Blog - Sunrise Homes & Renovations, Inc.

How Will Coronavirus Impact Our Real Estate Economy?

May 22, 2020 by Rhonda Costa

Without a doubt, the COVID-19 (coronavirus) pandemic has impacted every part of the economy. This is a dangerous virus and has left many parts of the country on lockdown orders to prevent it from spreading rapidly. The question many people are asking is how much the real estate is going to be impacted by the virus as well.

People Are Not Looking For Houses As Often

One of the biggest impacts of coronavirus is that some people simply aren’t out looking for houses. Stay at home orders and social distancing measures have prevented people from touring homes that they may be interested in buying and sellers postponing the listing of their home for sale.

In some parts of the country, the new listings available for homes have dropped drastically. This includes areas of the country that have been hit the hardest by the virus such as New York and California. Even web traffic to various real estate sites such as Zillow has dropped as well. Without a doubt, the rate of weekly mortgage applications has been impacted as well.

The Impact Of International Trade

In addition, for those who want to move, they might find a slowdown in international shipping and trade challenging. Many of the items that people need to furnish a home such as couches, tables, stoves, washers, dryers, ovens, and more are made overseas. Many home building materials are also manufactured and shipped from abroad. This creates a challenge for home builders and remodelers to effectively source the materials they need. It may take some time for the supply chain to reset and catch up with pent up demand.

The Response Of The Federal Government

Right now, those who currently own homes can find some relief from monthly mortgage payments if they are struggling financially. The government has put a moratorium in place on foreclosures. They have also told mortgage servicers to offer forebearance options for many mortgages. While these grace measures will expire eventually, they may be helpful for the time being.

Looking Forward

The impact of COVID-19 on the nation’s real estate market is already apparent; however, the real question is how long the market is going to take to recover. The most recent report from National Association of Realtors states that 2020 is forecast for a 15% overall decline in the real estate industry. Many analysts believe that the real estate industry will be one of the fastest segments to recover across the country. Once the market does open up, the demand should increase quickly.

Some Millennials Are Finding Home Buying Overwhelming

May 21, 2020 by Rhonda Costa

Some Millennials Are Finding Home Buying Overwhelming Many millennials are reaching the age where they are thinking about buying homes for the first time. It turns out that many members of this generation are finding this process challenging. Even though the housing market is great for those looking to buy, surveys indicate that this generation also finds the process overwhelming.

Reports have been published showing that many millennials are planning to buy their first home in the next year, showing that owning property is still a strong part of the American dream. Furthermore, many millennials also know that this is a great time to buy. Why are millennials finding this process so challenging?

Student Loan Debt

One of the biggest reasons why millennials are having issues purchasing a home is student loan debt. When someone is looking for a home, any potential lender is going to take their existing debt into account. It is no secret that student loans are a major issue right now.

With numerous millennials saddled with student loan debt, this makes it hard to qualify for a mortgage. While other forms of debt are easier to pay back, student loan debt is not. Some millennials have student loan debt that looks like a mortgage.

A Poor Understanding Of Costs

Even though millennials may look at their rent payments as a solid barometer for their mortgage payment, there are other costs that millennials need to consider. These include real estate taxes, HOA fees, homeowners’ insurance, and potential repairs. Therefore, they might need to reset their expectations.

Comparison Is A Dangerous Temptation

Finally, too many millennials are tempted by what they know. Many millennials end up moving back into their parents’ house after they finish school. The job market can be tough and they think this is a great way to save money. On the other hand, this also means they might end up looking for a house that is similar to their parents’.

Many millennials have set the bar high for their first home. A property like their parents’ simply isn’t within the budget. An unwillingness to accept this makes it harder to find a home. On the other hand, there are affordable homes out there. Millennials simply need assistance to find them.

How To Know You Are Ready To Stop Renting And Buy A House?

May 20, 2020 by Rhonda Costa

You might have gotten used to the flexibility of renting. You probably like not having to worry about repair costs and you likely enjoy the ability to pack up and move in short order. On the other hand, you are probably tired of throwing money away and are ready to build equity in a home. While the opportunity to become a homeowner is undeniably attractive, how do you know that you are ready to take on this responsibility? There are a few signs to note.

You Manage Your Debt Well

One of the most important factors any home lender is going to assess is your history of debt management. After all, the bank wants to know they are going to get their money back.

This is where your credit score is going to come into play. If you have a solid credit score, this is an indication of your ability to manage your debt. Some of the factors that will influence your credit score include prior credit cards, car loans, and even student loans.

In addition, the bank is going to look at your debt to income ratio. If your ratio is relatively low, this increases your chances of qualifying for a home loan successfully.

You Have Saved For An Emergency Fund

In addition to having a good debt to income ratio, you also need to have an emergency fund set aside. The monthly mortgage payments, down payment, and home insurance premiums aren’t the only homeownership costs. You could also have repairs that arise down the line. This is where an emergency fund is essential. That way, if something goes wrong (which will happen at some point), you are ready. Many sources recommend having six months of living expenses put away in an emergency fund.

Purchasing A Home

These are two of the most important signs that you are ready to purchase a home. If you are tired of living in an apartment and are ready to put down roots, then consider taking out a loan on a house. This is a great way to invest in your future.

Home Maintenance Projects That Could Save You Thousands On Repairs

May 19, 2020 by Rhonda Costa

Home Maintenance Projects That Could Save You Thousands On Repairs Owning a house comes with major responsibilities and one of the most important is routine maintenance. While many people like to skip routine maintenance in an effort to save money, the reality is that these routine maintenance is going to save people down the road. The reality is that maintenance is a homeowner’s first line of defense when it comes to protecting their most valuable investment, which is their home.

There are a few projects that may save homeowners thousands of dollars down the road.

Inspect The Plumbing Connections

It is easy to forget about the plumbing system because many people don’t even see their pipes until problems arise. The idea behind expecting the plumbing system is that problems can be spotted before they cause a house to flood. Some of the appliances that people need to think about include refrigerators, faucets, dishwashers, and washing machines. All of these devices have hoses that connect to the water supply.

If these hoses tart to crack, leaks can develop slowly. Eventually, this water is going to get behind the walls, causing mold to grow, and it may also get underneath the floors, causing them to warp. It is important for people to take a look at these pipes from time to time. If leaks are identified, they can be repaired.

Clean The Dryer Ducts And Vents

Many homeowners overlook their ductwork; however, people need to take the time open up their dryers and change their filters between every load. The vents that people use to remove lint from their clothes will clog up quickly. If the dryer is unable to suck air through this vent, it is going to have to work harder to dry the clothes. This is going to cause the dryer to overheat. It might even lead to a housefire. In order to prevent this from happening, homeowners should change their dryer lint filters after every load.

Routine Maintenance Is Critical

These are a few of the most important points that homeowners need to remember when it comes to routine maintenance. Homeowners need to have a regular schedule that they follow to ensure that none of these tasks are overlooked. It can prevent disaster from happening.

What’s Ahead For Mortgage Rates This Week – May 18th, 2020

May 18, 2020 by Rhonda Costa

Last week’s economic news included readings on inflation, retail sales, and a speech by Federal Reserve Chair Jerome Powell. The University of Michigan released a preliminary reading of its Consumer Sentiment Survey; weekly readings on mortgage rates and initial jobless claims were also released.

April Inflation and Retail Sales in Negative Territory

Consumer prices fell in April to a negative reading of -0.80 percent and matched expectations. The Core Consumer Price Index, which excludes volatile food and energy sectors, fell to -0.40 percent from -0.10 percent in March. Analysts expected a reading of -0.20 percent. Consumer Price Indices are used for determining inflation rates.

Retail sales also posted negative readings for April. Overall, retail sales fell by -16.40 percent as compared to the March reading of -8.30 percent and April’s expected reading of -12.50 percent. Retail sales excluding autos fell by 17.20 percent; analysts expected a reading of -0.90 percent based on the March reading of -0.40 percent. Retail readings may improve in May as retail establishments and malls start to open.

Fed Chair Expects Slow Economic Recovery

Jerome Powell, Chairman of the Federal Reserve advised business contacts that the economic recovery may be slower than originally expected. In remarks given at the Peterson Institute for International Economics, Mr. Powell said, “The path ahead is both highly uncertain and subject to significant downside risks.” Mr. Powell cautioned that “the passage of time can turn liquidity problems into solvency problem” and suggested that additional government assistance to households and businesses may be worth it to prevent more damage to the economy.

Mortgage Rates Mixed; New Jobless Claims Fall

Freddie Mac reported little change in average mortgage rates last week. Rates for 30-year fixed-fixed rate mortgages averaged two basis points higher at 3.28 percent. Rates for 15-year fixed-rate mortgages dropped by one basis point to 2.72 percent. Rates for 5/1 adjustable rate mortgages averaged one basis point higher at 3.18 percent. Discount points averaged 0.70 percent for fixed-rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages.

New jobless claims were lower than in the prior week but remained far above traditional readings. 2.98 million claims were filed as compared to the prior week’s reading of 3.18 million initial claims filed. Analysts expected a reading of 2.73 million new claims filed.

The University of Michigan released its preliminary Consumer Sentiment Index readings for May. The latest index reading was 73.70 as compared to an expected reading of 69.80 and last month’s reading of 71.80. May’s reading was in line with Chair Powell’s suggestion that consumers are looking ahead to returning to work and shopping as the economy gradually reopens.

What’s Ahead

This week’s economic reporting includes readings from the National Association of Home Builders on housing market conditions along with reports on housing starts and building permits issued. Data on existing home sales and weekly readings on mortgage rates and new jobless claims will also be released.

Tips On How To Sell Your Home In A ‘Buyer’s Market’

May 15, 2020 by Rhonda Costa

A “buyer’s market” happens when people looking to buy a home have a stronger bargaining position than the sellers have. In a classic economic sense, a buyer’s market occurs when the supply of homes available for sale exceeds the demand for them. However, other things in real estate create a buyer’s market.

Causes Of A Buyer’s Market

Besides having too many homes for sale and too few buyers, a buyer’s market in real estate may come from widespread credit market problems. There may be plenty of buyers interested in homes that are for sale, yet they may not be able to get a loan to buy the home. This may be caused not only by the credit history and qualifications of the buyers but also by the lending institutions’ available funding to make loans.

Another thing that can cause a buyer’s market for homes to suddenly emerge is a major relocation or closing of a large employer in an area. If the jobs disappear for many people, then they may have to move to find work.

Ways to determine if a specific area is a buyer’s market include tracking the median number of days that homes stay for sale on the market listings. Another strong indicator is the number of homes that lower their listing price.

Selling A Home In A Buyer’s Market

In a buyer’s market, trying to sell a home may be much more challenging. Here are our tips to sell a home in a buyer’s market:

Price: To be competitive, price the home at a very compelling level that is up to 5% less than the market value of comparable properties.
Staging: Stage the home to be in a perfect immaculate condition with extremely attractive interior design elements. Remove everything from the home, repaint, and then rent brand-new furniture. Use the services of a professional interior designer to make the home aesthetically stunning.
Paint: Paint the home inside and out. Use contemporary colors in a trending color scheme that is attractive for the most potential buyers. Avoid brash colors. Color choices should be neutral but not boring.
Home Inspection: Conduct a professional pre-inspection of the home, fix all the items that need repair, and show the inspection report and the receipts for the work done to any potential buyers.
Home Warranty: Offer a one-year home warranty included in the sale price, which covers the major appliances and home systems.
Energy-Efficiency: Install energy-efficient windows, seal around windows and doors to prevent leaks, and upgrade insulation to make the monthly utility bills as low as possible.
Use a Top Real Estate Agent: Work with an agent that has a track record of selling homes recently, who is a “closer” when it comes to making a sale.

Summary

If possible, try to avoid selling a home in a buyer’s market and wait for a better time. If that is not possible, or the market is permanently damaged and will be a buyer’s market for a long time, then take these steps to give your home advantages when compared to other homes that are for sale.