Homes, dreams and interest rates. What do they mean?

I'm writing this on what would be my two year anniversary! But like everything in the past few years, COVID has me stuck trying to remember when my anniversary actually is while coming off a high on the real estate market I don't think anyone could have ever expected.

You've seen the news, heard the stories and maybe even lived the dream yourself! Your home sold for a number you didn't think was achievable, locked in your new home for an interest rate that seemed too good to be true and rode the real estate wave to its fullest extent. I know Meg and I sold our first home high and got a 2.75% interest rate on our dream home! It was like riding a gravy train.

And then came the summer of 2022. Interest rates that once were in the twos and threes are now closer to six, expected to increase again and again, to fight inflation. The question for the past couple of years is "How much do I have to offer?" Now, it has shifted to people asking, "What is going to happen? When will the crash occur?"

I am one of the hundreds of thousands of Realtors who likely have scoured through the countless news articles, looked at historical data and tried to come up with an answer that I am comfortable in giving. To be honest, my opinion is the market is shifting, and quickly.

The best way I can think of analogizing the situation is interest rates rising work almost like brakes. As money is more expensive to borrow, the pressure on the brakes increases. More people are being squeezed out from the buying power they once had, or are uncomfortable with what the rates will mean on a monthly payment, and are deciding to reconsider their situations. It might mean they are looking for lower priced homes or leaving the market search completely. CNBC puts it in numbers for us. On a $300,000 loan, the monthly mortgage in December at 3.11% was $1,283 each month for principal and interest. In June, at 6.3%, the same loan costs $1,853 each month. A $570 increase per month and an additional $205,000 over the life of a 30 year loan.

What this means is a market once inundated with buyers is starting to falter and pricing a lot of people out. But to keep in perspective, the increasing rates are not something new. The last time we did see the rates more than 6% was in 2007.

So will we relive "The Great Recession?" This is where many of us vary in opinions. I don't believe we will, and here's why: Many people, in the last two years, not only took advantage of the historically low mortgage rates by either buying a new home or refinancing, but they put themselves in a good position to weather whatever storm we may have coming our way. The low interest rates, combined with banking practices that have worked to deter chaos from ensuing, will keep people in their homes. I've warned all of my buyers that they are paying very high prices and can't go into buying a new home with intentions of selling it for profit within the next five years. I just don't see that happening as prices begin flattening out. Is owning a home a bad idea if you just purchased it in the past couple of years? Historically, not at all. It will still be your biggest investment and should pay off down the line. And to pay for rent with absolutely no return in the future is definitely something you should keep in consideration.

What this does mean is it's ever-more important to price your home right in the next couple of years. Going for the stars may no longer be an option, especially with a buyer's pool that is certainly going to thin, but the good news is people will still need to have a roof over their head and the cost of building...that's another story.

It is going to be interesting to see the consumer response of higher interest rates. The days of multiple offers and people offering sellers "personalized cake balls at closing," yes that did happen, may slow down, but let's hope higher interest rates will do what they're intended to do, and that is level off home costs and slow down inflation on a national level.

The brakes are ok to slow everything down. We just prefer not to see a hard stop!

In March, Michigan joined many other states in an almost complete shutdown of the economy. Understandably, there is a serious fear of the unknown. Many are wondering if the Coronavirus would lead to a recession like we saw in 2008 that derailed the real estate industry. Many Realtors, like myself, have prepared for the worst.

Fast forward to May when real estate was one of the first industries released back to work. Expectations were low out of the gate but almost miraculously, the smoldering demand caught fire again. Call it pent up demand or families realizing they needed a larger home after being stuck inside for months, real estate has been a type of busy I would have never expected. My phone hasn't stopped ringing and I've entered into more than a dozen deals in just a couple of weeks.

Right now, what we are looking at is a market saturated with buyers and a very low inventory. This creates a supply and demand situation in mid-Michigan that is keeping home prices steady while making a very competitive market for buyers looking for their forever home. Right now, if you list your house at market value, I can almost guarantee you will have non-stop showings and multiple offers in the first few days. This will put you in position to receive top dollar for your home with very desirable terms from the potential buyer you choose. The importance of having a licensed Realtor give you a market analysis is paramount.

Now let me just say there is certainly still a fear of the unknown for Realtors like myself. A lot of it will hinge on whether a second wave of COVID 19 spreads through America and whether another shutdown will take place. Some articles from economists indicate a strong market through at least September. But if you've put thought into selling your home for top dollar, now may be your time to cash in. 

To take from a sports analogy, America is facing a curveball that we could have never expected. The question is how we will handle it standing at the plate. In the real estate profession, we are not immune from making the split-second decision.

Since the blindside of the so-called Coronavirus, COVID 19, every industry has had tough decisions to make. With mortgage rates at historical lows, business has not stopped, but it has arguably transformed. There are countless buyers and sellers biting at the bit to get their home sold or get into a new one, but with that comes more more concern on how to continue on a daily basis to not put clients or even agents like myself at risk.

I've read countless articles put out by the Centers for Disease Control in order to better advise clients on personal health safety. Scientists have said the virus can be transmittable by droplets from a cough or sneeze. I have advised both buyers and sellers to let me know if they're not feeling well. It's better to postpone showings and play it safe.

For sellers, I have advised them to turn all lights on and keep doors to rooms open so potential buyers walking through do not have to touch the switches or handles. The CDC also recommends to wipe down areas others who may be carrying the virus have touched. I've indicated they should follow this advice and wipe down cabinets, door handles, light switches and any other surface that could have been contaminated.

As for buyers, I've suggested they not touch anything in the homes they're touring. It's human nature to do so, but not seeing inside a silverware cabinet doesn't necessarily change their opinion of the home. But if they are so inclined to open things up, I do have sanitary wipes I am bringing to showings to wipe down the surfaces they touch.

I think this also is a good time to explore what technology can do for us. Many have been told to work from home as we let this virus play itself out. The same can be done for buyers and sellers. I am capable of providing you a market analysis without stepping foot into your home. This can be done by Facetime or Skype. I also have the ability to put a video together showcasing your home. If you're not comfortable with people coming in, there are certainly avenues we can take to make you feel at ease and get your home sold. For buyers, if you're not comfortable going on a tour, contact me and I can use the same technology to give you a virtual walkthrough of a house that you're interested in.

During this time, I also know the importance of keeping myself safe. Unfortunately, I am avoiding hand shakes or any physical contact with clients in order to keep my next clients safe. I also will likely not get too close to you to adhere to the social distancing advice provided by the CDC. Don't take it personal.

At the end of the day, every curveball can be hit. It's just how you prepare for it as you step up to the plate. Let's be smart and get through this as humankind!

If January is any indication in this year's market health, it's going to be an excellent year to sell your home. Inventory remains low and according to lender reports, the number of mortgage origination is near or exceeding an all-time high. Mortgage rates continue to be great! This means if you have your home presentable and ready for sale, it will sell because of the number of buyers browsing.

This year, I've received several calls from interested clients who tell me they are exploring the sale of their home in spring. I often ask why they are waiting. For several decades before now, it used to be people generally just wouldn't look for a new home during winter. There are many reasons for this. First, a Michigan winter means cold, and second, it usually means snow. But with more and more avenues Realtors are exploring with technology (professional pictures, engaging video, etc), it allows potential buyers to sit in the comfort of their home and shop. Much like many do with online purchasing. Most have a good idea if they're interested from their couch.

Listing your home in the winter gives you an advantage as a seller. You are not up against the number of homes that will be on the market when the weather turns. It also turns up serious buyers, ones who set up showings with intentions truly buying.

Proof - This January, in 21 days, I have executed seven separate deals. Most of them have been full-price offers if not better. Putting your home at a competitive, fair price will get it sold.

So for those of you who are saying, "let's wait until spring," you may want to reconsider! Make the call, talk to a real estate specialist and put yourself into position to getting a successful sale.

This was an article I thought I'd write in December, but due to unforeseen Michigan circumstances (not sure if I'm surprised at all), I need to share it early! Across Michigan as I write this, a firm snow cover blankets Mid-Michigan.

Even with a nice snowy mess, it doesn't mean buyers are hanging it up and done looking for a home this year. That's because they don't have to. With more available on each listing by way of the internet and tools available, the industry has seen activity continue even during the snowy months. I can guarantee you when your home goes live, it will be seen by hundreds of potential suitors. And with snow on the ground, you need the expertise in a Realtor to make your home stand out and make the buyer want more. You must grab potential buyers eyes by having a listing that reaches through the computer and grabs them so they take action and schedule a showing. This is done by good pictures, compelling video and a description that talks to them, not at them. Luckily, in my previous life as a television reporter, I was a word smith and know a little about photos and video.

So while the showing requests likely won't be as prevalent as they could be in the summer (when families call Realtors to see what they think COULD be a potential but probably won't work -- but plan to go get an ice cream with the kids after anyways so might as well see it), those who do schedule are immediately classified in my eyes as hot buyers. A hot buyer is somebody who we want because they're the creme de la creme, the ones who will bring you something on paper and get your home under contract.

And this is where it's on the seller to make sure to welcome in the hot buyers. First, make sure your driveway is clear! Not everyone has a four-wheel drive truck and you don't want somebody to get stuck or get out and get wet socks. So if there's any snowfall, make sure you get out there and shovel it away. You also want to have the sidewalks and entries cleared and salted. Chances are if somebody falls walking up to their house, your house will now give an aura of bad luck. Plus, you'd feel terrible if somebody got hurt and it could open up a whole new world of issues. Clear and salt!

In some instances, you've already moved and you're selling a vacant home. In those cases, you'll set the thermostat at 40 degrees because nobody's living there (who wouldn't?). I always tell my sellers it's a good idea when you know there's a showing, run over to the home or use the nest thermostat you have on your phone and crank up the heat a little bit. 60 to 65 degrees works! Remember, buyers are walking into a potential home that will work for them and if it's so uncomfortably cold inside, they'll remember that. I just had this exact thing happen this week. I was showing a great house but the buyer couldn't focus because it was 42 degrees inside and she was cold.

Another thing is to know the health of your roof and give pictures of what it looks like mid-summer. This can be done by having a roofing specialist or inspector come over and do an opinion on the life expectancy of the roof. Typically, when snow covers the roof, it can be concerning to buyers. If you have proof or documentation on the roof's health, it will be an added comfort to the buyer. As far as your landscaping, it's important to showcase it! With our cell phones having a pretty good camera on them these days, those pictures you took of your beautiful flowers this summer can easily be shared with your Realtor and placed on your listing. It's an added touch and could give your potential buyer a nice, warm, fuzzy feeling!

In many cases, you will hear your friends, family and even Realtor tell you it continues to be a pretty good seller's market. But remember, you are the seller, and presentation is everything!

Good luck this winter if you wish to list! I'd be honored to be on your team!

The leaves begin to change, the kids are back in school and pumpkin pie and apple cider replace golf and the beach. A Michigan fall defined! Maybe you've heard once October and November hit, the buying and selling season is over. That may have once been the case. But people, we are in 2019, when buyer decisions can be made by the warmth and comfort of their own home. That's the major benefit of the internet and more interactive real estate listings. Prospective buyers, who always may be looking, don't stop because it's chilly outside or there's a snowstorm lurking. Below are some benefits of buying or selling in the fall.

1) The Demand Stays Strong

In Mid-Michigan and across the state, real estate has been intriguing the past few years. So much shows in 2018 statistics provided by the National Association of Realtors. According to NAR, homes listed sold for 99% of listing price on average. In many cases, the sale of a home often led to multiple offer situations and the seller having to choose between two or more offers to purchase. As an active agent, I can tell you buyers remain strong.

2) There is less competition

Let's face it, do you really want to move in the cold winter months? If you are one who could tolerate it, it might make sense to list your home because there are fewer on the market. This is especially true if you have a home that is intriguing to the first-time home buyer. In many instances, people can be reluctant in selling their home with fear that they will not find a home they'd like to move to. That's not necessarily the case as more higher-end homes appear on the market near the end of the year.

3) You may own what somebody desperately wants

You may be in a home, reading this, not knowing the value of your home. If you are grappling with the idea of selling your home, it is in your best interest to have a real estate agent give you their opinion on the value of your home. Knowing this, hearing their opinion on the speed the property should sell and making the decision to list in the fall could be a good move.

4) Financing moves quickly

In the summer, it's not unusual to have your home pending for 30+ days, waiting for financing to go through. If you're selling, that time could be cut significantly because your file may not be in a long queue lenders and underwriters have like they might mid-summer or the height of the buying season. For buyers, this can benefit you, too.

Personally, in 2018, my fall sales stayed strong and in 2019, they're doing the same. I like to stress the internet, the video walk-thrus, drone footage and general accessibility to details of a property or home has created a paradigm shift in buyer and seller tendencies. The best time to sell isn't necessarily the spring or summer, it could be now!