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June 23, 2022

5 Ways to Protect Yard in Severe Weather

Mother Nature is unpredictable, it can damage any person's home and yard. A wildfire or a flood might not destroy your house, but drought, excessive rainfall, hailstorms, high winds, or other elements might harm your yard's curb appeal. Your yard might be set back years if severe weather is present or if it is paired with inadequate maintenance. You may want to rethink your regular lawn and landscaping ideas. Here are five tips to get you going. 

1. Reduce the damage caused by drought

Drought can devastate plants. Drought impacts plant growth, alters plants' structures, makes them more susceptible to diseases, and even leads to plant death. The soil will bake, become dry, and eventually, turn to dust. The dust's pesticides will spread across the wind.

Turf lawns should get at least one inch of water every week, says Luke Lee, a London-based real estate expert who assists homeowners with landscaping design choices. If your home is in an area that frequently suffers from drought, artificial turf (AstroTurf is one example) may be a good option. It will help conserve water and put a damper on grass fires, Lee says.

2. Avoid Damage from Excessive Rainfall

Plants and soil can be harmed by excessive rain and snowfall, says the marketing director of Green Building Elements, Inc., a Manchester, Connecticut-based firm. A monsoon-like downpour can unleash a torrent of stormwater pollution, which can kill plant roots, according to Monson.

A flood may also deplete the landscapes of a lot of nutrients, moreover, if they remain submerged for too long, the water will suffocate them of air. If plants die, growth can be hampered or slowed, in addition to being killed by extreme weather, such as heavy rains, according to McKenzie. This grading can result in erosion when combined with extreme weather, Monson says. Monson recommends that homeowners who live in areas with severe weather ensure that water drains properly. A considerable number of homeowners have customized drainage systems to prevent flooding, but many have not installed drainage systems, putting their yards at risk. 

3. Defend Your Yard Against Strong Winds

Gusts aren't just dangerous to homes and vehicles; they're also no friend to landscaping. Winds have been known to uproot smaller plants. After a windstorm, your yard might look like a disaster zone if it is covered with fallen trees, pine needles, and fallen leaves. Even gentle winds have the potential to erode the soil. That stunts the growth of landscaping and causes harm to it.

Landscapers suggest several measures. Before a storm, tie-down any loose or dead branches on trees and shrubs, secure outdoor furniture or decorations that may be blown around your lot, and prune any branches that might fall on them. Reduce the number of decorative trees or bushes, or stay away from trees that are susceptible to being uprooted by strong winds. even if you have to cut down a few. 

4. Prepare Your Yard for a heat wave

Extreme heat has the most lethal impact on humans, according to statistics. It can also be harmful to yards. This weather pattern might cause dead leaves, dormant grass, stressed shrubs, and infestations of insects and diseases. This weather pattern can cause stress to plants. To maintain a lush lawn in spite of the summer heat, consider replacing some areas with water-saving plants. You might install Spanish lavender, aloes, aloes, pride of Madeira, rockroses, and junipers, for example.

An expertly pruned plant prevents plant diseases from spreading to the healthy portions of your garden. Look for signs of infection, such as unusually growing branches, or indications of pathogens, such as insect larvae or microbial mucus. The stems could get a little mushy, and you might see yellow leaflets with white dots.

5. Safeguard Your Landscaping Against the Brutal Winters

Long, cold periods might leave your lawn vulnerable, especially if they occur at the same time as wind chills of -20 degrees Celsius or lower. By spreading seed over your lawn and keeping it safe during cold months, you can ensure that it thrives. Mulch, which also keeps plants healthy, provides insulation, regulates root and soil temperature, and keeps plants healthy, is another excellent option. 

Always clear away any trash and dead leaves. By this, you can stop your plants from withering and becoming infected with fungal diseases and pathogens. Mother Nature may occasionally be harsh and the key to landscaping is prevention.

In conclusion, spending money and effort on your yard can serve as a solid insurance policy against bad weather. Landscape maintenance may help keep your yard lush. By repairing issues that may have been prevented, you could also be able to save some money.

 

Source: Houselogic, 2022

https://www.houselogic.com/by-room/yard-patio/5-ways-to-keep-severe-weather-from-doing-a-number-on-your-yard/

Posted in Design, Remodeling
June 19, 2022

Is the Sky Falling on Real Estate?

After the Federal Reserve raised interest rates on 6/16/22, the media went crazy with stories about the real estate market collapsing.  I did a deep dive to see what economists (mostly economists outside of the real estate industry) are saying about real estate.  Below is what I found.

Fannie Mae predict that 11.1% fewer homes will sell in 2022 compared to 2021 because of rising interest rates combined with constrained inventory.  The National Association of Realtors (NAR) has been producing about the same drop in sales since the beginning of the year.

Matt Argersinger with the Motley Fool agrees that the the price decreases seen in some areas of the country are due to rising interest rates, which are raising the costs to own a home.

Lawrence Yun the NAR chide economists says, “It’s painful that on the same $300,000 mortgage, the monthly payment rose to $1,800 today from $1,265 in December. Consequently (it) will shrink the buyer pool.  Sales could fall even further with some inventory sitting on the market for more than a month like in the pre-pandemic days.”

Economist predict sales will continue to soften in the near future, which MAY put downward pressure on home prices.

Zillow is showing 5% of homes in its platform have seen 5% to 10% price drops.  5% is not a large number, but I would agree that home sellers who thought they could get a huge price for their house are having to adjust to the market by reducing their price to a more reasonable price for their house in order to actually sell their home.   Home buyer are a bit more cautious at the moment.  There is a demand to buy but less urgency.

In Chattanooga, the number of new listings grew in May and in the last week’s local real estate report. That is a good thing for home buyers.  The inventory of homes for sale has gone up as well.  Pending homes sales were up in May by 4.5%, but down during last week’s report.  The median home sale price in Chattanooga is still up by 21.2%, so home prices are not going down too much in Chattanooga yet.    

Matt Argersinger of the Motley Fool feels like housing will not take the brunt of a coming recession; “If we are entering a recession, I don't think the housing market is one of those areas of the market that's going to be hit too hard. There is that humongous demand/supply imbalance that is still there. Even though the housing prices have risen, interest rates are higher, there are millions of people who would rather own a house than be renting, or living with their parents, or whatever they might be doing at the moment. I think that demand is not going to go away. It's very demographically driven. If we do hit a recession, whatever that looks like, I think it's other factors that are going to be hit harder than the housing market in this particular time.”

The Chattanooga real estate market is softening some.  The market is slowing with less people putting in multiple offers on properties.  People who wanted dream prices for their homes are having to re-strategize if they really want to sell their homes right now.  It seems like we have hit the top of the market with some possibilities of prices decreasing to a small degree.  The one game changer is that the Chattanooga real estate market only has 1/5 of the number of homes for sale that they need to have in order to have a healthy real estate market.  The market still favors sellers.  The sky is not falling on real estate, but a shift is occurring. 

Contact Chattanooga Realtor, Nathan Walldorf, to help develop your home sale strategy or your home purchase strategy. 423-544-7700.

 

Other related articles:

The Real Estate Market is Starting to Shift

Real Estate Deceleration, Not Deflation

Posted in Market Updates
June 10, 2022

Real Estate Deceleration, Not Deflation

Real Estate Deceleration, Not Deflation

Fortune.com is starting to dub the current real estate market as the “Great Deceleration.”  The Fed raised interest rates which cause mortgage rates to go form 3.11% to 5.09%.  According to Freddie Mac, that has made principal and interest payments go up by 35%.  The National Association of Realtor’s chief economist says that the American Dream is now 55% more expensive than 1 year ago with the rise in home prices + the rise in interest rates.  The sharp rise in interest rates and a shortage of homes for sale has fueled a national slow down in the real estate market.  The Moody Analytics chief economist predicts that prices may decrease by 5-10% in this housing correction in significantly “overvalued” housing markets like Charlotte.  Most industry professionals do not see housing prices decreasing too much with the inventory of homes being so low.  Lance Albert from Fortune.com writes, “But homebuyers shouldn’t get too excited-yet.  While inventory levels are rising fast percentage wise, they’re still far below pre-pandemic levels.” We do see home buyers having more options now, which is good.
The Chattanooga real estate market now has around 1,060 homes for sale, which is a 40% increase since the beginning of the year, but a healthy real estate market for Chattanooga would have 5,000 homes for sale.  Chattanooga home prices were up by 20.5% in April, so we are not seeing a large scale decrease in home pricing right now.  There were 2.6% less pending home sales and 4.2% less closed home sales in Chattanooga in April.  Our “declaration” has not been too drastic.  In Chattanooga, we actually have a good number of people siting on the sidelines waiting for their home to come on the market.  I don’t foresee a sharp drop in home prices in our area, but there will be some correction. 

Posted in Market Updates
June 1, 2022

The Real Estate Market is Starting to Shift

Inman news reports that the real estate market is at an inflection point and the real estate may start "cooling off."  Inventory is rising.  Chattanooga photographers are so busy right now, that I anticipate there will be an uptick in listings in the first week or two of June.  For home buyers, a rise in the number of listing this summer would be a good thing.  That shift does not mean that we are headed into a seller's market with the supply of homes for sale being so low.  It only means that home buyers are about to have more inventory to choose from.

Jessica Lautz from the National Association of Realtors (NAR) says that a bubble is unlikely because of the strong buyer demand that still exists.  Other real estate economists agree that a real estate bubble is unlikely as well.

Foreign investment in the US is part of what has lead to lower interest rates.  That same foreign investment in the US is what will keep interest rates from rising too high.

Trying to time the market right now is pretty impossible.  As interest rates rise, even if prices go down slightly, you will still pay more money for a home with rising rates.  The time to buy a home is when you need one.

The real estate market needs builders to keep building homes.  More inventory of homes is what the market needs to get back to normal.  Hopefully home builders will not stop building out of fear of the market.  That would keep housing at un-affordable levels for many.

 

Article Source: https://www.inman.com/2022/05/26/the-shift-has-begun-but-rate-hikes-wont-be-housings-achilles-heel/

Related articles:

Are We in a Housing Bubble?

Buying a Home Now vs Buying a Home 1 Year from Now

 

Posted in Market Updates
May 24, 2022

Are We In A Housing Bubble?

Despite the public's fears that the real estate market is in a housing bubble, there are market fundamentals that show that there are legitimate reasons for rising home prices. "Shifts in disposable income, the cost of credit and access to it, supply disruptions, and rising labor and raw construction materials costs are among the economic reasons for sustained real house-price gains," per the Dallas Fed report in March.  The sharp increase in home prices does not necessarily mean a bubble.  The Dallas Fed went on to say, "there is no expectation that fallout from a housing correction would be comparable to the severity of the 2007–09" crisis.

Here are a few factors that are keeping us from having a housing bubble pop.

1) The housing market has a large pool of buyers in the millennial home buyer group and in the Gen Z group that are coming up right behind them.

2) There is more demand for homes than the supply that we have.  A healthy real estate market has 6 months of inventory, but the current market only has an average of 1.7 months of inventory.  The Chattanooga monthly supply of inventory is only 1 month.

3) Borrowers will probably not default on their loans right now.  Lending standards have been tighter since the Great Recession, so the home buyers over the past 10 years have actually been qualified to buy their home.  "Household balance sheets appear to be in better shape, and excessive borrowing does not appear to be fueling the housing market boom."

4) A rash for foreclosures is unlikely.  If people fall behind on their loans, most people have enough equity in their homes to sell them before the house ends up in foreclosure.

5) A light recession is imminent as the Federal Reserve raises interest rates to offset inflation, but we are looking at a fairly light recession with unemployment being so low.  One friend of mine who does investment banking said that the stock market has been so high that it was bound to come down some, which is what we are seeing.

The real estate market fundamentals do not appear to be taking us into a bursting housing bubble.  We simply have more buyers than homes right now, which will continue to push up home prices.  Buying a home right now means that you have to make some choices.  You can choose to wait, but you will end up paying a much higher interest rate on your home in a year or more.  You can choose to pay more than the asking price to secure a home.  Securing a home now locks in your housing payment to protect you against rising rents and rising home prices.  You can make some sacrifices to get into a home now.  The choice is yours.

Call Nathan Walldorf to guide you through buying or selling a home at 423-544-7700.

 

Source: Forbes Advisor, May 4, 2022

https://www.forbes.com/advisor/mortgages/will-housing-market-crash/

 

You may also want to check out "Buying a Home Now vs. Buying a Home One Year from Now."

 

 

May 13, 2022

Chattanooga Home Sales in April 2022

Home sales were down mildly in Chattanooga in April.  Closed Chattanooga home sales were down by 4.2% in April.  Pending Chattanooga home sales were also down by 2.6%.  The main reason that homes sales are down is because of the lack of available homes.  Lawrence Yun (the National Association of Realtors Chief Economist) says that sales will be down by 9% this year when it comes to the number of units sold due to the housing shortage.  He does not anticipate that home prices will go down. Yun predicts that home prices will rise by 8% nationally this year. 

April Chattanooga home prices were up 20.5% from 1 year ago.  The median sale price is now $302,500. Rising interest rates are making homes less affordable for some people, but there are still many people waiting for their perfect home to come on the market.  Call Nathan to help you buy or sell a home. 423-544-7700

 

Watch a home stats video at the following link

https://youtube.com/shorts/F5tnh2QrsGo?feature=share

Posted in Market Updates
May 11, 2022

How to Grow Wealth in Real Estate

At the recent National Association of Realtors (NAR) conference, Lawrence Yunn (the NAR chief economist) showed a slide with the shocking difference between the wealth of a home owner and the wealth of a renter.  Home owners on average have $320,000 of wealth, while renters have an average of $8000 of wealth. You can build some wealth initially through buying a home.  You can build more wealth in real estate through investing in single family homes or through investing in small multi-family real estate. 

Buying a home of your own is the first step and is a great way to hedge against inflation.

When you have earned enough money for a down payment (20%) for a rental home, you can start leveraging the rental market.  It takes the right lender and the right Realtor to guide you to the right investments.  Usually a local bank is the best option to lend to you as an investor.

Some people want to be in real estate but do not want to manage property.  They do not have time to be a property manager or to manage a property manager.  In that case investing passively in a multi-family apartment building would be a great option for you.  That kind of investment is much better than a REIT (Real Estate Investment Trust) that you can buy with a stock broker, because you get an annual return, a piece of the equity at the sale, and a tax write off due to depreciation.  Investing passively in an apartment building actually yields a better return than investing in a single family home to rent or small multi-family property to rent.

Nathan Walldorf can help you grow wealth through investing in real estate directly or by investing passively in an apartment building.  Call Nathan to find out more. 423-544-7700

 

 

April 29, 2022

Buying a Home Now vs. Buying a Home One Year from Now

As a home buyer, you are probably wondering if this is the right time to buy a home. With interest rates rising, some think housing prices may go down.  I personally do not think they will go down much and other experts agree with me, but let's say that home prices do go down by 5% in a year.

When is the right time to buy? Should you buy now, while interest rates are still low compared to what they will be in the coming years? Or do you wait for another year or so hoping housing prices will be a bit lower?

There is a balance between interest rates and housing prices, even if home values fall, the mortgage may still be more expensive.

If you buy a home right now for $300,000 at a 5% interest rate, you will be paying $2,145 per month on your mortgage.  If you decide to wait a year in hopes that home prices will go down (though most people do not feel like they will go down), and you buy the same property for $285,000 at 6.5%, you will pay $2,315 per month for your mortgage.  You will pay an 8% higher monthly payment per month.  Over the life of a 30 year loan, you will pay $61,200 more for the house that you waited to buy for $15,0000 less but at a higher interest rate.  Over 10 years, you pay $20,400 more in mortgage payments for the loan that you would get 1 year from now.

Economist predict that appreciation for home will slow from 20% right now to more normal rates (3-4% per year) as interest rates go up, but they are not predicting that homes will loose value with the high demand for homes that we have right now.  When we look at the data above, it is better to buy now than wait for the potential of a lower priced home. 

Call Nathan Walldorf at 423-544-7700 to navigate your next home purchase.

 

April 19, 2022

Why Are Interest Rates and Home Prices Rising?

During a segment of Wharton Business Daily's Real Estate special, Wharton Real Estate Professor Ben Keys explains the impact of high mortgage rates on the housing market.

For the first time in a long time, mortgage interest rates rose above 5% last week. Rates haven't been this high since 2011. When rates jump from 3.5% to 5% in a year, people pay attention to that. 

Many homeowners will be encouraged to stay put and will be "locked-in" to their mortgage because they have such a low-interest rate. Most homebuyers purchased when rates were as low as 3% or less. They therefore will not want to move and pay a higher interest rate on a new home loan.

For new home buyers, there are affordability issues with the new/higher interest rates. Prospective home buyers, particularly first-time buyers, may now face substantially larger monthly payments for the same-sized house.

Despite higher interest rates, home buyers are not deterred. Rental rates keep rising, so renters want to buy homes and lock in their housing payments. Millennials are at the age where they are earning more and are ready to buy homes, so they are putting higher demands on the real estate market. The real estate market is undersupplied as demand rises. It is strange for interest rates to be rising and for home prices to be rising, but the lack of housing supply is the root cause of that predicament.

The refinance market is now over with rates where they are now. It will be interesting to see if lenders will shift to other affordable products, particularly in the midst of a period of rising prices. There is no financial incentive for homeowners to refinance the whole balance of their outstanding mortgage at a higher rate of interest. Households will now turn to home equity lines of credit to access some of the equity in their homes.  Considering how much home prices have risen in recent years, there is a lot of equity out there. We'll definitely see a spike in demand for closed-end 2nd liens and home equity lines of credit.

Because we have a highly uncertain economy, there is a great deal of uncertainty about where rates will go in the following year. There are numerous causes for this, including the attack on Ukraine, various supply chain concerns, and COVID. There is also the question of how the Fed will deal with inflation. The Fed has two levers in the mortgage market, both of which have an impact on short-term rates. Some economists see the Fed trying to fix inflation with multiple rate hikes over the next few years until they see that those rate hikes will not fix inflation.

The Fed will unwind their bond-buying position fairly rapidly, because they see the market as sufficiently recovered and hot, which is another element contributing to current mortgage rates rising. It's usually difficult to pinpoint exactly why rates fluctuate from one day to the next, but it appears that it was largely in response to the Fed's signal, that they will not be purchasing mortgage-backed securities at the same phase or a potential unwinding of the negative position in the future months. This could contribute to the spring selling season being slower than usual. We could see a recession as inflation and mortgage rates keep rising. That will probably slow the real estate market down a bit, but the demand for housing will remain strong. Hopefully, this will help explain what is happening in this strange real estate market today. 

If you don't use real estate as a hedge against inflation in a home purchase, consider a multi-family purchase with a group of investors. Ask Nathan Walldorf how you can do that at 423-544-7700.

April 11, 2022

How to beat a cash offer on a home when you need financing

 

Having a hard time buying a home right now? The coolest solution is right here.

Ribbon© allows you to make offers with no financial or appraisal contingencies. They guarantee your offer once the inspection is completed.  Here is a quick walkthrough to get you started on your Dream Home.

First off, you will be making an offer with your Realtor. Then Ribbon will give you an addendum attached to that contract. The contract would say that if you, as the buyer, cannot close with your own financing by the closing time/end of the contract, then the contract will be assigned to Ribbon, who will buy that property with cash.

The buyer will now become the tenant of Ribbon, and they buy the property back at the same price. The inspection contingency is the only contingency that there will be because Ribbon will become the buyer's landlord after closing. Ribbon then has to make sure that the home does not have structural or safety issues. After the inspection, the sale is guaranteed even if the buyer backs out.

This is a huge benefit for a seller and Ribbon enables a home buyer to compete with other home buyers that have cash.  The seller can coordinate their next move more easily, and it gives them peace of mind that you are able to close on time.

Ribbon can close up to 14 days later, faster than anybody on the market.

How it works:

- The buyer must be pre-approved for a loan with the lender and then submits that pre-approval to Ribbon. The buyer provides Ribbon with the address, so they go ahead and evaluate the home to let them know what Ribbon is willing to pay for the home. You, as the buyer, can offer more than that, but you will have to make up for the difference in the deposit that you put down.

- The buyer can then write an offer with their agent and attach the ribbon addendum to it. After doing the inspection, Ribbon gets a copy of the inspection and could ask for repairs (if there are structural or safety issues). The buyer can close with their own financing and only pay a 1% fee for Ribbon to guarantee the offer.

- If the buyer can't close the mortgage on time or if they needed to accelerate their time frame and close in 14 days, Ribbon can close and give the buyer 180 days to buy the property back from them at the same price (210 days if it's an FHA loan). The buyer would rent by the day. That type of loan would cost the buyer 2.4% of the purchase price that you would pay Ribbon for their service.

- Ribbon guarantees appraisal protection since they go through an evaluation process and they have professional evaluators on staff. When the home appraises for less than the contract amount, Ribbon will make up for the difference with no additional fee.

 

If you want to know more about Ribbon visit https://www.ribbonhome.com/

 

Nathan Walldorf can help you connect with a lender that can do this type of loan. Call him and see how he can help you with your Real Estate needs. 423-544-7700.