All posts by Tomie Raines Housing News

Housing Inventory Market View – March 1, 2022

Limited housing inventory will continue  to plague the real estate market well into 2022. Buyers faced with few suitable choices will need to make creative offers in multiple offer situations. Banking sources indicate that the Ukraine war will have little effect on mortgage rates.

Market  View – March 1, 2022
• 360 currently listed homes for sale in the five county greater Lansing area.
• 226  homes have accepted offers. Awaiting inspections and/or appraisal.
400 homes are listed as Pending. Have completed inspections and will soon close.
• 799 homes have closed since January 1, 2022.
• 7455 homes have closed in the past 12 months.

Mortgage interest rates
30 year fixed – 3.89% ($4.71 per $1000)
15 year fixed – 3.14% ($6.99 per $1000)

Late Payments and Credit Scores

creditscore.largeConsumers who make late credit payments have no idea how badly their credit scores can be affected or how long it takes to repair the damage.  According to Nerdwallet.com, a late payment of 30 days or more can knock as many as 100 points off your credit score and stay on your credit report for up to seven and a half years.

FICO scores, the credit-scoring system used by the Fair Isaac Corporation, help banks and other lenders determine a borrower’s creditworthiness. Your scores can change with every new report from a creditor, but nothing impacts credit scores like a missed payment. Your payment history accounts for 35 percent of your FICO score, advises credit bureau Experian.com. Other factors include the amounts owed (30%) credit history length (15%), types of credit (10%) and new credit (10%.)

If you’re late making a payment on an account, don’t despair. Equifax.com, another credit bureau, explains that the payment due date on your statement or bill is the last day you can pay on your account without incurring late fees. Lenders routinely report accounts to credit bureaus at least 30 days after the payment due date, and they often don’t report late payments until they’re 60 days past due.

Even if your payment is late, go ahead and make it. If you can pay the amount due in full, some lenders won’t report the late payment. You’ll have to pay whatever late fees are levied, but your credit score will remain intact.

How Much Do You Really Need for a Down Payment on a Home?

Home Mortgage Down Payment, A gray house, brown card and calculaIn years past, lenders have always pushed that a 20% down payment was absolutely necessary in order to purchase home. Fortunately, this idea is a myth. The average first–time home buyer puts just 6% down, and certain loan programs allow as little as 3% or even zero down.

How much down payment you need for a house depends on which type of mortgage you get. A conventional loan is the most sought after loan option, and the down payment requirement starts anywhere from 3% to 5% down. On a $250,000 house, that’s a $7,500–$12,500 down payment. However, in order to avoid private mortgage insurance (PMI), you need at lease 20% down on a conventional mortgage – which increases your monthly mortgage payment.

Depending on the mortgage program for which you’re applying, there’s going to be a specified minimum down payment amount. For today’s most widely–used mortgage programs, down payment requirements are:

  • Conventional Loan (with PMI): 3% minimum
  • Conventional Loan (without PMI): 20% minimum
  • FHA Loans are guaranteed by the Federal Housing Administration and require as little as 3.5% down
  • VA Loans are backed by the Department of Veterans Affairs and have no down payment requirements. VA loans are designed for active military, veterans, and some surviving spouses
  • USDA Loans are guaranteed by the U.S. Department of Agriculture and require nothing down. However, USDA loans are devised for home buyers in suburban and rural areas who meet income limits and other eligibility criteria
  • Fannie Mae HomeReady Loan: 3% down minimum
  • Freddie Mac Home Possible: 3% down minimum
  • Jumbo Loan: typically 10% down, depending on lender

In the end, a 20% down payment isn’t always necessary. If you want to purchase a home this year, reach out to a trusted real estate agent to start the conversation and explore your down payment options.

Low Housing Inventory Again!

There’s evidence of another strong seller’s market as we move into February 2022 with not nearly enough listed homes to satisfy buyer demand.

This is typically what happens when a fairly priced home is offered for sale through the real estate Multiple Listing Service.  Photos and details about the property are immediately made available on every listing service (Zillow, Realtor.com, BHHS, etc.) across the country. Buyers who have asked to be notified, are automatically alerted, and real estate agents arrange immediate showings.  Within a few days, the seller selects one from the multiple offers that have been presented, leaving the remaining buyers to wait for another home to become available.  This has become a way of life in a market with low housing inventory.

Market  View – January 30, 2022
• 440 currently listed homes for sale in the five county greater Lansing area.
• 271 homes have accepted offers. Awaiting inspections and/or appraisal.
• 351 homes are listed as Pending. Have completed inspections and will soon close.
• 7479 homes have closed in the past 12 months.

Mortgage interest rates
30 year fixed – 3.55%
15 year fixed – 2.8%

 

20 things that may not add to your property value

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  1. DIY Home Improvements – while they may save you money, if not done professionally, it will be obvious to a prospective buyer, which might cost you in property value more than you invested in improvements.
  2. Garage Conversion – When it comes to home buying, buyers care about their garage space and size.  Cutting into that with a garage conversion that might not match the rest of the house might be something to consider before taking the plunge.
  3. Solar Panels – If you decide to lease solar panels instead of buying, keep in mind, that future home buyers might not want to take on that responsibility.
  4. Quirky Wallpaper – it may look cute, and you might think it adds character but with quirky wallpaper, the odds of others not holding them as fondly as you do are very high. Consider investing in temporary wallpaper instead and removing it before selling if you have your heart set on it.
  5. Custom Luxury Upgrades– They may be just perfect for you, but that’s just the thing, they probably won’t be for others, and the more custom you go, the likelihood the cost will go up for replacing the upgrades. Make sure you think through these decisions.
  6. Wine Cellars– With so maybe individuals who don’t drink, or hate wine, or are simply committed beer drinkers, wine cellars take up a lot of square footage. They are expensive and difficult to renovate into a different space.
  7. Remodeled basements and attics –If you are looking to add on a bedroom, using this space, there is a lot to factor in. There are ceiling height, closet, and emergency exit requirements that can end up racking up quite a cost so if you are thinking of doing this make sure you do your research and the math beforehand.
  8. An oversized home addition –If you expand the home too far, it will start to look unplanned and not give the added appeal you may be thinking it will have.
  9. New windows – If these are old windows we’re talking about, then they may add to your property value, but you need to check your local market to see if houses with new windows are going off the market faster than ones that haven’t made the upgrade, especially with windows being such a large investment.
  10. Swimming pools – Swimming pools often scare aware new family buyers who have little ones around to worry about, while they may seem fun, keep in mind your target buyer before installing.
  11. Lavish lighting fixtures– These can go wrong in so many ways, they can go out of style fast, dates themselves and your home, and aggressively tell other people your style and how much it’s not theirs.
  12. Too much wallpaper – Once again, it’s hard to envision a space of your own, in a room with a distinct look because of the wallpaper. Solid color walls give homebuyers more room for imagination.
  13. Textures on the wall and ceiling– Textured walls can go in and out of style, people who want this in their home will make the investment to do it themselves but for others who don’t want them, they may be discouraged by the mess of having them removed.
  14. Overbuilding for the neighborhood – A house that doesn’t match the neighborhood, can stand out and make people feel it’s out of place.
  15. Inconsistent high-end upgrades – This creates more work for the buyers to make the home more cohesive and it can sometimes give the impression that your home upgrades weren’t thought out.
  16. Invisible improvements– If it’s not something you need to be done and not something homebuyers would see or ask about, it likely will be a good deed unrecognized, save your wallet the stress.
  17. Quirky tiling – It is pretty hard to work with tiling if it is already setting the tone of the room all on its own. Try picking tiling that can mess well with many different design tastes, homebuyers often are interested in ripping up and replacing tile right after purchase.
  18. Too much carpeting– Carpet can age fast, wear down and get messy. It may make sense in some rooms like the bedroom but with the market changing, committing to most of the rooms with carpet is a big no-no, especially in the bathroom! 
  19. Bright or bold paint colors – If new buyers cannot imagine themselves in your home because you have left so many traces of your design style that they might not agree with, they are going to be less likely to see it as their dream home.
  20. Large Gardens – Gardens are amazing, but depending on the property price range, large gardens can be expensive and time-consuming to maintain, and not easy to get rid of if the new owners don’t share your green thumb.

This is not to suggest that you shouldn’t make your home as unique as you want it, but if you are considering selling in the not so far future, or are already on your way to listing, staying away from these items or self-correcting might pay off. 

 

The Housing Inventory Has Hit An All-Time Low

The number of available homes for sale typically decreases in the months of November and December, but this year’s current inventory is lower than what has been considered normal.  According to sources that keep track of housing statistics, the number of active listings on November 28th showed a 23% decrease compared to the same time period in 2020 and a 42% drop compared to 2019.

Even with the weather getting colder, the demand for homes will remain strong. New listings added through the months of January and February won’t increase the inventory significantly as these will likely sell quickly to buyers hoping to avoid competition during the annual spring surge which in early spring.

Those expecting a market crash that will soon end the current seller’s market should decide if they want to be homeowners or renters. Low housing inventory and mortgage rates at less than half of what they were fifteen years ago will continue to drive the annual multiple-offer frenzy we’ve witnessed each spring for the past eight years.

2021 Concludes with Continued Housing Shortage

The Lansing area real estate remains an active seller’s market with enthusiastic buyers jumping on new listings in spite of the traditional holiday slowdown. With limited choices, newly listed homes continued to receive acceptable offers within a few days.

Sales and Inventory of Residential Homes as of December 28th
496 currently active listings. (Entire Lansing area market area)
273 homes with accepted offers.
392 homes pending a closing date.
7452 homes have closed in the past twelve months.

Mortgage Rates at 3.05%
3.05% is the current 30 year interest rate closing out December.  This monthly mortgage payment will cost a buyer $4.24 per each thousand of borrowed money.
($100,000 mortgage = $424 monthly payment)

 

5 Home Improvements to Start Making This Winter

winter porchTake advantage of this winter season! There is no need to wait till spring to start investing in your home and yourself. Enjoying the space, you’re living in will make the holiday season that much more filled with joy.

1. Revisit your lighting!

You will be spending a lot more time inside, invest in energy-saving lightbulbs to save you money this winter! Address if you enjoy the lighting in your home currently. Make sure that you find the lighting pleasant and that it offers you the proper lighting for how you’re utilizing the space. A bonus for yourself could be investing in a few sun lamps since you won’t be seeing the sun as often!

2. Stop the leaks and holes!

Make your house more energy-efficient and keep out any critters. This will help keep your energy bill low, keep the cold air out, and stop you from having to call pest control. It’s often easier in the wintertime, for you to notice the leaks with such a temperature disparity outside.

3. Update your home décor and declutter

The wintertime is often a time to find ourselves cozying up indoors, so make sure the space you are occupying is a space not only you enjoy but also makes your life easier. This is a great time for you to address any home décor issues you have and take the time to update them. More so, when’s the last time you took a hard look at your laundry room? Does this space feel usable? Could it be better? Not only will this make your life easier, if and when you decide to sell. Decluttering will showcase the space’s full potential to prospective buyers.

4. Change batteries in the smoke detector

There is never a good time for a fire accident to happen, but winter is absolutely a terrible time. With the increase in time, you are spending inside, heating your home, so does your risk increase. Take the time to go around and check all your smoke detectors. While you’re at it, take the time to check your carbon monoxide detectors too.

5. Install a new programmable thermostat

Speaking of heating your home. Take the time to upgrade your thermostat to a new programable one. This will make a huge difference in your heating bill and increase the value of your home. An added bonus to upgrading is that if you upgrade through your energy company there is a large chance, they will be eligible for instant enrollment bonuses and instant rebates, and it’s better for the environment.

Take advantage of this winter season! There is no need to wait till spring to start investing in your home and yourself. Enjoying the space, you’re living in will make the holiday season that much more filled with joy.

First Time Home Seller’s Top Questions Answered…

Each new home seller has a list of questions that they may wish to ask their Realtor before the process of putting their home on the market begins. We answer the top questions most h4c96rb8diome sellers ask.

  • When is the best time to sell my home?

Every real estate market is different, therefore, the best time to sell a home will be different from real estate community to real estate community.  In the Lansing area market, the spring months are the best time to be selling a home.  The spring months begin in mid-March. Earlier if winter ends sooner.  Since every home seller’s situation is different, you should discuss the timing of your home sale with your Realtor.  Selling a home in the fall and winter months may be necessary and could be better than waiting until spring. There are fewer listings meaning less competition.  Also, only serious buyers will be shopping during the frigid winter months.  Keep in mind that Michigan State University and our major local business are constantly bringing new employees into the Lansing real estate market.

  • How is the real estate market right now?

One of the most important indicators on market conditions is average days on the market. New listings posted in the spring and summer have been selling within a few days. It may a little longer in the winter months, however, low interest rates (current around 3%) are an incentive for buyers to purchase a home.

  • What steps should I take to prepare my home for sale?

Not properly preparing a home for sale can put a home owner at a huge disadvantage. Making sure clutter is at a minimum, freshly painting rooms, installing new carpeting, or ensuring odors are non-existent are just a few things that could be done before listing your home for sale.

  • What should I disclose to potential buyers?

Michigan real estate law requires that sellers disclose imperfections that affect the structure and living environment. Basically, anything that you are aware of in your home. If you’re aware of defects with the roof, appliances, structure, or home in general, you’re required to be honest and upfront.  If you’re aware of defects, whenever possible, fixing them before going on the market is best.  This can avoid potential issues once your home is under contract, after inspections, and even years after you have sold your home.

Low Inventory Continues…Home Values Rise

Average home prices have continued to rise as shown by third-quarter (July – September) sales results. Mortgage rates are currently at 3.09% making it easy for buyers to make extremely competitive offers for the few available home choices.  Through July, August and September, sellers continued to receive offers exceeding the listing price and are often given an “appraisal guarantee” assuring that the buyer will provide additional, out-of-pocket, funds for the closing of the purchase.

According to third quarter 2021 sales statistics,  the average sales price of Lansing area homes increased from $194,103 at the end of September 2020 to $213,401 on September 30, 2021.  This is a 9.1% increase and represents an average home value increase of $19,298.  Average selling time for many homes is less than one month.  These figures include all sales through the Greater Lansing Association of Realtors.

 Check out our Third Quarter Sales Statistics Link (below) for an update of sales activity by community. (Please note that pending sales, properties under contract that have not yet closed, are not factored into these statistics.)

Third Quarter 2021 Sales Statistics


Market  View – October 28, 2021

• A strong seller’s market continues through the month of October.
• 675 homes listed for sale in the five county greater Lansing area.
• 413 homes have accepted offers, awaiting inspections .
• 617 home are listed as Pending. Have completed inspections and will soon close.