Home Value

Before Covid-19, open houses seemed to be a Sunday staple activity for would-be homebuyers.  However, as the pandemic put a halt to almost all in-person activities, the number of open houses dwindled—sellers didn’t want strangers in their homes and buyers didn’t want to be in the company of too many people.

Although just 4 percent of buyers purchase their homes through open houses, 41 percent still visit open houses as their first step in the home-buying process.  To overcome this hurdle, agents began providing virtual open houses for their clients.  And due to the lack of inventory, during these past two years, it surprisingly became more commonplace for buyers to purchase a home sight unseen.

With the recent slowdown in the real estate sales market, listing inventory has declined.  This slowdown has impacted the number of days a home has been on the market forcing price reductions, which has resulted in an increase of available inventory in some real estate markets.  Additionally, 44 percent of agents have reported that with this increase, they have observed a downturn in bidding wars.  Hence, buyers who had been sitting on the sidelines waiting for a shift for more favorable market conditions, are now beginning to return to the home buying process and agents are realizing the need to conduct open houses on a more regular basis.

Making the Most of Open Houses

Buyers
With busy schedules and juggling day-to-day activities, attending open houses may be more suitable for a buyer’s lifestyle as they begin the homebuying process.  The flexibility it offers to view homes at their own pace is often a desirable option.  Open houses are great tools for homebuyers to obtain as much information about a home in a more relaxed, stress-free environment.

Ask pertinent questions
Viewing a home on the internet is not the same as visiting it in person, so before you attend an open house, come prepared with questions to ask the real estate agent to obtain in-depth knowledge of the home.  Questions like, when was the home built?  What is the age and condition of the roof?  How old are the water heater and other mechanical systems within the home?  These items can be costly to replace, so knowing can help you assess possible future repairs and replacement costs.  By asking the right questions, the buyer can obtain the necessary information about the home.

Take notes
When visiting several open houses, make a list in order to make your day as efficient as possible.  Keep a notebook handy to jot down information about each property since it’s easy to forget details when visiting multiple homes in a short span of time.  Later, you can look over the information with the notes you have gathered to help in your decision-making process.

Revisit the home
This is an opportune time to revisit a home you are on the fence about.  It enables you to walk through the home at your leisure, weighing the pros and cons, and if you can envision you and your family living there.  Note: Be sure to alert the listing agent at the open house that you have previously toured this home with another real estate agent.

Filed under: Blog, Brooklyn, Buying, Condominium, Cooperative, Douglas Elliman Real Estate, Finance, Heating and Cooling, Home Buyer, Home Value, Homeownership, Open House, Real Estate, Real Estate Questions, Real Estate Tips, Selling, Staging by Ryan Roberts
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If you’re considering purchasing a home, debt-to-income ratio (DTI) is an important term to familiarize yourself with.  Your DTI can ultimately make it easier or harder for you to qualify for a mortgage.  So knowing your DTI can help you better understand how you can best move forward into homeownership.

What is debt-to-income ratio?

Filed under: Blog, Buying, Condominium, Cooperative, Debt, Finance, Financial Tips, Home Buyer, Home Value, Homeownership, Investing, Mortgage, Multi Family, Real Estate, Real Estate Questions, Real Estate Tips by Ryan Roberts
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We’ve all felt the effects of inflation, whether through higher gas prices or spending more on food at the grocery store, but it’s left many of us wondering what it means for the housing market.  While inflation can be somewhat unpredictable, we can look at a few key ways it’s been known to impact the housing market and also can better understand what it means for homeowner and homebuyers.

What is inflation?  

Inflation is the increase in the prices of goods and services over time.  The level of inflation is determined by the broader impact of higher prices and is measured through a few different indexes, with the most common being the Consumer Price Index (CPI).  CPI looks at the average cost of living, including goods and services such as transportation, food and medical care.  It helps to identify periods of inflation and how it influences the affordability of the cost of living.

Ultimately, a rise in inflation means a decrease in purchasing power, as the dollar doesn’t go as far as it did before.  Deflation, on the other hand, comes with an increase in purchasing power as prices of goods and services drop.  Therefore, home prices and the cost of rent fluctuate with the level of inflation, influencing the housing market.

Supply and Demand 

The law of supply and demand examines the relationship between buyers and sellers, specifically the price of a good and the willingness of a buyer to pay that price.  Inflation has a direct impact on supply and demand.  Historically, the demand for houses may be lower during higher periods of inflation because of higher mortgage rates, something that can cause houses to sit unsold for longer periods of time and their prices to sometimes drop.  While that might not seem like great news for homeowners, it’s worth noting that the overall value of houses steadily increases over time, meaning that houses will still likely sell for more that what homeowners initially paid for them.  And if time isn’t of the essence and homeowners can wait longer to sell, then the market would eventually balance out.

On the other hand, this can be good news for homebuyers since there’s less competition for homes as more people may wait for mortgage rates to drop again.  Since inflation can be somewhat unpredictable, it’s not always easy to determine when exactly rates will rise or fall.  Ultimately, homeownership is still a highly valuable investment for a variety of reasons.

Why homeownership is valuable 

As mentioned earlier, inflations causes the cost of all goods to rise, thereby impacting the general affordability of the cost of living.  Gas prices rise, groceries cost more, the cost of materials are higher, and housing costs increase.  It’s not necessarily a one-to-one relationship, but inflation has broad reach.  Higher mortgage rates might deter people from their pursuit of homeownership, leading more people to look into rental options.  However, rent is always fluctuating.  The price you pay for a rental will continually be susceptible to the current economic market, so you’ll rarely have a long-term fixed monthly payment.  Brooklyn median rents with concessions hit a new high at $3,206, a 7% increase from the month prior and a 21% increase from this time last year.  On the other hand, when you buy a home with a fixed mortgage rate, you’ll have one steady payment that will not change even as inflation increases or decreases.  The house would also appreciate over time, meaning the value of the property will increase.  Any initial down payment ends up being worth more since that number was determined by the cost of the house and the mortgage rate when purchased.  Homeownership is an investment, but it’s well worth it.  And in the long term, mortgage rates as of August 2022 are still lower that the historical average of 8 percent.

Inflation isn’t forever

The good news for both buyers and sellers is that inflation doesn’t last forever.  It eventually must end, otherwise money would continue to be devalued which would have a greater negative impact both nationally and on individuals.  So for the benefit of everyone, you can trust that inflation will decrease over time.

Filed under: Blog, Brooklyn, Buying, Condominium, Douglas Elliman Real Estate, Finance, Home Buyer, Home Value, Homeownership, Inflation, Interest Rates, Investing, Mortgage, Real Estate, Real Estate Questions, Real Estate Tips, Renting, Selling, Supply and Demand, Uncategorized by Ryan Roberts
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Has the idea of buying a condominium crossed your mind?  There is a lot to like about condo living, including reduced maintenance obligations and ample amenities.  However, living with increased regulations and being close to neighbors may not be suitable for you.  Make sure to carefully consider all the pros and cons of buying a condo and how they fit into your lifestyle.

What is a condominium?

A condo is a private residence within a larger community.  It is like an apartment, except you own the unit instead of renting it, and you can renovate or customize your space. There are typically multiple units on each floor, and you may have neighbors above, below, or next to you.  There also may be shared areas and amenities, including swimming pools, lounge areas, roof decks, and fitness centers.

The pros of buying a condominium 

Several benefits appeal to a wide range of homebuyers when it comes to condos. They give empty-nesters the freedom to travel without the concerns of home security, and condos allow first-time homebuyers to own property at a lower cost than a single-family home and build equity.

Less upkeep

A single-family home requires plenty of maintenance to keep it looking great, but a condo has many of these responsibilities covered. Most condos have a homeowners association (HOA) that’s responsible for exterior maintenance like mowing the grass and snow removal, along with upkeep of the roof, building exteriors, amenities, and shared spaces. This means you’ll have to spend less time and effort on making the property look great.

Affordability

A report by the National Association of REALTORS® found that the average condo price is more than $50,000 cheaper than a single-family home.  Additionally, condo insurance is typically much less expensive than homeowners insurance because you’re paying for coverage of a smaller space, and you do not need insurance for the outside of your condo.

Amenities

Having facilities like a fitness center or roof deck provides luxuries you may not be able to afford in a stand-alone house.  These amenities can be a great way to get to know your neighbors and create lasting friendships.  In addition to a roof deck or lounge, many condo communities hold events like game nights and barbecues, which are great opportunities to socialize.

Security

A condo community typically has a level of security you won’t find in a single-family home, such as a doorman to watch out for any emergencies.  Additionally, having neighbors close by can provide an unofficial level of security when you’re away.

The cons of buying a condominium

While condos will appeal to a handful of people, it just isn’t the best option for others. Make sure to consider these points before buying a condominium.

Common Charges

All the perks of having the additional amenities and fewer maintenance responsibilities come at a price in the form of fees. When you buy a condo, you’ll likely have to pay monthly common charges on top of your mortgage and insurance costs. This money goes toward the upkeep of the community’s shared spaces and exterior. You may also have to pay an additional fee to use some of the amenities.  However, you can sometimes opt-out if you won’t be using them.

Condominium Association Rules

In addition to the fees, the condominium can have a list of rules you must abide by.  These will vary from community to community and may include the number of visitors you may have at one time, the type of pets you can have, or how you can decorate an area like your terrace, which can be a little overbearing for some potential homebuyers.  Before agreeing to buy a condo, make sure to review the condominium’s governing documents, and consider how any monthly fees or rules will affect your life.

Lack of privacy

Being in closer confines does mean you’ll sacrifice a level of privacy in a condo. Sharing walls with neighbors on both sides of your condo, and potentially above or below you, means you may hear increased noise. Fellow condo owners may be outside or in the hallway late at night or in the early morning. Likewise, your neighbors may not be receptive to you entertaining guests or playing music.

Resale market

You may have a limited market to appeal to if you plan to resell your condo in the future.  For example, a growing family with pets may find the space restrictive and want a house with a private yard.  Others may not feel comfortable with the condominium’s regulations.  If you’re considering buying a condo, it’s beneficial to speak to your real estate agent about the unit’s potential resale value and any other factors that could play a part in determining that value.

Before you buy a condominium, make sure to consider these factors in your decision.

Filed under: Blog, Brooklyn, Buying, Common Charges, Condominium, Douglas Elliman Real Estate, Home Buyer, Home Value, Investing, Real Estate, Real Estate Tips, Selling, Uncategorized by Ryan Roberts
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An appraisal is a critical part of the homebuying process, as it determines the value of the property before a lender agrees to move through with a mortgage.  But how is this value calculated? Check out this list of seven factors that impact the value of a home during an appraisal.

Condition of the home

First, the appraiser will note some of the general details of the home, ranging from the materials used throughout the house to the property’s overall condition.  If anything is unsound or unsafe inside the home, the appraiser will make a note of it.  From broken appliances to missing shingles, signs of deferred maintenance may negatively impact the home’s value.  Appraisers will also look for signs of infestations.  Upgrades to features like the electrical system, roof, or windows, could positively impact the home’s value.

Age of the home

The appraiser will consider the age of the home when calculating its value.  However, you shouldn’t expect a newer home to receive a higher value than an older home due to its age.  While new homes will likely have fewer issues when it comes to maintenance, well-maintained older homes located in historic districts tend to have a higher appraisal value.

Size

The amount of living space inside a home will influence the property’s overall value, and a larger home will typically be worth more than a smaller home in the same market.  Appraisers will account for the square footage, along with the number of bedrooms and bathrooms.  Additionally, storage space will also be a factor, as large closets, along with a useable attic and basement, will help a house appraise at a higher value.

Location

A home’s location could impact its value based on several factors, including crime rate, school district, road maintenance, and the distance between the house and schools, hospitals, fire stations, and police stations.  If the home is next to an undesirable neighboring property, like a landfill, its value may be lower.  Also, the home’s location within the community may affect the value.  If the house is on a quiet street, it may be worth more than a home on a busy road in the same neighborhood.

Renovations

If a home has received upgrades since its last appraisal, renovations like a new garage or kitchen makeover can impact its value.  Even more practical upgrades, like a new roof and energy-efficient appliances, can increase the home’s value.

Filed under: Appraisal, Blog, Brooklyn, Buying, Contractor, Home Buyer, Home Value, Investing, Mortgage, Real Estate, Real Estate Tips, Renovations, Selling by Ryan Roberts
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