Real Estate Weekly: December 9, 2022

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Comfor table, refreshed, one level 1144 Sq. Ft. home with 3 bedrooms & 2 full baths Inside you will find spacious living area with new paint & flooring throughout. Nice sized kitchen with new refrigerator & new stove/range, plent y of counter & storage space, dining area. Primar y bedroom with new car pet and full bath, 2 more bedrooms with new car pet, 2nd full bath & separate laundr y room. Enjoy the private deck with hot tub & fenced back yard. Outside, there is a greenhouse, garden space, large storage shed, covered parking for your boat or RV, attached 1 car garage & tankless water heater Home is just minutes to I-5, shopping, & all amenities. MLS #2014235

Now could be the time to sell a new home and earn a slice of the real estate pie.

Record-low interest rates is renewing interest in the housing market for many people.

“When sellers are interviewing real estate agents to market their homes, their primary focus is usually on the advertising that the agent will offer them,” says Jessica Goodbody of Weichert Realtors.

Let us help you meet your marketing goals by advertising your listings in Real Estate Weekly.

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Is it time to downsize?

By Erik J. Martin CTW Features

The age-old axiom is that bigger is better. But that’s not always the case, especially when it comes to weight, debt, or home size. As we get older, we tend to want to simplify our lives and minimize hassles, including upkeep, utility bills, and property taxes.

Staying put in an abode that’s oversized for your needs can put pressure on your finances and cut into your free time, too.

That’s why many folks eventually choose to downsize to a smaller and more spatially appropriate residence.

“Downsizing is a smart

financial move in two key ways. First, it keeps your cost of ownership low by reducing your property taxes, utility bills, and maintenance costs – especially as you age and lose the ability to handle maintenance tasks used to do yourself,” says Martin Orefice, founder of Rent To Own Labs. “Second, it cashes out the equity you have built up in your current larger home, allowing you to move out of state or into another area for retirement and further stretch your retirement savings.”

Ryan Fitzgerald, a Realtor and the owner of UpHomes, says when you start to realize you are spending

more time cleaning and paying for the extra space that is not being used, it may be time for a downsize.

“Individuals who are recent empty-nesters or retirees are the perfect candidates for downsizing,” he notes.

Other worthy prospects for a more compact property are families who have children in college as well as parents who are relocating back into the city from the suburbs and who desire a more efficient space that is more centrally located, per Frances Katzen, an agent with Douglas Elliman in New York City.

“When your kids are no longer living at home

and are working full time outside of the house, when you physically are not able to maintain the home yourself, or when you can no longer access parts of the house due to age or physical limitation, these are telltale signs that you should consider downsizing,” Katzen explains. Not everyone is well suited to downsize mode, however. Those who frequently entertain guests or host large gatherings might want to think twice before trading in their spacious home for a more modest one, Boris Dorfman, a real estate investor and the founder of LBC Capital Income Fund, suggests.

“Similarly, people who have a lot of belongings or who simply enjoy having plenty of space to spread out may find that a smaller home doesn’t suit their lifestyle,” he continues.

If you’ve made up your mind and are ready to move, look for a home with a footprint that’s comfortable but not overbearing.

“Typically, a good size for a two-person home is around 1,200 to 1,400 square feet. You should also consider the size of your outdoor space and if you want to maintain a large lawn or landscape yourself,” says Fitzgerald. “Sometimes, finding a townhouse or retirement community

where landscaping is included is a great option for those looking to downsize.”

Single-story homes are an excellent choice, especially for retirees, “since they are easier to maintain and present fewer physical obstacles for aging residents,” Orefice points out.

Give thought, as well, to future resale value.

“Making your downsized home big enough to sell for a good value down the road can help settle your estate and provide for your descendants. That’s why I recommend a home with at least 1,500 square feet of space, even if you don’t need quite that much,” adds Orefice.

Katzen advises looking for a home with particular amenities, too.

“I always suggest a powder room so that no one is walking through a bedroom to use the bathroom while entertaining. The great room should always be sizable so that no one feels like they are living in cramped quarters. Windows are a really good way to create a much more open experience in the home, so I always suggest residences that have windowed bathrooms and kitchens as well as ample windows in the great room,” she says. Lastly, think carefully about the surrounding neighborhood.

“Retirees might want to look at homes located near amenities like grocery stores and medical offices,” Dorfman says.

Purchasing a home with today’s mortgage rates

Question:

Mortgage rates increased enormously since the start of the year. How do typical buyers purchase homes in today’s market?

Answer:

Many potential buyers have left the market. In September, according to the National Association of Realtors (NAR), pending transactions were down 31% from a year earlier. In 2021, NAR reported that there had been 6.12 million existing home sales, meaning that we are likely to see existing sales decline by over a million units in 2022.

There’s no doubt that what was affordable in January is now out of reach for large numbers of households. However, the problem is not mortgage rates alone, it’s the combination of financing costs and quickly rising home prices.

According to NAR, existing home values went from $413,800 in June 2022 to $384,800 in September. So yes, there has been a month-to-month decline, however, September home prices were still

8.4% higher than a year ago.

If you’re a homeowner and moving to a replacement property, you at least can benefit from the sale of your current home. That’s because higher prices likely give you more cash to buy another home. However, even for existing owners, costs may increase because of higher financing costs.

For first-time home buyers the situation is different. First-timers don’t have the real estate equity enjoyed by current homeowners and therefore have less ability to off-set rising monthly costs. Little wonder that just 29% of all existing home buyers were first timers in September 2022 versus 34% in 2021, according to NAR.

What can purchasers do to make buying more affordable?

There are several options.

First, make a bigger down payment. This will reduce mortgage debt as well as monthly payments. However, making a larger down payment is simply not plausible for many borrowers, in part because up-front costs have grown along with

Q&A Q&A

ASK OUR BROKER

By Peter G. Miller

higher prices.

Second, consider the use of an adjustable-rate mortgage (ARM). These are mortgages with a set interest rate for a start period that typically lasts three, five, or seven years. The start rate is typically lower than the prevailing fixed rate. The catch is that once the start rate ends, the interest rate can move up or down. For this reason, an ARM should be regarded as more risky than fixed-rate financing.

Third, pay additional points at closing to “buy down” the mortgage rate. A “point” is equal to 1% of the mortgage amount: for a $400,000 mortgage, a point is worth $4,000. If you have leverage with a seller, sometimes an offer can require the owner to pay one or more points on your behalf, a so-called “seller contribution.”

For details, speak with real estate brokers and mortgage lenders.

Email your real estate questions to Mr. Miller at peter@ctwfeatures.com.

Doors open for VA, FHA homebuyers

By Marilyn Kennedy Melia CTW Features

Rising mortgage rates have pushed many homebuyers out of the market. But their absence has provided FHA and VA buyers to step in.

When rates were in the low single digits and sellers had their pick of competing o ers, they hied away from buyers using FHA and VA nancings.

“ ere is less risk, and in some cases less cost, for a seller to deal with a conventional buyer versus a VA or FHA buyer,” explains Rob omson of Coldwell Banker, Colorado Springs.

When it was a strong seller market, sellers tended to shun these buyers because VA and FHA loans involve “appraisals that are more

tightly controlled,” notes Jim Whatley of Uber Realty, Walton Beach, FL.

According to mortgage data rm Black Knight, 27 percent of mortgage applications with a rate lock were FHA or VA loans in September 2022, up from 19 percent in January.

While sellers might not love these loans, they o er buyers important perks. “FHA and VA rates are generally lower than [the majority of mortgages],” notes Jennifer Beeston, SVP, Guaranteed Rate Mortgage.

Moreover, FHA loans require just a 3.5 percent down payment, and VA loans zero down. But home buyers must meet either the veteran requirements outlined by the VA, or take a mortgage within FHA limits, which vary by area.

A big advantage for Veterans is that the zero

down loan doesn’t also require private mortgage insurance charges, required on all other loans, including the FHA, when borrowers make less than a 20 percent down payment, adds Justin Hargrove, Amplify Credit Union.

It’s possible to “buy down” the rate on either loan, meaning paying a speci ed amount upfront in exchanges for a lowering of the o ered interest rate, notes Je rey Loyd of Get a Rate in Hackensack, NJ.

Despite their advantages, the greater acceptance of FHA and VA nancing isn’t reason alone to buy a home, warns Jason Deshayes, a Raleigh, NC, nancial planner.

Because prices are in ux due to rising rates, buy only if life circumstances, like moving for a new job, demand it, he says.

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Custom build your commercial enterprise: 13,361 square foot commercial tract (two lots) zoned C-2. Great location near recreation center; major grocer y store; hotel; restaurants; offices; health club; house and farm supply stores; gas stations; banks; and I-5. Water, Cascade Natural Gas, Puget Sound Energy, City sewer, and Comcast are all in the street. MLS#2009122

Three bedroom, 1 bath rambler has a large 2-tier deck with built-in bench seating and a backyard that would be wonder ful for enter taining. New roof this year, extra storage above garage, and fenced back yard on a nice low-traffic street. Great location close to schools, shopping, hospital, and easy access to I-5. MLS#1995422

Great oppor tunity to buy an affordable three bedroom, 1 3/4 bath home with a freestanding wood stove in a 55+ park with reasonable space rent. Space rent includes water, septic (maintained by the Park), and garbage. Ramps at both front and rear entrances for ease of access.

MLS#2015218

This coz y 2 bedroom Burlington home needs some work but has lots of personality : beautiful pergola to welcome you home; ample cabinets and counter space in the step - down k itchen, bath has a farmhouse style sink and plenty of room for a stack ing washer/dr yer; off-street park ing and awesome trees and shrubs Covered concrete patio Private yet in town and close to Maiben Park. MLS#2001713

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Stunning contemporary home with an amazing two-story foyer that provides the ‘wow ’ factor upon entry This home has it all, formal dinning and eat-in space in the kitchen, fabulous acacia floors; even the conveniently appointed kitchen has a view Glass blocks in the owner ’s primary suite bath; enhances the beauty and enjoyment yet allows for privacy The owner ’s suite bath also offers a jetted tub, separate shower; dual sink vanity with plenty of counter space and storage Moving into the suite there is also a walk-in closet, a sliding door to the covered patio, plush carpet, and a truly remarkable high ceiling Both the living and family room feature a natural gas fireplace with an elegant mantel and large windows to take in the territorial view. MLS#2007767

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