March 2023 Real Estate Guide

Real Estate

THE COASTAL REAL ESTATE RESOURCE Coastal Association of Realtors/Ocean City Today

Published by Ocean City Today for the Coastal Association of Realtors. Advertising in this publication is limited to members and affiliated members of the Association.

The COASTAL ASSOCIATION OF REALTORS® (CAR) is a trade organization for real estate professionals in Wicomico, Worcester and Somerset Counties on the Eastern Shore of Maryland. Its membership consists of more than 1,000 REALTORs® and affiliate members serving the home-buying and home-selling needs of the public since 1957.

The term REALTOR® is a registered collective membership mark, which may be used only by real estate professionals who are members of the NATIONAL ASSOCIATION OF REALTORS® and subscribe to its strict Code of Ethics.

The COASTAL ASSOCIATION OF REALTORS is located at 314 Franklin Avenue, Suite 106 • Berlin, MD 21811. Phone: 410-641-4409. On the Web: www.coastalrealtor.org

OCEAN CITY TODAY is the leading newspaper publisher on the Maryland coast, with Ocean City Today publishing weekly on Friday, Bayside Gazette and Ocean City Digest publishing on Thursdays and Real Estate, the Coastal Real Estate Resource publishing key weekends throughout the year. On the Web: www.oceancitytoday.com

Editor .........................................................................Stewart Dobson

Managing Editor............................................................... Lisa Capitelli

Account Managers....................... Mary Cooper, Vicki Shrier, Renée Kelly

Classifieds/Legals/Production Manager .................... Nancy MacCubbin

Senior Designer .............................................................. Susan Parks

Graphic Artist ................................................................... Kelly Brown

Publisher..................................................................... Christine Brown Admin. Assistant................................................................... Gini Tufts

410-641-0039 WWW.OCEANCITYTODAY.COM

NAR unveils updated national ad campaign

WASHINGTON (February 22, 2023) – The National Association of Realtors (NAR) unveiled today its fifth iteration of its awardwinning “That’s Who We R” national advertising campaign. This year’s creative demonstrates the many ways Realtors are “here for it all,” working to make the dream of property ownership a reality for their clients. The

campaign, created by Havas Chicago, further distinguishes Realtors from non-member agents and “do-it-yourself” tech platforms by showcasing the value, partnership and professionalism Realtors provide throughout the journey – whether it’s a first home, the next home or a home for their business.

Only members of the National Association of Realtors, America’s largest trade association, can call themselves a Realtor. NAR represents more than 1.5 million members involved in all aspects of the residen-

tial and commercial real estate industries and must abide by the association’s code of ethics.

“These ads showcase the trusted relationship between Realtors and their clients,” said Victoria Gillespie, NAR chief marketing and communications officer. “As a former agent and Realtor, I know the dedication, expertise and professionalism required during the often long, complex and emotional process. I am excited that these spots allow us to authentically demonstrate the Realtor difference in action, with clients and within

their communities.”

“NAR’s 1.5 million members are the Realtor brand, possessing a thorough understanding of the real estate transaction and local market conditions; an unparalleled commitment to ethics; impactful community and civic engagement; and an empathic, human approach,” said NAR President Kenny Parcell, a Realtor from Spanish Fork, Utah, and brokerowner of Equity Real Estate Utah. “Agents who are Realtors are here for you whatever your path to property

Continued on Page 7

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pitch shows how Realtors work with all aspects of market

Ad campaign promotes Realtors’ expertise

Continued from Page 4

ownership may look like.”

Through emotional storytelling and cultural truths, the new spots take viewers through various property buying experiences. The commercials leverage a diverse set of characters, locations and real estate situations – residential and commercial – that work together to be relatable at scale.

In each situation, viewers will see how Realtors are committed to putting their clients first in every aspect of the search and purchase experi-

ence – and often well beyond that. The spots also show Realtor involvement and volunteerism, supporting the communities in which they live and work.

“Whether it is your first time or your third time, the journey to property ownership can be stressful, even without changing market conditions and unexpected challenges,” said Myra Nussbaum, president and chief creative officer, Havas Chicago. “We chose to focus on the personal, relationship-building moments that go beyond home search apps or show-

ings. Viewers will see a variety of stories with real, surprising moments, such as moving closer to friends or relatives, or finding the right space for a growing family. No matter the experience, the stories emphasize Realtor expertise and the value they bring to their clients.”

Now in its fifth year, the “That’s Who We R” campaign has been recognized 50 times for national creative and media excellence. This year’s campaign will be seen through a fully integrated campaign across a multitude of modern touchpoints, includ-

ing broadcast and streaming platforms, online and terrestrial audio, social media and branded content partnerships.

In addition to paid media led by Havas Media, NAR will once again launch a full suite of new advertising and social media assets, created in conjunction with 2023 campaign imagery and messaging, for its members and Realtor associations to leverage locally.

The “That’s Who We R” campaign features eight total TV and five total radio spot storylines.

What’s my property’s worth?

Two ways of figuring value

One of the trickiest parts of dealing with real estate is figuring how much a property is worth. When you’re talking about the value of a home, you might hear two different terms used: assessed value and appraised value. Though they sound similar, they have essential differences that are crucial to understand, whether you’re selling a home or buying one.

Put simply, assessed value is the amount your local government thinks your home is worth; it’s what is used to determine property taxes. Appraised value, though, is the amount a professional home appraiser thinks your home is worth; it’s typically used by lenders when considering a mortgage application. Typically, appraised values are higher than assessed values.

Let’s break down the key differences you need to know:

What is a home’s assessed value?

The assessed value of a home is the amount that the local government believes the home is worth. Think of it in terms of a tax assessment: Typically, the local assessor’s office assigns a value to a property based on factors such as the size and location of the lot, the size and amenities of the home and recent sale prices of similar homes in the area.

Your town or county will charge property taxes based on that assessed value. For example, if your city assesses your home at $550,000 and charges a 2.5 percent property tax, you’ll owe $13,750 in property taxes each year.

Some areas allow for certain exemptions, such as not charging tax on the first $100,000 in assessed value or exempting a portion of the value for owner-occupied homes. If you believe that the government has assessed your home unfairly and is overcharging you, you can appeal your property assessment. Doing so typically involves having an assessor visit your home to re-evaluate it.

What is a home’s appraised value?

A home appraisal is a professional examination by a qualified professional (usually licensed, though that may vary by state) to determine the value of a property. Appraisers also look at things like recently sold homes in the area, a home’s size and number of bedrooms and bathrooms, lot size and, crucially, the home’s condition and apparent level of upkeep.

Most often, an appraisal is performed is during the mortgage applicaContinued on Page 11

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Coastal Association adds 18 new members

BERLIN — The Coastal Association of Realtors welcomed 18 new members during its new member orientation on Feb. 16.

New member orientation is a requirement for all members of the Coastal As-

sociation of Realtors. Attendees are introduced to services provided by the association. The class is held quarterly.

“We welcome these new members and wish them the best of luck,” said Coastal Association of Realtors President

Austin Whitehead. “The market is constantly evolving and so are the dedicated Realtor professionals that serve our area. This is an exciting time to join the real estate profession.”

For more information about CAR,

call 410-641-4409 or visit www.coastalrealtors.org.

The Coastal Association of Realtors represents more than 1,000 real estate professionals in Somerset, Wicomico, and Worcester Counties.

New members of the Coastal Association of Realtors are (top row from left): Wesley Rogers with Long and Foster, Joe Martenson with Keller Williams, Kevin Brittingham with eXp Realty, Erin Failaev with ERA Martin, Jesse Thompson with Compass, Charles Riccio with Redfin, Michael Payan with Atlantic Shores Sotheby’s, Austin Connick with Atlantic Shores Sotheby’s. (middle row from left): Cortney Dayton with Keller Williams, Zlatica Koscina with Coldwell Banker, Michele Steele with eXp Realty, Rachel Shapiro with Coldwell Banker, Haley Jackson with Compass, Anisa Impastato with Century 21. (Bottom from left): Haille Spicer with Long and Foster, Sarah McGee with Keller Williams, Robyn Kaspersky with Vision Realty and Eden Cavich with Atlantic Shores Sotheby’s

Ways to determine home values

Continued from Page 9

tion process. Lenders will typically hire an independent appraiser to confirm a home’s value before they agree to issue a mortgage — they need to verify that the home is really worth the amount they’re lending the buyer.

For example, if you want to get a $300,000 loan to buy a home but it only appraises for $275,000, that’s a problem for the lender. The difference, called an appraisal gap, will need to be bridged in some way, whether by renegotiating the price or paying the difference in cash, in order for the loan to go forward.

Even if a buyer isn’t financing their purchase, they may choose to get an appraisal to make sure they’re not overpaying for the property. Homeowners also sometimes commission an appraisal before they put their home on the market (called a pre-listing appraisal) to help them figure out a fair asking price.

Other ways of determining home value

There are many ways to determine the value of a home, each with pros and cons. Some other examples include:

Real estate comps: This valuation method involves looking at similar properties in a particular area and seeing what they recently sold for. If a twobedroom, 1,000-square-foot home in your neighborhood recently sold for

$300,000, it stands to reason that another two-bedroom, 1,000-square-foot home a block or two away would likely sell for around the same amount. (Depending on each home’s condition, of course.)

Comparative market analyses: Like comps, this type of analysis relies on looking at recent sales of homes in your area. It’s typically put together by a local Realtor who knows the area well and goes into deep detail, including factors like price per square foot, condition and more.

Automated valuation models (AVMs): An AVM is a computer algorithm that uses existing data to determine the value of a property. Zillow’s Zestimate is one of the best known examples. These are a convenient starting point for determining value, but they are not the most accurate method — there are many different AVMs out there, and you may find that each will produce a different value for the same property.

Bottom line

Every property is unique, and finding the true objective value of a home is all but impossible. But you can use local comps and other information to come up with a pretty educated guess. A Realtor can be very useful in determining a home’s value, and a professional appraiser is probably going to provide the most accurate number.

Buy now or wait until next year? It depends

Buy now, or wait until 2024? That’s the question prospective homeowners are struggling to answer in today’s housing market. Home prices skyrocketed throughout the pandemic, and the Federal Reserve’s work to tame inflation has sent mortgage rates soaring, too. That combination is leading many would-be buyers to pick the “wait” side of the equation. In fact, according to the Fannie Mae Home Purchase Sentiment Fannie Mae Home Purchase Sentiment Index released at the close of 2022, only 21 percent of consumers believe it’s a good time to buy a house.

However, things are starting to look better for buyers in many parts of the country. A January 2023 report from real estate company Knock predicts that 36 U.S. markets will become buyer’s markets by the end of the year — including plenty of desirable places like Phoenix, Denver, Dallas and Las Vegas. Prices are already starting to decline, or at least to increase at a lower rate, and many experts foresee that remaining the case all year.

So, is it time to buy a home? Or is it better to wait on the sidelines in the hopes that prices or rates see a significant drop soon? The decision ultimately comes down to your finances. Here are some key considerations to help determine the way forward.

Should I buy a house now?

If you buy now, you can start building

equity immediately. That’s true no matter which way the real estate market is leaning at the time. A key point for today’s market, though, is that buying now means avoiding the potential for additional mortgage-rate increases later.

“If a buyer finds a property they would like to call home, they should not delay,” says Stacey Froelich, a broker with Compass in New York City. “You cannot time the market, and a home should be a longterm investment. In the end, higher mortgage rates will cost a buyer more monthly if they are financing.”

Rising rates can spell serious trouble for your monthly budget.

Bankrate’s loan calculator can help you give you a sense of what a higher rate would mean for your payments. For example, on a $450,000 30-year loan with a 6.5 percent interest rate, the monthly payment is just over $2,844. If that rate jumps to 7.5 percent, the payment leaps to more than $3,146. Plus, you’ll wind up paying a lot more in interest over the life of the loan.

In general, if you can answer yes to these three questions, now is the time to buy.

1. Do you have excellent credit?

Anytime you’re borrowing money, start by reviewing your credit report and your credit score. The best deals on mortgages will be available to those with high credit scores of 740 and above. If you have demonstrated that you are a low-

risk borrower with a history of on-time payments, you’ll be in line for the lowest mortgage rates that a lender offers.

2. Saved for a down payment?

In addition to paying your bills on time, have you managed to save a fair amount of money, too? If you are sitting on a sizable chunk of change that can make a big dent in your down payment, now is a good time to buy. Make sure you’ll have plenty left over, though. Lenders feel more comfortable loaning you money if you have additional cash reserves that can provide a cushion if something unexpected happens.

3. Planning to stay for a while?

In addition to the purchase price, buying a home comes with closing costs that can run between 2 and 6 percent of the property’s price. So, to justify those one-time transaction costs, it’s wise to be reasonably certain that you won’t move again anytime soon — or that you’ll be financially stable enough to hold on to the property and rent it out.

Should I wait to buy a home?

If you want to become a homeowner but are waiting for mortgage rates to decline, a bit of patience might be in order. Fannie Mae predicts that 30-year mortgage rates will average 6.3 percent throughout 2023 before falling to 5.7 percent in 2024.

While six-tenths of a percentage point might not sound like much, it can make a big difference in how much house you can

afford over the long run. For example, Bankrate’s mortgage calculator shows that if you buy a $350,000 home with a 20 percent down payment, the monthly payment for principal and interest on a 30-year loan with a 6.3 percent interest rate is $1,733. The same loan at a 5.7 percent interest rate brings those monthly payments down to $1,625. That’s more than $100 of savings each month — adding up to more than $1,200 a year, or $36,000 over the life of a 30-year loan. Of course, it’s impossible to predict where rates will really land by the end of the year, but here are three instances in which it might make more sense to wait out the market:

1. If home values are dropping

If you looked at the market in the late spring of 2022 and opted to wait, you probably made a wise move — in many areas, that was the pricing peak. Since then, some metro areas have seen significant drops in median sale prices. A January 2023 report from Redfin shows that prices in big-ticket cities, including Los Angeles, Seattle, Boston and even New York, saw price declines. Those declines may not be done yet, so it could pay to be patient for a bit longer.

2. Is inventory increasing

When there are more properties on the market to choose from, buyers enjoy more bargaining power. Since a lot of

Continued on Page 12

Pending home sales increase, NAR reports

WASHINGTON – Pending home sales improved in January for the second consecutive month, according to the National Association of Realtors. All four U.S. regions posted monthly gains but saw year-over-year drops in transactions.

The Pending Home Sales Index (PHSI) — a forward-looking indicator of home sales based on contract signings — improved 8.1 percent to 82.5 in January. Year-over-year, pending transactions dropped by 24.1 percent. An index of 100 is equal to the level of contract activity in 2001.

“Buyers responded to better affordability from falling mortgage rates in December and January,” said NAR Chief Economist Lawrence Yun.

NAR anticipates the economy will continue to add jobs throughout 2023 and 2024, with the 30-year fixed mortgage rate steadily dropping to an average of 6.1 percent in 2023 and 5.4 percent in 2024. With an improving interest rate environment and job gains, Yun still expects annual existing-home sales to drop 11.1 percent in 2023 to a total of 4.47 million units before jumping 17.7 percent in 2024 (5.26 million units). NAR projects new-home sales will fall 3.7 percent yearover-year in 2023 before growing 19.4 percent in 2024.

“Home sales activity looks to be bottoming out in the first quarter of this year, before incremental improvements

will occur,” Yun said. “But an annual gain in home sales will not occur until 2024. Meanwhile, home prices will be steady in most parts of the country with a minor change in the national median home price.”

NAR also predicts median existinghome prices will be stable compared to the previous year for most markets — with the national median home price decreasing by 1.6 percent in 2023, to

$380,100, before regaining positive traction of 3.1 percent in 2024, to $391,800. It estimates median new-home prices will increase by 1.3 percent in 2023, to $461,000, and increase by 2.8 percent in 2024, to $474,000, due to higher costs of land and construction materials.

The Northeast PHSI rose 6.0 percent from last month to 68.7, a decline of 19.8 percent from January 2022. The Midwest index grew 7.9 percent to 83.3 in January,

a drop of 21.1 percent from one year ago. The South PHSI increased 8.3 percent to 99.2 in January, dipping 24.7 percent from the prior year. The West index elevated 10.1 percent in January to 66.2, diminishing 29.3 percent from January 2022. “An extra bump occurred in the West region because of lower home prices, while gains in the South were due to stronger job growth in that region,” Yun added.

Buy now or wait until next year?

Continued from Page 12

buyers have been sitting on the sidelines due to the interest rate environment, many areas are seeing a jump in inventory. According to National Association of Realtors data, the country had just 2.9 months worth of housing supply in December — still very low, but up more than 10 percent from the year before.

3. Personal finances

The biggest reason to wait is if your current financial situation is not ideal. For example, if you are expecting a sizable commission check, an inheritance or some other windfall that would make a big difference in your down payment, waiting until it arrives makes sense. And if your credit score is low, waiting is also

smart. Take some time to pay down your debt and improve your credit so you can qualify for better loan terms.

Deciding whether you should buy a house now or wait ultimately comes down to where you want to call home. Real estate is hyper-localized and can vary greatly from one market to another.

Consider this January data from Redfin: In Milwaukee, the median sale price of a home rose by 4.3 percent in the past year, and the typical home sits on the market for 55 days. But just a couple hours south in Chicago, home prices dropped by more than 5 percent in the same time frame.

In today’s market, it’s more important than ever to find a local real estate

agent who can help you successfully navigate the process. “The right broker will be privy to what inventory might be coming to market or a particular situation with a seller or building,” says Rachel Glazer, a broker with Compass in New York City.

Bottom line

Trying to buy a house right now might feel overwhelming, but waiting too long can present challenges as well. Review your finances in detail and think about how much you can save up for a down payment. Be sure to take the pulse of the town in which you’re hoping to live. Then, talk with a local Realtor to figure out whether you should buy now or hang tight until the market is a bit more friendly to your bank account.

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