Selling • December 16, 2023

If Your House Hasn’t Sold Yet, It May Be Overpriced

by Debbie Marett

I have this conversation often when I meet with sellers prior to listing their home.

I take the time to prepare an in depth market analysis on their property, analyze comparable homes and recent sales in their area. Sometimes there is data that “the public” cannot see on the actual final sold price of a home in their neighborhood.

Has the seller offered closing costs to the buyer?
Did the sellers have costs in repairs and if so, how much?
Did the property make the lenders appraisal value and if not, did the seller have to adjust the sales price to move forward on the contract and get to the closing table?

Once the home is presented/listed to the market, over pricing is a big mistake.

The offer price needs to be in line with what the market says the home is worth.

Overpricing for the sake of “negotiating room” is one of the biggest mistakes sellers make. The percentage of buyers who will look at your home at market value is about 60%. As the price versus market value goes up this percentage drops considerably. Getting traffic is the prerequisite to getting offers!

Has your house been sitting on the market a while without selling? If so, you should know that’s pretty unusual, especially right now. That’s because the supply of homes available for sale is still far lower than what we’d see in a normal year. That means buyers have fewer options than they usually would, so your house should be an oasis in an inventory desert.

So, if homebuyers have limited choices and your house still hasn’t sold, there’s a reason why. Let’s break one potential sticking point that may be turning buyers away: your asking price.

Especially with today’s higher mortgage rates already putting a stretch on their budget, buyers are being a bit more sensitive about price. As a recent article from the Wall Street Journal (WSJ) says:

“If you are serious about selling your home now, don’t get greedy with the asking price. This is still a seller’s home market as there simply aren’t enough affordable homes for sale in many parts of the country. But with average 30-year mortgage rates above 6%, buyers are much more price-sensitive than they were a year ago.”

Why Setting the Right Price Matters

While you want to maximize the return on your investment when you sell your house, you also need to be realistic based on current market conditions. The simple truth is your house is only going to sell for what people are willing to pay right now.

This can be a hard thing to accept. Especially since emotions can run high during the selling process, which only complicates matters more. After all, you may have lived in this house for years, so it’s only natural you’re emotionally tied to it – and those heartstrings can make it harder to be objective.

But it’s important to acknowledge that a bigger-than-expected price tag deters buyers and may make them dismiss your house as a possibility before even seeing it. And if no one’s looking at it, how will it sell?

If you want to get your house sold, you’ll need to do something to spark interest in your home again. That’s where a local real estate agent comes in. They’ll help use data to find out if it’s priced too high for your local market. They balance the value of homes in your neighborhood, current market trends and buyer demand, the condition of your house, and more to find the right price for your house, so you can close this chapter and start your next one.

Bottom Line

While it’s true there aren’t that many homes available for sale right now, your home’s asking price still matters. And, if it’s not selling, it may be priced too high.

Building a Home • December 9, 2023

The Expert Guide of Home Building Terminology

by Debbie Marett

Great Article Shared from a Local builder – David Weekley

Learn about the home building process with this list of home construction terms and definitions written to be easy to understand.

Home Building Glossary

The field of home building is often where skilled craftsmanship meets specialized knowledge. With the specialized knowledge comes a lot of specialized language and terms used in the day-to-day work of Builders. Homebuyers are often curious about what the jargon means, so we’ve created a helpful guide to offer more clarity.

This glossary provides clear definitions and detailed descriptions of common home building terms, allowing you to confidently know and understand terms used in home building.

A/C Condenser

What is an A/C Condenser?

The Condenser is the big metal air conditioning cabinet on the outside of your home. Metal coils inside the condenser fill with heated coolant so the heat can be dispersed outside the home by the fan. The chilled coolant then returns to the indoor part of the air conditioning system to keep your home at just the right temperature.

Acre

How Big is an Acre?

An acre is a standard measurement for tracts of land. One acre is equal to 43,560 square feet, or 4,840 square yards. An American football field, including the end zones, covers 1.32 acres.

Aggregate

What is Aggregate in Construction?

The gravel, sand, stone and other materials combined with cement and water are used to form concrete. The admixture of aggregates changes depending on the intended purpose of the resulting concrete.

Air Space

What is Air Space in Home Building?

Air space is the gap between the interior architectural structure of your home and the exterior surface of your home.

Alcove

What is an Alcove?

An alcove is a recessed portion of a wall, creating a partial addition to a room. One of the most common types of alcoves is the Bay Window, which typically bumps out a living or dining space wall to allow additional natural light and cozy seating.

Anchor Bolt

What is an Anchor Bolt Used For?

An anchor bolt is a heavy-duty metal rod used to secure a home’s foundation to the sill plate, thus “anchoring” the home to the foundation.

Attic

What is an Attic?

An attic is the space directly below the roof in homes with a pitched roof.

Backing

How is Backing Used in Home Building?

Backing refers to frame lumber used between structural studs of the home. This backing lumber adds extra support for hanging drywall and can be used for sturdier hardware installation.

The Coleton in Colorado Springs - Staircase

Balusters

What are Balusters?

The balusters are vertical posts supporting the handrail (banister) along a stairway.

Banister

What is a Banister?

A banister is the handrail build alongside a stairway, typically supported by Balusters.

Board Foot

What is a Board Foot?

A board foot is the basic unit of measurement for lumber. One board foot is 1’ thick, 12” wide and 12” long. A 3-foot-long piece of 2×6 lumber would be 3 board feet.

Cathedral Ceiling

What is a Cathedral Ceiling?

A cathedral ceiling is a high, double-sloped ceiling with its highest point at the center. This arched shape is inspired by cathedral architecture and is especially popular in open floor plans where the ceiling can run the full length of a living space. The angle of a cathedral ceiling matches the slope of the roof.

Caulking

How is Caulking used in home building?

Caulking is used to seal gaps between various home building materials and features. This helps prevent water, dust and insects from intruding into the home and improves a home’s energy-efficiency.

Dimension Lumber

What is Dimension Lumber?

Dimension lumber refers to the sturdy wood planks used to finish and shape a home’s frame. 2-inch by 4-inch lumber is the most common type. Advanced framing techniques typically use 2-inch by 6-inch dimension lumber.

Door Jamb

Which Part of the Door is the Jamb?

The door jamb is the inner portion of the door frame that the door hangs from and fits into when closed.

Easement

What Does an “Easement” Mean for My Home?

An easement is a portion of a private property that other parties are legally allowed to access for various purposes. A common type of easement allows utility service workers to access parts of properties to work on electrical and telecom lines.

Eaves

What Are the Eaves of a House?

The eaves are horizontal portions of the roof that extends out beyond the outer wall of the house. Eaves direct water away from the foundation, extend the lifespan of the home’s siding and helps prevent water intrusion.

The Providence in Portland, OR - Front and Side Exterior

Façade

What Is a Façade on a House?

The façade refers to the front, public-facing exterior of a home. Façade is a term more commonly used in non-residential buildings. In home building, the front exterior is often referred to as the elevation.

Flashing

What Does Flashing do?

Flashing is the weather-proofing sheet metal applied to a variety of seams and joints to help prevent water from seeping into the structure of a house. There are several applications of flashing you may hear referenced, such as base flashing, cap flashing, counter flashing, drip caps, pitch flashing, step flashing, valley flashing, J flashing, l flashing and z-bar flashing.

Gain

What Is a Hinge Gain?

A gain is a notch cut into a door frame to fit a hinge, thus allowing the door to close flush.

GFCI

What Is a GFCI Outlet?

GFCI stands for “Ground Fault Circuit Interrupter.” These are electric outlets that are purposefully designed to be extra-sensitive to power surges and to shut off at the hint of one. They include reset buttons on the front of the outlet to easily return to operation after the shut-off mechanism has been tripped. You’ll often find these installed in kitchens, bathrooms and outdoor outlets.

Hardware

What Does “Hardware” Mean in Home Building?

In home construction, hardware refers to the metal fittings installed during the final stages of building a home. These include things like door knobs, locks and towel bars.

Hose Bib

What Are Hose Bibs Called?

A hose bib is a water faucet located on the exterior of a home. Hose bibs are also called, perhaps more commonly, spigots. They may also be called sillcocks, though a sillcock is technically a different type of spigot than a hose bib.

Hot Wire

What Is the Hot Wire in a House?

Hot wires are black or red electric lines running through the walls of a house. These lines carry an electric current, as opposed to neutral wires, which are usually white.

Infiltration

What Is Infiltration in a House?

Infiltration is an HVAC term that refers to the unwelcome entry of external air and escape of conditioned interior air via unsealed gaps in the home’s envelope. Infiltration decreases energy efficiency and allows dust to enter the home.

Irrigation

What Is an Irrigation System in a House?

Home irrigation refers to the sprinkler or other watering system installed to maintain a home’s landscaping in times of inadequate rainfall.

Joist

What Is a Joist in a House?

Joists are the oversized pieces of lumber laid horizontally as part of the structure of ceilings and some floors. Joists transfer the weight of the structure above to load-bearing vertical beams.

Keeper

What Part of the Door Is the Keeper?

The keeper is the metal plate attached to the door frame. The door knob plunger fits into the keeper when the door is closed.

King Stud

What Does the King Stud Do?

King studs support the top plate on either side of openings, including windows and doors, where the regular interval of wall studs may be interrupted.

nee Wall

What Is the Purpose of Knee Walls?

A knee wall is a short, vertical wall that supports the rafters and closes off the small, unusable portions of an attic. Knee walls are typically between 2 and 3 feet in height.

Landing

What Is the Landing in a House?

The landing is a larger section of a staircase, typically where one flight of stairs ends and a new flight begins in a different direction or where the staircase ends.

Lap Siding

What Is Lap Siding?

Lap siding refers to overlapping wedge-shaped siding installed horizontally. The overlapping slats, when installed correctly, direct water away from the home.

Lot Line

What Is a Lot Line in Real Estate?

The lot line refers to where one piece of property ends, and another abutting piece of property begins. For a home, the lot line (also known as property line) is the boundary between your homesite and those of your neighbors. Fences are typically built along these lines, though not always exactly.

Masonry

What Is Masonry on a House?

The stone or brick-and-mortar structure of a home is commonly known as masonry. There are other substances, such as concrete blocks or clay tiles, that may also be referred to as masonry, especially when discussing historical or non-residential building techniques.

Mastic

What Is Mastic Used For?

Mastic is an adhesive substance used in bonding a variety of building materials, including its use as a sealant to connect HVAC ducts. It is very similar to the type of plaster you might think of as being used by hospitals to make casts.

Moisture Barrier

What Does a Moisture Barrier do?

Moisture barriers are specially treated materials designed to keep outside moisture where it belongs: outside your home. The exact type of material and how it is applied will vary by climate and region.

Newel

What Is a Newel?

The newel is the structural post at the top and bottom of a staircase’s handrail. There may be additional newel posts at landings or where a stairwell turns.

Nonbearing Wall

What Is a Nonbearing Wall?

Nonbearing walls serve to separate spaces but do bear the load of the home’s structure. If you watch home renovation TV shows, you’ve likely seen one or two Nonbearing Walls get demolished with little more than a sledgehammer and an abundance of gusto.

Plat

What Does a Plat Mean on a Map?

A plat map shows the layout of a new community in development. More specifically, it shows the location and boundaries of the individual homesites (or “lots”) throughout the community. A Plat Map is usually most important to Homebuyers when purchasing a to-be-built home and taking homesite selection into account.

Plumbing Rough-in

What Does Plumbing Rough-in Mean?

When a home builder talks about plumbing rough-in, they’re describing the installation of the pipes and water lines that will connect the home to water utilities. Later in the process, this rough-in plumbing will be finished with fixtures to become functional. In some instances, such as an unfinished basement, the rough-in plumbing is left unfinished and ready for future living space expansion.

R-Value

What Do the R-Values Mean?

The R-value of a building material is the measurement of its ability to resist heat escaping or intruding through it. The higher the R-value, the better the material acts as insulation. For example, steel has a very low R-value because it allows a lot of heat to transfer through it (which is why steel makes good cooking pans). Lumber and drywall have higher R-values than steel, but even these values are much lower compared to purpose-made insulation, such as fiberglass or polystyrene.

Rake

What Is the Rake of a Roof?

The rake is the angled overhang of a roof. Essentially, they’re the non-horizontal eaves of a gabled portion of the roof. They typically extend from an eave at the bottom to the roof ridge at the top. The rake siding and rake fascia refer to pieces of the rake that redirect water down and away from the home, helping protect against water intrusion and deterioration of the home’s siding.

Riser

What Is a Stair Riser?

The riser is the vertical portion of a stair step underneath the tread. When discussing the “rise and run” of a staircase, the “rise” refers to the height of the risers, which determines the vertical distance between one tread and the next.

Setback

What Is a Home Building Setback?

A setback dictates how far in from the property lines a home or related structure can be built. Setbacks vary by local restrictions, HOA rules, and developer preferences.

Slab Foundation

What Is a Slab Foundation?

A slab foundation involves pouring concrete onto a space prepared for the home. This will typically include a sand drainage pad, steel reinforcement, and a wooden frame. Once the concrete is dry, the home can be built on top of it. Homes built on a slab foundation do not have a crawl space.

Soffit

What Is the Soffit on a House?

The soffit is the protective material covering the underside of an eave that finishes the enclosure of the attic. Soffits are sometimes part of the attic’s ventilation system. The type of soffit used to finish an attic depends on the length of the eave, as well as the ventilation needs of the particular attic.

Top Plate

What Is a Top Plate?

The top plate is the top-most piece of lumber of a home’s wall frame. The rafters of the roof rest on the top plate, which supports and helps distribute the weight of the rafters evenly to the frame lumber below.

The Bridges in Charleston, SC - Front Exterior

Transom Window

What is the Window Above the Front Door Called?

Transom windows are smaller windows situated above doors and other windows to add decorative interest and allow more natural light into the home. Half-moon transom windows are sometimes referred to as fanlights.

Tread

What Is the Tread in a Stair?

The tread is the top, horizontal part of a stair step. It’s the piece you step on to climb up or down a staircase. The “nose” is the portion of the tread that overhangs the riser (the vertical surface of a stair step). When discussing the “rise and run” of a staircase, the “run” refers to the depth of the treads.

Vaulted Ceiling

What Is a Vaulted Ceiling?

Vaulted ceilings extend upward from the walls and typically peak at the center. They create more vertical space in a room. Vaulted may or may not meet at the same height at the center. There are non-parallel types of vaulted ceilings, such as shed ceilings, that allow the room’s vertical space to be offset.

Weep Hole

What Does a Weep Hole do?

Weep holes are small gaps in the mortar of a brick wall that allows water from within to evaporate and exit the structure.

Market Info • November 16, 2023

The Good News for Real Estate Investments in 2024

by Debbie Marett

The 2023 housing market has seen many ups and downs, leaving investors wondering what to expect in 2024. The good news is that regardless of interest rate increases and lower than average inventory, real estate investments remain one of the most lucrative areas to invest in as we head into the new year.

High Demand Means High Return

One of the central trends that defines the market today is low inventory and high demand. According to Lawrence Yun, Chief Economist for the National Association of REALTORS®, “Lack of supply is behind ongoing multiple offer scenarios on moderate- to mid-priced homes.” This demand is also fueling rising home prices, which NAR predicts will increase from an average of $384,900 in 2023 to $395,000 in 2024. This “seller’s market” can work in favor of the investor. Those who purchase, upgrade and list a property could see a quick sale and solid return. For investors waiting to list a property they already own, now is the time.

Mortgage Rates Expected to Stabilize

Although interest rates have been nearing 7% recently, Fannie Mae predicts an average rate of 6.5% in 2024. This could lead to more buyers entering the market in late 2024 and into 2025. Strong job growth may also contribute to buyer demand. The Federal Open Market Committee forecasts the unemployment rate to average a “healthy” 4.1%, an important factor that should positively impact the real estate market as a whole.

Consumer Confidence is Growing

Investors will be happy to learn that consumer confidence is rising, a positive sign of good things to come. According to the Coldwell Banker® 2023 International Consumer Survey, a significant number of respondents say they are optimistic about the state of the U.S. real estate market. In fact, 80% of luxury consumers believe purchasing real estate in the United States is a safe investment, and 76% rate the current market conditions to purchase a home as “excellent” and/or “good.”

New Construction on the Rise

To answer the housing demand, new builds are expected to increase next year. The National Association of Home Builders predicts that single-family production will rise from an average of 744,000 units in 2023 to 925,000 in 2024. Newly constructed homes could not only be a promising investment opportunity – they are also expected to lessen demand and help stabilize home prices.

Rental Property Remains a Reliable Investment

Although most experts predict that rent growth to decelerate in 2024, rental property is still a reliable real estate investment. People who take advantage of the market by selling their current home often need to move into a rental unit as they transition, ensuring investors have plenty of potential lessees. Rental income also helps offset higher mortgage rates for the investor, and rental property offers owners the benefits of long-term appreciation and various tax breaks.

Buyers are Motivated

Regardless of market trends, life goes on, and housing needs evolve. Retirees, growing families and divorcing couples don’t often have the luxury of waiting for the perfect time to move. Investors should also consider the increased mobility that comes with work-from-home buyers. Many are heading to more affordable regions, leading to pockets of growth that investors can take advantage of.

Whether the market is trending up or down, smart investors pay close attention to current trends and adjust their strategy accordingly. Once you understand the real estate landscape, you can confidently plan your next move.

Shared via Coldwell Blue Matter : https://blog.coldwellbanker.com/the-good-news-for-real-estate-investments-in-2024/?fbclid=IwAR2OAc7ySLzTn-cMl78Pi_0jU7CDuP3lt6fao9WlwIWHgkNYD9rsibIvctQ

Uncategorized • November 7, 2023

Well written by a fellow agent regarding the Recent Realtor Industry Lawsuit

by Debbie Marett

Good and thoughts shared by a fellow agent. Some of you may have heard of and may have been following the recent Realtor industry lawsuit. News reports have spurred a lot of discussion in the Realtor forums.

I’d like to take a moment to share my perspective on the home buying and selling process, how Realtors are compensated, and how ‘Uncompensated Effort’ fits into the broader conversation.

Some of you may have heard of and may have been following the recent Realtor industry lawsuit. News reports have spurred a lot of discussion in the Realtor forums. I’d like to take a moment to share my perspective on the home buying and selling process, how Realtors are compensated, and how ‘Uncompensated Effort’ fits into the broader conversation.

These words and thoughts were shared from my buddy Steve Crossland–one of the most thoughtful, carefully worded, and insightful men I know. Thank you Steve!

Realtors earn a ‘Success Fee.’ This means we do everything for free up until the point of closing and funding. Then, we’re paid a commission. Efforts that don’t result in a closing are what I call ‘Uncompensated Effort.’ Every Realtor absorbs this overhead. It’s part of how the system works, to the benefit of consumers.

Both buyers and sellers appreciate this system because it allows consumers to avail themselves of services at no cost, even if they never purchase a house or their home never sells.

For instance, a buyer might contact an Austin Realtor recommended by a friend or family member, have an initial conversation, and agree to work with that Realtor. They might fly into Austin and spend three nights in a hotel on a scouting trip. I’ve had many buyer clients do this over the years.

During that stay, you’d be chauffeured around Austin to see neighborhoods and houses, receive information about the real estate market, the various communities, current affairs, pros and cons of different areas, commute times, schools, and area amenities and lifestyle activities.

You can ask unlimited questions and receive honest, qualified answers and opinions about anything you want to know (assuming you’ve selected a competent agent). Having lived in Austin since all my life, I have a wealth of knowledge to share.

Let’s say you view 8 or 12 houses on Friday, then 6 or 8 more on Saturday, and decide that Austin isn’t the right fit for you after all. Maybe the July heat was a deal breaker, or you realized that your budget and the desire for better schools meant a longer commute than you wanted, despite being warned upfront.

You part ways and owe nothing. But the service you received, the uncompensated effort given to you by the Realtor, and the knowledge you gained were invaluable to you and your family as you contemplate your options.

Similarly, when a seller hires a listing agent, we guide you through everything that needs to be done to properly prepare and price a home, including all of the backend tasks most consumers never see, and the marketing efforts. If, ultimately, that home fails to sell and you decide to take it off the market, you owe nothing. Everything you received was provided for free.

We operate this way for two reasons:

Consumers prefer it. The system facilitates the buy/sell process in ways that may not be fully appreciated by the average person. Most people move every 8 years, so it’s not something you think about constantly. But when life changes—like receiving a relocation offer or having a grandchild—you can start working with a Realtor in that city with no upfront costs.

Realtors, especially those of us who understand sales, like it too. The deals that close more than make up for the efforts that didn’t result in a sale.

This means successful transactions subsidize unsuccessful efforts. It might not seem fair, but it is. Yes, any single deal might look like the agent didn’t do much, but the commissions from those closed deals allow all of the aforementioned efforts to happen at no cost.

Thus, the system is built around ‘success fees’ supporting the ‘free’ efforts that draw the necessary number of buyers into the process to get homes sold. And the agents who bring those buyers, benefiting the sellers, are generally paid a commission that appears on the seller’s side of the settlement statement.

And it’s this commission appearing on the seller’s side of the settlement statement that’s at the heart of this big lawsuit.

Lastly, nothing I’ve said touches on how commissions are calculated. I won’t argue with someone who thinks x% of the sales price might be ‘too high.’ There are valid arguments and examples of this that Realtors should not shy away from.

But I’d prefer to have that discussion with individuals who understand everything I’ve just covered about how the Success Fee system functions within an industry that everyone wants to keep working well overall.

Market Info • November 5, 2023

What’s Up with Real Estate? National news and local views for the week ending Friday, November 3, 2023

by Debbie Marett

Very happy to deliver some good news to would-be buyers: mortgage rates just had a nice move downward! If you’ve put off buying (affordability) or selling (feeling locked-in by low mortgage rates), let’s have a discussion to make sure you’re ready to move when the time is right.

What’s Up with Real Estate?

National news and local views for the week ending Friday, November 3, 2023

National Real Estate News

Home prices keep rising

The Case-Shiller indexes are some of the best measures of home price appreciation out there. In August, the national index rose 0.9% month-over-month (that’s a lot in one month!), and is now up 4% year-to-date. 10 of the 20 big city indexes set new records in August, and ALL of the city indexes are up year-to-date. Many of the hardest-hit markets in 2022 (Seattle, Las Vegas) are rebounding quickly.

Fed keeps rates steady

Despite the very strong 3rd quarter GDP number and the resilient job market, the Fed chose to keep interest rates on hold for the second-straight meeting. This, in and of itself, is ‘dovish’ (suggests that rate hikes are already or nearly finished.) But of course, Fed Chairman Jerome Powell refused to officially end the tightening cycle, instead warning that more rate hikes could still be possible.

Big drop in mortgage rates

Was it the Fed’s double skip? The weaker than expected job growth from ADP? Whatever the reason, let’s just celebrate that treasury yields and mortgage rates had a big move lower recently. Are we truly excited about an average 30-year mortgage rate of 7.5%? Perhaps not. But it’s a lot better than the +8% we had over the last few weeks. And it feels like the market has turned an important corner.

Local Market Trends

As of Friday, November 3, 2023

Area	Median Price	Active Listings	New Listings – 5 days	Median Days on Market
Austin, TX	$650,000 0.1%	3808 0.2%	252	61 0.1%
78628	$564,990 0%	646 1%	28	94 0.4%
Pflugerville, TX	$439,999 0%	330 0.2%	24	55 0.1%
Round Rock, TX	$452,470 0%	524 0.2%	31	65 0.1%

Local Market Trends ( Red downwards arrow

) from Oct. to Nov. 2023.

Market Info • September 14, 2023

Has the residential real estate market changed? For the better or worse?

by Debbie Marett

By Mark Sprague, State Director of Information Capital

A question Realtors, economists, real estate analysts, and more have been getting for the past 18+ months: Has the residential real estate market changed? For the better or worse?

Contrary to owners/investors’ fears, the so-called “strong housing bubble” of the last 3+/- years has not burst (“bubble” in quotes because we never had a bubble by any definition). Instead, a gentle decline in both supply and demand has struck a balance, resulting in a boost to the housing median price/value. Throughout the first half of 2023, Texas’ median home prices consistently show a 0.3-0.4 percent monthly increase.

Due to current owners’ reluctance to sell their existing property (locked into a home financed at a lower interest rate, i.e., “Why would I sell my current home for a smaller house and higher payments?”), the demand for new construction has significantly increased. This shift in preference has led to a swift climb in the market share of new construction, which surpassed 20% in June (historically, builders control 15% to 25% of housing markets). Due to a lack of resale inventory plus strong demand, new construction should move up to a 30+% market share over the next two years.

Let’s focus on the shift in the Texas metro residential real estate market that began about 18 months ago, as the Federal Reserve raised rates to fight inflation in March-April of 2022, leading to slower sales and market environment over the past year. (While rates are higher, they remain below pre-2009 levels.)

I need to remind you that this market cycle has been very different from others we’ve experienced over more than thirty years. One of the clearest indicators of this difference is the ratio of sales (houses, condos, and townhouses) versus the number of listings each month since 1990. (For reference, in 1990, Texas was coming out of the S&L/oil collapse. 1,617 commercial and savings banks failed between 1980 and 1994. There were tons of foreclosures in Texas and the oil patch, with a 90% loss of real estate value, both residential and commercial.)

Over the last 30+ years, a monthly average of about 35% of active listings were sold each month. Before 2013, the average was much lower at 22%. 2012 was the year we emerged from the “Great Recession,” and 2013 was the first year of the current market cycle. With rare exceptions, absorption of active listings has been above 34% since 2013 and was driven to a much higher average of 70% by the frantic period in 2020, 2021, and early 2022. In March of 2021, our market actually sold three times as many homes as were listed! Through 2022, the market easily absorbed 80+% of each month’s listings.

This supply-and-demand imbalance has obviously impacted home prices (as well as other real estate channels); as stated above, value increases have slowed in 2023 but are still increasing monthly. Why? More inventory is needed.

Yes, inventory supply has crept up to more than three months. That is still not a balanced market if you go by the standard wisdom that six months of inventory is parity. We could easily burn through that inventory as more and more potential sellers decide not to sell due to the ‘locked-in effect’ of having much lower mortgage rates than current rates available now. Yes, ‘days on the market/DOM’ has increased, but again, that is more of a move toward a ‘normalized’ market.

Again, we are a long way from a balanced six months of inventory (the point where inventory changes a ‘sellers’ market’ into a ‘buyers market’). In addition, a buyers’ market brings discounting off the list price. This is not apparent presently, with most homes selling above 95% to 98% of the list price. (Pricing appropriately – closer to the median value – historically makes for quicker sales and fewer negotiations on value, etc.)

Rates have increased at the fastest pace in US history over the past year, and sales prices continue to be driven above the long-term trend lines.

So, back to the question, are values going up or down? Every month, each of our Texas metros has continued to see appreciation, with little chance of de-escalation due to a lack of inventory. So, those waiting for values to drop or be discounted will not see those goals met. If you want/need to buy, waiting will cost you both in value and monthly payments.

Consider these trends when thinking about whether or not you should wait to buy.

Due to job creation, inventory remains low—a longer trend expected to last 4 to 5 years.
Rents are not slowing. Concessions on rents are small, with little to no chance of escalation. Any slowing is in the rental market is temporary. Stricter lending standards for commercial loans will slow down new construction of apartments, leading to more competition for existing properties and higher rents.
The cost of Labor and materials will continue to rise due to lack of availability.
Lending rates will remain at this level or higher due to inflation. “Marry the house, rent the rate” is now the buzz phrase on the street.
Based on the points above, values/prices will remain strong for a while.
The lower-than-normal lending rates (less than 6%) of the last 15 years are likely a thing of the past. i.e., there is no real opportunity of getting a much lower rate in the near future….

Some may disagree with any or all of the above, but I have spent the last 40+ years analyzing market trends in housing, financing, consumer behavior, and more. I am not a Realtor or lender, but I track the data and speak to where the market is headed. Time will tell!

Buying • September 8, 2023

Should You Buy or Rent a Home?

by Debbie Marett

In today’s competitive real estate market, you may wonder if it’s better to rent a place or buy a home. Purchasing a residence can provide more privacy and future investment potential, while renting allows for more flexibility and less maintenance. Both options have a myriad of pros and cons, but it ultimately will depend on […]

Costs and Maintenance

When you rent a home, you typically pay a flat monthly rental fee plus utilities and insurance, and any repairs or maintenance are the landlord’s responsibility. However, when it comes time to renew your lease, you may find that your monthly rent goes up. When purchasing a home, your monthly mortgage payment remains constant and there’s always the option of refinancing if interest rates drop. Of course, you will also be responsible for your own maintenance and repairs.

Building Wealth

When you own your own home, you build appreciation and equity as the value of your property increases over time. In recent years as property values have appreciated across the country, owning a home has proven to be a smart investment. When you rent, your monthly housing costs go straight to the landlord.

Customization

For renters, landlords often have specific rules about the surrounding property and limit things like growing gardens, decorations, painting interiors and more. But when you own, it’s yours to do what you like. While your HOA may have some restrictions on exteriors, you are generally free to customize your property to suit your personal style. You can also add amenities and make upgrades like new appliances, light fixtures, flooring and other features that can increase its value and your future financial prosperity.

Flexibility

Rental agreements often span a year or go from month to month, which allows you to make quicker adjustments for lifestyle changes or new job opportunities. However, when it’s time to renew your lease, there is no guarantee that the property will continue to be available. When you own a home, adapting your living situation is a process and involves finding a buyer, as well as the transfer of taxes, title insurance and other legal documents. However, it will give you the stability needed to build long-term success.

In many markets, it’s cheaper in the long run to own a home than to rent, as rent prices have risen steeply across the country. Contact me to help you determine if purchasing a home is the right option.

JENNIFER MCGUIRE Coldwell Blue Matter Article

Home Improvement • August 29, 2023

Interesting how color can influence the human brain in a number of ways.

by Debbie Marett

Color can influence the human brain in a number of ways

Stagers typically recommend painting homes in neutral colors like beige or gray to appeal to more buyers. But that advice isn’t always true.

Science has proven that up to 90% of homebuying decisions are influenced by color, which can have a greater impact on people’s moods and reactions than previously thought. The human brain processes and organizes color signals in a split second. Color is a universal language, and you can guide clients on how to use color science in their home sale.

For example, you may have heard that exterior paint colors should be limited to two or three choices or that warm neutral colors are best if you want interiors to look more spacious. This is generally true. Highly-specific and stylized exteriors and interiors can be off-putting, particularly if they don’t match your prospective buyers’ tastes.

But touches of the right colors inside and outside a home can help compel buyers to make a quicker purchase decision. (Spoiler alert: White is not always the answer for giving the impression of a larger space.)

The impact of color on our brains is scientifically proven. Choosing colors based on color science to match desired outcomes has the potential to make or break sales in the highly competitive real estate market.

Consider the following science-backed findings.

Green creates a calming effect and can lower your heart rate. However, when splashed on walls, green can create a sickening look, which is why it shouldn’t be used in medical facilities. Instead, use biophilic design—incorporating greenery from plants—which will support a healthier living environment.
Red creates excitement, aids metabolism and increases heart rate. That said, too much red can lead to anxiety. That’s why it’s often used selectively for retail signage and product labeling. Think about Target and Coca-Cola. Use red sparingly and as an accent.
Blue signifies trust and stability. Men tend to like blue more than women. Note: Many financial institutions use it as their principal hue, likely because of the subconscious messages it sends.
Black connotes luxury among some lifestyle brands. A black front door can signal opulence, and some studies have even suggested it can lead to a higher listing and purchase price. (Get inspiration for how to use black.)
Soothing lighting in the hallway can put buyers at ease. Keep in mind that the type of lighting will change the effects of colors in the space. Warm tones, daylight bulbs or LED lights will have a massive impact on the coloring as well as the shading of your environment.

Visualize Other Colors

High-tech tools like virtual reality can take this further, enabling agents, brokers and developers to personalize properties to the tastes and imaginations of house hunters. Yet lower-tech versions also can help you visualize the possibilities. (Search online for “paint visualizer mobile apps” to find tools.)

Also, consider securing painting estimates from contractors or leaving paint chips out on display at listings so prospective buyers can visualize how they might personalize the walls to their own tastes.

Leveraging color can help drive sales in other ways. Incorporating a fun color quiz into your sales process, for example, can help your clients understand their reactions to certain colors. This also can help clients see the potential of a property beyond the existing colors or wallpaper.

Real estate professionals also can use color in their logo and marketing materials to build trust and excitement among clients and prospects. A signature color can help differentiate you among a sea of other brokers and agents. Ryan Serhant, a reality TV star and founder of his own brokerage, even went so far as to invest in a car in “Serhant blue.”

But try simple touches like colorful eyeglass frames, jewelry, hats, scarves, shoes or ties in your signature color, which can be less expensive and still memorable.

Color science is being applied to multi-family communities, student and senior housing, commercial spaces, schools, medical facilities and other structures. As researchers learn more about the human brain’s functions, professionals will be able to learn more about how color can impact our actions and reactions, including when it comes to real estate.

Shared from: https://www.nar.realtor/blogs/styled-staged-sold/how-to-leverage-color-science-in-real-estate

Uncategorized • August 19, 2023

Understanding Title Insurance

by Debbie Marett

Title companies are nothing new in the real estate industry. But do you understand their function and how vital they are to you?

Title insurance is the inverse of other insurance coverages. Instead of assuming risk, title insurance companies eliminate the risk with a one-time payment, assuring the homeowner maintains the title as owner of the property. Title companies defend homeowners against any lawsuits attacking the title or if there is a covered loss, they will compensate them for the amount of the policy.

Title insurance is essential to the real estate and lending industries. Without it, you couldn’t feel confident you truly own the homes—or borrow against their collateral.

Ensuring ownership

Title insurance is different than other types of insurance.

Most consumer insurance policies—think car or homeowners insurance—assume risk. A policy gives you money if an adverse event qualifies for reimbursement.

In contrast, title insurance eliminates risk. For a one-time fee, you get an assurance that title will not be taken away from you once you own the property. That’s because the title company will defend against any lawsuits attacking title, or if there is a covered loss (such as the title being vested in an owner different from the one stated on the policy), the title company will compensate you for the amount of the policy.

Title companies do this by searching property history to ensure there are no unpaid debts, liens, or heirs that could contest the buyer’s ownership. Companies also resolve any fraud or forgery found in the chain of title before the buyer purchases the property.

Discovering property history

How can title companies ensure no valid claims can be made against the buyer’s ownership?

To be licensed in Texas, title companies must own or lease a title plant: special software or a filing system to search geographically indexed title records. Escrow officers search the records using a property’s legal description and review a run sheet of property information. Officers also search for the buyer’s and seller’s names to ensure there are no tax or judgment liens filed.

In the rare event that a county does not have a local title agent with geographically indexed title records, title professionals have to go to the county courthouse and manually do a grantor-grantee search. That’s tracing the property history backward one sale at a time.

Most properties need some kind of correction, or curative work, to their title information. It may be something simple like correcting a prior instrument with an error in the legal description, ordering proof of a mortgage payoff, or ordering homeowners or property association information. If the problem is small, the title companies can handle it themselves with the seller’s permission.

The escrow officer’s work depends on the property. If a property has changed hands often and everything’s up to date, it could close in as little as three days.

Working on a property that’s been in the same family for generations is not as easy as you might think, though. Title agents need to trace the property back through probate and wills to determine heirship. That may take 30 to 45 days.

Officers must also do significant work when a deceased homeowner’s estate isn’t organized, such as if there is no will. They have to make sure there are no unknown heirs. Sometimes people sign affidavits and they forget to include someone, or they don’t think an estranged son is entitled to the property. They may search obituaries or just Google these people.

Complex issues, such as untangling IRS tax or judgment liens, bankruptcies, or imminent foreclosures, may require involving attorneys. Title companies can work to get lien releases against the property, but these do not release the debtor from any personal liability on the debt if a balance remains.

Why title matters

In theory, you can buy and sell a property without title insurance. If you pay cash and all of the paperwork is clean and in order, it can be done. But doing so comes with risks.

For the vast majority of transactions, title insurance builds the trust required to conduct business. Buyers want to know they truly own the property.

Homeowners take out second mortgages and borrow against their homes to pay for a child’s education, for example. Clean title records allow this to happen.

Title insurance is the product title companies offer, but title companies also offer other important services during the real estate transaction. They can collect the funds, liens, and bills, and then handle the final exchange between buyer and seller, and then record the transaction and make sure everything’s in the deed and that ownership passes.

Title companies handle the actual closing and amend all of the records so everything’s up to date and accurate. If title companies disappeared tomorrow, the property records could be in disarray within five years. “We are constantly cleaning them up and correcting legal documents, sometimes requiring the prior owners’ signatures. And if you wait a few years, you may have to track down the executor of the owner’s estate.”

Home Improvement • August 13, 2023

Drought Causing Foundation Problems and What to do About it

by Debbie Marett

Shared from an inspectors point of view on water or lack there of in a foundation and it’s health.

Desiccation Cracks – my mud is cracking!

Texas is hot and dry and as we are moving into September, we are seeing more and more desiccation cracks, which means that the soil itself is starting to crack. This is something that happens during prolonged dry spells to certain types of soil. The soil type that is experiencing the biggest issues is soils that have a high content of clay minerals such as smectites. When smectites get wet, water is able to get in between the molecules causing the soil to expand by pushing the structural units apart. When these water molecules evaporate, it shrinks down again. These clay contents that have a high shrink-swell plasticity will result in large crack formation during dry spells and it is not uncommon to see shrinkage of ten percent or more.

Why should you care about this and what does it have to do with foundations? The soil that underlies most properties here in Austin are shrink-swell soils. As the soil desiccates its capacity of bearing and stabilize the foundation decreases, which means that your foundation might get damaged. On top of this, most homeowner’s insurances do not cover damages that are caused by expansive soils. It is estimated that the expansive soils in the US alone generates a cost of damage of $2-3 billion every year. A cost that I know most of us would like to escape.

When there are significant and repeated moisture content changes, the foundation takes the most damage. This means that by maintaining an even moisture level around your property, you can avoid these costly repairs. The moisture level needs to not only be evenly around the property but also during the different seasons. While a well-constructed drainage system can help you keep the moist level down during wet seasons, watering your yard can help it during the dry seasons. This can be done by using a sprinkling system or even a regular soaker hose within 10-12 inches of the foundation edge. Make sure to not add too much water and not too little. If you are seeing desiccation cracks on the south side of your home but not the north, the south side will need more water than the north to keep the moisture level balanced. As a result, the soil will not experience great changes, and if it does these changes will be somewhat even throughout the home and minimizing the stress it puts on your foundation.

Signs the Soil Around Your Foundation is Too Dry

How do you know if the soil around your foundation is too dry? If there has been a stretch of very hot and dry weather, and you have done no supplemental watering, there is a good chance the soil around your foundation is too dry. Visual indicators include large cracks in your yard, and, in extreme instances, soil visibly pulling away from your home’s foundation.