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 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

Is the Real Estate Market Going to Crash?

While many areas of the economy have contracted, the housing market has stayed remarkably strong. But can the good news last?

When COVID-related shutdowns began in March, real estate brokers and clients scrambled to respond to the shift. Record-low interest rates caused some lenders to call a halt to new underwriting, and homeowners debated whether or not to put their houses on the market. However, those first days of uncertainty ushered in a period of unprecedented demand in the U.S. real estate market, which ended the year with increasing average home prices (up 13.4% from the previous year) and shrinking days on market (13 fewer than in 2019).¹

Now, as the spring market approaches, you may be wondering whether the good times can continue to roll on. If you’re a homeowner, should you take advantage of this opportunity? If you’re a buyer, should you jump in and risk paying too much? Below we answer some of your most pressing questions.

How is today’s market different from the one that caused the 2008 meltdown?

At the beginning of the pandemic, fears of an economic recession and an ensuing mortgage meltdown were top of mind for homeowners all across the country. For many buyers and sellers, the two seemed to go hand in hand, just as they did in the 2008 economic crisis.

In reality, however, the conditions that led to 2008’s recession were very different from those that triggered the current downturn—and this time, the housing market is the source of much of the good news.² This is in line with historical patterns, as housing prices traditionally hold steady in the face of recession, with homeowners staying put and investors putting their money into bricks and mortar to ride out uncertainty in the stock market. 

This time around, because of lessons learned in 2008, banks are better funded, homeowners are holding more accrued equity, and, crucially, much of the economic activity is focused on financial factors outside the housing market. As many industries quickly pivoted to work-from-home, early fears of widespread job loss-related foreclosures have failed to materialize. Federal stimulus payments and the Paycheck Protection Program also helped to offset some of the worst early effects of the shutdown.

Are we facing a real estate bubble?

A real estate bubble can occur when there is a rapid and unjustified increase in housing prices, often triggered by speculation from investors. Because the bubble is (in a sense) filled with “hot air,” it pops—and a swift drop in value occurs. This leads to reduced equity or, in some cases, negative equity conditions.

By contrast, the current rise in home prices is based on the predictable results of historically low interest rates and widespread low inventory. Basically, the principle of supply and demand is working just as it’s supposed to do. In addition, experts predict a strong seller’s market throughout 2021 along with increases in new construction.³ This should allow supply to gradually rise and fulfill demand, slowing the rate of inflation for home values and offering a gentle correction where needed.

Effects of low interest rates

According to Freddie Mac, rates are projected to continue at their current low levels throughout 2021.⁴ This contributes to home affordability even in markets where homes might otherwise be considered overpriced. These low interest rates should keep the market lively and moving forward for the foreseeable future.

Effects of low inventory

Continuing low inventory is another reason for higher-than-average home prices in many markets.⁵ This should gradually ease as an aggressive vaccination rollout and continuing buyer demand drive more homeowners to move forward with long-delayed sales plans and as new home construction increases to meet demand.⁶

Aren't some markets and sectors looking particularly weak?  

One of the big stories of 2020 was a mass exodus from attached home communities and high-priced urban areas as both young professionals and families fled to the larger square footage and wide-open spaces of suburban and rural markets. This trend was reinforced by work-from-home policies that became permanent at some of the country’s biggest companies.

Speculation then turned to the death of cities and the end of the condo market. However, it appears that rumors of the demise of these two residential sectors have been greatly exaggerated. 

With the first vaccine rollouts, renters have begun returning to major urban centers, attracted by the sudden rise in available inventory and newly discounted rental rates.⁷ In addition, buyers who were previously laser-focused on a single-family home responded to tight inventory by taking a second look at condos.⁸ While nationwide condo prices continue to lag behind those of detached homes, they’ve still seen significant price increases and days on market reductions year over year.

In addition to these improvements, the 2020 migration has spread the economic wealth to distant suburban and rural enclaves that normally don’t benefit from increases in home values or an influx of new investment. As many of these new residents set up housekeeping in their rural retreats, they’ll revitalize the economies of their adopted communities for years to come.

How has COVID affected the “seasonal” real estate market?

Frequently, the real estate market is seen as a seasonal phenomenon. However, the widespread shutdowns in March 2020, coming right at the beginning of the market’s growth cycle in many areas, has led to a protracted, seemingly endless “hot spring market.”

While Fannie Mae’s chief economist Douglas Duncan predicts slower growth from 2020’s historic numbers, the outlook overall is positive as we embark on the 2021 spring selling cycle.⁹ Duncan anticipates an additional lift in the second half of 2021 as buyers return to business as usual and look to put some of their pandemic savings to work for a down payment. Thus we could be looking at another longer-than-usual, white-hot real estate market.

How will a Biden administration affect the real estate market?

Projected policy around housing promises to be a boost to the real estate market in many cases.¹⁰ While some real estate investors bemoan proposed changes to 1031 Exchanges, the Biden plan for a $15,000 first-time homebuyer tax credit aims to increase affordability and bring eager new home buyers into the market. In addition, Biden-proposed policy pinpoints low inventory as a primary driver of unsustainable home values and is geared toward more affordability through investments in construction and refurbishment.

Overall, according to most indicators, the real estate news looks overwhelmingly positive throughout the rest of 2021 and possibly beyond. Pent-up demand and consumer-driven policies, along with a continued low-interest-rate environment and rising inventory, should help homeowners hold on to their increased equity without throwing the market out of balance. In addition, the increase in long-term work-from-home policies promises to give a boost to a wide variety of markets, both now and in the years to come.  

STILL HAVE QUESTIONS? WE HAVE ANSWERS

While economic indicators and trends are national, real estate is local. We’re here to answer your questions and help you understand what’s happening in your neighborhood. Reach out to learn how these larger movements affect our local market and your home’s value. 

Sources:

1. Realtor.com -
   https://www.realtor.com/research/december-2020-data/
2. New York Magazine - 
   https://nymag.com/intelligencer/2020/06/why-this-economic-crisis-wont-be-as-bad-as-2008.html
3. Washington Post -
   https://www.washingtonpost.com/business/2021/01/11/2021-housing-market-predictions/
4. Freddie Mac -
   http://www.freddiemac.com/research/forecast/20210114_quarterly_economic_forecast.page?
5. Wall Street Journal -
   https://www.wsj.com/articles/housing-market-stays-tight-as-homeowners-stay-put-11611226802?mod=re_lead_pos1
6. Marketwatch -
   https://www.marketwatch.com/story/new-home-construction-activity-soars-to-highest-level-in-over-a-decade-as-builders-rush-to-produce-single-family-homes-2021-01-21
7. Forbes -
   https://www.forbes.com/sites/noahkirsch/2021/01/14/signs-of-a-rebound-new-york-city-rent-prices-are-climbing-back
8. Washington Post -
   https://www.washingtonpost.com/business/2021/01/07/condo-sales-rebound-amid-dwindling-inventory-houses/
9. Mortgage Professional America -
   https://www.mpamag.com/news/fannie-mae-chief-economists-forecast-for-us-economy-housing-market-in-2021-244045.aspx
10. Inman -
    https://www.inman.com/2020/11/09/what-a-joe-biden-presidency-means-for-real-estate-and-housing/

Essex County March Housing Report 3/9/2021

5 Inspiring Home Design and Remodeling Trends for 2021

We’ve all spent a lot more time at home over the past year. And for many of us, our homes have become our office, our classroom, our gym—and most importantly, our safe haven during times of uncertainty. So in 2021, it’s no surprise to see that designers are emphasizing soothing color palettes, cozy character, and quiet retreats.

To help inspire your design projects this year, we’ve rounded up five of the hottest home trends. If you plan to buy, list, or renovate your property in the next few months, give us a call. We can help you realize your vision and maximize the impact of your investment.

1. Uplifting Colors

Colors are gravitating toward warm and happy shades that convey a sense of coziness, comfort, and wellbeing. This year’s palettes draw from earthy hues, warm neutrals, and soothing blues and greens.[1]

While white and gray are still safe options, expect to see alternative neutrals become increasingly popular choices for walls, cabinets, and furnishings in 2021. For a fresh and sophisticated look, try one of these 2021 paint colors of the year:

• Aegean Teal (coastal blue) by Benjamin Moore
• Urbane Bronze (brownish-gray) by Sherwin-Williams 
• Soft Candlelight (muted yellow) by Valspar 

2. Curated Collections

After a decade of minimalism, there’s been a shift towards highly-decorative and personalized interiors that incorporate more color, texture, and character. Clearly-defined styles are being replaced by a curated look, with furnishings, fixtures, and accessories that appear to have been collected over time.[2]

This trend has extended to the kitchen, where the all-white fad is fading in popularity. If you’re planning a kitchen remodel, consider mixing in other neutrals—like gray, black, and light wood—for a more custom, pieced-together feel.[3]

3. Reimagined Living Spaces

The pandemic forced many of us to rethink our home design. From multipurpose rooms to converted office/closets, we’ve had to find creative ways to manage virtual meetings and school. And designers expect these changes to impact the way we live and work for years to come.

Some home builders are predicting the end of open-concept floor plans as we know them.[4] Instead, buyers want cozier spaces with more separation and privacy. Cue the addition of alcoves, pocket doors, and sliding partitions that enable homeowners to section off rooms as needed.[3]

4. Staycation-Worthy Retreats 

With travel options limited right now, more homeowners are turning their vacation budgets into staycation budgets. Essentially, recreate the resort experience at home—and enjoy it 365 days a year.

To give your bedroom that “boutique hotel” look, start with a large, upholstered headboard in a rich color or pattern. Layer on organic linen bedding and a chunky wool throw, then add a pair of matching bedside wall lights.[5] In your bathroom, try a curbless step-in shower and freestanding tub for a modern and spacious feel.[3]

5. Outdoor Upgrades

From exercise to gardening to safer options for entertaining, the pandemic has led homeowners to utilize their outdoor spaces more than ever. In fact, backyard swimming pool sales skyrocketed in 2020.[6] But a new pool isn’t the only way to elevate your outdoor area this year.

Pergolas are a relatively quick and affordable option to add shade and ambiance to your backyard.[3] Another hot trend? Landscapers are reporting an increase in front yard enhancements, including porch additions and expanded seating options. These “social front yards” enable neighbors to stay connected while observing social-distancing guidelines.[7]

DESIGNED TO SELL

Want to find out how upgrades could impact the value of your home? We can share our insights and offer tips on how to maximize the return on your investment. Contact us to schedule a free consultation!

Sources:

1. Good Housekeeping  -
   https://www.goodhousekeeping.com/home/decorating-ideas/g34762178/home-decor-trends-2021/
2. Homes & Gardens – 

          https://www.homesandgardens.com/news/interior-design-trends-2021

1. Houzz – 

          https://www.houzz.com/magazine/36-home-design-trends-ready-for-takeoff-in-2021-stsetivw-vs~142229851

1. Zillow -
   https://www.prnewswire.com/news-releases/the-end-of-open-floor-plans-how-homes-will-look-different-after-coronavirus-301080662.html
2. Homes & Gardens – 
   https://www.homesandgardens.com/spaces/decorating/bedroom-trends-224944
3. Reuters -
   https://www.reuters.com/article/us-health-coronavirus-pools/pool-sales-skyrocket-as-consumers-splash-out-on-coronavirus-cocoons-idUSKCN2520HW
4. Realtor Magazine -
   https://magazine.realtor/daily-news/2020/12/09/4-outdoor-home-trends-that-may-gain-steam-in-2021

Essex County Annual Housing Report 1/23/2021 - Covid 19

For the comparative years: 2018 vs 2019 and 2019 vs 2020:

Median Sales Prices rose at an accelerated pace

2018 vs 2019, Median Sales Prices Rose:

+4.4% for Singles; +6.4% for Condos and +9.1% for 2-4 Units

2019 vs 2020, Median Sales Prices Rose:

+13.2% for Singles; +10% for Condos and 14.4% for 2-4 Units

The Number of Active Listings declined: 

2018 vs 2019, Change in Number of Active Listings (weighted average):

-5.7% Singles; +5.4% Condos and -19% for 2-4 Units

2019 vs 2020, Change in Number of Active Listings (weighted average):

-35.7% Singles; -26.1% Condos and -26.5% for 2-4 Units

Months of Inventory Fell (6 months is a balanced market):

2018 vs 2019, Change in Months of Inventory:

-10.7% to 2.5 months for Singles; + 4.3% to 2.4 months for Condos and -14.3% to 2.4 months for 2-4 Units

2019 vs 2020, Change in Months of Inventory:

-32% to 1.7 months for Singles; -25% to 1.8 months for Condos and -8.3% to 2.2 months for 2-4 Units

• To view data for every Essex County town, go to:  http://www.sullivanteam.com/Properties/Reports/Public/Charts.php
  
  To dowload the full Housing Report go to: http://sullivanteam.com/pages/EssexCountyHousingReports

Essex County January Housing Report 1/11/2021 - Covid 19

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

• To dowload the full Housing Report go to: http://sullivanteam.com/pages/EssexCountyHousingReports
  
  
  

•  

New Year, New Home? Set Homeownership Goals Whether You’re Buying, Selling, or Staying Put

The start of a new year always compels people to take a fresh look at their goals, from health and career to relationships and finance. But with historically low mortgage rates, increased home sales and price growth, and a tight housing inventory, the time is right to also make some homeownership resolutions for 2021.

Home buyers, is this the year you work to improve your credit score, pay down some debt, or save for a down payment? 

Home sellers, we’ve laid out plans for you to get top dollar for your property, including timing your home sale, making your property stand out from the crowd, and investing in your extra living space. 

And even if you’re staying put for awhile, homeowners, you can resolve to improve your status quo by evaluating your home budget, finalizing your home maintenance schedule, or maybe investing in a second property.

So no matter your homeownership status, we’ve got some ideas and advice for you to make this year your best one yet. Read on to learn more.

HOME BUYERS

Resolution #1: Qualify for a better mortgage with a higher credit score.

Your credit report highlights your current debt, bill-paying history, and other key financial information. Importantly for your home-buying journey, it is also used by lenders and companies to calculate your credit score, which partly determines if you are qualified to obtain a mortgage. Therefore, before you start house-hunting, make sure your finances are in the best possible shape by checking your credit report from Equifax, Experian, and TransUnion (via AnnualCreditReport.com). You can also obtain your credit score for free from some banks and credit card companies.

Your credit score will be a number ranging from 300-850.¹ Generally speaking, a credit score of 740 or higher is considered very good to excellent.² If your FICO score drops below 740, you might need to work at boosting your score for a few months before you begin house-hunting. Ways to do this are to pay your bills on time every month, keep your credit card balances low, and avoid applying for new credit.

Resolution #2: Improve your credit health by paying down debt. 

Do you have student loans, credit card debt, or car payments tying up your income each month? That debt is hurting your “buying power,” or the amount of home you can afford. Not only is it money that you can't spend on your new home, but your debt-to-income ratio also affects your credit score, which we discussed above. The less debt you have, the higher your FICO score and the better mortgage you can obtain.

If you can, pay off some debt in its entirety—like a low balance on a credit card. Then apply that "extra" money you previously paid on that credit card to pay off bigger debt, like a car loan. Even if you can’t pay off all (or any) of your debt in full, reducing the balances of each account will help you qualify for the best possible mortgage terms.

Resolution #3: Create a financial safety net before applying for a mortgage. 

Don’t forget that buying a home requires some cash as well. A down payment is typically 7% of a home’s purchase price, and closing costs currently average $3,700.^3,4 You’ll also need money for moving expenses and any initial maintenance tasks that might pop up. And as the pandemic taught us, you never know when an unforeseen event might cause a job loss, drop in income, or health scare, so having some liquid savings will ensure that you can still pay your mortgage if a crisis occurs.

Dedicate some effort to building up your reserves. Cut down on unnecessary expenses, and consider having a portion of each paycheck automatically deposited into your savings account to avoid the temptation to spend it.

HOME SELLERS

Resolution #4: Decide on the right time to sell your home.

If you’re looking to maximize profit on the sale of your home, selling earlier in the year makes sense. Listing prices historically increase early in the year, peak in May, plateau through June, and decrease for the remainder of the year.⁵And, according to the National Association of Realtors, “[w]ith both mortgage rates and the number of homes available for sale expected to remain relatively low, home prices are likely to continue to increase. [In] mid-January, home prices typically begin a quick ramp-up in a normal year.”⁵

But sales price isn’t the only thing to consider. You might not be ready to sell your home yet because you don't want to uproot your kids during the school year or because you need to tackle some minor upgrades before placing your home on the market. 

This means that there is no one month or season that is the perfect time to sell your home. Instead, the right timeline for you takes into account factors such as when you’ll earn the highest profit, personal convenience, and whether your home is even ready to put on the market. A trusted real estate professional can talk you through your specific needs to clarify when to sell your home. 

Resolution #5: Boost your home’s resale value by making your property shine.

Housing inventory is at historic lows across the country, and that means the market is fiercely competitive.⁶ Selling your home in 2021 has the potential to net you a huge return right now, and you can maximize that amount with some simple fixes to make sure your property outshines your neighbors' for sale down the street. 

In your home, you might need to tackle a minor remodeling project, such as upgrading the flooring or adding a fresh coat of paint. According to the National Association of Realtors’ 2019 Remodeling Impact Report, simply refinishing existing hardwood floors recoups 100% of the cost at resale, and completely replacing it with new wood flooring recovers 106% of costs.⁷

Outside, you might consider improving your curb appeal by removing a dead bush, trimming a tree that blocks the front window, or power-washing your moldy driveway and sidewalks. In fact, real estate agents say cleaning the exterior of your house can add $10,000 to $15,000 to a home’s sale price.⁸ And according to a Virginia Tech study, improving a home’s landscaping may increase its value by 10 to 12%.⁹

A good agent should provide custom-tailored suggestions to ensure your property pops inside and out. Ask us about our local insider secrets that will make your home stand out from others on the market.

Resolution #6: Invest in your “extra” living space to meet current buyers’ needs. 

Due to COVID-19, more people are staying at home to work, go to school, exercise, and stay entertained. And these lifestyle changes are showing up in home buyer preferences. For example, according to one study, buyers are looking more and more for homes with formal, outfitted home offices, private outdoor spaces, and updated kitchen appliances.¹⁰ 

So if you’ve got an underutilized room, consider turning it into an office, home gym, schoolroom, or multi-purpose room to meet current home buyer needs and attract better offers on your home. Got some underwhelming space outside? You could turn it into an outdoor entertainment area by adding a firepit, upgrading the patio furniture, or installing a grilling area. Be sure to consult with a local real estate professional before investing in a renovation, however, as each market’s buyers have different tastes.

HOMEOWNERS

Resolution #7: Evaluate your household budget to reflect financial changes.

After this past year, in particular, your financial picture may have changed. Maybe you were furloughed, had your hours reduced, or got a new job further from home. Perhaps you’ve kept the same job, but you’re now working remotely. A work-from-home arrangement could mean less money spent on gas, tolls, a professional wardrobe, and dining out for lunch. 

But this could also mean new (or increased) expenses now that you’re working at home, such as new tech-related purchases, faster Wi-Fi, and higher energy bills. January marks the perfect opportunity to update your income and expenses and review last year’s spending habits, tweaking as needed for 2021.

For more specific ideas, contact us for our free report "20 Ways to Save Money and Stretch Your Household Budget."

Resolution #8: Save money now (and earn more later) with a home maintenance plan.

Having a schedule of regular home maintenance projects to tackle will save you money now and in the long-term. You’ll avoid some surprise “emergency fixes,” and when you’re ready to eventually sell your home, you’ll get higher offers from buyers who aren’t put off by overdue repairs.

Even if nothing necessarily needs fixing right now, you can lower your energy costs by maintaining and upgrading your home.  According to the U.S. Department of Energy, simple fixes add up: replace five most frequently used bulbs with ENERGY STAR ones to save $75/year; repair leaky faucets to save $35/year; replace older toilets with low-flow models to save $100/year; and seal air leaks to save $83-$166/year.¹¹

For a breakdown of home maintenance projects to tackle throughout the year, contact us for our free report “House Care Calendar: A Seasonal Guide to Maintaining Your Home.”

Resolution #9: Invest in real estate for a better standard of living.

Even if you don’t plan on leaving your current residence, real estate is a great way to improve your quality of life in 2021. 

Have cabin fever from the long quarantine? A vacation home in a getaway location you love lets you safely spread your wings. And if you have been looking for a second stream of income, an investment property might be your answer. Just be sure to consult with a real estate professional to get a realistic sense of a property’s true income potential.

Want more information on how a second property fits into your 2021 plans? Request our free report, "Move Up vs Second Home: Which One Is Right For You?"

LET US HELP YOU WITH YOUR 2021 GOALS

Without a plan and a support system, 55% of Americans will break their new year’s resolutions.¹² Whether you’re looking to buy, sell, or stay put in your home, it helps to connect with a trusted real estate agent to keep you motivated and on track.

As local market experts, we have the knowledge, experience, and networks to help you achieve your homeownership goals, whatever they may be. Reach out to us today for a free consultation and commit to a happy and prosperous new year.

Sources:

1. USA.gov - 
   https://www.usa.gov/credit-report
2. Equifax - 
   https://www.equifax.com/personal/education/credit/score/what-is-a-good-credit-score/
3. NerdWallet - 
   https://www.nerdwallet.com/article/mortgages/the-20-mortgage-down-payment-is-dead
4. Zillow - 
   https://www.zillow.com/mortgage-learning/closing-costs/
5. Realtor.com - 
   https://www.realtor.com/research/we-should-be-in-a-buyers-market-right-now-but-covid-turned-everything-upside-down-best-time-to-buy-a-home
6. Business Insider - 
   https://www.businessinsider.com/how-2020-broke-the-housing-market-inventory-could-run-out-2020-9
7. National Association of Realtors - 
   https://www.nar.realtor/sites/default/files/documents/2019-remodeling-impact-10-03-2019.pdf
8. House Logic - 
   https://www.houselogic.com/save-money-add-value/add-value-to-your-home/adding-curb-appeal-value-to-home/
9. Virginia Cooperative Extension - 
   https://www.pubs.ext.vt.edu/content/dam/pubs_ext_vt_edu/426/426-087/426-087.pdf
10. HomeLight - 
    https://www.homelight.com/blog/top-agent-insights-for-q2-2020/
11. U.S. Department of Energy - 
    https://www.energy.gov/energysaver/articles/how-much-can-you-really-save-energy-efficient-improvements
12. Ipsos - 
    https://www.ipsos.com/en-us/urban-plates-ipsos-NY-Resolutions