A word of caution… Can the war in Israel impact our Real Estate market? Historically, wars are not a good time for Real Estate.Typically as oil and gas prices tend to rise, and as consumption increases and often supply chains are disrupted, oil production can drop. As we need to spend more money to support both Israel and Ukraine, we also increase our national debt, and inflation becomes more of a threat to our own economy. If the war were to continue over a prolonged period, we could very well see home prices start to drop. Fear and uncertainty are never good factors in any market. Let us collectively hope that a peaceful and short time solution can bring this war to an end quickly.
Many very well respected economists have given their opinions as to what direction the economy is heading and how it will impact the real estate market. Of course, no one knows for certain. As I see it locally, there are a number of different factors that continue to influence us here in Columbia county. Some are positive, while others certainly don’t help. First and foremost is that in any economy, higher interest rates will always be responsible for keeping a large pool of potential buyers on the sidelines, simply because of affordability. The percentage of first time home buyers across the nation continues to fall, especially here in Columbia county, where currently the median selling price for residential property has hit an all time high of $495,000. A figure far out of reach for the bulk of our local buyers. The major reason we are still seeing sales activity in our local market is primarily due to the influx of out of town buyers, many of whom are leaving major metropolitan areas due to the many social problems plaguing big cities. Until the threat of continuing inflation in reduced, the Federal Government has not taken off the table the possibility of increasing interest rates. Until the rates come down, many current home owners do not want to move and lose their lower interest rates on their mortgages. This remains another reason why our current inventory is so low. Also, as we approach a Presidential race in 2024, historically potential second home buyers tend to want to wait to see if there is going to be a change in administrations before electing to buy a second home. In the end uncertainty is never a good thing for any market.
Wishing you all well in the coming months!
Zillow claims to have a tool on their site, called Zestimates that can provide homeowners a means to determine the current market value of their home. How accurate are the values? In reality, not very accurate at all. Why is that? To begin with, many factors have to be considered to come up with a true value. The data that Zillow relies on comes, for the most part, from local information it gathers from local town records. These records for example tend to not reflect information about upgrades that may have been done by the home owners, which certainly add value. It also takes into account local assessments of the property, again these figures do not take into consideration that they may have been done years ago, and don’t account for the current market conditions. Banks who provide the funding for mortgages, would only rely on independent appraisers who have access to recently sold properties in order to provide the banks with far more accurate data on true market value. You don’t need to hire and pay for an appraisal. A smarter approach for home owners is to connect with a professional agent in the area of your interest, and have them work for you as your agent and advocate. They know the area, properties, and have direct knowledge of the neighborhoods, and current market conditions. They can preform a comparable market analysis, using many of the same techniques and tools used by bank appraisers. This is too big a decision not to have a knowledgeable and professional agent on your team.
-Charles “Chuck” Bartolo
People will often ask, “Is this a good time to consider buying investment property?”. Aside from owning your home and perhaps a second home, maybe adding an investment property to your portfolio is worth considering. There are quite a few advantages to do so. Unlike a traditional portfolio, Real Estate is a tangible asset, that is you can actually feel, see & touch it. Typically, you will enjoy long term appreciation, as well as a great hedge against inflation, while also having a steady rental income. If you’re new to being a landlord, there are a number of excellent property managers who can take that part of ownership out of the equation. All though interest rates are high now, they are expected to come down as inflation woes lessen. The demand for housing continues to remain strong, and as a result rental prices have continued to rise. The wealthiest folks throughout history have often attributed the owning of Real Estate investment properties as the very foundation that helped create their wealth. So give it some thought, there are lots of good reasons to do so.
It’s often a good idea for anyone considering listing their home or property to interview a few agents. Lately, prospective sellers have been drawn to include big National brand names in this process, thinking that would be a better choice. However it’s important to note, that when it comes to choosing a Real Estate Agency, the individual agent that you select matters far more than a brand’s national coverage.
You, as the potential client, need to trust the agent regardless of the agency that they work for. Personal relationships matter far more than the brand of the agency.
Often agents from these large brand name agencies come from outside your community, and as such are not nearly as familiar with the area as are local agents who live and work nearby. When showing properties to buyers, agents are often asked for local recommendations and resources, so having personal knowledge of the area is a great asset.
Many clients have found that these larger brand name agencies tend not to have the flexibility that a smaller agency will often have. This means the smaller independent agencies are more apt to customize their services to meet your special needs and circumstances. It’s important to remember in any client relationship, that the person you will be dealing with throughout the process is one of the most important considerations you have.
Our first five month results gives us a chance to look back and see what direction our local real estate market is heading. We are seeing a real drop in total sales activity from last year. Only 183 residential properties were sold in the first five months, while last year 275 sold. That’s a significant drop, due largely to less buyers in the market place, higher interest rates, and inflation woes. The median sales prices are also dropping, for the first five months last year the median price was 467,500, while this year it dropped to $450,000. What continues to keep the market active is that as inventory still remains low, there are enough buyers competing. Bidding wars are still common. However, that is also changing as inventory continues to move up as more properties are coming in to the market. As we approach summer and the strongest selling season, I see that inventory number will be increasing. So If you are thinking of selling, my advice is don’t hesitate. I see the market continuing to move in the direction of softening. However, the market does continue to remain active due to increase buyer demand. Good luck whether you’re planning on a buying or selling.
- Find out what your house is worth by contacting a top agent in your community. Ask friends and family for referrals.
- Declutter your space, and remove all personal items as these can be big distractions for buyers.
- Have a qualified home inspector do a pre-inspection, a small expense with big rewards. Address all major issues they uncover.
- Clean up the yard, first impressions really do matter.
- Follow the recommendations made by your Realtor, they do this for a living & know what is most important.
Best of luck!
-Charles “Chuck” Bartolo
The simple answer is… it depends. Of course, owning your own home is certainly a far better financial option in the long term, rather than renting and paying off the landlord’s mortgage. Both rental costs and housing costs are rising. So, step one is to determine if you can actually afford a to carry a mortgage and the additional costs associated with home ownership. To begin that process, you need to speak directly with a qualified mortgage broker or your local bank. Based on your income and your credit score and any outstanding debt, that person should be able to pre-qualify you at a particular price point. Then, depending on where you are thinking to buy, you should reach out to a local Real Estate agent to see if what you can afford is available in the area where you need to live. Keep in mind that your first home need not be you dream home. Concern yourself with what you need rather than what you want. Good luck in what ever path you take!