into that space. Not pretty, right? 

For most of us, our housing needs are cyclical.1 A newly independent adult can find freedom and flexibility in even a tiny apartment. That same space, to a growing family, would feel stifling. For empty nesters, a large home with several unused bedrooms can become impractical to heat and clean. It’s no surprise that life transitions often trigger a home purchase. 

While your home-buying journey may not look like your neighbor’s or friend’s, broad trends can help you understand what to keep in mind as you house hunt. No one wants to regret their home purchase, and taking the time now to think about exactly what you need can save a lot of heartache later.

The Newly Married or Partnered Couple

The financial and legal commitment of marriage has provided a springboard to homeownership for centuries, though these days more couples are buying homes without exchanging rings. In the last few decades, changing demographics have shifted the median age of first marriage and buying a first home into the late 20s and early 30s, planting most newly married or partnered buyers firmly in the millennial generation.2,3 But no matter your age, there are some key factors that you should consider as you enter into your first home purchase together.

Affordability is Key

There’s no doubt about it—with high student loan debt and two recessions in the rearview mirror, many millennials feel that the deck is stacked against them when it comes to homeownership. And it’s not just millennials—Americans of all ages are facing both financial challenges and a tough housing market. But stepping onto the property ladder can be more doable than many realize, especially in today’s low mortgage rate environment. 

While many buyers are holding out for their dream home, embracing the concept of a starter home can open a lot of doors.4 In fact, that’s the route that most first-time homebuyers take—the average home purchase for a 20-something is about 1,600 square feet. While the average size increases to around 1,900 square feet for buyers in their 30s, it’s not until buyers reach their 40s that the average size passes 2,000 square feet.5

Chosen carefully, a starter home can be a great investment as well as a launchpad for your life together. If you focus on buying a home you can afford now with strong potential for appreciation, you can build equity alongside your savings, positioning you to trade up to a larger home in the future if your needs change.6

Taking Advantage of Low Mortgage Rates

Mortgage rates are historically low, making now the perfect time to purchase your first home together. A lower interest rate can save you tens of thousands of dollars over the life of your loan, which can significantly increase the quality of home you can get for your money. 

 

But what if both halves of a couple don’t have good credit? You may still have options. First, boosting a credit score can be easier than you think—simply paying your credit cards down below 30% of your limit can go a long way. But if that’s not enough to boost your score, you might consider taking out the mortgage in only the better-scoring partner’s name. The downside is that applying for a mortgage with only one income will reduce your qualification amount. And if you take that route, make sure you understand the legal and financial implications for both parties should the relationship end.

Commute and Lifestyle Considerations

Whether you’ve lived in a rental together for years or are sharing a home for the first time, you know that living together involves some compromises. But there are certain home features that can make life easier in the future if you identify them now. The number of bathrooms, availability of closet space, and even things like kitchen layout can make a big difference in your day-to-day life and relationship. 

Your home’s location will also have a significant impact on your quality of life, so consider it carefully. What will commuting look like for each of you? And if you have different interests or hobbies—say, museums vs. hiking—you’ll need to find a community that meets both your needs. Need some help identifying the ideal location that fits within your budget? We can match you with some great neighborhoods that offer the perfect mix of amenities and affordability.

The Growing Family

Having kids changes things—fast. With a couple of rowdy preteens and maybe some pets in the mix, that 1,600 square foot home that felt palatial to two adults suddenly becomes a lot more cramped. Whether you’ve just had your first child or are getting to the point where your kids can’t comfortably share a bedroom any longer, there’s plenty to consider when you’re ready to size up to a home that will fit your growing family. 

The Importance of School Districts

For many parents, the desire to give their kids the best education—especially once they are in middle and high school— surpasses even their desire for more breathing room. In fact, 53% of buyers with children under 18 say that school districts are a major factor in their home buying decisions.7 Of course, better funded (and often higher ranking) schools correspond to higher home prices. However, when push comes to shove, many buyers with kids prefer to sacrifice a bit of space to find a home in their desired location.

But when you’re moving to a new community, it can be tough to figure out what the local schools are actually like—and online ratings don't tell the whole story. That’s why talking to a local real estate agent can be a gamechanger. We don’t just work in this community; we know it inside and out.

Lifestyle Considerations

For many families, living space is a key priority. Once you have teenagers who want space to hang out with their friends, a finished basement or a rec room can be a huge bonus (and can help you protect some quieter living space for yourself). 

A good layout can also make family life a lot easier. For example, an open plan is invaluable if you want to cook dinner while keeping an eye on your young kids playing in the living room. And if you think that you might expand your family further in the future, be sure that the home you purchase has enough bedrooms and bathrooms to accommodate that comfortably. 

Functionality

Try to think about how each room will fit into your day-to-day. Are you anticipating keeping the house stocked to feed hungry teenagers? A pantry might rise to the top of the list. Dreading the loads of laundry that come with both infants and older kids (especially if they play sports)? The task can be much more bearable in a well-designed laundry room. Imagine a typical day or week of chores in the house to identify which features will have the biggest impact.

Chances are, you won’t find every nice-to-have in one home, which is why identifying the must-haves can be such a boon to the decision-making process. We can help you assess your options and give you a sense of what is realistic within your budget.

The Empty Nesters 

When we talk about empty nesters, we usually think about downsizing. With kids out of the house, extra bedrooms and living space can quickly become more trouble than they’re worth. While the average buyer under 55 trades up to a larger home, buyers over 55 are more likely to purchase a smaller or similarly sized but less expensive home. Even in the highest age groups, the majority of home purchases fall in the single-family category. According to research by the National Association of Realtors, by the time buyers reach their 70s, the median home size drops to 1,750 square feet.5 But there’s plenty for empty nesters to think about besides square footage.

Maintenance and Livability

What factors are driving your decision to move? Identifying those early in the process can help you narrow down your search. For example, do you want to have space for a garden, or would you prefer to avoid dealing with lawn care altogether? What about home maintenance? In many cases, a newer home will require less maintenance than an older one and a smaller one will take less time to clean. You may also want to consider townhomes, condos, or other living situations that don’t require quite as much upkeep. 

Lifestyle Considerations

Many empty nesters have retired or are nearing retirement age. This could be your chance to finally pursue hobbies and passions that were just too hard to squeeze into a 9-5. If you’re ready to move, consider how you’d like to spend your days and seek out a home that will help make that dream a reality. For some, that might mean living near a golf course or a beach. For others, being able to walk downtown for a nice dinner out is the priority. And with more time to spend as you wish, proximity to a supportive community of friends and family is priceless. 

Ability to Age in Place

Let’s face it—we can’t escape aging. If you’re looking for a home to retire in, accessibility should be front-of-mind.8This may mean a single-story home or simply having adequate spaces on the first floor to rearrange as needed. While buying a home that you plan to renovate from the start is a viable option, being forced into renovations (because of the realities of aging) a few years down the road could seriously dig into your nest egg. Location matters, too—if your family will be providing support, are they close by? Can you easily reach necessities like grocery stores and healthcare? While it’s tempting to put it out of our minds, a few careful considerations now can make staying in your home long-term much more feasible.

Finding the Right Home for Right Now

One thing is for sure—life never stands still. And your housing needs won’t, either. In the United States, the median duration of homeownership hovers around 13 years.9 That means many of us will cycle through a few very different homes as we move through different life stages. At each milestone, a careful assessment of your housing options will ensure that you are well-positioned to embrace all the changes to come.

Whatever stage you’re embarking on next, we’re here to help. Our insight into local neighborhoods, prices, and housing stock will help you hone in on exactly where you want to live and what kind of home is right for you. We’ve worked with home buyers in every stage of life, so we know exactly what questions you need to ask. Buying a home—whether it’s your first or your fifth—is a big decision, but we’re here to support you every step of the way.

We support the Fair Housing Act and equal opportunity housing.

 

Sources:

  1. Freddie Mac -
    http://www.freddiemac.com/blog/homeownership/20190104_homebuying_lifecycle.page
  2. PRB -
    https://www.prb.org/usdata/indicator/marriage-age-women/snapshot/
  3. Experian -
    https://www.experian.com/blogs/ask-experian/research/average-age-to-buy-a-house/#:~:text=Buying%20a%20first%20home%20will,by%20real%20estate%20marketplace%20Zillow
  4. Nerdwallet -
    https://www.nerdwallet.com/article/mortgages/starter-home-forever-home
  5. NAR 2020 Home Buyers and Sellers Generational Trends Report -
    https://cdn.nar.realtor/sites/default/files/documents/2020-generational-trends-report-03-05-2020.pdf
  6. Investopedia -
    https://www.investopedia.com/personal-finance/what-look-starter-home/
  7. NAR 2019 Moving With Kids
    https://www.nar.realtor/research-and-statistics/research-reports/moving-with-kids
  8. Kaiser Health News -
    https://khn.org/news/baby-boomers-aging-aging-in-place-retrofit-homes/
  9. National Association of Realtors -
    https://www.nar.realtor/blogs/economists-outlook/how-long-do-homeowners-stay-in-their-homes#:~:text=As%20of%202018%2C%20the%20median,varies%20from%20area%20to%20area

Essex County May Housing Report May 10, 2021

One year after Covid-19 decimated our economy & jobs,
Single Family median prices up an eye-popping 20.8% from last year. 

 

Month Over Month, April 2021 vs March 2021

  • Median Sales Prices Up for Singles and Multis and Down for Condos:
  • Single Families +10.9%;  Condos -4.5%;  Multi-Families +7.2%
  • Unit Sales Up Sharply, Buyer Demand Is Strong:
    Single Families +35.9%, Condos +13.3%, Multi-Families +30.2%.
  • Active Listings Down as we move into Spring:
    Single Families -2.1%, Condos -1.4%, Multi-Families  -9.4% 

Year Over Year, April 2021 vs April 2020

  • Median Sales Prices Up Double Digit for Single Families and Multis: 
    Single Families +20.8%; Condos +8.5%;  Multi-Families +25% 
  • Unit Sales Up Sharply:
    Single Families +23.9% , Condos +31.4%, Multi-Families +78.3%.
  • However, Active Listings Continue to Plunge:
    Single Families -51.7%; Condos -34.5%; Multi-Families -34.6% 

Terry

 

To view data for every Essex County town, go to:  http://www.sullivanteam.com/Properties/Reports/Public/Charts.php

To Download the full housing report go to:  http://sullivanteam.com/pages/EssexCountyHousingReports

 

 

Essex County April Housing Report April 10, 2021

Essex County April Housing Report 4/10/2021 - Covid 19

Inventory still remains at record low levels, prices up strongly year over year and sold units remain sluggish from lack of inventory. 

Month Over Month, March 2021 vs February 2021

  • Median Sales Prices Up for Condo and Down for Singles and Multis:
     Single Families -1.1%;  Condos +2.7%;  Multi-Families -1.4%
  • Unit Sales Up Sharply for Singles, Condos and Multis:
    Single Families +8.0%, Condos +22.6%, Multi-Families +19.2%.
  • Active Listings Up for Singles but fell for Condos and Multis:
    Single Families +9.1%, Condos -4.6%, Multi-Families  -4.9% 

 Year Over Year, March 2021 vs March 2020

  • Median Sales Prices Up Double Digit: 
    Single Families +11.2%; Condos +10.1%;  Multi-Families +8.6% 
  • Unit Sales Off:
    Single Families -15.3% , Condos +1.6%, Multi-Families -4.6%.
  • Number of Active Listings Plunged to Near Record Lows:
    Single Families -56.8%; Condos -44.7%; Multi-Families -44.3% 

To view data for every Essex County town, go to:  http://www.sullivanteam.com/Properties/Reports/Public/Charts.php

To Download the full housing report go to:  http://sullivanteam.com/pages/EssexCountyHousingReports