Monthly Archives: September 2021

Remote Work Is Here To Stay. Can Your Home Deliver the Space You Need?

A lot has changed over the past year. For many people, the rise in remote work has influenced what they’re looking for in a home and created a greater appetite for a dedicated home office. Some professionals took advantage of the situation and purchased a bigger home. Other people thought working from home would be temporary, so they chose to get creative and made the space they already had work for them.

But recent headlines indicate working from home isn’t a passing fad.

If you’re still longing for a dedicated home office, now may be the time to find the home that addresses your evolving needs. More and more companies are delaying their plans to return to the office – others are deciding to remain fully remote permanently.

According to economists from Goldman Sachs in a recent article from CNN: “Job ads increasingly offer remote work and surveys indicate that both workers and employers expect work from home to remain much more common than before the pandemic.”

Other experts agree. A survey conducted by Upwork of 1,000 hiring managers found that due to the pandemic, companies were planning more remote work now and in the years to come.

According to Upwork: “The number of remote workers in the next five years is expected to be nearly double what it was before Covid-19. By 2025, 36.2 million Americans will be remote, an increase of 16.8 million people from pre-pandemic rates.”

How Does This Impact Homeowners?

If you own your home, it’s important to realize that continued remote work may give you opportunities you didn’t realize you had. Since you don’t need to be tied to a specific area for your job, you have more flexibility when it comes to where you can live. Moving to vacation areas like Cape Cod could be an option now, instead later when you retire. We’ve worked with many client over the last 12 months who have done just that.

If you’re one of the nearly 23% of workers who will remain 100% remote: 

You have the opportunity to move to a lower cost-of-living area or to the location of your dreams. If you search for a home in a more affordable area, you’ll be able to get more home for your money, freeing up more options for your dedicated office space and additional breathing room.

You could also move to a location where you’ve always wanted to live – somewhere near the beach, the mountains, or simply a market that features the kind of weather and community amenities you’re looking for. Without your job tying you to a specific location, you’re bound to find your ideal spot.

If you’re one of the almost 15% of individuals who will have a partially remote or hybrid schedule:

Relocating within your local area to a home that’s further away from your office could be a great choice. Since you won’t be going in to work every day, a slightly longer commute from a more suburban or rural neighborhood may be a worthy trade-off for a home with more features, space, or comforts.

We’ve seen these changes in our own family. Hank’s brother, whose company continues to push back return to the office deadlines, recently purchase a larger home with office space for both him and his wife. Our nephew, who lives in Michigan, just started a job for a Boston-based company that’s giving him the flexibility to work in the office or remotely, as he needs to.

If ongoing remote work is changing what you need in a home, or if you’re still living in a house that’s too big with closed off bedrooms that might be great office space, for a buyer who’s looking for some, we’d be happy to help you review your options.

We can connect at 508-568-8191 or msennott@todayrealestate.com.

Have a great week…

Mari and Hank

Will Home Price Appreciation Continue to Skyrocket in 2022?

One of the major story lines over the last year is how well the residential real estate market has performed. One key metric in the spotlight is home price appreciation.

Here are the latest percentages showing the year-over-year increase in home price appreciation:

The dramatic increases are seen at every price point and in all regions of the country.

Home Price Appreciation Is Skyrocketing in 2021. What About 2022? | MyKCM

According to the latest Home Price Index from CoreLogic, each price range is seeing at least a 19% increase year-over-year.

Every region in the country is also experiencing at least a 14.9% increase in home price appreciation, according to the Federal Housing Finance Agency (FHFA).

Home Price Appreciation Is Skyrocketing in 2021. What About 2022? | MyKCM

What About Price Appreciation in 2022?

Prices are the result of the balance between supply and demand. The demand for single-family homes has been strong over the last 18 months. The supply of houses available for sale has been near historic lows. However, there’s some good news on the supply side. Realtor.com reports: “432,000 new listings hit the national market in August, an increase of 18,000 over last year.”

There will, however, still be a shortage of supply compared to demand in 2022. CoreLogic says that “given the widespread demand and considering the number of standalone homes built during the past decade, the single family market is estimated to be undersupplied by 4.35 million units by 2022.”

On Cape Cod, supply continues to lag. There were 535 homes for sale last month. In August 2020, there were 1,050. August 2019? 2,082.

Even with supply continuing to be less than demand, the percentage of list price received continues to drop. In August, that number was 100.5%. In July, it was 103.6%. June’s number was 104.3%. This confirms what we’ve been reporting anecdotally that the market has calmed down and the mind boggling offers of February through May are disappearing.

Most forecasts call for home price appreciation to moderate in 2022. The Home Price Expectation Survey, a survey of over 100 economists, investment strategists, and housing market analysts, calls for a 5.12% appreciation level next year. Here are the 2022 home appreciation forecasts from the four other major entities:

  1. The National Association of Realtors (NAR): 4.4%
  2. The Mortgage Bankers Association (MBA): 8.4%
  3. Fannie Mae: 5.1%
  4. Freddie Mac: 5.3%

Price appreciation is expected to slow in 2022 when compared to the record highs of 2021. However, it is still expected to be greater than the annual average of 4.1% over the last 25 years.

What does this mean?

If you owned a home over the past year, you’ve seen your household wealth grow substantially, and you’ll see another nice boost in 2022. If you’re thinking of selling, you’ll still receive a solid return on your investment as percentage of list price received is still higher than a year ago. (96.1%). But don’t expect that head scratching price your neighbor received just a few months ago.

If you’re thinking of buying, consider making your move now as prices are forecast to continue increasing through at least 2022. If you dropped out earlier this year, because competition was pushing you beyond your budget, the market may be coming back to you.

Curious about your options? Helping our clients make the best decisions for their individual situations has been our full time job for 22 years. Let’s connect at 508-568-8191 or msennott@todayrealestate.com. We’re happy to help…

Mari and Hank

This Labor Day, the Housing Market Remains Anything but Normal

Some talking heads and so called experts are suggesting that we’re returning to a more “normal” real estate market. They claim that we’re going back to pre-pandemic days.

But that’s just not happening. The market is still extremely vibrant as demand remains strong and housing supply is slowly returning.

The dictionary definition of normal is “usual, typical or routine.” So, using this definition, here are five housing industry metrics that prove we’re nowhere near normal.

1. Mortgage Rates

If we look at the 30-year mortgage rate chronicled by Freddie Mac, we can see the average rates by decade:

  • 1970s: 8.86%
  • 1980s: 12.7%
  • 1990s: 8.12%
  • 2000s: 6.29%
  • 2010s: 4.09%

Today, the average mortgage rate stands at 2.87%, which is very close to the historic low. But, they are predicted to slowly rise.

2. Home Price Appreciation

According to Black Knight, a housing data and analytics company, the average annual appreciation on residential real estate prices since 1995 has been 4.14%.

According to the latest forecast from the National Association of Realtors (NAR), home price appreciation nationally will hit 14.1% this year, which will be greater than any year since Black Knight began collecting this data.

On Cape Cod, the median sales price for a single family home through July is up 30.4% over last year.

3. Months’ Supply of Inventory (Homes for Sale)

According to the National Association of Realtors (NAR): a “six months supply (of homes) is associated with moderate price appreciation.”

As of the latest Existing Homes Sales Report from NAR, the current months’ supply of inventory nationally stands at 2.6. That’s less than half of a normal supply.

On Cape, the supply of available single family homes for sale is smaller. That figure stood at 1.3 months through July. A year ago, it was 3.2.

4. Days It Takes To Sell a Home

The days-on-market metric gives an indication of how hot a market is and how quickly homes are selling. In 2019, prior to the pandemic, the national average days on market stood at 35, according to NAR. Today, that number is cut in half and is now at 17 days.

Cumulative days on market before sale on Cape is a little higher at 22.

5. Number of Offers per Listing

According to NAR, the number of offers per listing stood at 2.2 in 2019. Today, that number nationally is double at 4.5.

There are no cumulative statistics available locally for the number of offers per listing. But we can tell you anecdotally based on our own experience and what we hear from colleagues that the days of 10 or more offers seem to have passed. In general, a “hot” property is now receiving maybe five offers.

So what does this mean for buyers and sellers?

If you have been sitting on the sidelines waiting for home prices to drop, you’re costing yourself money. Mortgage rates are predicted to rise and home prices are expected to remain at least steady.

If you have finally decided to sell, don’t expect the buyer frenzy and head scratching offers your neighbor received just a few months ago. While list price remains the starting point — the days of hoping to get close to asking are long gone — buyers seem less willing to break their bank to buy a property. But given the equity most homeowners have, a successful sale will still result in a very nice return on investment.

Curious about your options? Let’s connect at 508-568-8191 or msennott@todayrealestate.com. We’re happy to help.

Happy Labor Day!

Mari and Hank