Monthly Archives: August 2021

Time to Sell Your Vacation Home?

As summer comes to a close, is it time to think about selling your vacation home?

Based on recent data and expert opinions, it’s something you may want to consider. According to research from the National Association of Realtors (NAR), vacation home sales are up 57.2% year-over-year.

If you’ve taken your last vacation this summer, here are reasons you should consider selling your vacation home this year.

1. Remote work continues to drive demand for vacation homes.

As the report from NAR says, based on continuously evolving work needs, there could be more interest in your second home than you think: “In 2020, the fraction of the laborforce that works from home is typically higher in vacation home counties than in non-vacation home counties…The opportunity work from home could further raise the demand for vacation home in future years.”

Barnstable County/Cape Cod is certainly a vacation home county. Median prices for single family homes across Cape are up more than 30% YTD. But, for those communities that we would consider more vacation-y, prices are up in Dennis (32.3%), Brewster (31.3%) and Wellfleet (34.9%), for example.

Recent data shows we’ll likely see a sustained increase in the rate of remote work over the next five years. That means your vacation home could be highly sought after by certain buyers. Lawrence Yun, Chief Economist at NAR, puts it best: “With many businesses and employers still extending an option to work remotely… vacation housing and second homes will remain a popular choice.”

With the virus not yet under control. many businesses have changed plans and delayed return to work schedules or made at home options permanent. This gives employees the freedom to consider other opportunities like vacation homes.

2. Selling could allow you to upgrade your vacation spot – or even your day-to-day scenery.

When demand is high, so is buyer competition. When competition is strong, buyers will do everything they can to make their offer on your vacation home as appealing as possible. This can include things like all-cash offers and concessions in terms of time you need to move, etc.. If you sell now, you’ll be able to benefit from high buyer competition and pick the offer with the best possible terms for you. That offer could give you the opportunity to purchase the home of your dreams.

Or, if you find that you’ll continue working from home, you could consider taking up permanent residence in your vacation property and selling your primary residence. While this isn’t a choice everyone can consider, it could be a great option.

Buyers remain interested in vacation homes this year for a number of reasons. Now that summer is winding down, it’s time to think about taking advantage of today’s demand for vacation homes. Interested in reviewing your options? Let’s connect at 508-568-8191 or msennott@todayrealestate.com. We’re happy to help.

Talk soon…

Mari and Hank

What Does Price Appreciation Mean?

When you hear the phrase home price appreciation, what does it mean to you? Through context clues alone, chances are you know it has something to do with rising home prices. And as a seller, you know rising home prices are good news for your potential sale.

But let’s look past the dollar signs and dive deeper into the concept. To truly understand home price appreciation, you need to know how it works and why it matters to you.

Investopedia defines appreciation like this: “appreciation, in general terms, is an increase in the value of an asset over time. The increase can occur for a number of reasons, including increased demand, a weakening of supply, or as a result of changes in inflation or interest rates.”

When you consider the definition and how it applies to real estate, a few words stick out: supply and demand.

In today’s real estate market on Cape Cod and elsewhere, we’re experiencing high buyer demand and not enough sellers listing their homes for sale. No matter the industry, anytime there’s more demand than supply, prices naturally rise.

According to Quicken Loans, the national average home price appreciation rate is between 3-5% in a typical year. Today, home prices have been appreciating well beyond the norm thanks to high demand. Here are the latest expert projections on the rate of home price appreciation for this year (see chart below):

A Look at Home Price Appreciation and What It Means for Sellers | MyKCM

Compared to the normal pace of 3-5% appreciation per year, the current forecast of nearly 11.5% nationally is significant.

Across the Cape, the median sales price for a single family home (YTD) is up 30.4% from $461,000.00 to $601,000.00.

For sellers, this means that with the current rise in prices, your house may be worth more than you realize. Price appreciation helps give your equity a boost. Equity is the difference between what you owe on the home and its market value based on factors like price appreciation.

It works like this (see chart below). You can use your built-up equity to power a move into your dream home, or you can put it toward life-changing goals like funding an education or opening a business.

A Look at Home Price Appreciation and What It Means for Sellers | MyKCM

But — and this is important — while price appreciation is strong now, those same experts say it’ll start to appreciate at a more normalized pace next year. If you decide to sell sooner rather than later, you’ll be in a better position to capitalize on the higher-than-average home price appreciation we’re seeing today.

This morning at our virtual office meeting, we talked about how some sellers entering the market now may be disappointed that offers are not coming in at the head scratching figures over list price that they were a few months ago. One story was told of sellers, who received an offer at asking and countered $50,000.00 higher!

So, is it time to make your move? We’d be happy to help you review your options. Helping our clients make the best decisions for their individual situations has been our full time job for 22 years. Let connect at 508-568-8191 or msennott@todayrealrestate.com.

Talk soon…

Mari and Hank

How About A Condo?

It’s no secret that one of the top stories in today’s real estate market is the low housing supply and high buyer demand. If you’re a first-time buyer looking for a starter home or if you’re someone who’s interested in downsizing, it may be worth considering a condominium as an option.

In fact, trends indicate condos are gaining popularity among buyers. In the latest Existing Homes Sales Report from the National Association of Realtors (NAR), the data shows condo sales rising throughout the first half of this year (see graph below).

Looking for a Place To Call Home? Consider a Condominium. | MyKCM

There are a few reasons more people are opting to buy condos – the benefits of condominium life can be quite compelling. Let’s explore the main perks to find out if a condo is a good fit for you.

Affordability

According to the NAR report, the median sales price of a condo nationally is roughly $59,000 less than the median price of a single-family detached home.

Here on Cape Cod the price differential is significantly larger. Year to date (YTD), the median sales price for a condo is $351,450.00, while the median price for a single family home is $601,000.00!

In our hometown of Sandwich, the median sales price of a single family home YTD is $551,500.00, while the median price of a condo is $292,750.00.

This makes condos a great option for first-time homebuyers, those with limited down payment savings, or those looking to save money by downsizing.

Maintenance

A recent article from BankRate adds low maintenance as another perk of a condo lifestyle.

Generally, exterior maintenance for condos is handled by a Homeowner’s Association (HOA). This can include landscaping and upholding a certain standard of cleanliness and condition for walkways, siding, and roofs. If you’re looking for a lower-maintenance option or see the appeal in being hands-off with upkeep, condos may be a good choice for you. With exterior maintenance off your plate, you’ll have more free time for yourself and recreational/social activities.

Amenities

You can use that free time to enjoy some of the value-added features your condo community may have, which could include pools, a rentable clubhouse and grilling areas. If being able to host or attend community social outings is important to you, condominiums may give you more opportunities to enjoy the company of your neighbors. As a bonus, some even have gyms and on-site security teams.

If you’ve been frustrated looking for a home, it may be time to consider a condo as a viable alternative. As with any real estate investment, the decision to buy a condominium can be influenced as much by price, as a desired lifestyle.

As always, if you have questions about the Cape Cod real estate market, in general, or condominiums, in particular, please reach out to us at 508-568-8191 or msennott@todayrealestate.com. We’re happy to help.

Talk soon…

Mari and Hank

Questions to Ask Before Buying a Home

Sometimes it can feel like everyone has advice when it comes to buying a home. While your friends and loved ones may have your best interests in mind, good old Uncle Harry, who “knows a little something about real estate,” might not be aware of critical information about today’s housing market that you need to make your best decision.

Before you decide whether you’re ready to buy a home, you should have the answers to these three questions.

1. What’s Going on with Home Prices?

Obviously, prices are the major factor directly impacting how much it will cost you to buy a house and how much you stand to gain as a homeowner when prices appreciate.

This graph shows just how much experts are forecasting prices to rise this year.

Key Questions To Ask Yourself Before Buying a Home | MyKCM

Continued price appreciation is great news for existing homeowners, but can pose a significant challenge if you wait to buy Using these forecasts, you can determine just how much hesitating could cost you.

For example, if prices increase based on the average of all forecasts (12.46%), a home priced at $350,000 in January 2021 will cost an additional $43,610 by the end of the year. What does this mean for you? Simply put, with prices increasing, the longer you wait, the more it could cost you.

Year to date, median sales prices on Cape Cod have increased nearly 35% when comparing 2020 and 2021. A home that was $447,500.00 a year ago now costs $603,000.00.

As we’ve mentioned before, the market appears to be “moderatin” on Cape with out of sight offers not as frequent as earlier in the year. This is good for buyers who dropped out because competition was pushing prices above budget, but potential opportunities lost for sellers, who stayed on the sidelines.

2. Are Today’s Low Mortgage Rates Going To Last?

Another significant factor that should inform your decision is mortgage interest rates.

Key Questions To Ask Yourself Before Buying a Home | MyKCM

Today’s average rates remain close to record-lows. To put that in perspective, some of us can remember buying our first homes when rates were 15-16%!

Much like prices, though, experts forecast rates will rise over the coming months, as the chart shows. Your monthly mortgage payment can be significantly impacted by even the slightest increase in rates, which makes the overall cost of the home greater over time when you wait.

3. Why Is Homeownership Important to You?

The final question is a personal one. Before deciding to buy, you’ll need to understand your motivation and why homeownership is an important goal for you. The financial benefits of owning a home are often easier to explain than the many emotional ones.

The 2021 National Homeownership Market Survey shows that six of the nine reasons Americans value homeownership are because of how it impacts them on a personal, aspirational level. The survey says homeownership provides:

  • Stability
  • Safety
  • A Sense of Accomplishment
  • A Life Milestone
  • A Stake in the Community
  • Personal Pride

Homeownership is life-changing, and buying a home can positively impact you in so many ways. If you’re ready to begin your journey, we’d be happy to answer any questions. Just reach out at 508-568-8191 or msennott@todayrealestate.com to start the conversation.

Talk soon…

Mari and Hank

Hot Topics in the Housing Market

If you’re a prospective buyer or seller, it’s important you understand current real estate market conditions and how they affect you. The Counselors of Real Estate (CRE) just released its Top Ten Issues Affecting Real Estate report. Here are three hot topics from the list and how they impact today’s housing market.

Technology Acceleration and Innovation

The past year ushered in many changes to the real estate industry, especially when it comes to technology. The CRE report explains that: “Lockdown-driven changes in our work, the economy, social structures and personal behavior have pushed our reluctance (to use technology) aside. The acceleration and adoption of technology during the pandemic has impacted everything, and real estate is no exception.”

For real estate, innovations like digital documentation, virtual tours, and video chats enable agents to connect with clients no matter their location. These options are ideal for prospective buyers and sellers, who aren’t local to the area, or who need the added flexibility of signing documents online or doing virtual tours.

These technologies will remain in place as they provide greater flexibility and convenience to clients.

We completed a transaction last week on a house whose new owners conducted the much of the process — including the home inspection — virtually. The first time they physically saw their new home in Sandwich was the day before they signed closing papers.

Remote Work and Mobility

Working from home has become the reality for many, and the latest list from the CRE identified that and mobility as an important influence on the real estate market.

According to the report, the virus crisis universally caused a movement away from urban cores, particularly for those people with higher incomes, who could afford to move, and for some lower-income individuals seeking to decrease living expenses. Most of these relocations — about 84% — remained within their general region.

Some question whether this was a permanent urban exodus or just a short term reaction to the virus crisis. Here on Cape, many wonder how these new full time residents will react when they discover that our February is not their summer vacation!

Housing Supply and Affordability

The limited supply of houses for sale and the related affordability challenges also made CRE’s list of key factors for the year. On Cape Cod and elsewhere inventory remains tight, even as more homes come on the market.

But, there is good news. Homes are still more affordable than they have been historically thanks to today’s low mortgage rates. As the supply of homes for sale improves, buyers will have more options.

As we’ve noted before, waiting for prices to drop is not a sound strategy as both the cost of homes and mortgage interest rates are predicted to continue to rise at a modest pace.

What we are seeing is a calming of the market with the buying frenzy of a few months ago dissipating — at least for now. There’s no telling what the impact of the Delta variant spike will have going forward.

New technology, remote work, housing supply, and home affordability are key factors in the housing market right now for both buyers and sellers. If you want to better understand how these and other topics can impact you, please get in touch at 508-568-8191 or msennott@todayrealestate.com. We’re happy to answer your questions.

Mari and Hank