Category Archives: living well

What to Consider When Selling Your Home in a Rising Rate Environment

There are many economic variables to consider when selling your home when interest rates are rising. If that’s the only changing economic variable, you’re generally going to see a negative impact on both home sales and home prices. This means as interest rates rise, the buyer pool for your home is going to shrink.

In 2008, the Federal Reserve set rates at 0.25 percent because of the recession and the lack of buyer confidence or demand. Since then, buyer confidence and buyer demand have risen. In December 2015, rates climbed to 0.5 percent and continued to rise to where they are today at 1.5 percent. The Fed has noted rates will rise to 2 percent in 2018 and then 3 percent by 2020.

What Happens to the Ability to Sell Your Home With These Rises in Interest Rates?
If interest rates rise 1 percent and all other economic factors remain the same, purchasing power for homebuyers will decrease by just over 11 percent; therefore, every quarter-percent (0.25 percent) rise of interest rates reduces homebuyer purchasing power by 3 percent.

That means for a home purchase of $300,000, a 1 percent interest rate rise reduces buying power to just under $267,000. So, someone who potentially may have been able to purchase your home may no longer have the buying power to do so. This creates a smaller buyer pool and less demand for your home. It’s also likely to increase supply as fewer people are able to purchase homes.

If mortgage rates rise, it becomes more probable for indecisive buyers to rush into the market, and the short term will likely see a decent boost; however, it could add extra pressure if rates continue to rise without leveling out.

While interest rates play a role in the housing market, there are a variety of personal and economic factors to consider, as well.

What Other Economic Factors Play a Role?
Supply and demand play crucial roles in determining the movement of home prices. If supply goes up, home prices go down. If supply goes down, home prices will probably go up. If demand increases, home prices mostly likely will as well; however, if fewer people are looking to buy homes, then prices will most likely decrease. As a seller, these are important factors to consider when putting your home on the market.

The sale of new homes is another factor to consider alongside rising interest rates because supply and demand will always play a factor in the home-buying process. Supply increases when new homes are created. Assuming that interest rates don’t rise too rapidly, paying attention to new-home inventory levels will give you an indication of what to expect as a seller.

Monthly income, as it relates to monthly mortgage payments, is a more important variable to gauge than interest rates alone. Your debt-to-income ratio plays a larger factor in your ability to qualify for a mortgage than interest rates alone. When monthly income rises, your ability to absorb higher interest rates does, as well. This means that as long as people are making more money, they’ll also be able to pay off any increase in debts.

When the real estate market crashed in 2007-2008, monthly payments of principal and interest were nearing 25 percent of the U.S. median family monthly income. Even with a rise in interest rates, Americans are currently seeing the highest monthly median income in the last 35 years. Because of this, the percentage of monthly income going toward monthly payments is still well below levels that analysts consider dangerous.

One of the largest surprises is the percentage of all-cash transactions for home purchases. Even with interest rates at historic lows, the percentage of all-cash transactions is higher than normal.  Overall, we seem much more hesitant to take out mortgages than we have been in the past.

High stock market valuations allow people to diversify their percentage of assets, cash out and reinvest in real estate to keep their portfolio balanced.

The number of distressed properties is a result of a strong job environment. This allows folks to pay their mortgages without defaulting, while also helping to keep prices up even with a rise in interest rates.

While interest rates play a large factor in selling your home for top dollar, they’re in no way the only deciding factor. All of the factors mentioned above should be taken into consideration before you rush into selling your home because of high interest rates.

By Ryan Fitzgerald,  Raleigh Realty

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The Triangle is home to one of the safest cities in the U.S., report says

For the third year in a row, a Triangle town has landed on SmartAsset’s list of “The Safest Cities in America.”

Cary ranked No. 5 on the 2017 list, up three spots from last yearIn 2015, it ranked fourth.

SmartAsset evaluated 200 U.S. cities for its study, focusing on crime rates, vehicular mortality rates, drug poisoning rates, excessive drinking, air quality and the percent of commuters who drive to work alone. Not much has changed in the lineup from 2016.  The cities that came in before Cary were #4) Alexandria, VA, #3) Naperville, IL, #2) Fremont, CA, and #1) Sunnyvale, CA.

Regarding Cary, SmartAsset reported:

“There are only about 1,100 total crimes per 100,000 residents. For both violent crime rate and property crime rate it ranks in the top 5.

“It also has a relatively low number of drug overdoses. Cary has 8.1 deaths from drug overdoses per 100,000 residents. It ranks in the top 16% in that metric.”

Cary was the only North Carolina town to make the list. The town has also been named one of the 10 safest cities for drivingand a top 10 town for millennial homebuyers.

By  , Triange Business Journal

How to Make Your Home Attractive to Environmentally-Conscious Buyers

More buyers are becoming attracted to houses that are designed with the environment in mind; therefore, sellers must package their homes in a way that scores some eco-friendly points. Below are four ways you can make your homes more attractive to this type of buyer.

Install Solar Panels

Having solar panels installed makes potential buyers quickly see how they can save energy and thus save money. Solar panels make the eco-friendly efforts visible and tangible. In addition to conserving power, any extra energy the solar panels generate can be sold off to the national grid. It might look like a costly investment, but it can attract more buyers, and you can recover your solar installation costs from the proceeds of the sale.

Use Plants

Plants make a property seem more lively and cheerful. You can also use artificial plants, as they do an excellent job of beautifying the place without requiring constant care, although I would use them sparingly. Place some potted plants and flowers throughout the rooms to inject life into your home. In addition to adding plants, Apartment Therapy advises that you invest in an air purifier to improve the air quality in your house.

Perform Environmental Assessments

To ensure that your home and yard are eco-friendly, you can employ the services of environmental assessment consultants. These professionals will assess your home environment in various areas like health and ecological risks, monitoring of air quality, and management of waste, among others. Through this, they will ensure that you have complied with all relevant regulations and have met the necessary environment-related thresholds.

Get Certifications

There are different certifications given to houses that prove they were designed with eco-friendliness in mind. Secure a certification for your home, and, if provided by a widely acknowledged accreditation bureau, it will improve the value of your house for eco-minded buyers.

Failure to present your house as an environmentally-friendly property can be a deal-breaker for buyers. The eco-friendly nature of the house must not just be intrinsic; it must be visible. Potential buyers must be able to see that the house is just right for them. Coupled with your explanations, ensure no element of your home fails to be noticed by buyers.

by: Hannah Whittenly , RISMedia’s Housecall