RealNews RoundUp
Each week I round-up the best real estate articles and break them down for you in an easy to digest format. Here are the articles I’ve found most interesting over the last couple weeks:
The Article: Keeping Current Matters: Why Buying a Home Makes More Sense Than Renting Today
The Highlights: Rents are on the rise and have been for decades now! In fact, rental prices have been climbing steadily since 1988 at a higher rate than inflation, and the pandemic exacerbated rental prices even more.
In March, the median asking rent was $1,732, up $15 in a month alone, and $354 (nearly a 26% jump!) from pre-pandemic levels in 2019.
This massive price jump begs the question: Is it better to buy than rent? This article suggests that rental rates will continue to increase year after year, while buying locks you in to a monthly mortgage payment for up to 30 years, AND allows you to gain equity as you make improvements and hold it for the long term.
What’s more, the research shows that cost of rent rises significantly in relation to the number of bedrooms needed to accommodate you and your family. As your need for space grows, so does the cost of rental.
My Take: While the reasons people choose to rent vs. buy are personal and vary from one person to another, I agree with this article—especially if you plan to stay in a home for at least a couple years and have plans to grow your household in the future.
The numbers speak for themselves! Homes appreciate at an average of 2%-4% annually but have been even higher over the last few years. As you live in the home and make improvements over time, you can add even more value. Not to mention the pride in ownership and freedom you have when you own vs. rent.
That said, as with any investment, it’s important to do your research before you jump in! When purchasing real estate, you should always talk to a local realtor who knows the ins and outs of an area. Cities, neighborhoods, and location, and prior improvements can impact your return. Additionally, keep in mind that condos/townhomes generally appreciate at a slower rate than single-family homes.
All that said, save for a down payment, and get in the game!
Article: Keeping Current Matters: How Homeowners Win When They Downsize
The Highlights: There comes a time in most of our lives when the house we have no longer serves our needs. The desire to downsize generally comes as people near retirement age, but there are plenty of other factors that could make downsizing worthwhile too.
In the times of high inflation, the article suggests downsizing could be a huge money saver for young people looking to save money—and way more effective than clipping coupons. Lower mortgage payment, less to maintain, lower utilities…the list goes on.
They pose these three questions help determine if a move to a smaller home is right for you:
· Do the original reasons I bought my current house still stand, or have my needs changed since then?
· Do I really need and want the space I have right now, or could somewhere smaller be a better fit?
· What are my housing expenses right now, and how much do I want to try to save by downsizing?
My Take: While I suppose all the perks of downsizing as a way to save money are hard to argue, anecdotally, I don’t see this happening with younger people and their families very often unless it’s out of necessity.
That said, it’s something interesting to consider! Financial hardships might make downsizing essential, but you should also consider the *lifestyle* your larger home requires. It takes time and money to properly maintain a large home, and if this maintenance isn’t life-giving for you and/or your family, a smaller home in a more desirable location might be just what you need. After all, your home’s most important job is to serve you—not the other way around.
The Article: NAR: Home Staging Dips in Popularity as Fewer Agents Make the Effort
The Highlights: Demand for homes was at an all-time high last spring, and as a result, it didn’t take much to sell a home. The things agents typically do to help market a property became unnecessary.
According to the National Association of Realtors’ 2023 Profile of Home Staging released on Friday, the share of listing agents who stage all of their sellers’ listings declined from 31% in 2021 to 23% in 2023. The share of agents who only stage difficult-to-sale listings also declined from 13% to 10% during the same time period.
While inventory remains near record lows, the high interest rate environment we’re in right now temporarily paused home buying in the fall of 2022- early spring of this year and agents began relying on their usual tricks of the trade again.
Staging usually results in a higher offer compared to non-staged homes. A 1%-5% percent offer increase would result in an additional profit of $3,787 to $18,935 for a median-priced home — a worthy gain when compared to the median cost of staging.
My Take: Staging, even of the DIY variety, has always been a recommendation of mine when listing homes. It’s an amazing tool that allows potential buyers to better envision themselves in a space, and that generally leads to more and better offers. Home buying is emotional, and staging helps to create a clean and welcoming space.
If your realtor doesn’t provide a personalized staging consultation for you, my best advice is to declutter, depersonalize, deep clean!