All posts by : Caroline Dinsmore

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In addition to an extremely tight housing market in California, prospective homebuyers are also now facing the prospect of a rising cost of living on everything from cars to gas to groceries to consumer goods. This, in turn, has triggered a more aggressive stance by the Federal Reserve, which has signaled that they are prepared to raise their target interest rate several times this year in order to stave off further inflation. Thus far, interest rates for 30-year, fixed-rate mortgages have already risen from an all-time low of 2.65% at the beginning of 2021 to nearly 4% by February 2022. In addition, the emerging conflict between Russia and the Ukraine threatens additional inflation in the U.S. as global oil supplies are disrupted.

However, despite the rising headwinds facing the real estate market in California, there are also reasons for potential homebuyers to overcome the dreaded “buyer fatigue” to get their foot on the property ladder in 2022. First, interest rates are expected to continue to normalize back to pre-pandemic levels where rates above 4% were the rule, not the exception. Even if the Federal Reserve does not raise rates as many times as they have signaled, inflation expectations and a recovering economy will translates into higher long-term rates—the question is simply, “by how much?” This is an important consideration for future homebuyers because for the projected $830,000 median-priced home in California this year, each 0.5% increase in mortgage rates translates into roughly $200 per month in additional mortgage payments. And, that additional payment is for the same exact $830,000 home. No extra square footage; no extra amenities; no extra outdoor space—$200 per month is simply additional borrowing costs.

Another important factor for homebuyers to consider is the outlook for home prices. Even with the rise in interest rates, housing demand still far outstrips housing supply in California and this trend is expected to generate more upward pressure on home prices. Despite the turbulent economic environment owing to the pandemic, the fundamentals in the housing market remain robust and the prospects for a surge of defaults and foreclosures driving a flood of new inventory onto the market are minimal as a result. C.A.R. is currently forecasting that the median home price will rise by 5.2% in 2022, but there is consensus amongst other forecasters that prices will continue to rise as well.

Taken together, that means that the cost of waiting until next year will be two-fold: paying higher prices at even higher interest rates—something that will have significant financial implications for homeowners over a 30-year loan period.

Finally, the white-hot market characterized by extreme competition amongst buyers that prevailed last summer, has ebbed slightly creating a bigger window of opportunity for would-be homeowners. Although still very tight by historical standards, homes are staying on the market slightly longer now than they were in 2021. In addition, the percentage of homes selling for more than the asking price has also fallen slightly—another positive development for those submitting offers. As always, the decision on when is the “best time to buy” a home comes down to the individual personal and financial circumstance. However, an improving economy, rates that are still near historic lows, and the prospect of both higher prices and higher interest rates in the future suggest that, for those in a position to be able to do so, 2022 could be a good time for many homebuyers to finally achieve the American Dream of homeownership.

COPYRIGHT © CALIFORNIA ASSOCIATION OF REALTORS®

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It may see counterintuitive, but a rigid schedule can really mess things up.

One of the things that drives up remodeling costs (and frustration levels!) are delays. And these delays are often caused by ignorance on the homeowner’s part.

It’s that old axiom: You don’t know what you don’t know.

Until now.

Here’s a list of time-sucking mistakes homeowners often make (so you don’t have to).

#1 Designing Before Budgeting

You think you can afford that luxurious marble countertop — until you talk to the fabricator. It’s $2,000 over budget, and there’s no room to squeeze. If you’re already past the design phase, that’s a brutal discovery requiring a serious re-think — and extra time you don’t have at this stage of the game.

“There are an infinite number of design possibilities, but as soon as you pick a budget, seven-eighths are gone,” says Charles Rinek, who owns a remodeling and custom construction firm in Palm Coast, Fla. “Concentrate on the eighth that is appropriate with your budget.”

Know your budget. Then follow your dreams.

#2 Indecision

Even the design-challenged can create a stunning kitchen with Pinterest on their side. But the breadth of options might create dismay — and delay — if you keep finding a better backsplash.

“Over-analysis becomes paralysis,” says Annmarie Bhola, who co-owned a remodeling company. “Now you spend all this time watching shows, and looking through Pinterest, and before you know it, oh my gosh, now I have all this data. Which should I choose? Should I go with light or dark?”

And then, the paint color isn’t right. So now you’ve got to rethink your complete color scheme.

Don’t be that homeowner. Once your design is finalized and construction is under way, consider your choices set in stone, or you might find yourself days, even weeks behind schedule when workers are waiting on you to decide.

#3 Scheduling Work Before Materials Are On Site

You might have allotted enough time for each step — but if what you need isn’t there when you need it, all the scheduling in the world isn’t going to make up for that lost time.

Before scheduling workers to install your new cabinets and appliances, make sure the materials will be there for them. Don’t just allocate installation time; know how long it will take to ship your farmhouse sink. (Another related point: Know your contractor’s schedule, too, so you won’t be dismayed when he can’t come the day your cabinets arrive.)

Bhola says her common practice is to order everything ahead of time, to know the delivery dates, then to schedule contractors to start after that date.

Time is almost always the reason why kitchen remodeling mistakes happen.

#4 Choosing to Live in the Mess

Remodeling is messy — dust everywhere, your pots and pans scattered, and living spaces become storage spaces.

No one expects you to be Martha in the midst of a home makeover, but too much disorganization will hog your time because you can’t find anything. Next thing you know, you’re a day behind because you couldn’t find the installation guide for the dishwasher.

As part of your project plan, include a strategy for a temporary kitchen and all the stuff that needs a new home while construction is happening. And be sure to plan time to move it all so a) you don’t end up dumping everything in the nearest clear spot, or b) delaying the start of demolition, which means you’ll be starting out with a #fail.

#5 Not Paying Attention to Permits

Your Uncle Joe swore he didn’t pull a permit for his kitchen remodel, and everything turned out fine. But if an inspector raises an eyebrow on a drive around the ‘hood, skipping this essential step could cost you months of inspections and repairs.

Give your local building department a heads-up. Plus, permits ensure your renovation is to code, catching any dangerous (or deadly) errors, like faulty outlets and improper plumbing.

Just make sure to budget time for the inspection.

“You can’t move forward with anything until it’s been inspected,” Rinek says. “God forbid he doesn’t show up until 4 p.m. and he doesn’t like your work. All that time adds up.”

#6 Not Doing a Test Run on Materials

That soft coral tone was sure to make your subway tile pop. Until it didn’t. Give every paint, tile, and wood type a test run, otherwise, you might find yourself not liking the results, and then find yourself falling behind schedule while you pick the replacements.

For paint, Harris recommends covering a few inexpensive canvases in your favorite colors and leaving them in the room for a few days to help you decide. Do this long before workers come on site. As for cabinets, he suggests you “get a whole door.” You can’t see what a cabinet “really looks like from a three-by-three sample.”

#7 A Too-Rigid Schedule

It might seem counterintuitive, but sometimes, your best choice is to just suck it up and cause a delay — especially if you don’t want regrets later.

“Time is almost always the reason why kitchen remodeling mistakes happen,” says Evan Harris, a San Diego real estate investor.

If you do start falling behind schedule because of unexpected surprises (darn carpenter bees — on top of hurricane weather, really?!), you might be tempted to try and make up the time.

But there’s where the danger lies, says Harris. That’s when you end up with sloppy work that may not stand the test of time: cabinets that aren’t level, a floor that wasn’t allowed to dry completely between coats and loses its luster too soon, a sloppy paint job. Cue future problems and expenses.

His advice: Budget even more time than you think you need for every step — and you might even finish early, in plenty of time to plan your housewarming.

By: Jamie Wiebe

Photo: Mikael Blomkvist 

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There’s a lot to consider when selling your home, from the market and appraisals to where you’ll go next. Don’t forget, however, that design is also a key factor. It’s often one of the first things buyers notice when they walk into a home, and it’s also a detail that you, as a seller, can easily control.

According to Realtor.com’s 2022 housing market forecast, home for-sale inventory will increase from last year, as will the projected number of overall sales. This means, if you’re looking to sell in the near future, now is the time to consider how you can stand out.

Updating your home design is one way to do that. Changes like new security features or upgraded siding can add value to your home now and be highlighted when you market it for sale later. To get the most out of your updates, focus on these popular home design features that will wow buyers in 2022.

Keep in mind, not all of these will work well in every house. If you plan to buy, list, or renovate a property, give us a call. We can help you realize your vision and maximize the impact of your investment.

 

Eco-Friendly Fixtures

Millennials account for the largest share of current homebuyers, according to the National Association of Realtors. Sustainable living tops the list of priorities for this generation. A recent Deloitte survey found that nearly one-third of millennials initiate or deepen their consumer investment in products or services that help the environment—this also includes the houses they choose to live in. 

Here are a few eco-friendly design features that will be attractive to these millennial buyers in 2022. Bonus, they can net a significant return on investment (ROI) for you, as a seller, too. 

• Energy-Efficient Windows: Heat gain or loss from low-performance windows drives 25–30 percent of home heating and cooling costs, according to Energy.gov. Therefore, energy-efficient windows can help homeowners save money. 
• Low-Flow Water Fixtures: According to the EPA, replacing your shower head with one that’s labeled with WaterSense can save four gallons of water with each shower. Doing the same with your faucet can save 700 gallons per year. This leads to cost savings and environmental support.
• Native Landscaping:  According to the American Society of Landscape Architects, 58 percent of members report increased client demand for native trees and plants as a means to combat biodiversity loss from climate change. Enhance the eco-friendly appeal of your home with some native plants in the front yard. 

 

Wellness Retreat Nooks

The pandemic has had a significant impact on mental health. For example, in an effort to prioritize mental health, many people are relocating to quieter, more peaceful homes, with 22 percent of city dwellers planning a move to less congested residential areas, according to the Home Improvement Research Institute’s (HIRI) 2021 Insights Summit.

However, no matter where you live, you can still intrigue buyers by jumping on this trend. At-home wellness amenities, which were once viewed as luxuries, are now on many homeowners’ must-have lists. Indoor spaces that function as a retreat for wellness and self-care have become extremely popular, according to HIRI.

Improve your quality of life in your home with reading nooks, spa-inspired bathrooms, and exercise or meditation spaces. Even if your house doesn’t have the square footage to section off an entire room for relaxation, making simple tweaks to natural light, air purifiers, and indoor plants can help you feel better in your home now while enabling future buyers to see the opportunity for their own space.

 

Calming Paint Colors

Paint colors that produce a calming atmosphere will also be a key selling point in 2022. Soft earth tones and natural hues will prevail this year, including various shades of blue, green,  brown, and beige. Recent research suggests steering clear of trendy paint colors in favor of a more classic palette to bring the feel of nature indoors in a subtle and soothing way. 

In fact, the same research found that buyers are often willing to pay an extra $4,698 for a house with a light blue bathroom or an extra $1,491 for a house with a dark blue bedroom. Another crowd-pleasing hue to refresh the walls with is BEHR’s 2022 paint color of the year, known as Breezeway. 

This shade of green with silver undertones was created to mimic sea glass. As the BEHR website describes it, Breezeway “evokes feelings of coolness and peace, while representing a desire to move forward and discover newfound passions.”  

 

Home Safety Features

Buyers want peace of mind more now than ever before. According to a 2021 survey from the American Institute of Architects, members report seeing an increase in the popularity of these home safety features:

• Emergency backup power generation
• Accommodations for multiple generations
• Wider accessible doorways and hallways
• Home security monitoring equipment
• Interior ramps and home elevator features

Consider how you can build home safety features like these into the design of your home to enhance your quality of life now and attract more buyers later. For example, you could install a backup generator in the garage and sell it with the house or update your major doorways to be wider.

Before making an investment in expensive home safety upgrades, contact us. We can help you determine what will deliver the greatest ROI for your location and goals. 

 

Designated Work Spaces

It may come as no surprise that after the pandemic, 63 percent of homebuyers want their next house to feature room for a designated office, according to the National Association of Home Builders. In addition, 70 percent of these buyers want the office to be at least 100 square feet (or a 10×10 room).    

If you can, consider turning a bedroom or a den into a work-from-home office. When designing the space, make it both functional and aesthetically pleasing. Position a desk near the window for natural light, install a bookshelf unit, arrange a few succulents on the work surface, and hang a few framed posters or a cork bulletin board on the wall. You want the space to foster productivity as well as be a place in your home you enjoy spending time.

When you get ready to sell, we can help you highlight your designated work space. Given the high demand for this design feature, it can help you interest more buyers and attract more competitive offers—if marketed creatively. 

 

Luxury Kitchen Retouches

The kitchen has always been a main focal point of interior design, and that’s no different in 2022. Families will always need this space to come together in their own homes. 

This year’s buyers want a kitchen with new upgrades and retouches, but you don’t have to renovate the entire kitchen to make an impact. If you’re not sure where to start, here are a few tips on how to create a kitchen that buyers will love without spending too much money on renovations:

• Repaint the kitchen, keeping the calm and nature-inspired colors in mind that are most popular right now. Taking a kitchen from dark to light by painting cabinets and walls can make all the difference.
• Update the hardware. These kitchen “accessories” stand out and add personality to an otherwise standard kitchen. 
• Update light fixtures to bring in more light while also adding a fresh look and feel to the space. 

 

Unique Accent Walls

In a recent interview with the National Association of Realtors, Brian Santos, the director of education for Fresh Coat Painters, explains that bold, unique accent walls are trendy right now. An accent wall gives a home character while maintaining the calming feel of natural- and neutral-colored walls.

Santos also explains that this is part of a design aesthetic that draws inspiration from the Roaring Twenties, and it’s likely to remain a sought-after home feature in 2022. Here are some bold colors to consider for your home’s accent walls:

• Solid black
• Jewel or metallic tones
• Textured wallpaper
• Painted ceilings
• Built-in shelves

If you’re planning to sell in the next year, talk to us before adding an accent wall. Depending on your target buyer, it may be a design feature that actually hurts your home’s value. We can run a free Comparative Market Analysis on your home to help you understand what would resell best in your neighborhood.

 

Exterior Siding Updates

A new exterior siding refresh is one of the most affordable renovation projects you can do to help increase a home’s resale value. The average cost is just $12 per square foot, but higher-end material options can push costs closer to $50 per square foot. What’s more, there are many siding materials available, from fiber-cement, brick, and wood to vinyl, metal, and stone. 

While all these options can infuse the exterior with character and add curb appeal, fiber-cement and vinyl deliver the highest ROI. In fact, according to a 2021 Cost vs. Value Report, a vinyl siding replacement can boost resale value by $11,315 (68.3 percent cost recoup), and a fiber-cement siding replacement can boost resale value by $13,618 (69.4 percent cost recoup). 

Give your home this simple, affordable, and attractive facelift before putting it on the market. If you’re not sure how to get started yourself, our team can connect you with a trusted vendor to guide you through the process. 

 

Keep These Home Design Features on Your Radar in 2022

These design features can infuse personality into your home while helping to close the deal if you plan to sell in 2022. The average buyer knows just what they’re looking for in a space they plan to call home, so with some investment and foresight, you can give your house an edge over the competition—and boost resale value in the process. 

However, you don’t need to make all these changes to attract more buyers. We can help you determine which design features you should add to your home by sharing insights and tips on how to maximize the return on your investment. We can also run a Comparative Market Analysis on your home to find out how it compares to others in the area, which will help us decide what changes need to be made. Don’t hesitate to contact us: we have a deep history of successful home renovations that deliver a return on investment for our clients.

 

 

Sources:

1. Realtor –
   https://www.realtor.com/research/2022-national-housing-forecast/
2. National Association of Realtors –
   https://www.nar.realtor/research-and-statistics/research-reports/home-buyer-and-seller-generational-trend
3. Energy.gov –
   https://www.energy.gov/energysaver/update-or-replace-windows 
4. EPA.gov –
   https://www.epa.gov/watersense/about-watersense 
5. American Society of Landscape Architects –
   https://www.asla.org/NewsReleaseDetails.aspx?id=60427
6. Home Improvement Research Institute –
   https://www.hiri.org/blog/4-major-home-wellness-trends-from-hiri-summit-speaker-dr-jie-zhao
7. Zillow –
   http://zillow.mediaroom.com/2021-07-15-Homes-With-Light-Blue-Bathrooms,-Dark-Blue-Bedrooms-Could-Sell-for-Up-to-4,698-More-Than-Expected
8. Behr –
   https://www.behr.com/colorfullybehr/behr-announces-2022-color-of-the-year-and-trends-palette/
9. American Institute of Architects –
   http://info.aia.org/AIArchitect/2021/0910/aia-interactive/index.html#
10. National Association of Home Builders –
    ​​https://www.nahb.org/-/media/NAHB/news-and-economics/docs/housing-economics-plus/special-studies/2021/special-study-what-home-buyers-really-want-march-2021.pdf?_ga=2.188050984.1824982414.1639512139-1247360189.1639512139
11. National Association of Realtors –
    https://www.nar.realtor/blogs/styled-staged-sold/hot-home-trend-the-accent-wall-is-back
12. Forbes –
    https://www.forbes.com/advisor/home-improvement/how-much-does-siding-cost-to-install/
13. Remodeling Magazine –
    https://www.remodeling.hw.net/cost-vs-value/2021/

 

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The vast majority of agents around the country – and their buyers – are bemoaning the limited inventory of homes to buy. The reasons for this are many including:

1. The US has been under-building by millions for over a decade.
2. Most builders have focused more of their efforts on more expensive, more profitable homes.
3. Tons of Cheap money – and borrowing – has allowed people to pay more and fuel excessive price escalation in areas causing huge demand.
4. Institutional investors and i-buyers are competing with ‘regular’ home buyers further depleting inventory.
5. Wealthier buyers buying multiple homes. One person owning 3 homes equates to two fewer homes for other buyers to buy.
6. COVID-fueled migration from more expensive areas to cheaper areas of the US has driven prices up in those areas with increased demand AND buyers comfortable paying much more than locals.
7. Vast new wealth created from rapidly rising equity markets, crypto speculation, IPO’s, new business creation, inheritance, wealth transfer, etc has created a huge new pool of buyers, many armed with cash.
8. The COVID fueled desire to nest and own a home has unleashed the largest buying audience – millennials – to buy instead of rent after years of holding back.
9. Empty nesters seeking smaller homes are competing with first time buyers for smaller homes.
10. COVID fueled a greater awareness of our mortality fueling the desire to get on with life.

In some areas the inventory ‘on the market’ is very low. But there is quite a bit of inventory trading that barely makes it to market – if at all – because it is sold before it comes to market. That inventory is not registering clearly. Off-market deals are growing and they are mostly not pocket listings. The vast majority of these deals trade with both a buyer and seller agent.

It is for this reason – now more than ever before – for eager buyers to work with a professional, connected agent who knows inventory and the agents in their community extremely well. Betty Broker who knows Adam Agent well can help buyers achieve their goals now more than ever.

The Dinsmore Group would like to give content and writing credit to Leonard Steinberg @theleonardsteinbergteam. He shares his valuable insights through his wonderful Compass wide journal, Compass Contemplations. Mr. Steinberg holds the esteemed title of Chief Evangelist at Compass.

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As we enter the era of rising interest rates – almost a certainty – many are being VERY dramatic about this topic as if this has never happened before. Some cry hysterically that rates are jumping to 10%-plus. They are not. They are extremely low and hopefully remain under 5%, which is still VERY low. We have been spoiled rotten by many years of low interest rates. So let’s explore how in this lies some GOOD NEWS….

1. When interest rates rise it’s usually a sign of an overheating or rapidly growing economy. And rising incomes. And rising rates may slow inflation.

2. Anyone who was thinking of buying a home now may want to accelerate the process to lock in rates before they go higher. This could fuel home prices to rise till the supply-demand ratios become more balanced.

3. As rates rise, fewer people will be able to afford certain homes you and your buyers may be bidding on, thereby reducing the number of multiple bidders especially in areas that are overheated with more limited supply.

4. Sellers may re-adjust their pricing expectations to more realistic levels.

5. The excessive price increases should slow, creating more buying opportunities.

6. Higher rates may start to alleviate the dramatic inventory shortages around the country.

7. The price gougers may lose their audience as people simply cannot afford to pay those extra pricing excesses.

8. Mortgage lenders who now may see lower volume may become more competitive to keep volume up.

9. Most people don’t stay in a home for 30 years. The average is around 13 years. So the extreme focus on 30-year fixed rate mortgages may shift further towards shorter term.

10. The excessive pace of the market could slow a bit to normal allowing people to breathe better while making these big decisions.

11. Maybe some building costs will ease, or the excessive builder price-gouging that some are getting away with right now, thereby bringing down some building and renovation costs.

12. I would suspect those who were waiting to sell may now see the window for peak pricing closing….and list.

13. Those who rely on savings stand to earn more interest income from their cash investments…..they will have more money to spend, further fueling the economy. About 70% of the US economy is consumer spending.

14. Higher rates may drive some to rent instead of buy, further fueling rental prices….and making investment properties even more attractive to those diversifying investment portfolios. Higher returns in an inflationary environment can be a ‘safer’ place for cash.

Lets not forget: a Home Buyer getting a 4% interest rate on a 30-year fixed mortgage on a $400,0000 home has a monthly mortgage payment of $1,900. The monthly payment for this same buyer with a 5% rate on a 30-year fixed mortgage, rises to $2,138. A 1% increase in interest raises this monthly payment by $238, or roughly 13%, a very manageable number for most in a strong economy…..with rising incomes.

The Dinsmore Group would like to give content and writing credit to Leonard Steinberg @theleonardsteinbergteam. He shares his valuable insights through his wonderful Compass wide journal, Compass Contemplations. Mr. Steinberg holds the esteemed title of Chief Evangelist at Compass.

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