Everybody Calm Down! This Is NOT 2008

Everybody Calm Down! This Is NOT 2008 | MyKCM

Last week realtor.com released the results of a survey that produced three major revelations:

  1. 53% of home purchasers (first-time and repeat buyers) currently in the market believe a recession will occur this year or next.
  2. 57% believe the next recession will be as bad or worse than 2008.
  3. 55% said they would cancel plans to move if a recession occurred.

Since we are currently experiencing the longest-ever economic expansion in American history, there is reason to believe a recession could occur in the not-too-distant future. And, it does make sense that buyers and sellers remember the horrors of 2008 when they hear the word “recession.”

Ali Wolf, Director of Economic Research at the real estate consulting firm Meyers Research, addressed this point in a recent interview:

“With people having PTSD from the last time, they’re still afraid of buying at the wrong time.”

Most experts, however, believe if there is a recession, it will not resemble 2008. This housing market is in no way the same as it was just over a decade ago.

Zillow Economist, Jeff Tucker, explained the difference in a recent article, Recessions Typically Have Limited Effect on the Housing Market:

 “As we look ahead to the next recession, it’s important to recognize how unusual the conditions were that caused the last one, and what’s different about the housing market today. Rather than abundant homes, we have a shortage of new home supply. Rather than risky borrowers taking on adjustable-rate mortgages, we have buyers with sterling credit scores taking out predictable 30-year fixed-rate mortgages. The housing market is simply much less risky than it was 15 years ago.”

George Ratiu, Senior Economist at realtor.com, also weighed in on the subject:

“This is going to be a much shorter recession than the last one, I don’t think the next recession will be a repeat of 2008…The housing market is in a better position.”

In the past 23 years, there have been two national recessions – the dot-com crash in 2001 and the Great Recession in 2008. It is true that home values fell 19.7% during the 2008 recession, which was caused by a mortgage meltdown that heavily impacted the housing market. However, while stock prices fell almost 25% in 2001, home values appreciated 6.6%. The triggers of the next recession will more closely mirror those from 2001 – not those from 2008.

Bottom Line

No one can accurately predict when the next recession will occur, but expecting one could possibly take place in the next 18-24 months is understandable. It is, however, important to realize that the impact of a recession on the housing market will in no way resemble 2008.

How Interest Rates Can Impact Your Monthly Housing Payments

How Interest Rates Can Impact Your Monthly Housing Payments | MyKCM

Spring is right around the corner, so flowers are starting to bloom, and many potential homebuyers are getting ready to step into the market. If you’re thinking of buying this season, here’s how mortgage interest rates are working in your favor.

Freddie Mac explains:

If you’re in the market to buy a home, today’s average mortgage rates are something to celebrate compared to almost any year since 1971…

Mortgage rates change frequently. Over the last 45 years, they have ranged from a high of 18.63% (1981) to a low of 3.31% (2012). While it’s not likely that the average 30-year fixed mortgage rate will return to its record low, the current average rate of 3.45% is pretty close — all to your advantage.”

To put this in perspective, the following chart from the same article shows how average mortgage rates by decade have impacted the approximate monthly payment of a $200,000 home over time:How Interest Rates Can Impact Your Monthly Housing Payments | MyKCMClearly, when rates are low – like they are today – qualified buyers can benefit significantly over time.

Keep in mind, if interest rates go up, this can push many potential homebuyers out of the market. The National Association of Home Builders (NAHB) notes:

“Prospective home buyers are also adversely affected when interest rates rise. NAHB’s priced-out estimates show that, depending on the starting rate, a quarter-point increase in the rate of 3.75% on a 30-year fixed rate mortgage can price over 1.3 million U.S. households out of the market for the median-priced new home.”

Bottom Line

You certainly don’t want to be priced out of the market this year, and waiting may mean a significant change in your potential mortgage payment should rates start to rise. If your financial situation allows, now may be a great time to lock in at a low mortgage rate to benefit greatly over the lifetime of your loan.

Will This Economic Crisis Have a V, U, or L-Shaped Recovery?

Will This Economic Crisis Have a V, U, or L-Shaped Recovery? | MyKCM

Many American businesses have been put on hold as the country deals with the worst pandemic in over one hundred years. As the states are deciding on the best strategy to slowly and safely reopen, the big question is: how long will it take the economy to fully recover?

Let’s look at the possibilities. Here are the three types of recoveries that follow most economic slowdowns (the definitions are from the financial glossary at Market Business News):

  • V-shaped recovery: an economic period in which the economy experiences a sharp decline. However, it is also a brief period of decline. There is a clear bottom (called a trough by economists) which does not last long. Then there is a strong recovery.
  • U-shaped recovery: when the decline is more gradual, i.e., less severe. The recovery that follows starts off moderately and then picks up speed. The recovery could last 12-24 months.
  • L-shaped recovery: a steep economic decline followed by a long period with no growth. When an economy is in an L-shaped recovery, getting back to where it was before the decline will take years.

What type of recovery will we see this time?

No one can answer this question with one hundred percent certainty. However, most top financial services firms are calling for a V-shaped recovery. Goldman Sachs, Morgan Stanley, Wells Fargo Securities, and JP Morgan have all recently come out with projections that call for GDP to take a deep dive in the first half of the year but have a strong comeback in the second half.Will This Economic Crisis Have a V, U, or L-Shaped Recovery? | MyKCM

Is there any research on recovery following a pandemic?

There have been two extensive studies done that look at how an economy has recovered from a pandemic in the past. Here are the conclusions they reached:

1. John Burns Consulting:

“Historical analysis showed us that pandemics are usually V-shaped (sharp recessions that recover quickly enough to provide little damage to home prices), and some very cutting-edge search engine analysis by our Information Management team showed the current slowdown is playing out similarly thus far.”

2. Harvard Business Review:

“It’s worth looking back at history to place the potential impact path of Covid-19 empirically. In fact, V-shapes monopolize the empirical landscape of prior shocks, including epidemics such as SARS, the 1968 H3N2 (“Hong Kong”) flu, 1958 H2N2 (“Asian”) flu, and 1918 Spanish flu.”

The research says we should experience a V-shaped recovery.

Does everyone agree it will be a ‘V’?

No. Some are concerned that, even when businesses are fully operational, the American public may be reluctant to jump right back in.

As Market Business News explains:

“In a typical V-shaped recovery, there is a huge shift in economic activity after the downturn and the trough. Growing consumer demand and spending drive the massive shift in economic activity.”

If consumer demand and spending do not come back as quickly as most expect it will, we may be heading for a U-shaped recovery.

In a message last Thursday, Chris Hyzy, Chief Investment Officer for Merrill and Bank of America Private Bank, agrees with other analysts who are expecting a resurgence in the economy later this year:

“We’re forecasting real economic growth of 30% for the U.S. in the 4th quarter of this year and 6.1% in 2021.”

His projection, however, calls for a U-shaped recovery based on concerns that consumers may not rush back in:

“After the steep plunge and bottoming out, a ‘U-shaped’ recovery should begin as consumer confidence slowly returns.”

Bottom Line

The research indicates the recovery will be V-shaped, and most analysts agree. However, no one knows for sure how quickly Americans will get back to “normal” life. We will have to wait and see as the situation unfolds.

A Recession Does Not Equal a Housing Crisis

April 16, 2020

Some facts:

A Recession Does Not Equal a Housing Crisis

 

History shows that a recession does not equal a housing crisis. Let’s connect to talk about what’s happening in our market and how it impacts your goals this year.

Watch Now

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What if your Ideal home Isn’t available?

What if your Ideal Home Isn’t Available?
Imagine you’re looking for a new home. You have a list of all the features you
want, just like you would have a grocery shopping list. However, when you
explore the homes currently on the market, none meets all your criteria.
What do you do? You have a few good options.
First, you can take a second look at your list. Does your new home need
every single feature on it? Are there one or two features you can do without?
For example, can you settle for a smaller kitchen assuming the property has
everything else you want?
Often, buying a home that’s close to perfect is perfect enough.
Second, consider what features you might be able to add to the home later, by
way of a renovation or other improvement. If a property doesn’t have a
finished basement, for example, you might be able to get that done down the
road. Indeed, there are probably many features you can add later to an
otherwise desirable property.
Finally, consider the current level of activity in the local real estate market. Is
it likely that a lot of new homes will be coming on the market soon? If so, your
perfect home may come upon the market within the next few weeks.
Maybe even tomorrow!
In that situation, make sure you arrange to get immediate alerts for newly
listed homes that meet your criteria. You’ll want to jump on each new
opportunity before other buyers learn of the listing.
The good news is, in most cases, you should be able to find and buy a great
home, with most — if not all — of the features you want.

Buying Extra Storage for your Electronic Records

Buying Extra Storage for your Electronic Records

There are many storage options for your household items. For example, receipts and other paper records can be stored in a file box. Seasonal items, such as winter clothing, can be put in the basement. You can even rent a local storage unit to help with decluttering.

But what about stuff that exists electronically? These days, many important records — vacation pictures, tax receipts, home videos, school documents, etc. — are in the form of PDFs, JPEGs, and other electronic formats. Having those reside entirely on your computer is risky. What if your computer crashes?

Someone smart once said, “A computer file isn’t a file until it’s in two places.” So, the solution is to store your important electronic documents in a second place. Here are the most common options:

  • Portable storage. These are data storage devices that fit in the palm of your hand. For most homes, 1T (terabyte) of memory is plenty.
  • Cloud storage. Box, DropBox, and iCloud are the biggest players here. The advantage of storing your documents “in the cloud” is that, unlike portable storage, you can’t damage or lose it.
  • Large backup units. These larger units continuously backup your files so you don’t even have to think about it.

Whatever option you choose, the important thing is to have a duplicate or backup of your important files, so you never have to worry about losing them.

 

 

4 Tips for bathroom makeover – DYI

Bathroom Makeover Tips:

Want to make your bathroom look fantastic without having to do a major renovation? There are a lot of projects you can do yourself. In fact, there are some improvements you can get done in less than a day that will transform the look and feel of your bathroom. Check out these ideas

• Update the sink. If you have some basic plumbing knowledge, this is a project you should be able to do on your own. A new sink can make the entire vanity look like new. • Buy new decor. New shower curtains, towels, window coverings, mats, etc. can transform the look of a bathroom.

• Install new hardware. Replacing cabinet hardware may not seem like much of a change. However, it can have a surprisingly big impact. Shiny new hardware is like jewelry. It stands out.

• Replace the vanity mirror. Even if there are no scratches, an older mirror is like an old pair of glasses. It can become foggy. No amount of cleaning will make it any clearer. When ordering a replacement mirror, be sure that your measurements are exact.

• Paint. There’s no doubt about it. A fresh coat of paint makes any room look better.

4 Steps to a Stress-Free Sale

Ideally, when you sell your home, you want the process to go smoothly and relatively stress-free. While things may happen that are outside your control, there is a lot you can do to ensure that the selling experience is a good one.

Consider these four steps to reduce worry and stress when listing your home:

Step 1: Learn the selling process.

Find out what to expect when the FOR SALE sign goes up. How will viewings be scheduled? Will an Open House be needed? What happens when there is an offer? The more you know, the less mysterious—and, therefore, less stressful—the experience will be.

Step 2: Schedule wisely.

Use a calendar to block out times for viewings and other selling-related activities. Be sure to schedule plenty of time to clean and declutter your home before viewing or Open House. Try not to have a tight schedule during the sales period.

Step 3: Anticipate issues.

The more problems you can foresee, the better you’ll be prepared to deal with them as they arise. For example, if you know you’re going to have a busy week at work, start making plans now to deal with viewings and related matters during those days.

Step 4: Make decisions.

Things can move quickly in the real estate market. There might be a few days when there are no inquiries at all, and then suddenly two offers will come in.

Be prepared to make some quick decisions. Fortunately, with sound advice from me as your real estate agent, making those decisions will be a lot easier.

So, follow these simple steps. They’ll help make your sale less worrisome and even enjoyable!

The latest options in Outdoor Lighting

The Latest Options in Outdoor Lighting

 

Outdoor lighting has come a long way from the days of patio lanterns and strings of lightbulbs. These days, there’s an exhaustive array of options available to illuminate your outdoor space, and make it more appealing and comfortable, particularly in the evenings.

 

Here are just a few ideas:

 

  • Solar garden lights. These lights are on stakes that can be easily inserted throughout the garden. Powered by the sun, they generate enough energy to cast a soft, pleasant glow along walkways or in flower beds in the evenings.
  • Deck post lights. These are easy to install because they’re designed to sit on top of a standard 4×4 wood deck post. Most are solar-powered.
  • Street-style lamps. As the name implies, these look similar to old-fashioned street lamps. Installation is a little more complex, but still DIY-friendly. They’re eye-catching and have a dramatic impact on the look of your outdoor space.
  • Portable lantern lights. These are outdoor lights that are portable and often made to look like a decorative fixture for a coffee table or side table. They can be placed anywhere.
  • LED walkway lights. These are small lights that fit neatly and almost invisibly under stairs and around walkways. Walkway lights not only look good but also improve safety. Most are battery-powered.
  • Planter lights. This is one of the most interesting options. Each one is both a flower pot and a light in one! The pot itself is translucent which allows the light inside to shine through.

 

 

Design experts say you should treat your outdoor space as you would any room in your home. Lighting it up for evening comfort and enjoyment is a good place to start.

 

Boosting your home Curb Appeal!

One Hour Ideas for Boosting Curb Appeal

 

You’ve heard of the term “curb appeal”. It refers to the initial impression buyers get when they first see your property from the street. If the impression is a good one, it sets the right tone for the rest of the home viewing.

 

How do you boost curb appeal?  Here are some proven ideas that you can get done in an hour or so:

 

  • Wash both the inside and outside of the front windows. You’ll be amazed at the difference that can make.
  • Sweep the walkway leading up to the front entrance. Add a new welcome mat. Also, wash down the front door.
  • If possible, remove cars from the driveway. Let buyers imagine their own cars parked there!
  • Mow the lawn. Lightly trim the hedges. Weed flower beds.
  • Remove anything from inside window sills that may look unsightly from the outside. Try putting a couple of flowering plants there instead.
  • Place any trash bins out-of-sight. For example, put them in the garage or neatly at the side of the house.
  • If the entrance door hardware is old and worn, change it. New hardware can make a bigger difference than you might think.
  • Make sure the outdoor lights are working, especially if you’re showing your home in the evening.
  • Add some flowering plants to flower beds, or buy a couple of portable potted plants and place them strategically.
  • Clean your mailbox. If it’s rusted, replace it.
  • If you have a power washer, give the walkway and driveway a quick blast. Just be sure it will be dry before the buyers arrive.

 

These one-hour improvements may seem minor, but anything that helps buyers form a more positive first impression of your home is worth the effort.