The Central Alabama real estate market is among the most affordable and generally stable markets in the US. The average home sold in August 2018 in our Central Alabama area was $165,727.¹ Most recent published data from HUD indicates national average price of existing homes is upwards of $243,833 with average new home prices considerably higher at $328,000.² While many other parts of the country are experiencing major price increases and lack of inventory, the Central Alabama market overall is more in balance with a hint of a sellers market–just under a 5 month supply of homes. July data does show that demand is up and supply is down in our area, but prices have gone up only a modest 2% comparing year over year data. ³ Average days on the market in the Central Alabama region has been hoovering around 90 days for quite some time with nearly half (48%) of the homes selling in under 60 days, but over 11% selling after over a year.¹
Data and chart above obtained from The University of Alabama, Culverhouse College of Commerce, Alabama Center for Real Estate, July 2018 update.³
Data obtained from Montgomery Area Association of Realtors (MAAR) for August 2018 Residential Sales¹
Keep in mind that markets vary by neighboorhood. If you are interested in a more detailed breakdown of market trends by your particular zip code or neighborhood, let me know and I’ll send you a free report: Free Market Report for Your Neighborhood!
¹Montgomery Area Association of Realtors, Multiple Listing Service, August 2018 residential sales data.
²Office of Policy Development and Research (PD&R), U.S. Department of Housing and Urban Development, QTR 1 FY 2018 data.
³The University of Alabama, Culverhouse College of Commerce, Alabama Center for Real Estate, Montgomery area market report, July 2018 update.
Last month, our blog included a review of the state and the Montgomery area residential real estate markets. (If you missed it, you can take a look at the previous blog, “Real Estate Market Trends: Part 1”). We learned that by the end of 2017 the supply of residential homes for sale was down compared to the previous December and that the number of home sales and home prices were on the upswing.Although the Montgomery market is overall not as robust as the state, trends are showing significant positive improvements.
As we head into spring and the beginning of our most active real estate season in Central Alabama, a common question we hear is, “What’s the outlook for area real estate for 2018?”
What most people are interested in are the price and value of homes and most importantly what that means for their home and for them personally.
In fact, this local market information is extremely important for those considering buying or selling as well as homeowners interested in their equity position for possible refinance or eventual sale.
Nationally and statewide, we expect continued real estate growth in 2018, including continued price increases.But what about our local area?
WILL HOME VALUES CONTINUE TO RISE?
Nationally, prices are expected to increase in 2018 with predictions of 3 percent growth rate.1 We anticipate a similar trend for 2018 in our local area based on the rising trend in home prices in the Montgomery region over the past several years, including 2017.Data from the University of Alabama show the historical median selling price in Montgomery has steadily risen since 2014, from $130,000 to $147,750 in 2016.Montgomery area Multiple Listing Service (MLS) data from 2017 show the overall average sales price in 2017 was $167,792, up approximately 5% from 2016 levels. 2
ARE THERE MARKET DIFFERENCES BY COUNTY?
The short answer to this is a resounding YES! Let’s look at some data and check out the details!
In general, in 2017 the average price of homes sold (including resale and new construction) were highest in Autauga County and Lowest in Montgomery and Elmore.The average home sold price in the Montgomery Area MLS in 2017 of $158,368 was just slightly lower than the average sold price of $165,019 for Montgomery County.Elmore County residential sold property averaged $172,645.Autauga County topped the ranking of the three counties for price, coming in at an average sale price of $193,087. (The overall Montgomery Area MLS data includes other areas not included in the three counties mentioned here, which accounts for the differences in average price.) You can take a look at the chart to see the ovrall pattern between counties and new construction homes by county.
AVERAGE MONTGOMERY AREA HOME SALE PRICES (Overall, New Construction and Selected Counties) :
Average price ofall area homes (ALL) and new construction (NC) and breakdown by selected county for Montgomery (MGM), Autauga (AUT) and Elmore (ELM). Data from the Montgomery Area Multiple Listing Service (MLS) for the period January 2017 through December 2017).
WHAT IS THE IMPACT OF NEW CONSTRUCTION ?
You can see in the chart above that the overall average home price is influenced by the much higher home prices commanded by new construction across the area and in the three counties shown. New construction in the Central Alabama region is clearly contributing to home sales in our market and to the average price of homes. New construction residential homes across the Montgomery MLS sold at an average price of $263,294 in 2017. Montgomery County led the average sold price in new construction homes at $293,283. Autauga County followed with an average new construction home sold price of $246,035. Elmore county new construction sold at an average price of $214,568.
New construction is especially important in keeping up with the dwindling inventory of available homes to meet the needs of buyers. Growth in home sales nationally will be driven largely by new home sales, which is expected to continue to increase with single-family construction according to economists at Freddie Mac.3 Volume of new construction sold in the Montgomery region is also up markedly over the past few years, with an increase of 25 percent in 2017 over 2014 levels.(691 new construction units sold in 2017 compared with 553 new construction units sold in 2014).
WHAT DOES THIS MEAN FOR YOU?
Home prices in Central Alabama are on the rise and demand is increasing.
If you’re looking to get into the market either to buy or sell, now could be the time you’ve been waiting for.If you’ve been thinking of selling and possibly purchasing another home, prices and market competition are on your side to transition you to a new home.If you’re thinking about buying, there are many great options for financing available so that you can start your road to home ownership and build equity. But if you’re concerned about rising prices and home affordability in our area, keep in mind the the nationwide median price based on residential sales is $335,000! 4
WHERE CAN YOU GET HELP?
While national, state and regional real estate numbers and predictions can provide a “big-picture” outlook, real estate is neighborhood and home specific. As a local market expert, I can guide you through the specifics of our market andhelp you understand the factors that are likely to drive home values in your particular neighborhood. As a Certified Pricing Strategy Advisor by the National Association of Realtors, I can help ensure you have comprehensive information concerning the value of your home—whether you are buying or selling.If you have specific questions, or would like more information about area real estate, please give me a call! Id love to discuss the market and help you sort through your plans to buy or a sell a home this year or in the future.
When you’re buying or selling a home, it’s crucial to work with a qualified real estate agent. Not just a professional, but an amazing agent and a market expert. So how do you ensure you’re hiring an amazing real estate agent?
There are currently more than two million real estate professionals in North America.1,2With so many options to choose from, how does a prospective home buyer or seller choose the right agent or broker? According to the National Association of Realtors®, trust and reputation are the top deciding factors consumers use when hiring an agent.3
But how do you measure trust and reputation … and what criteria can be used to help you make your decision?
In this guide, we’ve outlined the top attributes that amazing agents possess, as well as the questions you can ask to make sure you’re working with the right market expert to achieve your real estate goals.
5 ATTRIBUTES OF AN AMAZING AGENT
Not all real estate professionals are the same. Following are five key attributes of amazing agents to help you understand what makes top agents and market experts stand apart from the competition:
1. A Pricing Specialist: For buyers, amazing agents have a strong understanding of market trends to help you identify and secure a deal to ensure you get the home you want, within your desired budget, and at a reasonable price. For sellers, market experts have experience pricing homes optimally for the market, helping you sell for your desired price, and avoid costs like additional mortgage and utility payments.
Takeaway: Whether buying or selling a home, pricing can be tricky. Market experts can help navigate best-possible pricing strategies, and also secure the home you want within your budget.
2. An Effective Time Manager: The average agent may not be utilizing the latest tools and technology to make the transaction easier and more cost effective for you. Market experts have tools and strategies at their disposal to minimize the amount of time you spend on the process. For sellers, they can also ensure you only deal with qualified buyers, not “window shoppers” who waste your time. For buyers, a market expert knows how to prioritize your needs and wants to find you the ideal home within your budget, without wasting your time on houses that aren’t a fit or are likely turn up major issues in an inspection.
Takeaway: Even a well-intentioned agent may not have the skills, tools or technology to make the experience easy for you. There are lots of hidden activities that may take up unexpected time, and a market expert will save you time and energy.
3. A Market Insider: While most agents can pull market stats about a neighborhood, community or city, they may not understand important trends or developments that would affect your transaction. Market experts live and breathe local real estate and know the trigger points for buying and selling in your market. We also stay current on effective marketing and negotiation practices, resulting in our track record of success.
Takeaway: An experienced real estate agent is often the best source of information about a city, neighborhood, or even street … we’re literally conducting market research every day.
4. A Strong Negotiator: Amazing agents truly set themselves apart in their ability to negotiate. Real estate negotiations take skill, experience and a knowledge of how to fight for your client’s best interests. While any agent can enter negotiations to buy or sell a home, experienced Realtors understand what to do before entering negotiations (establishing the upper hand), as well as during the process (when to offer or accept concessions) in order to set up the best outcome to represent your interests.
Takeaway: Working with a market expert will help ensure you get the best deal on your terms, not just the fastest deal.
5. An Effective Closer: Closing a deal fast is often a good thing. However, top real estate professionals know how to not only achieve your real estate goals quickly, but in the right way to avoid pitfalls. Just like negotiations, the paperwork and process of closing a real estate transaction are complicated. Market experts have a strong understanding of the contracts, timelines, clauses and contingencies within the closing process.
Takeaway: Real estate transactions often involve a significant investment, so even a small mistake can mean serious trouble. With that in mind, it’s best to work with a true market expert.
5 QUESTIONS TO ASK YOUR REAL ESTATE AGENT
The first step would be to “shop around.” Many people work with the first agent they come across without a firm understanding of their level of experience or education. It’s always a good idea to interview a number of agents before selecting one. If you’ve gotten referrals from people you trust, then you may only need to interview 2-3 agents.
However, it can be tough to know what to ask in the interview process. Here are some questions that can help you qualify the best agent to help you achieve your real estate goals:
1. Can you send me some information about yourself? Look for professionalism and consistency. What are their accomplishments? See how they approach their work. If they’re a newer agent, that’s ok, ask about their specialized training, previous relevant work accomplishments, and their team’s dynamic and accomplishments.
2. How long have you been in real estate? While longevity can be important, don’t be fooled by just sticking with the status quo. It is more important to be up-to-date. Also, consider the quality of transactions they have closed or been involved in. So feel free to also ask: “What’s your track record?”
3. What will you do to keep me informed? Will the agent be able to meet your expectations? Determine how much communication you want, and then find an agent who will give you the attention and time you deserve.
4. Can you provide me with further resources I may need? From market reports and pricing trends to lenders, inspectors, and reference materials on school performance and crime statistics, top agents should have resources at their disposal … or know where to find them.
5. Seller only: Can you share with me your plan to market my property? Many agents will simply put your home in the MLS and wait for it to sell. An amazing agent should have a detailed plan of how to get your home exposure on social media, to their local networks, and more.
Now that you’re armed with the 5 Attributes of Amazing Agents and the Top Questions to ensure you work with the best possible real estate agent, you’re ready to start interviewing agents.
We’d love an opportunity to win your business. Schedule a free consultation with us to find out how true market experts can help you achieve your real estate goals!
When things don’t go as planned in the sale of a home, it can be easy for a seller to give up on the excitement to move that they once had. You may even be sitting there reading this thinking that it’s best to throw the towel in and give up on the dream of selling, or to wait for an extended period “when the market is better,” or to question whether or not to even work with a real estate agent.
Gone are the days when an agent could just input a listing in the Multiple Listing Service (MLS), put a sign in the yard, and sit back and wait for another agent to sell the house for them. If all it took to sell a house was simply a sign and putting it in the MLS, wouldn’t everyone be selling their homes themselves? By now, don’t you owe yourself more than the status quo?
It’s time for a new approach: It’s time for a new agent, new marketing, new buyers, and most of all… new possibilities.
Staging – Did you know that staging a home to sell is different than making your home look beautiful for your everyday living? Feedback buyers often give of homes that don’t sell is that they couldn’t envision themselves living in it given the current owner’s choice of furnishings, let alone if there is clutter or imperfections. The National Association of REALTORS® states that the average staging investment is between 1 and 3% of the home’s asking price and generates a return of 8 to 10%. In our particular market, when price and general location are equal, the home that shows the best generates the most interest and will benefit from the exposure to potential buyers. I am professionally trained in home staging, and I will provide you with suggestions, guidance, and honest feedback to help you properly stage your home to get it sold.
High Quality Photography – Over 90% of buyers begin their home searches online, so first impressions matter. This is why I take my time to take high quality professional photographs using high quality digital equipment, off camera lighting, and post processing software to ensure we show your property in the best light from the very beginning.
Online Placement and Social Media Promotion – You may have heard of real estate syndicate websites like realtor.com, zillow.com, trulia.com and others. You are probably also familiar with Facebook, Twitter, Instagram, YouTube, and LinkedIn. I am certified in real estate digital marketing (e-Pro®). In addition to more traditional marketing strategies, I will be using the appropriate online tools and platforms to ensure optimum exposure of your property to potential buyers.
Responsiveness – The statistics are clear– the modern internet consumer moves fast and expects us to do the same. According to a study done by MIT, even a 30 minute delay in responding to customer inquiries significantly reduces the likelihood of ever making contact. Is there any wonder why the average real estate agent misses so many opportunities to identify buyers for their sellers? Also, when other agents are planning showings for their buyers, they may overlook a listing if the selling agent has not responded to them. I am dedicated to prompt responses to all my calls, texts and e-mails, whether from you or from your potential buyer!
INTERESTED IN MORE DETAILS?
Please call/text or e-mail me. It’s my pleasure to help you. You may reach me by phone or text at 334-201-5034, or through e-mail at: Sheila@4WallzRE.com.
Ultimately, my goals are your goals–to sell your property for the most money possible, to close on time with no hassles, and in the process re-connect you with the excitement and optimism you originally felt upon first listing.
Please contact me to find out more about the many services included in my comprehensive Property Marketing Plan that will be customized for you to get your home SOLD and not just listed.
Are you still interested in selling your home if you could get the right offer?
The current trends are all about utilizing rich color, maximizing texture and creating comfortable interiors you can’t wait to relax in. Use these trends to get inspired to makeover your home’s interiors and create spaces you love that also appeal to your personal style. Remember, if you plan to sell in the next few years, you may want to avoid doing anything dramatic and instead incorporate small changes that would appeal to buyers.
Why are these trends gaining popularity?
The underlying theme of these trends is creating a home environment you love; one that appeals to your emotions and feels like a retreat from the stresses of the world. Although the home is a place where you can relax and spend time with loved ones, work expectations are beginning to blur the line between work and home. Even if people don’t work from home specifically, many are stretching their work hours into their evenings and weekends to complete work projects.
It’s no wonder the Nordic concept of hygge (most often pronounced “hoo-gah”) has become a hot trend. A centuries-old concept, incorporating hygge in the home means creating simple and comfortable spaces that make you feel cozy and safe and appeal to your senses.1 The emphasis is on simplicity and fostering positive experiences, whether you’re spending time with family, reading a good book or catching up on work emails.
WARM AND RICH COLORS.
Whether you want to play with a bold color or stick with neutrals, one thing is clear—paint is the foundation of a great design. Painting your interiors has a return on investment of about 75 percent and is a relatively inexpensive project to complete, costing between $25 to $100 for paint alone.2 If you’re thinking of refreshing your home’s interiors with a coat of paint, popular colors include warm taupe, fresh green and dark tones. These colors are popular choices because they evoke feeling of warmth and coziness when you walk into a room.
Wondering how to pair these colors? Taupe is the perfect alternative to traditional neutrals, such as gray and white, and goes well with cool blues, earthy greens and deep shades of wine.Green goes well with other earthy shades, such as copper and moss, as well as deep plum and bright pink. If you’re hesitant to paint your walls green, incorporate it into your home by way of accent pillows, rugs, lamps, vases and other accessories or add a few house plants.
If you’re interested in adding more drama to a room, include bold, dark colors.Dark shades add color and sophistication to any space. Plum and dark gray pair well with pale blues, warm whites and light gray.
Try one of these Colors of the Year:
Poised Taupe – Sherwin Williams
Greenery – Pantone
Shadow – Benjamin Moore
Lux materials create a space in which you can’t wait to kick off your shoes and relax at the end of the day. The Danes use a mixture of materials and pattern as a way of adding character and interest; however the overall look still needs to adhere to a color palette to prevent it from looking distracting.
Natural materials and textures allow you to maximize the comfort of the bedroom, living room or family room. Wood accents give rooms an earthy feel. Incorporate rustic wood sculptures, trays and furniture into your space. Choose furniture made with sustainably harvested wood certified by the Forest Stewardship Council (FSC) or use reclaimed wood for an environmentally friendly alternative.
If natural elements aren’t your style, but you want to add more visual interest to your room, try mixing patterns. Although it may have been avoided in the past, mixing stripes, florals and geometric prints actually help ground a space as long as the patterns feature complimentary colors or different shades of one color. If you’re worried about going overboard and making your room look “busy,” focus your mix in one area of the room. For example, add throw pillows in a variety of patterns to your sofa.
According to a recent study from the American Psychological Association, people are more stressed than ever, with 24 percent of adults reporting they’re experiencing “extreme stress.”3
Top sources of stress include work and money. By incorporating small changes, like making your house more energy efficient, you can start to lower your bills and get back to relaxing and enjoying life like the Danish do (who consistently top the polls as the happiest people).
Save money on your energy bills by sealing the “envelope” of your home, which includes the windows and doors, walls, floor and roof. The better insulated your home is, the less heat will escape and the lower your energy bill (and stress level) will be.
The most heat loss occurs through the walls of the home: up to 35 percent of heat loss, to be exact.4 Ceramic insulating paint is a space-inspired coating of paint mixed with ceramic compounds and applied to interior or exterior surfaces. It seals your walls and prevents heat from escaping, which means reduced energy bills all year long.
THE FUNCTIONAL HOME OFFICE.
Twenty-four percent of employed people do some or all of their work at home.5 Since more people are working remotely than ever, home offices are becoming more popular. Even if you don’t plan on working from home, a home office gives you a place to pay bills, work on personal projects, plan your family’s schedule and more. Home offices tend to be multifunctional, serving as a guest room when family and friends visit, and have the potential to meet other needs that arise.
The key idea behind hygge is to enjoy the environment around you and for each room to be a sanctuary to sink into at any given moment. Your home office is no exception! Maximize your productivity, efficiency and focus by painting the walls shades of green or blue.6 If space is an issue, create a nook by installing docking and tech cabinets that are big enough to store a printer and other small office equipment and files without taking over the room.
If you don’t have room in your home for an office, look no further than your backyard. Shedquarters, small structures or sheds built in the backyard for use as an office or home-based business, are an attractive option for homeowners who don’t have a room to dedicate to an office and don’t wish to add on their homes. while the jury is out on how much value these structure add to a home, they can convert easily into a storage shed if you plan to sell in the future.
SPLURGING ON KITCHEN RENOVATIONS.
The kitchen is often the busiest, most hectic room in the house and one of the top renovation projects with a high return on investment.7 We do more than cook meals there; it’s where homework is done, bills are paid, weeks are planned and more.
Kitchen remodels consistently show a respectable return on investment. According to the 2017 Cost vs Value Report from Remodeling magazine, a minor kitchen remodel touts an 80.2 percent return on investment.8 You don’t need to overhaul your entire kitchen to make it more hygge. Smaller additions can transform it into a relaxing and functional space you enjoy spending time with friends and family in.
What does a “minor kitchen renovation” entail? In addition to replacing the fronts of your cabinets and drawers, it also includes replacing out-of-date appliances and fixtures. You may also consider replacing countertops. Quartz and quartzite are becoming more common as are other green laminate options, including ones that mimic stone, wood and concrete. Laminates install in less time, often over the existing countertop, make it an ideal choice for busy homeowners as well. Other hot kitchen trends include incorporating sustainable materials like bamboo into your countertops and floors and water filtration systems.
Want to improve the look and feel of your home’s interior? Are you thinking of upgrading to a home that better fits your changing needs? Call us—we’d love to help you achieve all of your home-related dreams.
Great curb appeal not only makes your home the star of the neighborhood, it can also improve its value and help you sell it for more. Whether you’re thinking of listing your home or just want to make your home the envy of your neighbors, here are several ways to increase your home’s curb appeal.
Make your home’s exterior look like new.
For many potential buyers, the condition of the exterior of a home can offer clues to the condition of the interior. The first place to start when boosting curb appeal is the exterior of your house.
Paint. Paint is the best way to make your home appear newer. While you can paint your home yourself, if it’s large or more than one story, consider hiring a professional. Painting is a fairly inexpensive improvement with between 60 to 100 percent return on investment.1
Maintain your siding. Over time, weather and the elements can make your home’s siding appear dull and dirty. Use a pressure washer to clean stains, spider webs and accumulated dirt and grime, or use a soft cloth and a household cleaner to get into those small nooks and spaces. Although the average life expectancy of siding ranges from 60 to 100 years, depending on the material, extreme weather may reduce this number. If you need to replace the siding, you’ll enjoy a 77 percent return on investment.1
Paint or replace garage doors. If your garage doors are in good condition, give them a new coat of paint. If they’re beginning to show their age, consider replacing them. Not only are new garage doors more energy efficient and better insulated than older models, they also have a 91.5 percent return on investment.1
Maintain your fence. Replace rotted or worn posts and panels and freshen it up with a coat of paint. If you have a hedge that serves as your property’s border, keep it trimmed and in good shape.
Pay attention to the small details.
The small details tie your home’s exterior together and help it stand out from others in the neighborhood.
Paint front door, trim and shutters. This inexpensive improvement adds brightness to a home, whether you choose a bold color, a neutral tone or classic white.
Install new door fixtures and be sure they match in style and finish and complement the style of your home.
Update your house numbers. Make sure potential buyers and guests can find your home. If the numbers have faded or need an update, replace them. If choosing a metallic finish, make sure it matches the finish of your exterior light fixtures.
Tend to your driveway and lawn.
Well-landscaped homes may sell for between 5.5% and 12.7% more than other similar homes and studies show it may also add up to 28 percent to your home’s overall value.5
Place a border along your driveway or walkway made of brick, stone, pavers or another hardscape element to add visual interest to a plain driveway.
Maintain your green space. If you have grass, a well-maintained, green lawn makes your home look inviting and picturesque. However, in many parts of the country, water conservation is becoming more important. Xeriscaped landscapes incorporate drought-tolerant vegetation that thrives in warm, dry climates, such as lavender, sage, wisteria and agave, with water-saving drip irrigation and mulch. Xeriscaping has a cost savings of 36 cents per square foot annually through reduced irrigation and maintenance costs.3 Additionally, these landscapes are virtually maintenance free, which makes it an attractive option for busy buyers.
Include trees and shrubs to create texture and add interest to your landscape. Planting a few types of trees and shrubs of varying heights, widths and flowering times boosts your home’s curb appeal year-round.
Make it feel inviting.
It’s no secret that emotions play a role in a person’s decision to purchase a home. Stage the outside of your home to evoke warm feelings.
Stage your porch. If you have a front porch, make it feel more inviting by including seating, such as a chair or loveseat, an outdoor rug and a small table. If space is an issue, incorporate small decorative touches, such as a festive wreath or potted plant.
Hang flower boxes on your front porch railings and/or below your windows. If you don’t want to affix flower boxes to your home, purchase nice planters and containers and place them around your porch or on your front steps.
Choose flowers and plants that bloom at different times of the year for year-round appeal. For example, bulbs not only bloom all spring, they also multiply and come up every year. Perennials often flower for most of the year and will prevent you from having to replant them every year.
If you don’t have a green thumb, choose low maintenance plants andflowers. Flowers such as lavender, rosemary, and zinnias are a few low-maintenance and drought-tolerant options.
Boost Your Online “Curb Appeal.”
For those interested in selling, it’s important to know the effect online curb appeal has on a home. The better impression your home gives online, the more likely buyers will want to see it in person. Here’s how to get your home ready for its listing debut.
Stage your home. Staging shows your home in its best light and helps potential buyers picture themselves living there.
Hire a professional to take photos. A photographer has the skills and equipment to shoot your home in the best light and make it look its best.
Include a short video tour of the home. Videos are becoming a popular way to give buyers a glimpse of the home before they step foot in it.
Before you start a home project, keep these four things in mind:
Why are you renovating? In other words, is your intention to update your home and get it show-ready or do you want to sell it for more money? Don’t fall into the trap of undertaking major renovations that may not pay off when you sell. If your home is in good shape, a few inexpensive updates may be enough to make your home attractive to buyers.
The style of the neighborhood. Whenever you renovate your home, make sure the project fits with the style of the neighborhood and rules of the homeowner association. For example, an HOA may limit the choice and number of trees you can plant on your property. Similarly, a tall hedge border may not fit in in a neighborhood of low, picket fences.
Permits. If you’re planning an extensive exterior renovation, you may need a permit from your municipality or other authority.
Budget. A budget keeps your project’s costs and scope in check. Make a list of the improvements you’d like to make, set a realistic budget and stick to it. If you’d like advice on improvements you can make to boost your home’s curb appeal, give us a call.
Are you thinking of boosting your home’s curb appeal or renovating your home before you list? Do you want help making your home more appealing to potential buyers online and in-person? Give me a call/text and I’ll help you present your home in its best light.
Wealth is within reach for many people; however, according to a recent study, 63 percent of Americans said it’s not likely they’ll become rich.1 While younger people are more likely to say they’ll achieve wealth one day, only 34 percent of people aged 30 to 49 and 21 percent of people aged 50 or older say the same. There is no secret to becoming rich: it takes time, sacrifice and good financial sense. Here are a few ways to build your household’s wealth.
Let Compound Interest Work for You
Compound interest is your interest earning interest. While the concept may work against you when you take out a loan to buy a car or use your credit card, it works in your favor when you’re saving money. For example, if your savings is growing at a rate of four percent, your investment will double in eight years and quadruple in 16 years. Your money will grow exponentially the longer you save: the more money you’ve saved, the more your money will grow.
Tap into Your Home Appreciation
Experts expect home prices to appreciate 3.24 percent and grow by 21.4 percent cumulatively.2 If a homeowner purchases a home this year for $250,000, they could earn more than $40,000 in equity over the next five years. Although the home value of the average American family’s home is $165,000, home values vary by market.3 If you’re curious about the value of your home, give us a call!
Build Equity in Your Home
One of the most compelling reasons to own a home is it allows you to build wealth over time. According to one study, the average homeowner has a net worth of $200,000, which is 31 to 46 times the net worth of the average renter.4 Saving for a down payment, especially if you plan to put down more than 20 percent, helps you adopt good financial habits. The more you put down when you buy, the higher your share of equity when you close. Although for the first five to seven years, the majority of your payment will go toward interest, over time more money will be applied to the principal. There are many tools online that calculate your current and future equity in your home, including this one here.
Build equity sooner by choosing a shorter amortization term. While your payment may be higher, you’ll likely qualify for a lower interest rate and will pay less interest over the life of the loan.
Build Equity Faster in Your Home
Months to pay
Annual percentage rate
Source: Federal Reserve Bank of Dallas, Building Wealth: A Beginner’s Guide to Securing Your Financial Future
Pay Down Your Mortgage…or Not
Many homeowners grapple with whether or not to pay down their mortgage. On one hand, if you pay it down, or pay it off early, you’ll save money on interest, which you can use to make other investments. On the other hand, if your goal is to be debt free, it’s better to pay off your higher-interest debt, such as credit card debt, first before paying down your mortgage debt. Additionally, if you’re saving for retirement, putting extra cash toward your retirement accounts will help you build a nice nest egg to enjoy later on.
If you decide to pay off your mortgage sooner, here are a few ways to do so:
1. Pay more money at the beginning of your amortization period and apply it to your principal.
2. If you receive a tax refund or other windfall, apply it toward your principal.
3. Make one extra payment each year. You’ll save money on interest and pay your loan off sooner.
4. Add an extra $50, or another amount you can afford, to the principal of your payment each month.
5. If you locked into a 30-year fixed loan, refinance to a shorter, 15-year fixed loan. Your payment may be higher, but you’ll pay it off sooner.
Your financial advisor can help you decide if paying off or paying down your mortgage is right for your goals.
Purchase Investment Property
Investment properties provide passive income to your growing financial portfolio. More than 25 percent of Americans say real estate is the best way to invest money you may not need for the next 10 years.5 While many people flip houses to make money—that is, they buy a home at a low price, fix it up and sell it quickly—others purchase multifamily properties to create monthly cash flow to save or to reinvest in other properties.
The longer you own a property, the better investment it becomes as you’ll continue to build equity. While rental costs rise with inflation, your mortgage will remain the same. The best part? Once you pay off the mortgage, your cash flow will increase. Remember to create a budget for maintenance each month, between 10 to 20 percent of the rent you receive, or more if the home is older. This will help you save more money in the long run and allow you to prepare for unexpected repairs.
There are tax benefits to owning investment property as well. You may be able to claim deductions for depreciation, as long as it fits within the guidelines; repairs, travel expenses, interest and more. If you’re thinking of purchasing investment property, talk to your tax professional to get the details.
Achieve More Wealth by Creating Financial Goals
Setting a goal will help you achieve your desired level of wealth. Once you achieve one goal, reassess and set the bar higher.
1. What is your idea of wealth? Your idea of wealth will change as you earn more money. That’s why it’s vital to set goals along the way. What do you want your net worth to be in 5 years, in 10 years and in 20 years?
2. Write down your short-term and long-term goals. Once you have determined your goals, write them down. This is the first step towards getting your desires out of your mind and into motion and it will be easier to refer to them later on.
3. Develop a budget to help you reach these goals. A budget not only helps you understand where your money goes each month, it may also prevent you from overspending. That way you can have more money to save and invest.
Total Available for Investment
To increase the amount you can invest, make adjustments to your daily spending and monthly bills, if possible. Look for opportunities to save money and transfer that savings into your accounts.
It’s never too late to begin building your family’s wealth. Whether you’re interested in buying a first home, upgrading to a larger home or are thinking of renovating, we have you covered. Give us a call and we’ll answer all of your real estate questions and offer suggestions to help you increase the value of your home.
Sources: 1. BankRate.com
2. Pulsenomics, Home Price Expectation Survey Q4 2016
3. Statistic Brain, August 1, 2016
4. National Association of REALTORS, Economists’ Outlook, September 8, 2014
Our local Central Alabama area real estate markets vary widely. In some areas there is a solid buyer’s market and the ample supply of homes gives buyers an advantage in negotiating the best deal. Prattville seems to be leading the way toward a better balance in home supply with a continued trend toward a seller’s market. Compared with the available homes for sale, the trend from August has continued into September with fewer listings and steady home sales. This emerging trend is showing a continued strengthening of the Prattville real estate market, especially when compared with the same time period last year.
Stable demand, fewer competing listings, higher median prices
Overall in the Prattville real estate market, conditions are continuing to reflect improvements in the market. Out of 104 Prattville single family residential active listings in September 2016, there were 26 homes sold. During the same period a year ago , there were 25 sales, however there were 146 listings for buyers to choose from. There are only 87 currently active single family residential listings in Prattville as of today.
Median prices are up too! Based on statistics from the Montgomery Area Association of Realtors, Multiple Listing Service (MLS), in September 2016, Prattville of the 26 single family residential homes sold, the average (median) unit cost was $ 176,150. Although home sales for September 2015 were at a similar pace (25 sales) they were at a significant lower average (median) price per sold unit of $160,000 a year ago.
Homes that sold are selling faster! Average days on the market for Prattville homes that have sold is going down significantly. That’s good news especially for sellers! In September 2016, homes that sold were on the market an median average of only 34 days. This compares with more than double that time, 78 days, for homes that sold back in September 2015 in Prattville. Overall in the River Region, homes that sold averaged 63 median days on the market. Prattville seems to be leading the way. Our area and Alabama in general, however, are lagging behind the nation in days to sell.Many states had median days to sell at fewer than 31 days.Only Alabama and Wyoming had a median of over 90 days from listing to home sale according to an article published recently by the National Association of Realtors: http://economistsoutlook.
Inventory trending downward
Our local MLS data continue to show a decrease in the number of single family residential listings available in Prattville. Based on the rate of sales, the inventory of available single family residential homes is only about a 3-4 month supply.A six month housing supply is considered a balanced market, with a supply less than six months favoring sellers. If you’re thinking of selling, now could be a good time to get your home on the market! If you’re thinking of buying, don’t hesitate–between overall low home prices compared with the rest of the nation and historically low interest rates–this could be a great opportunity for you!
I provide expert real estate services to residential buyers and sellers in the Central Alabama area, including Prattville and the surrounding communities. Contact me today for more information on area real estate and for professional assistance navigating this complex home market.Contact me for a complimentary buyer or seller consultation.