Category Archives: Real Estate

“We’ll just rent it”

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We occasionally hear this from homeowners facing job transfers, or those considering for a variety of reasons — maybe they didn’t stay at their Cape house much last summer– to use their property to generate rental income, instead of selling it.

This is an option that has gained some popularity in recent years. According to a Harris Poll survey, 28% of homeowners have considered renting out their homes for additional income.

But is it a good idea?

Owning rental property can be tempting, but you may find the reality challenging. Here are some of the obstacles you could face, if you rent out your home instead of putting it on the market.

A Rental Comes with Responsibilities

Successfully owning and renting a house takes work. Think through your ability to make that commitment, especially if you plan to use a platform that advertises your rental listing. Most of them have specific requirements hosts have to meet, and it takes a lot of work.

Managing a rental property can be time consuming and challenging. Are you handy and live close-by to make some home repairs yourself? If not, do you have a network of affordable and reliable contractors you can reach out to? As homeowners, there are certain inconveniences that we are willing to put up with while waiting for a plumber or electrician. Your renters may not be that patient.

There’s also the responsibility of being a landlord, which means screening tenants, collecting rent, and other tasks. Are you willing do that? If not, you’ll need to pay a property manager to do it for you.

Your House May Not Be Ideal for Your Goals

Not every house ends up being a good rental. Are you thinking about using your home in a quiet residential neighborhood as an Air B&B? (Another idea we sometimes hear.)

If so, are you willing to field calls from former neighbors upset about that group of 20-somethings, who partied all weekend at your old house?

In addition, are you prepared to clean your former home in between renters? Or pay someone to do it? Are you going to be responsible for the landscaping? Or pay someone to do it?

In the beginning, renting sounds like a good idea. If you’re being transferred, for example, you tell yourself you can keep your Cape home and come back “someday.”

The additional income you have plans for? The roof will still need to be replaced.

Isn’t selling your home and putting the proceeds in your bank account a better idea? It’s certainly takes less time and energy.

Over the last few years, we’ve worked with several military families, who bought their homes from us when they were transferred to Joint Base Cape Cod. When they received new orders, some initially considered renting their homes. (One family was being transferred to Alaska!) But after we helped them sift through the options, they all decided to sell.

Bottom Line

There’s a lot to consider before taking the leap and converting your home into a rental. If you are not ready for the work it takes, it could be wiser to sell. With the market readjusting — prices levelling off and mortgage interest rates dropping – – we’d be happy to help you review your options. Let’s connect at 508-360-5664 or msennott@todayrealestate.com. Talk soon…

We don’t like to brag, but….

We’re grateful to all our clients who decided to make their move with Mari in 2022. Is 2023 your year??

Mari and Hank

What Makes a Home Affordable

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If you’ve been following the housing market over the last couple of years, you’re likely aware of the growing concern about home affordability.

But according to experts, the key factors that determine housing affordability are projected to improve this year.

The three measures used to establish home affordability are home prices, mortgage rates, and wages. Here’s a closer look at each one.

1. Mortgage Rates

Mortgage rates shot up to over 7% last year, causing many buyers to put their plans on hold. But things are looking different today as rates are starting to come down.

According to Cape Cod Five’s Patti Lotane: “Conforming rates have dropped over the past couple of months. At the end of October we were seeing a 30 year fixed rate for a primary residence at 6.375%/APR 6.431.  Last week we were offering a rate at 5.625% /APR 5.679 for our 30 year fixed rate option.”  

If you’re waiting for rates to drop even further, as some potential buyers have told us, keep in mind that these current numbers are comparable to pre-pandemic figures that no one was claiming were too high. Those 3% rates were a once in a lifetime opportunities.

So, if 7% rates paused your homebuying plans last year, this could be the opportunity you need to get back in the game.

2. Home Prices

The second factor at play is price. Home prices have made headlines over the past few years because they skyrocketed during the pandemic. According to Lawrence Yun, Chief Economist at NAR: “After a big boom over the past two years, there will essentially be no change nationally…Half of the country may experience small price gains, while the other half may see slight price declines.”

Here on Cape, the median sales price for a single family home peaked in July 2022 at $710,751.00. In January it was $659, 500.00. By December prices were lower than when the year began. ($650,000.00)

3. Wages

The final component in the affordability equation is wages. The graph below uses data from the Bureau of Labor Statistics (BLS) to show how wages have increased over time:

The 3 Factors That Affect Home Affordability | MyKCM

Also, according to the Bureau, the average weekly wage for Barnstable County/Cape Cod is $1,129 or $58,708 per year. The national figure is $1,374.

Don’t forget, as Cape Cod Five’s Lotane notes, that the affordability of a monthly mortgage payment can also be influenced by down payment, credit score, and other monthly debts.

Bottom Line

While affordability hurdles are not completely going away this year, based on current trends and projections, 2023 should bring some relief to homebuyers who have faced growing challenges. According to Mike Fratantoni, Chief Economist at the Mortgage Bankers Association (MBA): “Rates are expected to move lower for the year, and home price growth is expected to cool, both of which will help affordability challenges.”

Buying a home is a scary proposition no matter the economic situation. There always seems to be as many reasons to purchase, as there are not to. (And well meaning relatives and friends telling you to keep renting or sleeping in your in-law’s basement one more year.)

Before making your decision it’s important to have the advice of respected realtors (like Mari Sennott Plus) and trusted lenders (like Cape Cod Five’s Lotane.)

If you have questions, let’s connect at 508-360-5664 or msennott@todayrealestate.com.

You may be closer to owning a home than you think.

Mari and Hank

Have Home Prices Levelled Off?

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Whether you’re already a homeowner or you’re looking to become one, recent headlines about home prices may leave you with more questions than answers. News stories are talking about home prices falling, and that’s raising concerns about a repeat of what happened to prices in the crash in 2008.

One of the questions that’s on many minds, based on those headlines, is: how much will home prices decline? But what you may not realize is expert forecasters aren’t calling for a free fall in prices. In fact, if you look at the latest data, there’s a case to be made that the biggest portion of month-over-month price depreciation nationally may already be behind us – and even those numbers weren’t significant declines on the national level. Instead of how far will they drop, the question becomes: have home values levelled off?

Let’s take a look at the latest data from several reputable industry sources (see chart below):

Have Home Values Hit Bottom? | MyKCM

The chart above provides a look at the most recent reports from Case-Shiller, the Federal Housing Finance Agency (FHFA), Black Knight, and CoreLogic. It shows how, on a national scale, home values have changed month-over-month since January 2022. November and December numbers have yet to come out.

Let’s focus in on what the red numbers tell us. The red numbers are the change in home values over the last four months that have been published. And if we isolate the last four months, what the data shows is, in each case, home price depreciation peaked in August.

While that doesn’t guarantee home price depreciation has moderated, it confirms prices aren’t in a free fall, and it may be an early signal that the worst is already behind us.

According to the Cape Cod and Islands Association of Realtors, the median sales price for a single family home in January 2022 was $586, 500.00. In June it was $665,000.00 and by December, the median price was $650,000.00. This certainly suggests that, in general prices, have calmed down.

What does this mean?

If you’re a buyer who stepped out of the market mid-year because of prices, it’s probably time to get back in.

If you’re a potential seller, what are you waiting for?

Either option, let’s connect at 508-360-5664 or msennott@todayrealestate.com. We can provide you with up-to-date information about the housing market that will help you make the best decision for your individual situation.

Talk soon…

Mari and Hank

Looking Ahead to 2023 Home Prices

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When it comes to real estate and the housing market, everyone has an opinion. It doesn’t matter where — a family gathering, the grocery store, out to dinner — we’re always asked: “How’s the market?”

After sharing our opinion based on the most current information available, the questioners sometimes offer their opinions. This is where we’re told that the market is going to crash or interest rates are going sky high or need to drop further.

It can be confusing. Last year — after a very active 2021 that few predicted — the market underwent a major shift as economic uncertainty and higher mortgage rates reduced buyer demand, slowed the pace of home sales, and moderated home prices.

Nonetheless, median sales prices for single family homes on Cape Cod in 2022 increased 10.8% from $620,00.00 to $667,000.00. Median sales prices for condominiums went up $18.4% from $380,000.00 to $450,000.00 driven by the lack of inventory for single family homes.

So what’s going to happen in  2023?

An article from HousingWire offers this perspective:

“The red-hot housing market of the past 2 ½ years was characterized by sub-three percent mortgage rates, fast-paced bidding wars and record-low inventory. But more recently, market conditions have done an about-face. . . . now is the opportunity for everyone to become re-educated about what a ‘typical’ housing market looks like.”

This year, experts agree we may see the return of greater stability and predictability in the housing market if inflation continues to ease and mortgage rates stabilize. Here’s what they have to say.

The 2023 forecast from the National Association of Realtors (NAR) says:

“While 2022 may be remembered as a year of housing volatility, 2023 likely will become a year of long-lost normalcy returning to the market, . . . mortgage rates are expected to stabilize while home sales and prices moderate after recent highs, . . .”

Danielle Hale, Chief Economist at realtor.com, adds:

“. . . buyers will not face the extreme competition that was commonplace over the past few years.”

Lawrence Yun, Chief Economist at NAR, explains home prices will vary by local area, but will net neutral nationwide as the market continues to adjust:

“After a big boom over the past two years, there will essentially be no change nationally . . . Half of the country may experience small price gains, while the other half may see slight price declines.”

Mark Fleming, Chief Economist at First American, says:

“The housing market, once adjusted to the new normal of higher mortgage rates, will benefit from continued strong demographic-driven demand relative to an overall, long-run shortage of supply.

If you have specific questions about today’s housing market and whether this is the time you should make your move, please connect with us at 508-360-5664 or msennott@todayrealestate.com. We’ll provide you with the most current, fact based information that can help you make a decision that is in your best interest.

Talk soon…

Mari and Hank

A Renter Again in 2023?

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We can all agree that the costing of housing is high. If you’re renting, there’s a chance you’re paying more than what a mortgage payment would be, if you owned your own home.

And as has been said many times, your rent is actually your landlord’s mortgage payment.

As a renter, you face an important decision every year: renew your current lease, start a new one, or maybe buy a home. 2023 is no different. But before making the decision to rent again, it helps to understand the true costs of doing so.

In the past year, both current renters and new renters have seen their rent go up. According to realtor.com: “Three out of four renters (74.2%) who have moved in the past 12 months reported seeing their rent increase. The strain from recent rent hikes isn’t exclusive to renters, who have recently moved. Nearly two-thirds of renters (63.2%), who have lived in their current rental between 12 and 24 months, and likely renewed their lease, have also reported increases in their rent.”

If you look at historical data, that shouldn’t come as surprise. That’s because, according to the Census, rents have been rising fairly consistently since 1988 (see graph below):

Avoid the Rental Trap in 2023 | MyKCM

So, if you’re considering renting as an option in 2023, it’s worth weighing whether this trend is likely to continue. The 2023 Housing Forecast from realtor.com expects rents will keep climbing (see graph below):

Avoid the Rental Trap in 2023 | MyKCM

This forecast projects that rents will increase by 6.3% in the year ahead (shown in green). When compared to the blue bars in the graph, it’s clear that the 2023 projection doesn’t call for an increase as drastic as the ones renters have seen over the past two years, but it’s still above the historical average for rent hikes between 2013-2019.

That means, if you’re planning to rent again this year and you’ve not yet renewed your lease, you may pay more when you do.

Homeownership Provides an Alternative to Rising Rents

These rising costs may make you consider what other alternatives you have. If you’re looking for more stability, it could be time to prioritize homeownership. One of the many benefits of owning your own home is that it provides a stable monthly cost that you can lock in for the duration of your loan. As Freddie Mac says: “Monthly rent payments may increase over time, but a fixed-rate mortgage will ensure that you’re paying the amount each month.”

Homeowners also enjoy the added benefit of home equity, which has grown substantially. In fact, the latest Homeowner Equity Insight report from CoreLogic shows the average homeowner gained $34,300 in equity over the last 12 months. As a renter, your rent payment only covers the cost of your dwelling. When you pay your mortgage on a house, you grow your wealth through the forced savings that is your home equity.

There are two stumbling blocks that those thinking about buying often mention to us: interest rates and down payments.

But the facts are these: current interests rates are at or near pre-pandemic levels and no one was suggesting back then that they were too high.

The days of needing 20% for a down-payment are also long gone. For first time home buyers, the amount can be as little as 6%!

Is it time for you to break the rental cycle? If it is, please connect with us at 508-360-5664 or msennott@todayrealestate.com. We can help you put together a plan to get you on the road to homeownership and financial stability. Thanks…

We’re not ones to brag, but our completed number of transactions for 2022 (29) made us the number one agents in the Sandwich office of Today Real Estate. According to the National Association of Realtors, the average realtor in the U.S. completes four transactions per year.

We’re grateful for the trust so many families placed in us last year and are excited about the opportunity to help many more the year ahead. Let us know how we can help.

Mari and Hank

Thinking About Retirement in 2023?

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If you’re spending time with family over the holidays, you may be discussing plans for the new year that include retirement. If so. one of your goals could be selling your house and finding a home that more closely fits your needs.

Fortunately, you may be in a better position to make a move than you realize. Here are a few things to think about when making your decision.

Consider How Long You’ve Been in Your Home

From 1985 to 2008, the average length of time homeowners typically stayed in their homes was only six years. But according to the National Association of Realtors (NAR), that number is rising today, meaning many homeowners are living in their houses even longer (see graph below):

Planning to Retire? It Could Be Time To Make a Move. | MyKCM

When you live in a home for a significant period of time, it’s natural for you to experience a number of changes in your life while you’re in that house. Children grow up and move out. You may develop physical issues that make going up to the second floor bedroom challenging. As these life changes happen, your needs do, too. If your current home no longer meets them, you may have better options waiting for you.

Consider the Equity You’ve Gained

Additionally, if you’ve been in your home for more than a few years and have been paying your mortgage regularly, you’ve likely built up significant equity that can fuel your next move. That’s because the longer you’ve been in your home, the more likely it’s grown in value due to home price appreciation. Data from the Federal Housing Finance Agency (FHFA) illustrates that point (see graph below):

Planning to Retire? It Could Be Time To Make a Move. | MyKCM

While home price growth varies by state and local area, the national average shows the typical homeowner who’s been in their house for five years saw it increase in value by over 50%. And the average homeowner who’s owned their home for 30 years saw it almost triple in value over that time.

Consider Your Retirement Goals

Whether you’re looking to downsize, relocate to that “someday” destination, or move closer to loved ones, your equity can help you achieve your homeownership goals. NAR shares that for recent home sellers, the primary reason to move was to be closer to loved ones. Retirement also played a large role for those moving greater distances.

If retirement is in your plans for 2023, we can help you review your options. If you’re looking to relocate, we have contacts literally all over the US and Canada and as far away as Israel, because of our involvement with the Tom Ferry organization — our industry’s leading education and training group.

We’re grateful for the number of clients/friends, who we worked with in 2022. Because of our successful partnerships, Mari Sennott Plus ends the year as one of the leading realtors in Today Real Estate and throughout Cape Cod.

We’re looking forward to assisting more individuals, couples, and families attain their homeownership goals in 2023. Let’s start by connecting at 508-360-5664 or msennott@todayrealestate.com. Talk soon…

Happy New Year…

Mari and Hank

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Is 2023 Your Year?

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As we prepare for the holidays, many of us are also thinking about the year that’s ending and making plans for the one ahead.

If 2022 was the year you made a change, congratulations! Whether upsizing, downsizing, or moving to that “someday” neighborhood, it no doubt wasn’t easy due to limited inventory, prices, and stress producing bidding wars. But, if the pandemic taught us anything, it’s that life goes on.

We certainly didn’t start 2022 with the goal of leaving our home of 28 years. But, as the year progressed we realized that we were the people who we frequently talked about. We had a house that had become too big; was getting increasingly expensive to maintain, and didn’t fit our lifestyle. It was time to downsize.

Making the long story short, we used the equity in our home to help finance the purchase our new — and smaller — one. We then marketed our old house putting us in the position of knowing where we were going, which is a common concern expressed by homeowners, who want to sell.

If you sat on the sidelines this year waiting for prices to drop (or go even higher), you should know that — as predicted — prices are stabilizing. According to the latest report from the Cape Cod and Islands Association of Realtors, the median sales price of a single family home last month is just 1.4% higher than November 2021.

BTW…The median sales price of a condominium for the same time period is up 32.3%!

Last month, sellers received 95.9% of original list price. YTD that figure is 100.5%. This is good news for buyers and maybe not so good for sellers, who were hoping to receive the same crazy price that their neighbor got earlier this year. Anecdotally, price reductions, which had been rare, are now on the rise.

A home priced right will still sell quickly. We just put two under contract. And equity will put homeowners in a favorable position to make their next move.

With family often together over these next few weeks, please don’t hesitate to contact us, if you discuss making a change. We’d be happy to provide the most current information available to help you make a decision. You reach us at 508-360-5664 or msennott@todayrealestate.com.

As the holidays approach, we can’t help but think of the clients/friends who we worked with in 2022 and the hundreds we’ve gotten to know over the last 22 years. We hope everyone enjoys this special time of year in the place that they now call “home.”

Best wishes,

Mari and Hank

What Can You Expected for Home Prices?

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If you’re thinking about buying or selling a home soon, you may have questions about what’s happening with prices right as the market cools. The simple answer is that the real experts don’t expect prices to come crashing down, but the level of home price moderation will depend on factors like supply and demand in each local market.

That means, moving forward, home price appreciation will continue to vary by location, with more significant changes happening in overheated areas. Here’s a quick snapshot of what the experts are saying:

Danielle Hale, Chief Economist at realtor.com, says: “The major question on the minds of homeowners and aspiring buyers alike is what will happen to home prices. . . Soaring prices were propelled by all-time low mortgage rates which are a thing of the past. As a result, home price growth is expected to continue slowing, dipping below its pre-pandemic average to 5.4% for 2023, as a whole.”

According to Mark Fleming, Chief Economist at First American: “House price appreciation has slowed in all 50 markets we track, but the deceleration is generally more dramatic in areas that experienced the strongest peak appreciation rates.”

Taylor Marr, Deputy Chief Economist at Redfin, says: For those bearish folks eagerly awaiting the home price crash, you’ll have to keep waiting. As much as demand is pulling back supply, it is also reducing downward pressure on prices in the short run.”

On Cape Cod, the median sales price for a single family home is up 1.4% comparing this November to a year ago. Prices were up 12% comparing November 2021 to November 2020! Year to date median sales prices are still up almost 22%, but the trend is stabilizing.

What Does This Mean for You?

If you’ve been playing the “waiting game” for prices to continue to increase (sellers) or decrease (buyers), time may be running out.

Potential sellers should know that Open Houses aren’t the social events that they were and, in general, bidding wars are a thing of the past. The number of days a property stays on the market is increasing, too, as are price reductions as sellers try to get the price their neighbors or friends got six months ago.

Buyers, who are hoping for prices to drop, are losing out. Some have told us that they’re waiting for interest rates to drop. They have been ticking back and the difference between 5.25% and 5.50% may not be as significant as you think, when you remember your mortgage is for 30 years and refinancing is always an option. (We’re never going to see 3% again…)

If you don’t have a relationship with a reputable lender, we can recommend several whom we have worked with over the years. It’s important to have that pre-approval letter and know how changes in interest rates impact what you can afford.

If 2023 is going to be you year and you have questions about what’s happening with home prices, let’s connect at 508-360-5664 or msennott@todayrealestate.com so we can share with you the latest information on what’s happening.

Talk soon…

Mari and Hank

How You Can Use Your Home’s Equity

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If you’re currently a homeowner, odds are your equity has grown significantly over the last few years as home prices skyrocketed and you made your monthly mortgage payments. Home equity builds over time and can help you achieve certain goals. According to the latest Equity Insights Report from CoreLogic, the average borrower with a home loan has almost $300,000 in equity right now.

As you weigh your options during these somewhat confusing economic times, it’s important to understand your assets and how you can leverage them. As real estate professionals, we can be a good source of information to help you understand how much home equity you have and suggest some of the ways you can use it.  Here are a few examples.

1. Buy a Home That Fits Your Needs

If you no longer have the space you need, it might be time to move into a larger home. Or you may have too much space and need something smaller. No matter the situation, consider using your equity to power a move into a home that fits your changing lifestyle.

If you want to upgrade your house, you can put your equity toward a down payment on the home of your dreams. And if you’re planning to downsize, you may be surprised that your equity may cover some of the cost of your next home, if not all.

Earlier this year, we used the equity in our home to put us in the position to make a successful offer on our new home without including a home sale contingency. We then marketed our house after our offer was accepted.

If you’re concerned about where you will move when you successfully market your home, your equity allows you to answer that question before listing your property.

2. Reinvest in Your Current House

According to a recent survey from Point, 39% of homeowners would invest in home improvement projects if they chose to access their equity. This is a great option if you want to change some things about your living space, but you aren’t quite ready to make a move.

Home improvement projects allow you to customize your home to suit your needs and sense of style. Just remember to think ahead with any updates you make, as some renovations add more value to your home and are more likely to appeal to future buyers than others.

For example, a report from the National Association of Realtors (NAR) shows refinishing or replacing wood flooring has a high cost recovery. We can advise you on which projects to invest in to get the greatest return on your investment when you sell.

3. Pursue Your Personal Goals

In addition to making a move or updating your house, home equity can also help you achieve the life goals you’ve dreamed of. That could mean investing in a new business venture, retiring or downsizing, buying a vacation home, or funding an education.

While you shouldn’t use your equity for unnecessary spending, leveraging it to start a business or putting it toward education costs can help you achieve other personal goals.

Bottom Line

Your equity can be a game changer. If you’re unsure how much equity you have in your home and how might you best use it, let’s connect at 508-360-5664 or msennott@todayrealestate.com. We’re happy to help.

Mari and Hank

Mortgage Rates Will Come Down, It’s Just a Matter of Time

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This past year, rising mortgage rates have slowed the red-hot housing market. Over the past nine months, we’ve seen fewer homes sold than the previous month as home price growth has slowed. This is due to the fact that the average 30-year fixed rate mortgage r has doubled this year, putting the breaks on escalating prices.

This was the goal of the Federal Reserve when it raised rates: to cool down the market.

This month, the average rate for financing a home briefly rose over 7% before coming back down into the 6% range. But we’re starting to see a hint of what mortgage interest rates could look like next year.

Inflation Is the Enemy of Long-Term Interest Rates

As long as inflation is high, we’ll see higher mortgage rates. Over the past couple of weeks, we’ve seen indications that inflation may be cooling, giving us a glimpse into what may happen in the future. The mortgage market is eagerly awaiting positive news on inflation. As Ali Wolf, Chief Economist at Zonda, says: “We are watching for any additional stability in the MBs market, signs of cooling inflation, and/or less aggressive Federal Reserve action to give us confidence that mortgage rates are past their peak.”

What Does This Mean for the Future of Mortgage Rates?

As we get through the inflation battle and start to see that coming down, we should expect mortgage rates to follow. We’ve seen nods of this over the past couple of weeks. As the Federal Reserve works to bring inflation down, mortgage rates will come down as well. Bill McBride from Calculated Risk says: “My current view is inflation will ease quicker than the Fed currently expects.”

Not every mortgage lender is the same. They offer different options and different rates. For example, local banks that have their own portfolios and don’t sell their mortgages to investors have different financing opportunities when compared to mortgage finance companies that do sell their mortgages. So, it’s important to shop around.

As a buyer, it’s a questionable strategy to sit on the sidelines waiting for your magic number when it comes to interest rates. We know for sure that the chances of seeing rates of 3% or less are almost non-existent. Consider meeting with your financial advisor or lender and determine what the impact of rates in the 4% to 6% rate range, can have on your personal financial situation. You could miss out on the home you really want while waiting for a rate that will never be available.

And remember: mortgages can be re-financed to lower rates.

If you don’t have a working relationship with a lender, we can recommend several who we work with on a regular basis. Please contact us at 508-360-5664 or msennott@todayrealestate.com. With inventory increasing every day, be in the position to make your move when you find your next home.

We were happy to host our Third Annual Thanksgiving Pie Party last Tuesday at JD’s Burgers and Sushi in Sandwich. More than 70 of our client-friends turned out to re-connect with people they met last year and make new acquaintances.

We donated the pies that were not taken to the Sandwich Food Pantry, which reminds us that tomorrow is Giving Tuesday. Please take a moment to support a charity or non-profit that is close to your heart. Thanks…

Mari and Hank