A PUBLICATION OF THE CAPITAL CITY WEEKLY
SOUTHEAST ALASKA
JULY 2018
on the cover /
4262 brothers home offered by exit realty of juneau see page 12
THANK YOU FOR MAKING US YOUR FIRST CHOICE Whether you’re a first-time homebuyer, a seasoned owner looking to refinance, or just want to make the most of your VA benefits, Southeast Alaska agrees—Alaska USA Mortgage Company is the first choice for home lending! We have the home loan options you’re looking for! » 0% down VA » 0% down USDA Rural Development » HUD 184 American Indian and Alaska Native » FHA, low down and first-time homebuyer » Alaska Housing Finance Corporation, more options for Alaskans
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Make an appointment or apply online at alaskausamortgage.com Southeast Alaska 8390 Airport Blvd., Ste. 102, Juneau, AK 99801 License #AK157293 Washington Consumer Loan Company License #CL-157293 Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act, License #4131067
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On The Cover: 4262 Brothers Home. Offered by Exit Realty of Juneau 2 AlaskaUSA Mortgage 3 Coldwell Banker: Gwen Place 4 Ricker Real Estate Consulting AlaskaUSA Mortgage: Minerva Carandang 10 First Bank Mortgage
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Boomers Buying Whether you’re downsizing or moving to a new locale, the home for your later years takes a different approach. Here’s what boomers should heed when buying for retirement By Patricia Rivera CTW Features
Call it downsizing, call it rightsizing – regardless, buying a new home in the retirement, when many older adults take to traveling and other leisure activities, requires some additional research. Retirees must first educate themselves about their options and their new reality. “One of the biggest misconceptions is the assumption that a newer, smaller home will be cheaper than their current, larger one. That’s, unfortunately, not always the case,” says Dave Fry, a real estate professional with The Fry Group, Minneapolis. Smaller floor plans can often sell for the same price or even more than larger, multilevel homes, depending on location, amenities or association fees, among other factors. Fry says retirees should be prepared for the unexpected and suggests they find a good loan officer who will sit down with them and review different financing options before they start looking for potential homes. Retirees also should keep in mind that once they find the right home for their needs, they will need to act quickly. That might include purchasing a new place before they sell their current home. “If they’re fortunate enough to have enough equity in their current home, there are options for a bridge loan or they may even qualify for two homes,” Fry says. Making two mortgage payments for a few months may be worth the long-term benefits, even if it may mean spending more per month in the short term.
Study All Options
Before making a decision, consider a variety of options, including age-restricted communities. Independent living communities for seniors have active calendars full of activities for physical, emotional and mental well-being, says Daniel Sagal, founder of Total Senior, a senior housing referral agency in the Los Angeles
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area. In addition to the lifestyle, individuals who reside in senior communities are able to age in place and eventually receive assistance with their daily tasks of living. “Accepting assistance with daily tasks from caregivers you’ve been surrounded by for years makes for a simpler transition,” he says. Lori Corken, broker/owner of Corken + Company in Englewood, Colorado, says when retirees look outside of age-restricted communities, it’s important to consider location, amenities and floor plans. The trend is for fewer stairs or none at all. An ideal option is a main floor master or a ranch style home within a walkable community or one that offers exercise trails. “You also want to look for low or no-maintenance options to allow for a ‘lock and go’ lifestyle,” she adds. Fry says retires who are downsizing should also think about staying put and budgeting for maintenance services, such as lawn care and snow removal. “You may be surprised when you run the numbers that keeping your current home with that added expense may the net the same result as moving,” he adds.
or the death of a spouse. He, too, recommends a more conservative approach to real estate investment. “You just don’t need to be in debt at this stage of your life,” he says.
The Down Payment
Retirees who are downsizing should consider putting at least 20 percent down, if they have that amount of equity in their current home. From there, they should assess their monthly expenses against their income. If they are in a position where a tax write-off is needed, then borrowing up to 80 percent may make some sense. “If retirees are on a fixed income with a tight monthly budget, it would probably make sense to make as big of a down payment as they can so their monthly payment is minimal without putting themselves in a position where any unexpected expense could be trouble,” he says. © CTW Features
Opt For Fixed Rates
Given that interest rates currently are low, the “ideal” mortgage is a very subjective and depends greatly on a retiree’s individual financial position, Fry says. “But I would recommend that retirees consider a fixed-rate loan instead of an adjustable rate loan, because the rates are so low. Plus, adjustable rate loans increase upward as interest rates rise, which means the mortgage payment will grow as interest rates do. And that can be challenging for retirees on a fixed monthly income,” he says. Damon Nickle, registered investment advisor with Biddle Capital Management in Wilmington, Delaware, says the reality is that older adults could deal with life changes that impact their finances, including unexpected health issues
5
Keep It Lovely
Owners hit curb on home maintenance budget By Jim Parker CTW Features
Home purchases are described as the American dream, maybe the priciest acquisition that people make. Yet once buyers have signed a deal on a house, they tend to shy away from saving a few thousand dollars to replace a worn heat pump, for instance. A similar pattern follows car owners, who are plunking down thousands for a vehicles but put away little if any funds for future costs as new tires. “People can be caught offguard by the true cost of home or car ownership,” says Chip Wade, a do-it-yourself expert and personality on HGTV. “After accounting for utilities, property taxes and insurance, you also need to budget for ongoing maintenance and big-ticket repairs like a busted furnace, a leaky roof or even new tires,” he says. Wade recommends that owners budget 1-2 percent of a home purchase price to cover annual maintenance and repairs, or $2,500-$5,000 on a $250,000 home. An alternative would be to set aside $1 per square foot a year, or $2,000 on a 2,000-square-foot house. “It’s smart to start saving today for tomorrow’s obstacles,” he says. He made the comments in response to a new Liberty Mutual Insurance study showing that 48 percent of Americans save less than $1,000 for home maintenance and one in three owners haven’t budgeted any money. One quarter of car owners have no cash for repairs, says Wade, a Liberty Mutual consultant. Liberty Mutual notes that costs “can clearly add up quickly if not prepared.” The insurance company, citing HomeAdvisor, says the average cost to replace 6
a furnace is $4,000 and a roof repair costs $774 on average while Angie’s List sets the average price of replacing four tires at $637. According to the Bostonbased insurer, 80 percent of householders and nearly three-quarters of auto owners “don’t have a plan or budget in place and tend to procrastinate or deal with home and car maintenance issues as they arise.” A much larger share of home owners, 69 percent, postpone a savings plan for maintenance or saving than auto owners at 31 percent. Age isn’t necessarily a deciding factor in home and auto repair savings. A clear majority of baby boomers, 57 percent, said they would deal with maintenance as needed but don’t have a plan or budget. By comparison, 51 percent of Gen Xer’s and 32 percent of Millennials prefer to cover expenses as they arise instead of planning for them. “Home and auto repairs are inevitable and it’s important for Americans to make a plan, which will save them from future headaches,” says Emily Fink, chief marketing officer
for U.S. Consumer Markets at Liberty Mutual. “We’re committed to offering resources, expert advice and customized insurance coverage to help consumers proactively stay ahead of upkeep for their home and car,” she says. Meanwhile, less than onethird of home and auto owners prepare ahead of time for severe weather such as hurricanes, tornados, snowstorms or thunderstorms. That leaves the property holders “vulnerable to potential home and car issues,” Liberty Mutual says. Wade and the insurance firm offer tips, such as: Smart budgeting: Plan to set money aside each month for home and car upkeep. Critical planning: Decide which maintenance work is do-ityourself and which can be done by a professional. According to the study, 61 percent of homeowners don’t contact their insurer after a major home improvement. Numbers matter: Determine the values of holdings to make sure there’s enough protection. Half of the survey participants didn’t know what their
belongings were worth, and 47 percent of tenants lacked renters’ coverage. Liberty Mutual, in business since 1912, describes itself as the sixth largest home and auto insurer in the U.S. For more, visit www. libertymutual.com/masterthis. Meanwhile, online financial site GOBankingRates explains that home-buying itself takes a toll on the bank account, so setting aside funds for maintenance can be a chore. The average American home costs more than $360,000, according to the U.S. Census Bureau. “The cost of owning a home doesn’t end with your mortgage loan, however; you must add maintenance into your budget, which might cost you an additional $1,204 a month, or $14,448 annually,” the company says. GOBankingRates cites seven expenses tied to maintenance — including fixed costs — and the monthly rate. Repairs and general maintenance works out to $168 a month, about 13 percent of total home-related ongoing costs. They include home insurance, $79 a month based on online data source ValuePenguin. “Homeowners insurance has gone up nearly 50 percent in the past decade and there’s no end in sight,” GOBankingRates says. Private mortgage insurance, a likely bill if you don’t shell out at least a 20 percent down payment, is $158; snow removal and lawn care, $130; property taxes, $218; utility bills, $201; and homeowners association fees, $250 a month. There are ways to reduce house maintenance costs, GOBankingRates notes. “If you’re handy, you can handle some of the repairs yourself. If you aren’t into DIY projects, the cost of hiring a professional might be worth it to boost your home’s resale value and give you peace of mind that the repair is done correctly the first time.” © CTW Features
Good Timing How to find a mortgage and schedule your purchase and sale for a harmonious transition By Erik Martin CTW Features
Nobody wants to get saddled with paying two mortgages. That’s why people prefer to sell their current home before completing the purchase on a move-up property, the experts say. But real estate transactions – like life – don’t always proceed smoothly and according to preferred timetables. Decided to sell your current home to upgrade to a new one? Shopping around for the right residence is only one part of the process. You’ll also need to shop around for the right mortgage deal to finance that bigger, better house you’ve been dreaming about. To be ready, gather at least three years of tax returns plus several months of bank statements and pay stubs. Also, check your credit report and make sure your FICO credit score is better than it was the last time you applied for a loan, Portland, Ore.-based broker Rob Levy says. While you can always try financing your new mortgage with your current mortgage lender, it pays to compare loan offers from several different lenders and to compare total loan costs – including rates, points, fees and closing cost – carefully. “Using the same mortgage representative or broker makes sense if you had a positive experience,” says Marietta, Ga.-based broker/attorney Bruce Ailion, Re/Max Town and www.capitalcityweekly.com
Country – The Ailion Team. “When comparing the rates you are quoted, they should not vary more than an eighth of a percent.” For a referral to a reputable mortgage broker or lender, ask your real estate agent, family, friends and other people you trust. Lastly, “make sure you are pre-approved for a mortgage before you list [your current home for sale], which is different than getting pre-qualified,” says Ken Maes, northwest divisional vice president for Skyline Home Loans in Clackamas, Ore. Keep in mind that many lenders require homeowners to sell their residence or make an offer contingent on its sale before purchasing another home, which makes matters fairly cut and dry for most sellers. On the other hand, those who have the earning power and resources to qualify for two mortgages are afforded a lot more flexibility. Consider that, in markets favorable to sellers, many sellers would select an offer from a party without any contingencies, rather than accept an offer in which they’ll have to wait for the buyer’s former residence to sell. However, move-up buyers have some leverage for their own home sale. They can make the sale of their house contingent on finding a home to purchase, and they can include a rent-back agreement in the contract that enables them to reside in their old house while they get ready to move. Renting briefly from a buyer not only
grants extra time to find a new residence, it means the seller will not have to move twice (although lenders limit the rent-back term to no longer than 60 days). How do you carefully time such a complicated dual transaction within a limited window of opportunity? Enlist the help of an experienced team of real estate professionals, including a savvy agent, trusted mortgage broker/lender, and a responsive property attorney, Maes says. “Make sure you are pre-approved for your next mortgage before you list your home, look at move-up homes well ahead of time and not after you get an offer on your current home, and have everything ready to move,” Maes says. “Also, structure your closing date for as long away as possible to give yourself extra time.” The best circumstance is to have simultaneous closings on your sale and purchase properties, which a good real estate agent should be able to facilitate, Ailion says. “You may also want to be prepared to lease your former home to avoid paying two mortgages.” Dan Gjeldum, senior vice president of mortgage lending at Guaranteed Rate in Chicago, says a simultaneous closing involves structuring the contracts to occur on the same day, “which is typically set up as a morning sale and an afternoon purchase.” © CTW Features
7
Ask Our Broker With Peter G. Miller By Peter G. Miller
Delay Dilemma
PETER@CTW Features.COM
QUESTION: We now expect our closing to be delayed. Do the sellers have the right to cancel the transaction if we miss the closing date? Can they keep our deposit? ANSWER: As a buyer you may have a loan lock-in that ends by a given date, which can be lost with a late settlement. Buyers and sellers may have hired moving vans. The closing agent has calculated various costs to the day. If closing is delayed, there can be a lot of irritation and cost. Licensed brokers handle most real estate sales in the U.S. Most brokers – but not all – belong to a local professional association. The local associations have attorneys that create a variety of standardized form agreements for members designed specifically for a given jurisdiction. Those are the sale agreements member brokers use for transactions. What this means is the language in sale agreement forms can vary by jurisdiction, including the language related to settlement. So, the first thing you have to determine is whether you are “late” according to the terms of the agreement. Some agreements say closing will be held on a certain date. Others are more flexible and talk about settlement on or before a given date. Some make allowances so closing automatically will be delayed if settlement falls on a weekend or federal holiday. Agreements also may provide that if closing does not occur by a certain date, the seller will be able to keep the buyer’s deposit and possibly take other actions. In practice, a more likely approach is that settlement dates can be modified if both parties agree, which brings up the issue of mutual interests. Some transactions are like war where buyers and sellers battle for every penny and see everything done or said by the other side as an affront or insult. Such combat sales don’t leave a lot of room for compromise. The goal of buyers and sellers in most cases is to complete the transaction. The National Association of Realtors reports that 29 percent of all sales are postponed, which means that settled buyers and sellers need to work cooperatively and understand that a home sale is a big transaction with a lot of complications. Sometimes, even though both parties work in good faith, there are delays. If you feel closing might be delayed, immediately get advice from your broker or attorney. The odds are that with a little compromise – and by keeping the sellers informed – everything will work out just fine. Peter G. Miller is author of “The Common-Sense Mortgage,” (Kindle 2016). Have a question? Please write to peter@ctwfeatures.com. © CTW Features 8
Millennials
• Changing the Idea of Home
As the Millennial generation moves into the housing market, they’re jettisoning the traditional concept of a “forever home” – a home designed to last through multiple decades of life. Instead, a recent survey found that Millennials desire flexibility and choice when it comes to where they live. As a result, a significant portion stated that they plan to spend less than 10 years in a home, while the vast majority are considering purchasing new construction because of the greater flexibility in floor plans.
Prospective Millennial Homebuyers
80% equal or more interested in newly built home vs. resold home
58% think that the term “forever home” is outdated
54% will use a so-called “starter home” as a first purchase
33% plan to purchase another home within the next 10 years
Source: Taylor Morrison Home Corporation's 2017 Consumer Survey © Content That Works
Equity Unease Why homeowners are thinking before tapping equity
By Marilyn Kennedy Melia CTW Features
Thanks to appreciating home prices, many homeowners are worth more now than they were a few years ago. And, ten million of them will spend some of their housing wealth through a home equity line of credit (HELOC) by 2023, predicts a J.D. Power report. But many owners, remembering the foreclosure crisis, will have to convince themselves that it makes sense to take on more home-related debt, says Craig Martin of J.D. Power. Their worries, which center on taking on debt that will over-burden www.capitalcityweekly.com
them, as well as the uncertain cost of a HELOC, are sensible and merit careful consideration, says Terri Munro, a certified financial planner. With a HELOC, owners are able to draw funds over a five or ten period, up to a limit, based upon their equity, which is figured by subtracting any outstanding mortgage from the appraised value. During the draw period, borrowers are usually only required to pay interest charges, says Keith Gumbinger of HSH.com, a mortgage data site. During the next five or ten years, both principal and interest payments kick in for payoff. Typically pegged on the prime rate, plus a couple of percentage points, the rate charge fluctuates with every movement of prime, says Gumbinger. Munro recommends running scenarios on what payments could be when prime jumps a couple of percentage
points, since “we are in a rising rate environment.” And, “be mindful of the amount of equity left in your home, especially if you will be relying upon that equity for a down payment on your next house,” Munro warns. Usually, lenders will require that at least ten percent of equity is retained, says Gumbinger. (A $300,000 home with a $200,000 mortgage would have $100,000 in equity, and borrowers could tap $70,000, retaining $30,000.) One variation of the HELOC, whereby borrowers can convert some of what they’ve borrowed into a loan with a fixed rate, is a good option for owners who worry about how long and at what cost they’ll carry equity debt, Gumbinger says. © CTW Features
9
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Renter Relief Rent increases are slowing down finally. Here’s why and what to expect. By Erik J. Martin CTW Features
For years, we’ve been bombarded by real estate headlines announcing the high cost of leasing and lack of affordable rental properties. Now, thankfully, renters can enjoy some good news for a change: the pace of rental increases appears to be slowing. Per a new report from Zillow, rents grew only 0.7 percent over the past year, representing the slowest rate of appreciation observed since late 2012; today, the median rent payment nationwide is $1,408. The study credits new construction with helping to soften the rental market and meet rental demand. In addition, 59 percent of respondents to a recent Freddie Mac renters poll expect to rent their next home – up from 55 percent tallied last September; 52 percent say renting is currently a good choice for them versus 46 percent in January 2016; and 41 percent reveal they have enough funds to last beyond every payday, compared to 34 percent last September. Meanwhile, only 15 percent say they’re working toward homeownership and 41 percent expect to own, down from 21 percent and 45 percent, respectively, in September. Jay Denton, senior vice president of analytics at Dallas-based Axiometrics, a firm that tracks apartment market data, says he isn’t surprised by any of these findings. “Renting by choice, whether it be an www.capitalcityweekly.com
apartment or single-family home, can be a very attractive and flexible option, especially in a world where people are used to instantly getting what they want,” he says. A major factor contributing to increased renter optimism and the rent increase deceleration is healthy rental inventory, says Shane Lee, statistical data analyst for RentHop in New York City. “While the supply of homes for sale tumbles toward an all-time low, a lot of the new developments and homes being built are being dedicated to rentals, as many landlords and investors see better long-term profits through rentals,” Lee says. “They’ve been offering incentives like months of free rent to keep tenants.” Ernie Rafailides, managing member with Bayview Management LLC, a rental property management company in Towson, Md., agrees, noting that many landlords and developers have had to lower their prices or create incentives to keep their rental units occupied. “Over the last five to 10 years, developers have been primarily building luxury apartments, and now there’s an oversupply. Up to now, working class families and couples and middle-income Americans having been largely ignored. But serving this market would yield the most growth.” Absorbing all the new rental inventory now available will likely take two years or longer, predicts Stan Broekhoven, agent with Keller Williams Tribeca in New York City. “Because of high rents, people have been
leaving Manhattan and are moving to the outer boroughs. But now, a lot of new rental inventory in Manhattan is coming to the market, giving renters more options and driving down prices,” Broekhoven says. Lee predicts that rent increases will likely continue to slow and moderate over the next couple years. “Many condos and buildings will be launching in the next two years, increasing the influx of supply,” Lee says. “Plus, the domestic economy has started slowing down – if we enter a recession, it’s likely that this slower rate of rent increases will continue.” Many believe renting remains the best option currently for millennial buyers and younger for the foreseeable future, but every individual circumstance will differ. “If you want to settle into one place for a while, build some equity and enjoy more space, owning a house could be a good option,” Denton says. “If you lack the down payment required and prefer flexibility, enjoy convenient neighborhood amenities, and like having other people take care of maintenance, then renting an apartment may be the right choice.” To help you make a more informed decision about whether to rent or buy, “work with a professional real estate agent who knows the market, the inventory and who will negotiate the best deal for you,” Broekhoven says. © CTW Features
11
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Shop Around Better shopping yields lower mortgage rates By Marilyn Kennedy Melia CTW Features With a monthly mortgage bill in the hundreds of dollars, totaling thousands yearly, how much is it worth to you to save about $300 a year? That’s the average of what borrowers might have saved by mortgage shopping, instead of taking a loan from the first [and last] lender one sees, according to an analysis of 130,241 conventional mortgages by economists Sergei Koulayev and Alexei Alexandrov. Moreover, some consumers could have saved much more than $300 by hunting for the best fees and rate, according to the study, which is a Consumer Finance Protection Bureau Office of Research Working Paper. Combined with emotion-laden home shopping, comparison mortgage shopping is a hassle, with consumers opting to “take the path of least resis12
tance,” agrees Christopher Palmer, an MIT finance professor, who has also studied loan shopping. Before they can get an accurate rate quote, a borrower has to supply lots of information – including savings and income history, debt obligations and down payment amount. Some online sites aim to provide multiple quotes with one preliminary application. Sam Michner of LendingTree, for example, says that if consumers complete forms including everything but the exact home they’ll buy, “the rates quoted are actual rates.” But that’s assuming all the input remains correct when a borrower submits a formal application, which typically costs a few hundred dollars and incudes a home appraisal. Of course, if market rates rise in the interim, that impacts costs. After securing preliminary quotes,
suggests Palmer, check sites like bankrate.com and Zillow.com, which lists average regional costs. Also, consumers may benefit from visiting local banks, says Ron Haynie of the Independent Community Bankers of America. Some banks are trying to attract local mortgage business, and are very rate competitive, he says. Discounts on stated costs are also often available, “if you have another deposit relationship or you get your mortgage payment automatically deducted,” Haynie adds. © CTW Features
Overcoming Stressed-Out
Shopper Syndrome How to leave behind your home buying worries. By Erik J. Martin CTW Features
From sweating the down payment to fretting about interest rates creeping up to worrying about overpaying, homebuyers face a lot of fears today – particularly in a market where sellers seem to have all the leverage. But with the right help, an organized approach and a positive mindset, they can feel more in control and better manage the process, say the experts. Make no mistake: buyers feel pretty stressed nowadays. A new Owners.com study indicates that 72 percent of prospective buyers polled anticipate stress in the home purchasing process. Their top concerns? Worry over losing an earnest money deposit (chosen by 64 percent); becoming “house poor” (61 percent); and the price going up due to bidding wars (59 percent). “With high home prices, low inventory and increased competition in many markets, it’s not surprising that the financial aspects of buying a home are worrying for many people,” says Michael Lissack, a Greater Boston-based real estate agent and Owners.com spokesperson. Gloria K. Frazier, president/broker with ERA American Real Estate in Shalimar, Fla., agrees. “The main reason the process is so stressful is because buyers are having to make decisions quicker than they are comfortable with, plus www.capitalcityweekly.com
most second-guess how good the idea is of bidding over asking price,” Frazier says. “Fear of loss is more powerful than opportunity for gain, so buyers become too competitive in bidding wars, make poor decisions and then regret it when they’ve won the war.” And for those buyers that find it hard to make quick decisions, “they can lose out on several homes or get totally discouraged and bow out of the market completely,” Frazier says. Other factors that can ratchet up the pressure include appraisals coming in below the sale price and sellers demanding that you commit to the purchase price even if the appraisal doesn’t support that demand, says Rich Cebulak, a Chicago-based broker with Baird & Warner. “Also, there’s social pressure – the thought that ‘my friends, neighbors or coworkers paid over asking price, so why shouldn’t I?’” Cebulak says. His remedy for these and other tensions is simple: choose experts you can trust. “Always work with experienced professionals, including a Realtor, loan officer, real estate attorney and property inspector,” Cebulak says. “Meet with your agent and determine a maximum bid before you even venture into the market, and ask for data to support your decisions so that you don’t make them emotionally. Have a plan B whenever possible, too, so you can be ready to adjust and stay on budget.” Another important way to curb worry is to get
your financials in order well in advance. That means checking your credit score, saving up for the necessary down payment, learning what you can afford and getting pre-qualified with a chosen lender. “Preparation is the key to finding your dream home,” Frazier says. “Make a list of your absolute needs and another list of your wants that you could live without. Communicate that to your agent, and ask him or her to show you homes that only fit these criteria – you’ll know soon enough if you’re being unrealistic with either your needs or wants. Remember to stick to your price range, but be flexible with your expectations.” Have a loan pre-approval letter ready when it’s time to make an offer, as well, says Marta DuPree, broker/vice president of Keyes Company Realtors in Coral Springs, Fla. “In addition, be prepared to make an offer when a good deal comes on the market, because a qualified buyer who has the down payment and a strong pre-approval letter ready will have a better chance of getting the contract,” DuPree says. Lastly, keep an open mind and avoid being pessimistic and self-critical. “Try to maintain a positive attitude, which will hopefully help you find your dream home faster,” Lissack says. © CTW Features
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‘X’ Marks the Overlooked Generation When it comes to home buying and selling, Gen X is back in the real estate game. By Erik J. Martin CTW Features
By whatever name you call them – millennials, Generation Y or twentysomethings –consumers typically born between the early 1980s and mid 1990s continue to dominate headlines, especially when it comes to housing trends. But their bigger brothers and sisters have been making some real estate news of their own lately that should interest home buyers and sellers of any generation. Based on a new National Association of Realtors study, Gen Xers (often born between the mid-1960s and early 1980s) have increased their home purchase activity by 28 percent in the year ending June 2016, up from 26 percent a year earlier and the highest rate observed since 2014. The report, which expects increased home buying from Gen X to continue in 2017, credits marked growth in home values, a more robust economy, and several years of solid job gains with spurring 37- to 51-year-olds to purchase more homes lately. Racquel Popovic, agent with Mirdaor Real Estate in New York City, says she found the aforementioned 28 percent uptick statistic “astounding,” but can understand the drivers of this trend. “Consider what life stage many Gen X individuals are in right now. Many are thinking about retirement and moving in or out of big cities, and their children are now the ones requiring larger homes for expanding families,” Popovic 14
says. “Many in this generation trust property over other investments and prefer the stability of the real estate market rather than gamble with stocks or other uncertain assets.” The real estate crash nearly a decade ago affected Gen X the hardest, many believe. “They were in prime buying and selling mode when the market rose, but were left holding the bag when it tanked,” says Gina Tufano, Realtor with Ashburn, Va.-based Pearson Smith Realty. “Thankfully, many have recovered through building equity or savings and are no longer trapped. Now, the time has come for them to be active players in the market again.” Douglas Wagner, director of brokerage services for New York City-headquartered BOND New York Properties, says Gen X often has been overshadowed by millennials in media coverage because the latter is seemingly more homogenous. “Their practically unison movements are quickly identifiable as trends, and, as such, millennials are interesting culturally. By contrast, Gen Xers live more like the Baby Boomers before them,” Wagner says. “But this new home purchasing data provides the media with an entirely new chapter to explore.” Joshua Jarvis, owner of Jarvis Team Realty in Duluth, Ga., agrees that Gen X is a different breed from Gen Y. “Gen Xers have families and are coming into their own in their careers. They were generally taught to work hard to get what you want,” says Jarvis, adding that these qualities may not be as interesting to the media.
Wagner believes Gen X has learned from past mistakes, too. “This generation suffered greatly from falling home values, predatory lending and the foreclosure epidemic. Some weren’t financially ready to undertake huge mortgage debt and learned from the Great Recession to live within their means,” Wagner says. Gen Xers – or prospective buyers of any age group, for that matter – need to be honest with themselves about what they can afford and their future goals and needs, say the experts. “Before purchasing, they should be confident they have enough funds on hand after closing to carry the property into the future, even if they should see an interruption in their incomes,” says Wagner, who recommends keeping a ratio of expenses to income at or below 30 percent. “And before selling, Gen Xers need to get multiple professional opinions on a home’s value and consider where they’re going to move next.” Tufano advises buying based on “what is, not what you hope it will be,” she says. “The market will likely go up and equity will improve, but what if it doesn’t? Will you be able to sell this home down the road? What if you can’t refinance? What if you get laid off?” Ultimately, “think big picture, and you will likely find a home you not only love,” Tufano adds, “but one that will be an asset in your portfolio toward retirement.” © CTW Features
Endless Summer Preserve your home’s beauty for selling later By Marilyn Kennedy Melia CTW Features
Summertime is beloved for a reason. Landscapes are lush, and homes are more attractive. Owners contemplating selling later this year, or the recognized start of the “spring” selling season – a misnomer since that’s the weekend after the Super Bowl – should capture summer’s glory with photos, say experts. Here, some collective wisdom from agents on summer photos to liven up marketing during barren winter months.
1. Ask for professional help.
It’s not too early for serious sellers to select a good listing agent, says Maura Allard, agent with Century 21 North East, Beverly, Mass. “During the interview process, ask if [the agent] could arrange to have professional photos taken of the exterior for later in the
year,” suggests Allard. Taking shots with your smart phone “won’t be as good as using a professional camera,” adds Jackie Padilla of ERA Dawson Bradford Realtors, Bangor, Maine. If you’re not talking to agents, try to find a camera, she suggests. While pictures snapped with a phone likely can’t be used in a brochure, Padilla says they may work for social media postings or slide shows in the online listing.
2. Make a sincere first impression.
“The curb appeal photo is often the first [in online listings],” says Michael Seiler, a College of William & Mary professor who’s researched the influence of listings. “If they don’t like this picture, they move on in their search quickly.” But a brand new listing needs a current
Staying Home
22.5 Percent of millennials are living at home with one or both of their parents – a 9 percent increase since 2005. Source: Zillow © CTW FEATURES
photo in the first slot, maintains Linda Feinstein, RE/MAX Signature Homes, Hinsdale, Ill. Otherwise, it “could give a buyer the false impression that the house has been on the market since last summer.”
3. Give buyers the full picture.
If a deck or patio serves as another room, that could influence buyers who increasingly value outdoor living, says Padilla. And, if you have a garden, photos of where flowers are will help the new owners fill-in new plantings. Beside online listings and brochures, placing photos near windows help buyers envision their summer view, she concludes. © CTW Features
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RESULTS YOU CAN COUNT ON HAPPY INDEPENDENCE DAY SALE G PENDIN
LDaD y SiO n1
7887 North Douglas Hwy. | $335,000
9450 Del Rae Road | $284,900
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SALE PENDING 3037 Wood Duck Ave. | $287,000
D
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7860 Glacier Hwy. | $375,000
D
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9431 Berners Ave #11 | $165,000
Drs SinO3 L hou 4481 Hillcrest Ave | $479,000
• • • FOR SALE • • •
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