Realty Executives Midwest
Everywhere you look, people are talking about a potential recession. And if you’re planning to buy or sell a house, this may leave you wondering if your plans are still a wise move. To help ease your mind, experts are saying that if we do officially enter a recession, it’ll be mild and short. As the Federal Reserve explained in their March meeting:
“. . . the staff’s projection at the time of the March meeting included a mild recession starting later this year, with a recovery over the subsequent two years.”
While a recession may be on the horizon, it won’t be one for the housing market record books like the crash in 2008. What we have to remember is that a recession doesn’t always lead to a housing crisis.
To prove it, let’s look at the historical data of what happened in real estate during previous recessions. That way you know why you shouldn’t be afraid of what a recession could mean for the housing market today.
To show that home prices don’t fall every time there’s a recession, it helps to turn to historical data. As the graph below illustrates, looking at recessions going all the way back to 1980, home prices appreciated in four of the last six of them. So historically, when the economy slows down, it doesn’t mean home values will always fall.
Most people remember the housing crisis in 2008 (the larger of the two red bars in the graph above) and think another recession will be a repeat of what happened to housing then. But today’s housing market isn’t about to crash because the fundamentals of the market are different than they were in 2008. Back then, one of the big reasons why prices fell was because there was a surplus of homes for sale at the same time distressed properties flooded the market. Today, the number of homes for sale is low, so while home prices may see slight declines in some areas and slight gains in others, a crash simply isn’t in the cards.
What a recession really means for the housing market is falling mortgage rates. As the graph below shows, historically, each time the economy slowed down, mortgage rates decreased.
Bankrate explains mortgage rates typically fall during an economic slowdown:
“During a traditional recession, the Fed will usually lower interest rates. This creates an incentive for people to spend money and stimulate the economy. It also typically leads to more affordable mortgage rates, which leads to more opportunity for homebuyers.”
This year, mortgage rates have been quite volatile as they’ve responded to high inflation. The 30-year fixed mortgage rate has hovered between roughly 6-7%, and that’s impacted affordability for many potential homebuyers.
But, if there is a recession, history tells us mortgage rates may fall below that threshold, even though the days of 3% are behind us.
You don’t need to fear what a recession means for the housing market. If we do have a recession, experts say it will be mild and short, and history shows it also means mortgage rates go down.
Source: Keeping Current Matters
Realty Executives Midwest
1310 Plainfield Rd. Ste 2 | Darien, IL 60561
Office: 630-969-8880
E-Mail: experts@realtyexecutives.com
If you’re buying a home this spring, today’s housing market can feel like a challenge. With so few homes on the market right now, plus higher mortgage rates, it’s essential to have a firm grasp on your homebuying budget. You’ll also need a sense of determination to find the right house and act quickly when you go to put in an offer. One thing you can do to help you prepare is to get pre-approved.
To understand why it’s such an important step, you need to know what pre-approval is. As part of the process, a lender looks at your finances to determine what they’d be willing to loan you. From there, your lender will give you a pre-approval letter to help you understand how much money you can borrow.
Freddie Mac explains it like this:
“A pre-approval is an indication from your lender that they are willing to lend you a certain amount of money to buy your future home. . . . Keep in mind that the loan amount in the pre-approval letter is the lender’s maximum offer. Ultimately, you should only borrow an amount you are comfortable repaying.”
Basically, pre-approval gives you critical information about the homebuying process that’ll help you understand how much you may be able to borrow so you have a stronger grasp of your options. And with higher mortgage rates impacting affordability for many buyers today, a solid understanding of your numbers is even more important.
That’s not the only thing pre-approval can do. Another added benefit is it can help a seller feel more confident in your offer because it shows you’re serious about buying their house. And, with sellers seeing a slight increase in the number of offers again this spring, making a strong offer when you find the perfect house is key.
As a recent article from the Wall Street Journal (WSJ) says:
“If you plan to use a mortgage for your home purchase, preapproval should be among the first steps in your search process. Not only can getting preapproved help you zero in on the right price range, but it can give you a leg up on other buyers, too.”
Getting pre-approved is an important first step when you’re buying a home. It lets you know what you can borrow for your loan and shows sellers you’re serious. Connect with a local real estate professional and a trusted lender so you have the tools you need to purchase a home in today’s market.
Source: Keeping Current Matters
Realty Executives Midwest
1310 Plainfield Rd. Ste 2 | Darien, IL 60561
Office: 630-969-8880
E-Mail: experts@realtyexecutives.com
Warmer weather means the trees are getting their leaves back, flowers are in bloom, and it is time to start mowing the grass again. As spring turns to summer, it is the perfect time to start tackling landscaping projects that will increase curb appeal and prepare your home for long, sunny days and warm, summer nights.
Whether you’re a DIY pro or just learning how to landscape your home, here are a few projects you can do this spring to spruce up your landscaping for summer.
Spring is perfect for adding mulch to your flower beds and gardens. The mulch will add a thin protective layer to your plants, keeping them cooler and hydrated during summer months. Mulch will also help prevent weeds from spreading, saving you time weeding later in the year. The mulch will protect your plants and cover up the old, faded mulch and add a fresh look to your garden beds.
While you should start watering your lawn and plants in the spring, ensure you’re not overwatering or drowning your vegetation. Start watering early in the morning to give your plants time to absorb the water before temperatures rise. Keep an eye on any plants that are wilting, as it’s a sign they need more hydration. It is also recommended to water your grass according to your soil type. Clay soil requires less regular watering, while peat or sand soil requires more water.
Over the winter, your walkways and outdoor living spaces get dirty from the snow, rain, plant debris, and other natural elements. Using a pressure washer to clean off the areas, you’ll remove any stains or leaves and have a clean slate to enjoy your space all summer. If you do not have a pressure washer, a hose with a nozzle will often work. Keep in mind that some hardware stores will rent equipment for daily use.
Planting bright, colorful flowers in your yard will liven up your space for summer and add a fun accent to your landscaping. Some hardy perennials will survive several years — even in freezing weather if you live in a cooler climate. For warmer climates, research colorful plants like geranium, marigold, or cosmos that will survive in hot summers. By taking the time to plant them in the spring, you will allow the roots to grow for several months and establish hardy roots before winter hits again.
After a long winter, your grass needs some extra tender, loving care. Adding an organic fertilizer to your yard can infuse the grass with the nutrients it needs to have a healthy growing season in the spring and summer. You can test your soil to see what nutrients it lacks, then purchase the corresponding fertilizer. Adding fertilizer every month from May to September will help your grass grow strong and stay healthy throughout the cooler months.
Warmer weather also means more insects. Spring is the perfect time to protect against insects and pests before the weather gets hotter and the mosquitos, ants, or other bugs emerge from their winter hiding. Depending on the bugs native to your area, you can spray your yard with a repellant, place ant traps around your house, or spray wood structures to deter bees. This is also a great time to check your house for any open crawlspaces or areas where other rodents can enter.
Adding landscape lighting to your yard can take it to the next level and keep it illuminated all hours of the day. You can add solar panel lights along your walkway or spotlights to the front of your house. If you have a backyard patio or deck, string lights can create a welcoming atmosphere perfect for hosting guests. Solar lights are a low-cost way to get high-quality lighting without hardwiring into your electrical system. Explore what lighting would work best for your home and have fun!
Before trees and plants enter their peak season, take a minute to trim back the current plant to make way for new growth. Keeping your bushes and trees well-manicured and trimmed will improve your curb appeal and make your home look pristine. To trim your plants, you can use hand clippers or use a pruning pole for taller trees. By making cuts at a downward angle, you’ll promote new growth while keeping it healthy.
From planting to pruning, your yard is the most visible way to maintain your house. As you prepare for summer, take the time to get your yard ready so you can enjoy all that summer has to offer! You’ll thank yourself later.
Source: https://www.realtyexecutives.com/blog/spruce-up-your-landscaping-for-summer
There have been a lot of shifts in the housing market recently. Mortgage rates rose dramatically last year, impacting many people’s ability to buy a home. And after several years of rapid price appreciation, home prices finally peaked last summer. These changes led to a rise in headlines saying prices would end up crashing.
Even though we’re no longer seeing the buyer frenzy that drove home values up during the pandemic, prices have been relatively flat at the national level. Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), doesn’t expect that to change:
“[H]ome prices will be steady in most parts of the country with a minor change in the national median home price.”
You might think sellers would have to lower prices to attract buyers in today’s market, and that’s part of why some may have been waiting for prices to come crashing down. But there’s another factor at play – low inventory. And according to Yun, that’s limiting just how low prices will go:
“We simply don’t have enough inventory. Will some markets see a price decline? Yes. [But] with the supply not being there, the repeat of a 30 percent price decline is highly, highly unlikely.”
As you can see in the graph below, we’ve been at or near record-low inventory levels for a few years now.
That lack of available homes on the market is putting upward pressure on prices. Bankrate puts it like this:
“This ongoing lack of inventory explains why many buyers still have little choice but to bid up prices. And it also indicates that the supply-and-demand equation simply won’t allow a price crash in the near future.”
If more homes don’t come to the market, a lack of supply will keep prices from crashing, and, according to industry expert Rick Sharga, inventory isn’t likely to rise significantly this year:
“I believe that we’re likely to see low inventory continue to vex the housing market throughout 2023.”
Sellers are under no pressure to move since they have plenty of equity right now. That equity acts as a cushion for homeowners, lowering the chances of distressed sales like foreclosures and short sales. And with many homeowners locked into low mortgage rates, that equity cushion isn’t going anywhere soon.
With so few homes available for sale today, it’s important to work with a trusted real estate agent who understands your local area and can navigate the current market volatility.
A lot of people expected prices would crash this year thanks to low buyer demand, but that isn’t happening. Why? There aren’t enough homes for sale. If you’re thinking about moving this spring, partner with a trusted real estate agent.
Source: Keeping Current Matters
Realty Executives Midwest
1310 Plainfield Rd. Ste 2 | Darien, IL 60561
Office: 630-969-8880
E-Mail: experts@realtyexecutives.com
The median sales price in MRED's residential marketplace increased 2% week-over-week to kick off the month of April. That jump to $295,000 didn't reach 2022's total of $300,000 during the same span, but it marked the largest single-week total since August of last year.
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