Real Estate Articles Worth Reading For June
As the economy wakes back up from its quarantine hibernation, real estate markets nationwide have bucked the broader trend of mass unemployment and recession.
Median home prices are actually up 4.3% year-over-year according to Realtor.com. Despite near-record unemployment figures (more on them later), housing supply has plummeted as would-be sellers sit tight to wait out the pandemic. Realtor.com notes that listings are down 25% year-over-year, even as mortgage applications have surged 12.7% year-over-year. Homebuyers eying rock-bottom mortgage interest rates apparently remain unfazed by the bump in property prices.
In that context, here’s the roundup of June’s best real estate-related articles. Happy trails!
What to Know About Construction Loans
Have you always dreamed about building your own home and it is now becoming a reality? If so, good for you! You must be very excited as it is an awesome experience to be able to customize exactly what you want in a home, especially when you have the budget to do it just right. One of the more essential things to know when building a new home is how you will finance the project.
More than likely you will be getting a construction loan. In the article at Maximum Real Estate Exposure, Bill Gassett shares his expertise on how a new construction loan works. Bill takes his readers from start to finish on what to expect with this kind of mortgage. Borrowers should understand that it is much different than when financing a resale house. Take a look and get familiar with the new construction financing tips.
When buying and selling a home, especially at the same time, you may not be able to coordinate the closings to be on the same day or even week. When this circumstance takes place lots of folks look to finding temporary storage for their things. Like anything else, you should at least have the basics of renting a storage unit, along with what you can expect to pay.
In the article at Newsmax, you will learn a break down of what you can expect to pay for storage.
Setting Up the Perfect Home Office
Many of the workers suddenly telecommuting in the pandemic will never go back to working at an office. (Which has enormous implications for commercial real estate markets, but that’s a whole different conversation.)
With the explosion of home-based workers, homeowners have leaped to create home offices. And would-be homebuyers have suddenly elevated home offices on their dream home wish list.
Check out Paul Sian’s Tips for Setting Up The Perfect Home Office as you both improve your own home office and help your buyer clients navigate today’s market, where home offices have skyrocketed in popularity and importance. Sellers can also benefit from home office staging advice and possibly even minor modifications to convert dead space into usable home office space.
Pros & Cons of Selling a Home As-Is
When home listings drop 25% year-over-year, sellers have more leeway to call the shots and sell their homes without massive renovations or contingent repairs.
Michelle Gibson unpacks the pros and cons of selling a home as-is, to help sellers understand their options. She also points out some hybrid and alternative options, such as simple cosmetic updates to make properties livable for first-time homebuyers.
If the current balance of supply and demand continues, with more sellers dropping out of the market than buyers, expect to see more as-is home sales in the months to come.
Unemployment Rate by County Across the US
Not every city and county has been hit evenly in the economic devastation caused by COVID-19. Some cities and counties have seen unemployment skyrocket into the double digits, while others continue humming along at a healthy 5%.
On our SparkRental blog, we created an interactive map displaying the unemployment rate in every county in the US. Because ultimately, all real estate is inherently local. It doesn’t particularly matter what the unemployment rate is in some far-flung county halfway across the country – what matters is the unemployment rate in your local market.
That’s what impacts homebuying demand, rent demand, property values, and the incidence of evictions and foreclosures.
What to Know About Moving Boxes
One of the least enjoyable aspects of buying and selling a home is packing up and moving. Frankly, it is a ton of work! One of the first tasks you’ll have when moving is putting together a list of boxes you should have to move. If you have never moved before, you probably don’t realize there are a ton of moving box options. They actually come in all shapes and sizes. There are also specialty moving boxes as well.
Take a look at the article from Vocal where you will see a complete review of all the types of moving boxes.
“We Buy Houses for Cash” Companies: What You Need to Know
With the unemployment rate soaring, many pinched homeowners and landlords will look to sell their properties. As that need grows more urgent, many will consider faster options than listing for sale on the MLS.
This is precisely what “We Buy Houses for Cash” companies sell: a fast, certain settlement. At a low sales price.
Read up on what you need to know about “We Buy Houses for Cash” companies, because more sellers may feel the temptation to turn to them.
Why America has Ditched Homeownership to Become a Nation of Renters
Even before the pandemic, homeownership rates sat low compared to historical averages.
Danny Margagliano points out that 7.3 million more American households rent today than ten years ago, as he explores how and why America has become a nation of renters. And in the wake of COVID-19 and the mass transition to telecommuting, Americans may increasingly prefer the flexibility that comes with renting over homeownership.
Because when you rent, you can move at your leisure. And if you don’t need to live physically close to where you work, why lock yourself into one home for years on end? Renting has become so popular that there is now fancy software that keeps track of scheduling for landlords.
Questions to Ask Before Buying a Home
Anyone who does still wants to buy rather than rent needs to do their homework before spending hundreds of thousands of dollars. Toward that end, Sharon Paxon points out a range of questions to ask before buying a home.
They include everything from local school rankings to neighborhood noise, home age to home appliance age, and remaining lifespan. Buying a home is a multi-year commitment in most cases, as it takes time to build enough equity to recover the money lost in each set of closing costs (both when you buy and when you sell). Don’t make that commitment lightly!
How an Adjustable Rate Mortgage Works
Historically low-interest rates have attracted buyers to the market despite shelter-in-place orders and falling home inventory supply. Most of those buyers want to lock in today’s low rates for the entire life of their 15- or 30-year mortgage.
But lenders would rather issue loans that will adjust in rate later on, and by “adjust” they mean “increase.” It serves them in two ways: first, it lets them raise the interest rate to mirror future rates (which will inevitably be higher than today’s artificially low rates). But just as importantly, it creates an incentive for borrowers to refinance in the future, to lower their rate once again.
Joe Boylan explains exactly how adjustable-rate mortgages (ARMs) work because buyers should know what their lenders will try to pitch them.
Mortgages for Single Parents
It’s not easy being a single parent. And buying a home is no exception.
Eric Jeanette breaks down the common challenges that single parents face in qualifying for a mortgage – and more importantly, how to overcome them. In addition to loan programs that often make a good fit, he also provides links to several resources designed to help single parents buy their first home.
Check out his article on mortgages for single parents at Dream Home Financing.
Love Letters Could Haunt a Home Seller
Unfortunately, we live in a very litigious society. For some people when things don’t go exactly the way they want them to, a lawsuit is the first thing they think about. Sad but true. One common practice in real estate where this could easily happen to a seller is getting a love letter from a home buyer.
On the surface, you might think what’s the big deal? A buyer is telling a seller how much they love the home often giving details of their family and may even include a family photo. Here’s the problem – a buyer could turn around and sue a seller for not choosing their offer based on a dynamic mentioned in the letter.
Think it is far fetched? Be a buyer for a moment and think about having offered more money than anyone else but you are a different race than the seller. Your offer does not get selected? Why? There may be a completely legitimate reason why other than being discriminated against.
Does that mean someone could not sue anyway? No, it doesn’t. The bottom line is real estate agents may want to reconsider putting their clients in that position.
We live in strange times indeed when 15% unemployment and a sweeping global recession cause a nearly 5% increase in home prices.
If 2020 has taught me anything, it’s comfort with uncertainty and lack of control. Perhaps “comfort” is too strong a word, but the pandemic has forced us all to confront the fact that we don’t have as much control as we thought we did.
Keep rolling with the punches, the stock market roller coaster, and the daily deluge of bipolar news. This too shall pass, so focus on coming out ahead rather than behind when the pandemic and its recession finally recede.
Previous Best of Real Estate Articles
Check out some of the previous month’s issues of the best of real estate at Massachusetts Real Estate News.
- Best of real estate in May 2020 – See some of the best articles from last month shared by numerous top real estate bloggers.
- Best of real estate in April 2020 – get helpful information about buying or selling a home in this past issue of the best of real estate.
About the Author: The above article on the best real estate articles for June 202o was written by Brian Davis. Brian is a real estate investor who co-founded SparkRental.com, which exists to help everyday people build passive income from rental properties to (eventually) replace their 9-5 job. He spends ten months of the year overseas with his family and enjoys living a frugal FIRE lifestyle on the road to financial independence. Reach out any time through SparkRental to connect with him!