How Long Will Interest Rates Remain Low?



Experts are predicting an increase in mortgage interest rates in the near future. Here is how this will affect home affordability.

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Mortgage interest rates have remained at historic lows, but how long will it be until we see a spike in rates? Today I’d like to take a closer look at interest rates and let you know where I think they’re heading.
Right now, we’re looking at about a 3.5% interest rate for a 30-year mortgage, and even lower in some cases with 15-year or 10-year mortgages. However, Fannie Mae, the National Association of Realtors, and the Mortgage Bankers Association have all been hinting at an increase in rates soon. They’re predicting a .25% increase within the next 30 days or so.
They’re also forecasting that over the course of the next four quarters, we’ll see up to a half percentage point increase. This may not sound like a big deal on the surface, but let’s take a look at how these numbers will affect affordability.
On a $250,000 loan at the current 3.5% interest rate through a 30-year term, interest payments would equal about $154,000. This is a lot of money. However, at a 4% rate, your interest payments would increase to $179,000. I don’t know about you, but I have a lot of other ways I’d like to spend that $25,000 difference!
“
Take advantage of these low interest
rates while you can.
”


This possible interest rate increase affects home buyers and puts pressure on home sellers since buyers will have decreased purchasing power.
Here’s another scenario to consider. When I started my real estate career in 2005, the average interest rate was 6.5%, which, at the time, was considered pretty low compared to previous rates. In 2008, these rates were lowered in an effort to stimulate the market after the crash.
If interest rates do rise to 6.5% again, which I think they eventually will, that same loan amount of $250,000 over a 30-year loan would equate to a $289,000 interest payment. That means you would pay more in interest than you are for the property!
Take advantage of these low interest rates now. If you’ve been thinking about buying a home, now is absolutely the time to do it. Alternatively, it’s a fantastic time to sell your home as well. Low inventory means that even though we’re in a fall market, you’ll face far less competition when selling your home.

 If you have any other questions about taking advantage of our market while you can, give me a call or send me an email. I’d be happy to help you!
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Where Are Home Prices Going Lately?



Home prices have risen all across Central Virginia because the pending activity has created a modicum of active listings.

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How are home prices doing in our market currently?   

I just got a report from a local appraiser who pulled information directly from our MLS that will give you a general idea. The following is a list of surrounding counties and how their average sales price has fared year over year through the second quarter of 2016:  

  • Chesterfield County is up 4%.
  • Henrico County is up 2%.  
  • Hanover County is up 5%.
  • Richmond County is up 10%.
  • Goochland County is up 1%.
  • Powhatan County is down 2%. This is the only county that saw a reduction.
  • New Kent County is up 2%.
  • Metro Richmond is up 4%.
“
Prices are up and inventory is
down in Central Virginia.
”

There are some interesting conclusions we can draw from this data, and one of those is in regard to pending home sales. The pending activity has created even fewer active listings, and that’s been a concern for the past two or three years because when there are fewer active listings in the marketplace, there are fewer homes for buyers to choose from. This effect has pushed home values up and increased prices.  

Year over year, active listings in Central Virginia are down 18% overall compared to last year. In the city of Richmond, there are 23% fewer units than there were through the end of the second quarter of last year. In terms of inventory, Henrico County is down 13%, Chesterfield County is down 17%, and Hanover County is down 22%.

This is good news for sellers, but not for buyers. If you’re thinking about selling your home, now is an excellent time because there’s no competition out there.

There are pockets in Richmond where the market is very strong and pockets where it’s not. If you’re curious which pocket your home sits in, give me a call or shoot me an email and I’d be happy to do a free market analysis of your property. I look forward to helping you!
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How Buyer Representation Protects You



Why is it important to be represented by a buyer’s agent when looking to buy a home?

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Why is having buyer representation so important when purchasing a home?

When I got into the real estate industry in the smoking hot 2005 market, one of the things that I ran into early was a lot of dual agency. Basically, this is when home buyers and sellers would work with the same Realtor. This never made sense to me, and I very quickly made the decision to never do it in my business.

I think that it’s important for home buyers to have independent representation on their side when deciding to purchase a home for a few different reasons:

“
Listing agents have a responsibility
 to their clients, not you.
”


1.  Listing agents are working for the seller. The seller’s agent has a fiduciary responsibility to protect that seller’s best interests and get them the most money possible for their home. How is it possible for an agent with that kind of responsibility to get you the best deal possible as a buyer?
2.  Dual agency is illegal in eight states. Because there is such a clear conflict of interest, dual agency has been banned in eight states.  
3.  When looking at new construction homes, going directly to the builder poses the same problem. The builder’s representative has the same contractual fiduciary responsibility to the builder to look out for their best interests, not yours.
4.  A buyer’s agent has experience working with buyers. Negotiating terms and going over the contract to make sure that the buyer’s interests are protected is the job of the buyer representative.

When you’re looking to purchase your next home, make sure that your best interests are protected by hiring your own independent representation. We’re never too busy to answer any questions you may have about buyer representation or anything else related to real estate, so feel free to give us a call or send us an email anytime. We’d be happy to help you!
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Why Owning a Home Is Cheaper Than Renting



In Richmond, buying a home is still cheaper than renting one.

One of the main reasons is because of these historically low interest rates that we have been experiencing for the last eight years or so. Nationally speaking, buying is actually 36% cheaper than renting.

From a national perspective, interest rates would need to rise to 10.6% for renting to actually be cheaper than buying a home. We haven't seen interest rates that low since 1989, so the odds of interest rates going back to that level anytime soon are highly unlikely.

If you're on the fence about buying a home, it makes a lot of sense to make a move now.

“
If you're on the fence, now is the 
time to buy.
”

According to the National Association of Realtors, the average family's home is $225,000 if they own a home versus only $5,000 if they don't own a home. Now, some people are at a stage in life where they're not ready to own a home and renting is a better option, and I understand that. However, if you are in a position to own a home, the numbers are clearly in your favor.

While interest rates are this low, you can benefit by owning a home not only to build your net worth but also simply for the fact that it's cheaper than renting. Why pay off someone else's mortgage when you could pay off your own?

If you're thinking about buying a home or you have questions about the Richmond real estate market, give me a call. I'd be happy to help.
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Is Renting in Richmond Cheaper Than Buying?



Is it cheaper to rent a home than to have a mortgage in today's Richmond market with the historically low interest rates?

The answer is an emphatic NO!
“
   Historically low interest rates are making
 mortgages cheaper than renting.
”

Historically low interest rates are making mortgages cheaper than renting. According to Trulia, paying a mortgage is a staggering 34.8% cheaper than paying rent for those who put 20% down on their purchase. I saw that figure and thought it was unbelievable. For retirees, buying is cheaper than renting in all major metros by almost 42%. That's also an astonishing figure.

If you take a look at the graph in the video above, you can see mortgage affordability vs. rent affordability in today's market. Today, 30% of your household income is going to rent if you're renting a home. With today's low interest rates though, only 15% of your household income is needed to carry a mortgage. It just makes sense to buy as opposed to renting. Gallup also recently conducted a poll across various demographics that found that America's choice for the best long-term investment is real estate, besting gold, savings, and the stock market, among others.

If you have any questions about real estate, don't hesitate to reach out to me! Just give me a call of send me an email, and I'd be happy to help.
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What’s the Current State of Richmond Real Estate?



A lot has been going on in the Richmond real estate market lately. We’ve got a market update for you today so you are in the loop whether you are thinking about buying and selling or not.

 According to Lawrence Yun, the Chief Economist for the National Association of Realtors, home sales are up 4.5% this year compared to last year. Last year was a strong market in its own right, but the market is even stronger now. That’s really good news if you’re thinking about selling.

Interest rates continue to decrease. We’ve been talking about them possibly going up for a while now, but they continue to trend down. Right now, rates are about 3.48% on average. That’s a historically low level. If you’re thinking about buying, money is cheap. You can lock in a 30-year mortgage for cheap.


“
Demand for homes is very high.
”


Buyer traffic continues to be very strong here in Virginia. Demand for homes is very high. The issues we’ve been seeing for the last four or five months remain the same, however. The housing supply has been dropping dramatically and not keeping up with demand.

 It’s an exceptional time to sell if your home is in good condition. Our specialty is helping our clients prepare for the market. We can help you get your home in great condition, so you’re ready for the multiple offers to pour in. In fact, just this last week I bought a home that received four offers in the first 24 hours it was on the market.

If you have any questions for us, don’t hesitate to give us a call or send us an email. We look forward to hearing from you.
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Connecting With Tech For Troops




Today, I’m joined by Mark Casper, the executive director of Tech For Troops, to talk a little about his veteran-centric nonprofit company.  

Tech For Troops recycles and refurbishes old computer equipment and cell phones from other companies and individuals to give back to veterans for free. In the last three years, they’ve managed to recycle over 1,004 pounds of computer parts alone. They don’t just recycle, though - they also hire and train veterans to enter IT jobs.

“
They don’t just recycle - they also train veterans to enter the IT field.
”
If you have an old computer you don’t use anymore and want to give away, they’re open Tuesday through Friday, 10 a.m. to 4 p.m. Keep in mind, however, that they do not accept CRT monitors, broken monitors, fax machines, or TVs.

We’re proud to be connected to Mark and hope that you support him, too. By the way, we’re never too busy for any of your real estate referrals, so don’t hesitate to reach out to us by phone or email.
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What Kind of Life Are You Living?





Last year, I was out at an event by Brendon Burchard called High Performance Academy, and it changed my life. Brendon talked about three different people at this event:

1. People living a caged life. If you are living a caged life, your mentality goes something like this: They don’t understand me, they don’t know where I’ve been. In other words, this person is full of excuses. Their problem is always someone else’s fault. I’ve certainly been there in my lifetime, and I bet many of you have, too.

2. People living a comfortable life. Luckily, everyone has probably been comfortable in their life at some point as well. If you’re at this stage, you are comfortable with the amount of money you’re making, with your job, and with your relationships. However, you might not be pushing yourself to the next level anymore. You are enjoying where you are at.

3. People who live a charged life. These people walk into a room, and you can just feel their energy. They are ready to go. Maintaining that charge is difficult. You might feel on top of your game in the morning only to fade out at the end of the day. Remember, we are influenced and impacted by the people around us.

“
Are you living a caged, 
comfortable, or charged life?
”

Where are you? Are you in a comfortable place? Maybe you’re not bringing new information into your world. Maybe you’re not reading books anymore, or your relationships are holding you where you are instead of lifting you up. Are you caged, comfortable, or charged? Take a look at that and figure out if you can move from one area to the next.

If you have any questions for me, please don’t hesitate to reach out. I look forward to hearing from you.
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Why Is Richmond in Such a Crazy Seller’s Market Right Now?




Right now, we are in a crazy seller’s market. This market started back in March and hasn’t slowed down yet. Here are a few things you should know about this market:

  1. There have been massive increases in the number of sales. Every county in central Virginia has seen sales go up year over year, with the exception of Powhatan County. Overall, every single county has seen a significant uptick in sales activity.
  2. Pending home sales have increased. Hanover and New Kent are the only two counties where pending home sales have not gone up. This is great news, as pending home sales indicate the future of home sales in the market.
  3. New listings have decreased. We are experiencing low inventory everywhere but Powhatan and Chesterfield. There are fewer homes on the market than there are buyers. In other words, supply is down and demand is up, which has caused home prices to go up as well, which is great news for sellers.
  4. Active listings have decreased year over year in every single county by an average of 10%. Again, this is because there is more demand than the inventory can support.
  5. The average sales price has increased in every county except for Powhatan and, surprisingly, Henrico, which saw a decrease of 1.6%.
  6. Days on market has dropped. This is the really exciting number. In every market, the average number of days on market is down by 22 to 23%. Homes are selling in as little as 20 to 30 days!
“
Homes are selling in 20 to 30 days!
”

If you’re on the fence about selling your home, get off the fence now and hop into the market. Interest rates are still historically low and keep getting lower. The Fed keeps putting off raising them, so it’s a perfect storm for sellers in almost every market right now.

If you have any questions, give me a call or send me an email. I would be happy to help you!
Labels:

Why Is Richmond in Such a Crazy Seller’s Market Right Now?




Right now, we are in a crazy seller’s market. This market started back in March and hasn’t slowed down yet. Here are a few things you should know about this market:

  1. There have been massive increases in the number of sales. Every county in central Virginia has seen sales go up year over year, with the exception of Powhatan County. Overall, every single county has seen a significant uptick in sales activity.
  2. Pending home sales have increased. Hanover and New Kent are the only two counties where pending home sales have not gone up. This is great news, as pending home sales indicate the future of home sales in the market.
  3. New listings have decreased. We are experiencing low inventory everywhere but Powhatan and Chesterfield. There are fewer homes on the market than there are buyers. In other words, supply is down and demand is up, which has caused home prices to go up as well, which is great news for sellers.
  4. Active listings have decreased year over year in every single county by an average of 10%. Again, this is because there is more demand than the inventory can support.
  5. The average sales price has increased in every county except for Powhatan and, surprisingly, Henrico, which saw a decrease of 1.6%.
  6. Days on market has dropped. This is the really exciting number. In every market, the average number of days on market is down by 22 to 23%. Homes are selling in as little as 20 to 30 days!
“
Homes are selling in 20 to 30 days!
”

If you’re on the fence about selling your home, get off the fence now and hop into the market. Interest rates are still historically low and keep getting lower. The Fed keeps putting of raising them, so it’s a perfect storm for sellers in almost every market right now.

If you have any questions, give me a call or send me an email. I would be happy to help you!
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