Category: Monthly Newsletter

I hope you are staying cool after this HOT week we’ve had. Our air conditioner has been on the fritz for two weeks and we’ve been coordinating with our warranty company to obtain the part that it requires to bring it back up to full speed. AND, our refrigerator ice maker broke so that also requires coordinating with the warranty company.

Our home was built in 1994 and we’re only the 2nd owner. We purchased it in 2014 (9 years ago) and the previous owner was meticulous keeping mechanicals serviced and up to date but homes age, mechanicals wear down and major items eventually need replaced. We opted to invest in a home warranty many years ago and thank goodness we did.

The warranty covers major mechanicals and appliances including the washer & dryer and can include dual HVAC if your home is large enough to require two units. We pay an annual premium (that can be paid monthly if you choose) just like car insurance, and when mechanicals and/or appliances need repair or replacement, the warranty covers the cost after the deductible is satisfied.

BUT – this is a huge BUT – you have to be patient with the process. When you have a home warranty there is a step by step process that will most likely add on extra days v. if you were to simply call a local professional of your choosing to come out asap.

First you must file a claim with the warranty company and pay your deductible, which can be between $100-$250 depending on the package you chose when you purchased the warranty.

The warranty company reviews your claim then assigns an “approved partner” in your area to come out and diagnose the problem. Which means, if you have a favorite plumber or HVAC company, you simply can’t call them to come out and help you. You must use the company the warranty company assigned to your “claim”.

In the past, using our warranty, we’ve obtained a new water heater, a new furnace and our ice maker has broken once before. We will soon have our air conditioner and ice maker repaired this year so far, which all combined we have saved a lot of money but we’ve had to be patient with a few extra steps.

When I’m working with a first time homebuyer buying an existing home, I always suggest he/she research home warranty company options. Mechanicals and appliances may pass inspection the day of closing but as time goes on, it’s logical they will wear down and will need repaired or replaced. Rather then stress about the thousands of dollars out of pocket each possible repair/replacement could cost, a warranty can help relieve that financial stress.

You can invest in a warranty at any time once you own your home too – not only when you purchased. We didn’t have our warranty the first couple of years in this home but once I became a licensed realtor and understood all the big ticket items it covered, we made the investment.

I’m happy to answer all your questions about our experience any time!

On a personal note, my kids are getting ready to head back to school and it’s baffling that I will have TWO kids in High School this year! Jack is starting his Senior year and Kelly is an incoming Freshman. They will drive off every morning together to Cathedral High School and I kinda wish I could be a fly on the wall of the car to hear their morning conversations.
Teehee 😉

Have a fabulous day & as always, I appreciate your business and referrals!
It’s what helps me to support my family (and pay my warranty deductibles).

All my Best!

I hope your Summer is going well and I wish you a safe 4th of July week.

I recently saw a social media post of someone who was selling their house because they believe the market is going to crash and they wanted to capitalize on their equity. I’ve written and shared often in the past that there are many reasons why this housing market isn’t like the one we saw in 2008 (when I was working for the largest lender in the country, btw). One of which is how lending standards are different today.

Every month, the Mortgage Bankers Association (MBA) releases the Mortgage Credit Availability Index (MCAI). According to their website:

“The MCAI provides the only standardized quantitative index that is solely focused on mortgage credit. The MCAI is . . . a summary measure which indicates the availability of mortgage credit at a point in time.”

Basically, the index determines how easy it is to get a mortgage. Take a look at the graph below of the MCAI since they started keeping track of this data in 2004. It shows how lending standards have changed over time. It works like this: 

• When lending standards are less strict, it’s easier to get a mortgage, and the index (the green line in the graph) is higher.
• When lending standards are stricter, it’s harder to get a mortgage, and the line representing the index is lower.

In 2004, the index was around 400. But, by 2006, it had gone up to over 850. Today, the story is quite different. Since the crash, the index went down because lending standards got tighter, so today it’s harder to get a mortgage.

Loose Lending Standards Contributed to the Housing Bubble

One of the main factors that contributed to the housing bubble was that lending standards were a lot less strict back then. In the early 2000s, it wasn’t exactly hard to snag a home mortgage. Many mortgages were given without borrowers proving their incomes and they actually couldn’t afford homeownership. Today, lenders impose higher standards and require borrowers to have excellent credit. 

The tall peak in the graph above indicates that leading up to the housing crisis, it was much easier to get credit, and the requirements for getting a loan were far from strict. Back then, credit was widely available, and the threshold for qualifying for a loan was low.

Lenders were approving loans without always going through a verification process to confirm if the borrower would likely be able to repay the loan. That means creditors were lending to more borrowers who had a higher risk of defaulting on their loans.

Today’s Loans Are Much Tougher To Get than Before

As mentioned, lending standards have changed a lot since then. Bankrate describes the difference: 

If you look back at the graph, you’ll notice after the peak around the time of the housing crash, the line representing the index went down dramatically and has stayed low since. In fact, the line is far below where standards were even in 2004 – and it’s getting lower. Joel Kan, VP and Deputy Chief Economist at MBA, provides the most recent update from May:

“Mortgage credit availability decreased for the third consecutive month . . . With the decline in availability, the MCAI is now at its lowest level since January 2013.”

The decreasing index suggests standards are getting much tougher – which makes it clear we’re far away from the extreme lending practices that contributed to the crash.

Bottom Line

Leading up to the housing crash, lending standards were much more relaxed with little evaluation done to measure a borrower’s potential to repay their loan. Today, standards are tighter, and the risk is reduced for both lenders and borrowers. This goes to show, these are two very different housing markets, and this market isn’t like the last time.

On a personal note, my family and I are headed to Nashville, TN for a few days to enjoy good music and time together.

Have a wonderful holiday week!

I hope this finds you well as we get into the summer months. Spring flew by and I’m excited that I was able to help 1st time homebuyers get accepted offers on their first home! The conventional down payment assistant programs available are a blessing to those that desire lower down payment costs so if you know anyone who is tired of renting and ready to get their foot in the door, I’d be honored to help. I wish I could say I knew what rates are going to do this summer. Last week I attended a lending presentation and my lender partners can’t predict rates from one day to the next. I’m told not only do they change daily, they often change a few times throughout the day. Frustrating, I know. What I can do is help a buyer understand his/her buying power with current rates averaging 6-7%. The total monthly mortgage payment (taxes & insurance included) is often times less of a monthly payment then renting and the buyer starts to build equity in something he/she OWNS.   What’s wonderful about this summer’s buyers market v. last summer is LAST summer, my buyers were having to offer OVER appraised value because there were 15 offers on one house. Although multiple offers can still exist, it’s nothing like we experienced last summer and every buyer I worked with, who was ready to write an offer, has secured a home! Sellers should know it’s still a seller’s market in many markets and you could receive multiple offers. You should also know that homes are continuing to appreciate so if I did a market analysis for you last year or any time in the last 6 months, it would be beneficial for me to do an update this summer. What I’m seeing in homes desired are updated single level homes and main floor masters in two level homes. The above mentioned receive a lot of showings, traffic, and offers if priced correctly, BUT all homes if priced correctly are much desired as we’re still in a shortage overall.  As always, I’m so grateful for your referrals. I know you many not be in the market to buy, sell or build but I appreciate so much when you refer me to someone you know who is – and I thank you for reading my monthly email. 🙂 Have an awesome, safe 1st month of summer! Shawna

May is my favorite month! I love watching the trees and flowers bloom and walking & biking outside. I also love seeing the housing market ramp up! There have been A LOT of listings go live recently so please send buyers you know my way and we’ll have some fun looking for their “dream home”.   

The market is slowly balancing and I’ve even seen sellers give concessions to buyers to help with closing costs, buying the rate down and breaking rental leases. Also, I am partnered with Lenders who offer wonderful financing programs that do not require large sums of down payment funds. 

Builders are also offering incentives if you’ve thought about building. Did you know you don’t pay Broker fees to have a Realtor (me) represent you when you build?! Of course there are closing costs associated with any home purchase or build, which I’m happy to help you estimate, but is not a broker commission closing fee to partner with me to represent you.

Visiting the model home is fun and you will receive great information but the representative at the model home works for the builder, not you. It’s imperative you have professional representation when you build and I’m here to help!

If you’re considering selling this is still a wonderful time. I stated above the market is slowly balancing but we still have lower inventory then in years past so you will likely have high interest and receive strong offers if you choose to list this season and the home is priced correctly. I can help you with that too! 😉

On a personal note I am off to Washington DC today to chaperone my 8th grade daughter’s class trip. We have an action packed schedule and I know we’ll have a great time & make wonderful memories but I will miss Pat and Jack this week.

HOWEVER I’m never too busy for your referrals and you can call, text, & email anytime and I’m more then thrilled to help you and others you know buy, sell or build. I value you and your referrals. That’s what keeps my business growing & gives me the pleasure of meeting, working with, & helping amazing, wonderful people while also providing for Jack & Kelly.

Have a wonderful day!

Happy April 1st! Today is Pat’s birthday – Happy Birthday to Pat!

And, it’s our last day of Spring Break with Jack & Kelly. We’ve had a blast together and with friends and I’m looking forward to diving into the busy Spring season of helping individuals and families buy, sell & build homes! 

More and more people are getting their homes ready to sell. But with recent shifts in real estate, this year’s spring housing market will be different from the frenzy of the past several years. To sell your house quickly, without hassles, and for the most money, be sure to follow these four simple tips:

1. Make Sure You Give Buyers Access

One of the biggest mistakes you can make as a seller is limiting the days and times when buyers have access to view your home. In any market, if you want to maximize the sale of your house, you can’t limit potential buyers’ access to view it. If it’s not accessible, it could cost you by sitting on the market longer and ultimately selling for a lower price. It’s still a seller’s market so be prepared to be displaced for a few days while multiple buyers ask for private showings each day.

2. Make Your Home Look as Good as Possible on the Inside

You home should look inviting. I can give you expert advice on ideal staging for your home. Clean and decluttered homes look better in the listing photography and allow buyers to view themselves and their belongings in your home. Simply updating a room with fresh paint, steam cleaning carpets, or removing clutter from closets, counters and bookshelves can make a big impact.

3. First Impressions Matter

“You never get a second chance to make a first impression” matters when selling your house. Often, the first impression a buyer gets is what they see as they walk up to the front door. Putting in the work in on the exterior of your home is just as important as what you stage inside. Freshen up your landscaping & the front door to improve your home’s curb appeal so you can make an impact with potential buyers.

4. Price It Right

This is the most important aspect of selling your home in today’s real estate market. If a house is priced competitively, it’s going to sell quickly. To do this, you have to know what’s happening with home prices in your area and understand the factors that are affecting the market right now. That’s why it’s best to work with a trusted real estate professional who can ensure you list your house at the right price. I have an excellent track record of pricing homes to sell and they are still selling in a week on average.

I can help!

Everyone selling their home wants three things: to sell it for the most money they can, to do it in a certain amount of time, and to do all of that with the fewest hassles. To accomplish these goals, let’s connect so you can understand the steps you need to take to sell your home this spring. 

Have a wonderful April! Happy Easter! AND please forward this email to someone you know. I’ve grown my business by doing a wonderful job for my clients and earning referrals. I appreciate your referrals tremendously!

Good Morning! The last few months I’ve been learning some new technology that MIBOR and FC Tucker have implemented to help me stay in touch with you. But I’ve missed sending these monthly newsletters where I can be more personal. Starting this month, I will be back on track with my monthly, “in the know” real estate news so please keep reading and please stay in touch. 🙂 This month, I’d like to share my newsletter I physically mailed out recently that lists the RATE OF RETURN on common home improvements. Please see the below for current values and feel free to print and save for future reference. If you are considering making any of the below improvements/renovations, I’m available to stop by for a consultation, professional advice, and a current market analysis on how it may impact your market value (list price) when the project is completed. On a personal note, my family and I are looking forward to spring! We always take a family trip for spring break and now that both kids are busy teenagers with lives of their own, Pat and I value this time together as a family.

Happy April Fools Day & Happy Birthday to Pat! 🙂

The Best Week To List Your House Is Just Around the Corner

Are you thinking about selling your house? If so, you may want to make it a priority to start the process soon. The sweet spot for sellers is just around the corner. In a recent study, experts analyzed housing market trends by looking at data from the past several years (excluding 2020, since it was an atypical year). When applied to the current market, experts determined the ideal week to list a house this year. The research says: The week of April 10-16 is expected to have the ideal balance of housing market conditions that favor home sellers, more so than any other week in the year.”

• You should see more buyer activity
• Your house is expected to sell quickly
• Hour house will be in the spotlight

Full article here.

Where are Mortgage Rates Going From Here?

With both mortgage rates and home values expected to increase throughout the year, it would be better to buy sooner rather than later if you’re able. That’s because it’ll cost you more the longer you wait. But, there is a possible silver lining to buying a home right now. While you’ll be paying a higher price and a higher mortgage rate than you would have last year, rising prices do have a long-term benefit once you buy.

If you purchase a home today valued at $400,000 and put 10% down, you would be taking out a $360,000 mortgage. According to mortgagecalculator.net, at a 4.42% fixed mortgage rate, your mortgage payment would be $1,807 a month (this does not include insurance, taxes, and other fees because those vary by location).

Now, let’s put that mortgage payment into a new perspective based on the substantial growth in equity that comes with the escalation in home prices. Every quarter, Pulsenomics surveys a panel of over 100 economists, investment strategists, and housing market analysts about their expectations for future home prices in the United States. Last week, Pulsenomics released their latest Home Price Expectation Survey. The survey reveals that the average of the experts’ forecasts calls for a 9% increase in home values in 2022.

Based on those projections, a $400,000 house you buy today could be valued at $436,000 by this time next year. If you break that down, that means the equity in your home would increase by $3,000 a month over that period. That’s greater than the estimated monthly payment above. Granted, the increase in your net worth is tied to the home, but it is one way to put the home price appreciation to use in a way that benefits you.

Bottom Line

Paying a higher price for a home and a higher mortgage rate can be a difficult pill to swallow. However, waiting will just cost you more. If you’re ready, willing, and able to buy a home, now will be a better time than a year, or even six months from now. Let’s connect to begin the process today.

I’m here to help!

All my best, 

Shawna

Happy March! 

What an exciting month with March Madness, SPRING, Daylight Savings, and of course St. Patrick’s Day. 😉

Lately there’s lots of talk about interest rates, supply and demand, and having to offer over ask price to secure a home. Yes, it can be overwhelming for both buyers and sellers but that’s why I’m here! I’m a huge advocate of investing in real estate and I’d like share the below:

Real Estate has been voted the best investment eight years in a row. As a long term investment, real estate has been on a winning streak for the past 8 years, consistently gaining traction as the best long term investment. See the graph below.

Even when inflation is rising like it is today, real estate is a great investment. Rising inflation means prices are increasing across the board. That includes goods, services, housing costs, and more. But when you purchase your home, you lock in your monthly housing payments, effectively shielding yourself from increasing housing payments.

James Royal, Senior Wealth Management Reporter at Bankrate, explains it like this: “A fixed rate mortgage allows you to maintain the biggest portion of housing expenses at the same payment. Sure, property taxes will rise and other expenses may creep up, but your monthly housing payment remains the same.”

If you’re a renter, you don’t have that same benefit, and you aren’t protected from increases in your housing costs, especially rising rents.

As a homeowner, your house is an asset that typically increases in value over time, even during inflation. That‘s because, as prices rise, the value of your home does, too. Tangible assets like real estate get more valuable over time, which makes buying a home a good way to spend your money during inflationary times. 

If you know someone who is still renting, I’d love an introduction to educate him/her on the financial perks of investing in real estate NOW with today’s rates. It’s an excellent long term investment that will provide real returns. As a renter, you build your landlord’s wealth and face rising costs. As a homeowner, you build your own net worth and lock in your monthly payments for the length of your loan. 

The below chart demonstrates a purchase price staying the same but interest rates rising. The monthly payment is only affected by about $100/mo.

On a personal note, I’m certainly feeling the inflation in terms of rising gas prices and how much I DRIVE my kids around to all their activities. Jack has started track practice every day after school and he has a part time job bussing tables at Jockamo Pizza on Fort Benjamin Harrison (stop in and say hi). He’s doing amazing maintaining straight A’s as an honor student and still finds time to hang out with friends.

Kelly is rocking it on her Munciana club volleyball 13yr team. She is also maintaining straight A’s and her social life is off the chain. We drive A LOT!  Tee hee. I don’t mind really – I know that I’ll miss these times being so busy with the kids. Gas is a small price to pay for these memories 😉

Thank you for your support! Hope to talk with you soon!

Best,

Shawna

I hope you are warm and safe today! I’m working from home while my kids, Jack and Kelly, virtually learn. I’m most likely in the same situation as many families with school aged children today. 🙂

The Top Indicator if You Want To Know Where Mortgage Rates Are Heading

Each Thursday, Freddie Mac releases its Primary Mortgage Market Survey. According to the latest survey, the average 30-year fixed-rate mortgage has risen from 3.22% at the start of the year to 3.55% as of last week. This is important to note because any increase in mortgage rates changes what a purchaser can afford. To give you an idea of how rising mortgage rates impact your purchasing power, see the table below:

How Can You Know Where Mortgage Rates Are Headed?

A great indicator of where they may head is by looking at the 50-year history of the 10-year treasury yield, and then following its path. Understanding the mechanics of the treasury isn’t as important as knowing that there’s a correlation between how it moves and how mortgage rates follow. Here’s a graph showing that relationship over the last 50 years:

This correlation has continued into the new year. The treasury yield has started to climb, and that’s driven rates up. As of last Thursday, the treasury yield was 1.81%. That’s 1.74% below the mortgage rate reported the same day (3.55%) and is very close to the average spread we see between the two numbers (average spread is 1.7).

Where Will the Treasury Yield Head in the Future?

With this information in mind, a 10-year treasury-yield forecast would be a good indicator of where mortgage rates may be headed. The Wall Street Journal just surveyed a panel of over 75 academic, business, and financial economists asking them to forecast the treasury yield over the next few years. The consensus was that experts project the treasury yield will climb to 2.84% by the end of 2024. Based on the 50-year history of following this yield, that would likely put mortgage rates at about 4.5% in three years.

While the correlation between the 30-year fixed mortgage rate and the 10-year treasury yield is clear in the data shown above for the past 50 years, it shouldn’t be used as an exact indicator. They’re both hard to forecast. Yet understanding the relationship can help you get an idea of where rates may be going. It appears, based on the information we have now, that mortgage rates will continue to rise over the next few years. If that’s the case, your best bet may be to purchase a home sooner rather than later, if you’re able. 

Bottom Line

Forecasting mortgage rates is difficult. However, if you’re either a first-time homebuyer or a current homeowner thinking of moving into a home that better fits your changing needs, understanding what’s happening with the 10-year treasury yield and mortgage rates can help you make an informed decision on the timing of your purchase.

If you are NOT in your forever home and would like to discover the equity you’ve earned in recent years, please allow me to do a comprehensive market analysis. I will share what you could sell your home for AND what purchase price you may qualify for in your new home 🙂

Sincerely,
Shawna