Real Estate Advice from the Experts
The real estate roundup is the best articles on the net to keep you informed and updated on the latest trends. The market is changing quickly. It’s important to stay up to date on the latest news. You can do that here by getting to know our experts.
What Are Pocket Listings: Pros and Cons Explained
Pocket listings or off-market listings is a topic that realtors argue about regularly. Bill Gassett, a realtor for 37 years, is sharing his opinion on this contentious topic. Bill also shares the pros and cons so you can make up your own mind about what’s best for your home sale.
It’s a simple concept. Just real estate lingo that only means that the property will not appear on the multiple listing service. It’s, of course, a personal decision for you to make. And depending on your circumstances, you may choose to sell off market. If you do, you need to know the risks.
Some realtors use pocket listings a lot, while others rarely do. Of course, there are different theories about why a home seller should or shouldn’t sell their home this way. I worked with a client who was an antique dealer. He didn’t want the interior of his house splashed all over the internet. That’s understandable. We still put it on the multiple listing service to get his house the most possible exposure, just without interior photos.
Recently, I sold a house that was overstuffed with personal belongings. Interior photos would not have left buyers with a positive feeling about the house. So we didn’t include them. That’s vastly different than keeping the house a secret by keeping it off of the MLS.
Now that you know my opinion, be sure to read what pocket listings are and the pros and cons. It’s an interesting topic that Bill explains in detail.
The Differences Between FHA, VA, and USDA Mortgages
The speed of home sales isn’t the only thing that changes when the market takes a turn one way or another. I’m sure you’re familiar with the current status of mortgage interest rates. But did you know that lenders can change their requirements for mortgages? You may have to have a higher credit score, higher income or a larger downpayment. The types of loans available may change too. Some banks, like Wells Fargo, may stop doing what’s called warehouse loans. In other words, the only way to get a Wells Fargo home mortgage is to go directly to them. They’re not available through mortgage brokers anymore.
Often buyers hope for the market to “crash” or the “bubble to pop” so home prices will go down. But there’s so much more that happens when the real estate market adjusts downward. You might remember the fiasco that was the housing market during the Great Recession. People lose their jobs, then the financial pressures cause them to lose much more.
This generation of home buyers hadn’t experienced a tough economy until now. So the idea of a “crash” seemed like a good one.
Your options are a good thing to know about, especially when you’re in a new market. Madison Mortgage Guys explains the differences between FHA vs VA vs USDA Loans. Not every situation is right for every loan type. Some loans aren’t even available except under specific circumstances. If you’re jumping into the market, whether you’re buying a home or selling one, it’s a good idea to know your options.
What Is Debt To Income Ratio When Applying for a Home Loan?
I briefly mentioned that banks can change their home loan requirements when lending “tightens.” A higher income and credit score are to be expected when the market tips down. Remember, the higher the risk, the higher the interest rate. In order to compensate for worries over the economy, banks may lower the preferred debt to income ratio for home buyers.
Debt to income ratio refers to how much debt you have compared to your income. After watching the news recently, I saw that consumer debt has gone up significantly over the past few months. The Federal Reserve is trying to get us to stop spending. They don’t want Americans to accumulate more debt.
Your interest rate reflects your debt to income ratio (DTI). Simply, if you have lower debt, you’re a lower risk. Be sure to read Massachusetts realtor Kevin Vitali’s article to understand the full meaning of DTI, how it’s calculated, and how it affects your mortgage options.
How Does A Recession Impact Real Estate?
Cincinnati realtor Paul Sian is right on the mark with his real estate and recession post. The experts can’t even agree on whether we’re in a recession, out of one, or haven’t started but will be in one. Or if the recession is over. Confused yet?
The one fact we know is that the real estate industry is suffering while home sellers and buyers figure out this new territory. In a recession, we expect lower home prices to make up for higher interest rates. However, we have another factor that is a long-term housing problem. And that’s the shortage of inventory. The low inventory may be the thing that’s keeping prices higher than may have been expected.
Paul tells us that the the National Bureau of Economic Research’s (NBER) “traditional definition of a recession is that it is a significant decline in economic activity that is spread across the economy and that lasts more than a few months.” Since several sectors of the economy don’t fit into that definition, the pundits are using the term “rolling recession.” This term seems to be a better fit for fluctuations in the economy that don’t affect all areas. That makes our current economy situation even more confusing.
Take a moment to read Paul’s informative article to learn more about both residential and commercial real estate and the recession.
What are Your Housing Market Goals this Year?
If buying or selling a home is part of your dreams for 2023, it’s essential for you to understand today’s housing market, define your goals, and work with industry experts to bring your homeownership vision into focus.
Real estate markets are changing back and forth quicker than ever.
Remember when people got a watch or an award for working at their company for 30 years? Well, that doesn’t happen anymore either. It’s a different world.
The cooling off for our market was obvious in June 2022. And it had stayed that way until the rates dipped recently. Then it heated up again. A lot more buyers at open houses and houses were selling more quickly. Offer dates came back into play. Then rates went back up again.
I think this is the new normal until the rate increases stop and the economy is stable/strong again.
The Federal Reserve is expected to raise interest rates again at its next meeting on March 22. They may – hopefully – keep the increase down to 25 points as opposed to 75. But they aren’t going to stop raising rates until they see 2% inflation, which is expected to take a couple of years.
In order to know the status of the market you’re going to need to keep in close contact with your realtor. These changes come quickly and don’t stick around.
You’re not going to be able to wait until the statistics come out a month or two from now. You’ll need someone who’s watching it daily and able to analyze from past experience with other fluctuating markets. An agent who is looking at what happened 3 months ago is going to be at a disadvantage and so are you.
If you’re waiting for rates to go back to 2022, you’re going to be waiting years. That time may never come again.
Flipping houses is also a thing of the past. That worked for that moment in time. But we’re not in a market where that makes financial sense.
You need a professional realtor now more than ever. Let me know if I can help. I can put you in touch with a realtor in your market of interest.