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Jan. 24, 2024

What's in store for Chattanooga Real Estate 2024

In 2024 the Walldorfs will have some great new homes coming on the market that we are excited to sell in North Chattanooga, in Riverview, and on Lookout Mountain.

2024 will be the year of lower interest rates.  The 8% interest rate in October/November is behind us. In 2024, we should have rates between 6.5% to 6%.

Home buyers and sellers will enter the market with more force this year.  As rates go down, home sellers will be more interested in selling and home buyers will be more interested in buying,  It will be more affordable for both buyers and sellers to buy homes.  For sellers, they could use their equity in the home they are selling to buy down the purchase price of a new home and be OK with buying a new home.

There will be more competition for homes this year.  There is pent up demand that will be unleashed as interest rates go down.  The inventory of homes for sale is still tight, so that will make it competitive to buy a home.

Make your offer quickly.  Many people are still waiting for the right home, so make your offers quickly. If you delay an offer, you may end up competing with other offers and paying more money.

Home buyer concessions? The jury is still out on whether sellers will give any concessions to home buyers in 2024. If more inventory hits the market, you may be able to get some concessions.  If not, you have to take what you can get.

If you are investing in real estate, longer term holds make the most sense unless you can "buy right."Buying right means buying where the numbers work if you remodel a home to resell it.  You have to make sure there is profit left over after the remodel costs. 

Want to invest in real estate? Ask Nathan to help you as he and his wife have been investing in real estate for 12 years.

Want to buy or sell? Call the Walldorfs. 423-544-7700

 

Jan. 19, 2024

Tips on How to Clean up After a Snow Storm

Tips on How to Clean up After a Snow Storm

I was showing homes after a snow storm and most of the home sellers had not even cleared the walkway to the door, so here are tips on cleaning up your home after a snow storm (especially if you are selling a house).

1. Wait for the Snow to Stop:

Ensure that the snowfall has ceased before you start cleaning up.
2. Clear Pathways:
Begin by clearing pathways and sidewalks. Use a snow shovel to remove the snow, making sure to create a safe and accessible path.
3. Remove Snow from Driveways and Parking Areas:
If you have a driveway or parking area, clear it of snow to make it usable again. ​
4. Shovel Decks and Patios:
Shovel snow off decks and patios to prevent excess weight. Clearing these areas also provides access to outdoor spaces.
5. Remove Snow from Outdoor Furniture:
If you have outdoor furniture, clear it of snow to avoid damage. Wipe off excess snow and moisture to prevent freezing.
6. Check for Ice and Treat Slippery Surfaces:
Look for icy patches on pathways and driveways. Use ice melt or sand to improve traction and reduce the risk of slipping.
7. Inspect for Damage:
Inspect structures, fences, and other outdoor elements for any damage caused by the snow or ice. Address any issues promptly.
8. Clean Gutters:
Check and clean gutters to prevent ice dams and ensure proper drainage.
9. Monitor for Melting and Refreezing:
Keep an eye on the weather forecast, as melting snow can refreeze, creating icy conditions. Address any icy patches promptly.

Posted in Home Inspections
Dec. 13, 2023

December Home Sales Activity is Up

The MBS Highway National Housing Index was up in December from a November low.  The improvement was driven by a 7 point rebound in home buyer activity.   The 1% drop in 30 year mortgage rates in the last six weeks brought some buyers back into the market.  In late October/early November, I did not know what I would be selling in December in the Chattanooga area, but I will end December selling 3 properties.  I am very thankful that interest rates have declined over the past 6 weeks.  The inventory of homes for sale is still tight, so home prices are not going down.  Barry Habib, MBS Highway Founder and CEO, thinks, "there is reason to be optimistic," in 2024 with inflation decreasing and the Federal Reserve cutting rates. 

The Federal Reserve met on Wednesday, December 13th and are now penciling in 3 rate cuts in 2024 according to the Wall Street Journal. 

The Greater Chattanooga Realtors also released their November home sales numbers recently.  Those numbers showed a 4.2% increase in pending homes sales, which will mostly close in December.  At the same time, closed home sales were down by 7% in November mostly due to the high interest rates in late October.  New listings and the monthly supply of inventory have both gone up, so now may be a good time to see what new housing possibilities you can find. 

 

Call Nathan to sell or buy your home in 2024

Posted in Market Updates
Nov. 16, 2023

The Real Estate Market Has Hit Bottom

The real estate market has already hit the bottom in 2023.  My prediction along with many other bankers and now also the (National Association of Realtors) NAR Chief Economist is that we have already reached the peak in terms of interest rates. Every banker that I speak to says that interest rates will go down next year.  UBS says, “the Federal Reserve will shock markets with aggressive interest rate cuts next year.”  I think “shock the market” may be a bit strong, but I do think rates will go down.  UBS also claims that unemployment will rise in 2024, economic growth will keep slowing in 2024, and disinflation will continue in 2024.  All of those factors will push the Federal Reserve to react and lower interest rates.  The NAR Chief Economist says existing home sales will rise by 15% in 2024 due to pent up buyer demand and falling interest rates.  He also predicts that interest rates will be between 6% and 7% by the spring. 

This does not mean that you can go house shopping and ask for deep discounts from the listing price.  The inventory of homes for sale is still very tight, and sellers are getting the prices they are asking for.  Right now, your competition will be less and you will be buying at a lower price compared to when interest rates go down and lots of people are again bidding on few homes.

Call Nathan Walldorf to help you with you next move 423-544-7700.

Posted in Market Updates
Nov. 3, 2023

Are Realtors Conspiring to Keep Commissions High?

A past clients asked me about the National Association of Realtors (NAR) loosing a lawsuit over conspiring to keep commission costs artificially high.  The case said that NAR rules and corporate practices lead to set pricing.  The crazy thing is that NAR internally in their conferences and meetings never talks about a set commission amount.  That would be a violation of anti-trust, so Realtors, as a policy, don’t talk about that in their conferences and classes.  
When you list a home for sale, the documentation gives a total commission to be paid, and then says that 1/2 of that commission will go to a buyer’s agent if a buyer comes along with their own agent.  If a seller were to decide to not pay a buyer’s agent’s commission, you would have less buyer’s agents promoting your property to their buyers.  Then you would have fewer people bidding on your property meaning a lower price for your home.  
Home buyers who do not have an agent will typically make offers that are not competitive with the current market, so they become a lost opportunity for your home.
NAR is appealing the ruling, so we’ll see what happens.

 

Posted in Selling Your Home
Oct. 30, 2023

Home Buyers Frighten Easily in Today's Real Estate Market

Home buyers frighten easily in today's real estate market, a tale of three contracts.

As a home seller, you need to understand the environment that home buyers are in.  Home buyers are watching the Federal Reserve continually raise interest rates, and they are watching Israel and Ukraine at war.  They are a bit uneasy, so you need to think first before you make aggressive counter offers to potential buyers of your property.  It is not 2021 any more.  Here is what happened to my last 2 contracts I wrote and to a friend's contract recently.  

Contract 1: After I gave my out of town clients a Face Time tour of a house, they made a good offer on the house with acreage that was within $10,000 of the asking price.  The seller had been burned by another out of town buyer, so they decided to counter my client's offer at full price and give them less time to inspect the property. That did not give the buyers a good taste in their mouths and made them rethink their decision to buy the house.  They decided that 1) they did not want to rushed and 2) the property (that they were previously ready to buy) needed too many updates.  The seller came back and was willing to agree to the original terms, but the buyers had already moved on.

Contract 2: A different land buyer made a good offer (within $10,000 of the asking price) on a property, but the seller countered them at full price.  Again, the buyer had time to pause with this counter offer, and they talked themselves out of buying the property.  They thought of more expenses during that time of considering their response to the counter offer, and that was the end of that contract.

Contract 3: Another Realtor friend of mine had a buyer back out in the middle of a contract and refused to purchase a property because of the political environment.

All of this happened within weeks of each other at the end of October.  Know that if you counter a good offer, you may loose those buyers all together.  You may be buying the property back from them after having not taken their original offer.  If you have a good offer that is close to the price you want, be sure to think twice and decided if the risk of loosing the buyer for your property is worth sending them a counter offer.

Call Nathan and Charlie Walldorf to sell your home at 423-544-7700.

Posted in Market Updates
Oct. 11, 2023

What’s Happening with Interest Rates?

What’s Happening with Interest Rates?

I have good news concerning future interest rates.  After the last federal reserve meeting, the Fed announced that they would probably do one more rate hike before the end of the year.  The residential mortgage interest rates responded by raising right after that announcement.  Reuters reported on Monday that, “top ranking Federal Reserve officials indicated..that rising yield on long-term US Treasury bonds..could steer the Fed from further increases.”  That means that the mortgage market raised interest rates on its own, so they do not have to increase interest rates again.  The Fed vice chair, Philip Jefferson, said they they are balancing the risk of not tightening enough and being too restrictive.  The Fed says they do not want to do unnecessary harm to the economy.  
The National Association of Realtors, The Home Builder’s Association, and the Mortgage Banker’s Association penned a letter to the Fed chairman telling him that the interest rate increases are, “exacerbated housing affordability and created additional disruptions for a real estate market that is already straining to adjust to a dramatic pullback in both mortgage origination and home sale volume.”  They went on to say that further rate increases pose a wide spread risk to economic growth and increase the likelihood of a recession.  Real estate makes up 16% of the US economy so further rate increases would create a hard landing rather than the soft landing that the Fed has been hoping for. NAR Chief Economist Lawrence Yun said, “The fast-rising interest rates are breaking several sectors of the economy. The remaining sectors will also likely crack if the rate hikes continue. Given that the inflation rate is already cooling, the Fed needs to stop raising rates and strongly consider cutting interest rates next year. That would be the ‘soft landing’ without the net job cuts to the economy.”  Basically, there is a decent chance that we may have seen our last interest rate hike.  
The other bit of good news is that late fall is a great time to buy a home for a little less.  Even though the interest rate is high now, when rates go down next year, the pent up home buyer demand from this year will hit the market making people have to pay more for a home in order to get to an accepted contract.  When rates go down, you can refinance after having paid a lower price for the house than if you wait for rates to go down again.  Call Nathan Walldorf to find your Chattanooga home today. 423-544-7700.

 

Posted in Market Updates
Oct. 6, 2023

Is Knob and Tube Wiring Dangerous?

Is knob and tube wiring dangerous?


Knob and tube wiring is an older electrical wiring system that was commonly used in homes in the United States and Canada from the late 19th century through the early 20th century. While it can still be found in some older homes, it is generally considered outdated and less safe compared to modern wiring systems like Romex.
Here are some key considerations regarding knob and tube wiring:
    1    Aging and Deterioration: Knob and tube wiring is quite old, and the insulation on these wires can deteriorate over time. This can lead to exposed wires and an increased risk of electrical fires.
    2    Lack of Grounding: Knob and tube wiring typically lacks a grounding conductor, which is an important safety feature in modern wiring systems. This means that it may not provide the same level of protection against electrical shocks as modern wiring.
    3    Not Designed for Modern Electrical Loads: Knob and tube wiring was designed for a different era with lower electrical demands. Many modern homes have far more electrical devices and appliances than homes from the early 20th century. Overloading a knob and tube system can pose significant safety risks.
    4    Insufficient Insulation: The insulation used in knob and tube wiring may not meet current safety standards. Modern wiring systems use insulation materials that are more fire-resistant and durable.
    5    Not Up to Code: In many areas, knob and tube wiring is not up to current electrical codes, and using it for new installations or significant renovations is not allowed.
In summary, even if not overloaded, knob and tube wiring can still present safety concerns due to its age, lack of grounding, and the potential for deterioration of insulation. If you have knob and tube wiring in your home, it is advisable to consult with a licensed electrician to assess its condition and discuss options for updating your electrical system to meet current safety standards. In many cases, it is recommended to replace knob and tube wiring with a modern wiring system to ensure the safety of your home and its occupants.

One thing to consider when you are buying a home is that some insurance companies (not all) will not insure a home if it has knob and tube wiring.

If you need help buying a Chattanooga home or selling a home in Chattanooga feel free to reach out to Nathan Walldorf at 423-544-7700.

Posted in Home Inspections
Sept. 29, 2023

5 Real Estate Transactions Impacted by a Government Shutdown

5 Real Estate Transactions Impacted by a Government Shutdown

1. FHA will not make commit to new loans in the Multi-family Program during the shutdown. There may be some delays with FHA processing.  
2. Fannie Mae and Freddie Mac are not reliant on appropriated federal fund and should operate normally.  BUT…Fannie Mae and Freddie Mac may have a hard time getting social security numbers verified and getting a tax return transcripts.  Both are needed to process a loan.
3. Rural housing loans will not be issued during the government shutdown.  That is a 100% rural development loan.
4. SBA loans would most likely be delayed (mainly impacting some commercial property financing but not most)
5. VA loans should still close but there will be fewer processors meaning longer wait times (potentially).


-Only 11% of home buyers were negatively impacted by the last government shutdown.
-25% of home buyers decided to delay buying during the last government shutdown.

 

In the end all, the impact of a government shutdown will be minimal.  Some real estate transactions will be impacted or slowed down though.

Call Nathan Walldorf for all of your real estate needs. 423-544-7700.

Posted in Market Updates
Sept. 29, 2023

Incentives When Buying a New Home Are At a 4 Year High

Incentives when buying a new home are at a 2 year high.  
The problem for most new construction home buyers over the past 2 years is that they have not had any leverage to negotiate.  New construction home buyers would love to be able to get a little more for their money, like anyone would.  Watch this video and I’ll tell you 4 different kinds of incentives that you can get out of builders right now.
Builders did not have to offer any incentives to sell a home over the past few years.  Many new homes were selling when they were still literally on the drawing board in the last few years.  The Federal Reserve’s conversations about raising interest rates again this year and the country’s credit rating being downgraded, have both made interest rates rise and have slowed down home buyers.  With that happening, home builders are now giving more incentives in order to keep homes selling.  Here are 4 incentives that you may be able to get out a builder right now:
    1)    The most popular incentive right now is an interest rate buy down that could make your interest rate be 1%-2% lower. 
    2)    Builders are giving upgrade credit to buyers.  One builder was giving 50% off of upgrades up to $30,000 (meaning $15,000 of those upgrades would be free) a month ago or so.  If you want things like quarts countertops, a nicer tile, more decorative ceilings, or even engineered hardwood instead of luxury vinyl plank, you may be able to get those upgrades for free or at a largely discounted rate.
    3)    You could get upgrades appliances or an appliance that the builder does not usually provide like a refrigerator.
    4)     When I asked a builder about other incentives for home buyers to buy new construction, he said that most builders will do incentives up to 1% of the purchase price in cost to them.

One thing builders will not do is take a lower sales price, because that sales price will bring down all of the sale prices on the remaining homes in the neighborhood.  A builder will give incentives though.  
If you want to buy a new construction home, give me a call.  I would be happy to guide you through the process.

Posted in Buying a Home