Blog Header - Smart Home

4 Smart Home Devices: Which Are Right for Your Home?

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When you’re not home, little doubts can plague you. Did I lock the door? Did I leave a key for the housekeeper? Is the AC still on full blast? Smart home devices can resolve those questions and ease your mind. They can also make your home more comfortable and convenient, and save you money. 

Once the exclusive domain of the super-rich and alpha geeks, smart home devices have become more common, user friendly, and affordable. You can equip your home with some basic smart devices like a smart thermostat, smart lighting, and smart door locks for $1,000 or less. You can run these devices with your smartphone or tablet. And in many cases, you can install them yourself; no electrical engineering degree required. 

Here’s what you need to know to get started in choosing the right smart home devices for your home and your budget.

What Are My Smart Home Goals?

Start by deciding what you want to accomplish, and that will lead you to a relevant device. If you want more security, consider a smart door lock. Are you looking for more comfort and convenience? Check out smart lights that come on right before you get home from work. Want to save money? A smart thermostat that uses artificial intelligence to control the temperature in your house may be the way to go. Do you crave a cool, high-tech gadget that’s downright Jetsons-esque? Go for a smart appliance like a fridge that can stream cooking videos.

Do I Need a Hub?

You don’t necessarily need a hub. In the early days of smart home tech you needed a dedicated device that tied all your smart home devices together. Back then, hubs were problematic, because not all devices were compatible with them, and their software needed to be updated regularly. Those old hubs are near relics now. These days, you can run your smart home devices through an app on your phone or tablet. Wi-Fi and the cloud have been game changers in smart home technology because they enable many devices to network together regardless of the make and the brand. 

Many homeowners use a voice assistant like Siri or Alexa as a de facto home hub by tying all their smart home devices to it. Once you do that, you can control your devices with a single unit. If you tie your smart home door lock and smart home appliances to your voice assistant, you can say, “Siri, preheat the oven to 350 degrees and unlock the door,” and consider it done. 

“Voice assistants have made so much more possible in the area of smart home devices,” says John Carey, vice president of Designer Appliances, a New Jersey retailer that specializes in smart appliances. “They can work with so many different products.”

Do I Need a Wi-Fi Connection?

You can run your devices by connecting them to a hot spot device, like a MIPS (Microprocessor without Interlocked Pipelined Stages), which lets you tap into a cell phone signal. A MIPS is basically a little computer that hooks your smart devices to the cloud via a cell phone network. You can also run smart devices through a hot spot on your phone or tablet. But you’ll get the best experience with Wi-Fi hooked up to the internet, Carey says. 

Can Smart Homes Get Hacked?

Although smart homes can be hacked, the damage a hacker can do is limited, says Christy Roth, director of offer management, home and distribution software for Schneider Electric in Nashville, Tenn. “Hackers can’t get to your bank account through your smart refrigerator,” she says. “But they could see what’s in your refrigerator or turn it off.” 

Although appliances can be at risk, homeowners are typically more concerned about risk tied to devices like smart locks and cameras. Carey says you’re better safe than sorry when it comes to security with smart home devices and appliances. “We recommend people set up a guest network that’s separate from their main network and connect all their smart devices to that. That way hackers can’t get on your network and onto your computer, where you store sensitive information.”

4 Smart Home Device Categories

Here’s a quick primer on four of the most popular smart home devices and some pros and cons for each.

  1. Smart thermostats —They’re the top-selling smart home device. Around 33 million households in the United States had one as of 2020. “They’re the most natural place to start if you want to get into smart home tech,” Roth says. Smart thermostats let you create programmable temperature settings based on your schedule, the weather, and your own needs. Many smart thermostats incorporate artificial intelligence technology to learn your schedule and adjust heating and cooling according to when you’re home. They’ll turn off the AC while you’re at work and turn it on 30 minutes before you get home from work each day. “They definitely pay for themselves with energy savings,” Carey says.

Pros

  • Smart home thermostats reduce the use of heating and cooling systems when nobody is home. If your HVAC runs less, your utility bill will be lower.
  • They alert you when it’s time to change the filter and can tell you when your last maintenance check was, saving you costly repairs.

Cons

  • They can be complex to operate. “Setting up the profiles for vacation and sleep isn’t easy, so people can end up ignoring them or overriding them,” Roth says. “And the AI can annoy some people so that they override it. That defeats the purpose of having them.” 
  • Some require professional installation. 
  1. Smart lighting This includes smart lightbulbs or smart switches. Both can be controlled remotely, via your smartphone when you’re miles away or with a voice assistant when you’re at home. You can program them to turn on or off at certain times and control their brightness.

Pros

  • Smart bulbs are simple to set up; you can screw them into a light fixture yourself.
  • They are easy to scale up; buy more to enlarge your smart lighting system.
  • They let you use whatever bulb you want because the switch is hooked to the cloud, not the bulb.

Cons

  • You can’t get smart bulbs to fit every fixture.
  • They don’t work well in fixtures tied to dimmer switches.
  • They require rewiring to install. You’ll need to call a pro.
  1. Smart appliances —Anything that runs on electricity is game for joining the Internet of Things, the ever-growing network of connected devices that talk to one another via the cloud. So, you can get smart microwaves that let you download cooking instructions for frozen food, smart ovens you can preheat before you get home, and smart refrigerators that alert you when food hits its expiration date. “Our biggest seller is smart washing machines,” Carey says. “They’ll alert you when your laundry is done, so you can get it into the drier before it sours.” 

Pros

  • They look cool. What’s not to love about a refrigerator with a touchscreen that lets you see inside the fridge without opening it?
  • They can cut your electric bill. Some smart appliances can calculate energy rates and schedule themselves to run during off-peak hours when electricity rates are lower.  

Cons

  • They’re expensive to buy and repair. 
  • If your internet goes down, your smart appliances become dumb ones.
  1. Smart door locks —They let you lock and unlock your house with the tap of a finger or a voice command. No keys required. Smart locks enable remote access, so you can unlock a door to let in a guest while you’re at work. Some locks allow you to monitor entry and exit logs in real time, so you can see if the kids got home from school or if the dog walker arrived on time. Some allow you to set up entry codes that work for only a certain period of time, so you can control who has access to your house.

Pros

  • You don’t have to dig in your purse or pockets for keys. 
  • You can see who comes and goes at your house.
  • Instead of giving out house keys to everyone who needs to get into your home, you can set a code for the cleaning person or the dog walker that only they use. 

Cons

  • They run on batteries. If the battery goes dead, you’re locked out.
  • If the power goes out or your Wi-Fi goes down, you won’t be able to operate the lock remotely.
  • Like all smart tech, smart locks can be hacked. But they have a system that will notify you or the police of an unauthorized entry.

Smart devices are a smart investment as long as they add comfort, convenience, or savings that you value. You’ll be more likely to get what works for you after exploring the most popular options and their pros and cons.

 

By: Leanne Potts

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Blog Header - Lighting

How to Enhance Your Life and Home With Lighting

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Your home’s interior lights want to help you have fun, feel better, and save energy. Will you let them?

It used to be we’d walk into a room and flip on the light switch, maybe slide the dimmer up or down a bit to change the brightness.

But that’s so old school. Instead, press a tab marked “Cooking” on a wall-mounted panel to let all kitchen task lights come up to full brightness while lights in the family room dim so the kids can play video games.

Or hit the button marked “Romance,” and the lights throughout the house go out while the lights in the bedroom ebb to a soft glow that turns a sultry blue.

Household technology is undergoing a transformation that’ll make lighting more integral to our everyday lives. Not only will we see better, but we’ll use light to alter our moods, protect our well-being, safeguard our houses, and save bunches of energy.

“Home lighting today is about lifestyle enhancements,” says Paul Nagel, technical adviser and consultant for Oquirrh Ventures in Sandy, Utah. “We want to know how to control light to create environments we’re comfortable in, and have energy efficiency while we do it.”

Related: Lighting’s Not Cheap: Here’s How to Do It Right

Lighting Our Homes With a Purpose

Today’s progressive lighting schemes aren’t about turning lights on and off; they’re about being partners in your lifestyle. The concept is simple: Imagine all your home’s light fixtures as a single system that can be programmed into a variety of zones. Each zone is dedicated to particular task or mood, and can be controlled by wall switches, a master wall panel, or a smartphone app.

So in addition to “Cooking” and “Romance” zones, you might have buttons for:

  • Outdoor entertaining – Patio and walkway lights illuminate.
  • Coming home – Triggered by a timer or a smartphone, the porch, entry hall, and kitchen lights come on.
  • Nighty-night – Lights in kids’ rooms slowly fade out as they fall asleep.
  • Vacation – Lights turn on and off in random patterns.
  • Panic mode – All lights in the house flash on and off.

If walking over to a wall panel is too much effort at the end of a long day, you can call up an app on your smartphone or tablet and control zones while curled up on the couch. If your app is voice-activated, you won’t even have to swipe a finger.

Easing the Fear of Lighting Technology

Do your eyes glaze over at the thought of yet another layer of high tech added to your everyday life? Fear not: In the hands of a pro, zone lighting systems are relatively easy to install. Home automation companies and lighting contractors can retrofit your house with a single-zone system in half a day or, with more time, install a whole-house system.

You’ll get an easy-to-understand central control unit that “talks” with new switches, light fixtures, and bulbs that are specially made to receive wireless signals. You decide on your zones and, once everything’s set up, have the light throughout your house change intensity and color on command.

DIYers Can Zone Out, Too

Relatively low-cost mini-systems are coming to market that’ll let you install your own zones, even if your geekability quotient is near zero.

Philips Hue smart light starter kits feature smart LED bulbs, the Hue Bridge, and a variety of smart accessories to help you easily set up a smart lighting system. Screw in your light bulbs, plug the Hue Bridge into your Wi-Fi router, and download the Hue app. Add your lights to your system and you’re ready to go. The system works with either Bluetooth or the Bridge.

No Dim Bulbs Here

Other DIY smart bulbs are on the market. They’re made to replace any screw-in type of lightbulb. All you need is a free app you download to your phone so you can dim lights, change colors, and turn individual lights on and off.

(FYI: Smart bulbs also work via conventional on/off wall switches; you’re not locked into controlling them with an app.)

ilumi bulbs come in different strengths including the A19 Color Bulb800+ Lumens (60-watt incandescent equivalent) for lamps and sconces, and the indoor BR30 Color 1100+ Lumens (85-watt incandescent equivalent) for down lighting. You can download the ilumi app, connect the bulbs with your iOS or Android device via Bluetooth, and enjoy smart lighting throughout your home with no hub or bridge. You’ll need to have your smartphone within range of ilumi bulbs (meaning within 100 feet) so that your phone’s Bluetooth network, with its short-range capability, can talk to them.

LIFX has created smart lights that do more than illuminate, according to its owner, Buddy Technologies. LIFX Clean can be scheduled to emit high energy visible wavelengths that can eliminate bacteria in your home. And LIFX Nightvision can be set to emit infrared wavelengths that boost your security camera’s ability to see in the dark.

Using Light to Alter Moods and Stay Healthy

If you’re feeling blue, it may be the light. Light can affect our moods and, ultimately, our health. Just ask anyone with seasonal affective disorder, a type of depression characterized by low energy and poor concentration. MedlinePlus estimates that 10 million Americans have SAD. The therapy is exposure to more daylight or to artificial lights that mimic the properties of natural light.

The health- and mood-altering properties of light haven’t been lost on lighting manufacturers, who’ve come up with a variety of new home lighting products that claim to have health benefits. Although clinical proof can be hard to come by, the products are intriguing.

Dynamic lights vary between warm white (2600K) and cool light (5600K) so that the natural rhythms of daylight are reproduced indoors. That helps keep you happy during the depths of winter. Several manufacturers make dynamic lightbulbs, also called full-spectrum bulbs.

The Withings Sleep Tracking Mat can be installed with a one-time setup under the mattress, and the pad is compatible with most mattresses. The mat tracks sleep metrics including duration and onset; deep, light, and REM phases; continuous and average heart-rate; and snoring duration. On top of that, you can control lights and temperature by getting into and out of bed.

LEDs — The Energy-Sipping Superstar of Home Lighting

LED lights (which stands for light-emitting diode) point the way for the future of home lighting. Why? LEDs:

  • Use only 3% of the energy of an incandescent bulb
  • Last from 50,000 to 100,000 hours
  • Have no restrictions on number of times they’re turned on and off
  • Save energy and replacement costs, though more expensive initially

LEDs can be made small — really small. In fact, some lights are no bigger than the point of a pencil. That’s going to change how we illuminate our homes. For example, hundreds of tiny LEDs can be embedded in sheets of drywall to create walls and ceilings that glow.

Mixing Light and Home Automation

Lighting solutions can be standalone projects, but they’re often paired with other home automation features to create a holistic home environment that’s controlled by a single wall panel and app. For example, press that “Relax” button on your scheme choices, and as the lights dim, you’re surrounded by the soothing sounds of jazz.

Lights are essential components of home security systems, too, teaming up with video cameras, alarms, and motion sensors to keep your house safe, whether or not you’re there.

Another advantage of automated energy management systems is that they combine smart thermostats, Energy Star appliances, and lighting schemes to trim energy costs across the board, and that’s a future we can all live with.

 

By: John Riha

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Blog Header - Home Tech

How Smart Home Technology Can Be a Selling Point

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You often judge a house by it’s good looks. But guess what? Now you can also judge it by its IQ. Long-buzzed about smart home technology — think smart thermostats, smart lighting, and app-controlled security systems — are moving into more homes. Smart home tech can up your coolness factor and make homes easier to operate. Plus, it may also offer perks when you sell your home one day.

Home shoppers are increasingly looking beyond that killer kitchen upgrade to a seller’s Wi-Fi signal and connectivity. This isn’t just a priority for the techie set. As smart home technology gets more affordable and easier to use, more people are adding devices. Half of U.S. consumers owned at least one smart home device in 2021, up from 35% in 2020, according to NPD Connected Intelligence. The number is expected to grow as homeowners look to save money, feel safer at home, and add convenience.

A Home’s Technology Smarts Matter

Here comes a potential home buyer. Motion-activated lighting automatically turns on as they enter. A smart thermostat adjusts the temperature for ultimate comfort. The smart robot vacuum is keeping the home tidy. The window blinds are adjusting based on the sun’s direction. And the smart speaker is telling them about the home’s features.

Seriously, wouldn’t you be a little impressed?

Four in 10 Americans have bought a smart home device since the COVID-19 outbreak and are more interested in smart home technology, according to a 2020 REALTOR.com study. “The pandemic has driven smart home technology forward,” says Angel Piontek, an associate broker with Coldwell Banker Elite in Fredericksburg, Va. “How we interact with our homes is becoming different. At some point, buyers will expect it.” 

The majority of real estate professionals surveyed by Z-Wave Alliance believe smart home technology can help in marketing a home, according to the organization’s 2020 report on smart technology. In fact, some real estate professionals are already using smart home features as selling points. You may spot more icons on online 3D tours of real estate listings that flag smart technology inside a home. Or, during in-person real estate showings, laminated placards may point to devices and highlight what they do. 

Smart Home Technology Costs and Buyer Preferences

Consumers between 18 and 34 said they would pay more for homes with home theaters, smart speakers in every room, and connected kitchens, according to the REALTOR.com study. In the 25 to 54 age group, consumers said they’d pay more for solar roof tiles and home battery packs. And for those 55 and older, solar roof tiles, smart doorbells, and security systems would be worth extra money.

It’s tougher to validate that smart technology can generate more money in a home sale. Anecdotally, real estate professionals believe it can: “If a home is marketed correctly and has smart home technology, it can sell for top dollar,” says Kristin Triolo, a broker associate with RE/MAX Platinum Realty in Sarasota, Fla.

Fully automating an entire home with higher-end systems could cost upward of $15,000. But an appraiser would factor in such a system at resale, according to Christopher Matos Rogers, an associate broker with the Matos Rogers Group’s Palmerhouse Properties in Atlanta.  

Boosting Marketability with Smart Technology

If you don’t already have smart home technology, some real estate professionals may recommend adding it before you list your home. Tech-savvy generations may expect it. And older adults may be drawn to such systems — particularly voice-controlled ones that support aging in place.

You can easily add smart home technology to modernize an older home and help it compete with newer ones. After all, many homebuilders offer smart home packages to outfit new homes with smart thermostats, app-controlled garage doors, smart lighting, door locks, and video security systems.

Smart home technology investments can range from $20 for adding smart lightbulbs to $20,000 or more for automated solutions that connect systems in one hub for an entire house. For $1,500, you can outfit your home with multiple systems like a smart speaker, smart lighting, and a smart thermostat to increase the home’s smart tech appeal. For about $5,500, homeowners could automate the lights, door locks, and thermostat, and install a smart speaker, hub, and smart plugs in three rooms, according to FixR.com.

Regardless of how extensive your devices are, real estate professionals will typically want to spotlight them. “Buyers may not have a lot of knowledge of smart home technology, but they do know and understand energy savings and cost savings,” Triolo says. For example, a Nest consumer survey estimates that the company’s smart thermostat could reduce a home’s heating costs by 10% and cooling costs by 15%. 

What Else Adds Smart Tech Appeal

Bigger brand names in smart home technology — like Nest, Ring, and Lutron — have instant name recognition when selling, says Piotnek.

Ease of use also counts. For example, having to open several apps on a phone to control various aspects of a home can feel cumbersome, says Ellis Gardner, a broker with Keller Williams Realty in Chattanooga, Tenn. But being able to say, “Hey, Google, turn on my lights!” shows convenience.

With smart devices, you’ll need to be clear about what stays and what goes with the home sale. “It’s a gray area with some of these devices on what’s considered personal property,” Piontek says. For example, digital assistants like Alexa or Google Home may be used as your smart home hub. But sellers may consider these personal property to take when they move. “So, it’s really important to get this all in writing so there’s no question at the end of a transaction.”

3 Ways to Avoid Misunderstandings About Smart Home Tech

Avoid misunderstandings about smart home technology with these three tips:

  1. Find an agent with smart technology expertise. They can help avoid hiccups in selling a smart home and also tend to be savvy marketers of smart tech. Some real estate professionals — like Triolo and Gardner – have smart home certification and extra training through the Residential Real Estate Council, a provider of real estate education and networking. 
  2. Identify which of your smart home technology devices or apps are real property versus personal property. In general, items affixed or hardwired to a house stay — likely your smart thermostat or any switches and mounts. If you plan to take your Nest thermostat or Ring doorbell, replace it before listing. The buyer could figure that anything in the house at a showing will remain with the house. 
  3. Turn over the virtual keys. On closing day, “turning over the passwords in a smart home is like turning over the key to the front door,” says Gardner. For all transferable technology, reset it to factory settings to erase any personal data. Leave instruction manuals or website links for the new owners to open up new accounts. 

Smart home technology is improving safety, security, and convenience in homes. Homeowners should also consider the benefits they’ll have when they sell one day, Piontek says. Just like curb appeal, high home appeal may make your home a standout to buyers.

 

By: Melissa Dittmann Tracey

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Blog Header - Countertops

What You Need to Know About Quartz Countertops

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The kitchen tends to be the home’s gathering place, so it’s only natural you want it to look and feel welcoming. But as the hub of your home, your kitchen needs durable countertops, especially if you have little ones helping with the cooking. Quartz countertops are a trendy choice for kitchens, but before you get in touch with your contractor, it’s important to assess the pros and cons and review some alternatives. 

What Are the Pros and Cons of Quartz Countertops?

Pros of Quartz Kitchen Countertops

  • Durable: Quartz countertops are highly durable, made from a mix of stones and stone-like materials bound together with resins. Makers of quartz countertops press the materials and resin into slabs that are solid and nonporous. That means the counters won’t chip or crack with everyday use (like when your little ones are helping you cook). 
  • Stain-resistant: Quartz is highly stain-resistant, thanks to its nonporous surface. But it can be stained by certain substances — like red wine, coffee, tea, tomato sauce, and juice — if the spill isn’t cleaned up immediately. The staining happens when the liquid interacts with the resin. You’ll also want to use gentle cleaners instead of harsh chemicals. Another positive: Quartz is relatively low maintenance and doesn’t require sealing. 
  • Highly customizable: Thanks to advances in engineered quartz, you can choose from a variety of patterns that can be custom-made or mirror the look of granite or marble. 

Cons of Quartz Countertops

  • Pricey: The price of quartz is high compared to the price of materials like marble and limestone. On average, quartz kitchen countertops cost $40 to $100 per square foot installed. 
  • Prone to heat damage:While quartz is heat-resistant, the binders used in about 10% of a quartz countertop slab are not. So, leaving hot cookware directly on a quartz counter could cause unsightly stains.  
  • Requires professional installation:Installing quartz countertops is probably not a DIY task. The material is incredibly heavy and needs professional attention to ensure the kitchen can support the counters.   

What Should You Look for in a Quartz Countertop?

Look for these quality markers when buying a quartz countertop:  

  • Cohesive coloring: Compare separate slabs from the quartz you plan to buy. Are they the same color? 
  • Coloring through the surface: Make sure the veins and colorations you see on the surface of the quartz continue throughout the slab. 
  • Consistent aggregates:Aggregates are the pebbles  you find along the edges of your countertops. No matter the size of these pebbles, they should be consistent throughout the countertop. 

Alternatives to Quartz Countertops

Your kitchen countertops should fit your lifestyle and the look of your space. So, before you choose them, explore several options to see what works best. Some alternatives to quartz kitchen countertops include:  

Marble

Marble is often comparable in price to quartz, but it has a unique and elegant look that may make the price worth it for some. While neither quartz nor marble requires resealing, marble has a porous surface, so it may be susceptible to stains, especially from acidic liquids, like tomato sauce or lemon juice. Quartz isn’t porous like marble but can still stain too. 

Slate

Slate is just as durable as quartz, but its designs and aggregates are more uniform. Slate costs more than quartz on average and requires a decent amount of maintenance, including regular sealing.  

Granite

Granite countertops are naturally made versus the man-made designs of quartz. While prices may be similar, granite requires more maintenance because of the need for regular resealing.  

How Much Do Quartz Counters Cost?

Several factors affect the cost of quartz countertops, including the brand, design, thickness, size of the project, and installation cost. On average, quartz countertops cost $40 to $100 per square foot installed. So, in an average kitchen with 30 square feet of countertop space, you’ll need to budget between $1,750 and $3,000 for quartz counters, with $2,300 being an average price. 

Compare that to other popular countertop options like granite, which costs between $2,500 and $5,000 for 30 square feet installed, or marble which may run you between $2,000 and $7,000. 

What Should You Ask Your Contractor About Installing Quartz Countertops?

Before you hire a pro to install new counters, be sure to ask a few questions, including:  

  • Is your team experienced with installing quartz countertops?  
  • Will replacing my kitchen countertops require a permit?  
  • How much do you charge for countertop installation, including removing my old countertops?  
  • Will you move my appliances and fixtures during installation, or am I responsible for that?  
  • Do you have insurance that covers any damage to my home or countertops during installation?  
  • Do you offer a warranty if something happens to the counters after installation? 

The answers to these questions and the information above can guide you as you decide whether quartz countertops are the best option for your kitchen.

By: HouseLogic

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Blog Header - Retirement

Should You Buy a Retirement Home Sooner Rather than Later?

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Every day in the U.S., roughly 10,000 people turn 65. Prior to the health crisis that swept the nation in 2020, most people had to wait until they retired to make a move to the beach, the golf course, or the senior living community they were looking to settle into for their later years in life. This year, however, the game changed.

Many of today’s workers who are nearing the end of their professional careers, but maybe aren’t quite ready to retire, have a new choice to make: should I move before I retire? If the sand and sun are calling your name and you have the opportunity to work remotely for the foreseeable future, now may be a great time to purchase that beach bungalow you’ve always dreamed of or the single-story home in the sprawling countryside that might be a little further out of town. Whether it’s a second home or a future retirement home, spending the next few years in a place that truly makes you smile every day might be the best way to round out a long and meaningful career.

Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), explains:

“The pandemic was unexpected, working from home was unexpected, but nonetheless many companies realized that workers can be just as productive working from home…We may begin to see a boost in people buying retirement homes before their retirement.”

According to the 20th Annual Transamerica Retirement Survey, 3 out of 4 retirees (75%) own their homes, and only 23% have mortgage debt (including any equity loans or lines of credit). Since entering retirement, almost 4 in 10 retirees (38%) have moved into a new home. They’re making a profit by selling their current homes in today’s low inventory market and using their equity to purchase their future retirement homes. It’s a win-win.

Why These Homeowners Are Making Moves Now

The health crisis this year made us all more aware of the importance of our family and friends, and many of us have not seen our extended families since the pandemic started. It’s no surprise, therefore, to see in the same report that 32% of those surveyed cited the top reason they’re making a move is that they want to be closer to family and friends (See graph below):

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The survey also revealed that 73% percent of retirees currently live in single-family homes. With the overall number of homes for sale today hitting a historic low, and with the buyer demand for single-family homes skyrocketing, there’s never been a more ideal time to sell a single-family home and make a move toward retirement. Today’s market has the perfect combination of driving forces to make selling optimal, especially while buyers are looking to take advantage of low interest rates.

If you’re one of the 73% of retirees with a single-family home and want to move closer to your family, now is the time to put your house on the market. With the pace homes are selling today, you could essentially wrap up your move – start to finish – before the holidays.

Bottom Line 

Whether you’re looking to fully retire or to buy a second home with the intent to use it as your retirement home in the future, the 2020 fall housing market may very well work in your favor. Let’s connect today to discuss your options in our local market.

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The Perks of Owning More Than One Home

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Many things have changed over the past couple of years, and real estate is no exception. One impact is an increased desire to own more than one home. According to the recent Luxury Market Report from Luxury Home Marketing:

“As trends such as remote working and flexi-hours took hold in 2021, so too did the flexibility of relocating as well as the growth of second homeownership.”

This may be because the pandemic has altered how we think about our homes. Where we live has become, more than ever, our safe space and our getaway. And with the rise in remote work, more people are reconsidering where they want to live and buying second homes to give them greater flexibility. If you fall in that category, here are just a few of the perks you’ll enjoy, and how owning a second home may be a great decision for your lifestyle and your future.

Enjoy a Change in Scenery (or Weather)

When you have two homes, you can alternate between them as the weather changes or as you crave different scenery. Do you want to live in an area with a particular season? Would alternating between a resort and a suburban setting be ideal? With two homes, you have those options. Being able to move between homes based on which location best suits you at the time gives you added flexibility and variety that can help increase your happiness.

Build Your Wealth Faster

You may have heard that home equity is skyrocketing, thanks to ongoing home price appreciation. CoreLogic reports that the average homeowner gained $56,700 in equity over the last year. With home prices projected to continue rising, if you purchase a second home, you could benefit from rising equity on both properties to build your wealth (and your net worth) even faster.

Be Closer to Loved Ones

The pandemic has also reignited the importance of being near our loved ones. One option worth exploring is whether you want your second home to be near the people who matter most in your life. This makes it easier to see your loved ones but still gives you your own dedicated, private space so you can be nearby for major life events or longer visits.

Lock in Your Expenses

Buying a second home today and locking in your mortgage rate may be a good option if you’re looking to stabilize your housing costs for the long haul. If you’re approaching retirement or are looking to use your second home as your permanent residence in the future, buying that house now with today’s rate and price may be a good financial decision. That way, no matter what happens with rates and prices in years ahead, your monthly payment is locked in for the next 15-30 years.

Bottom Line

Having multiple homes has considerable benefits. If owning a second home is something you’re interested in, let’s connect to explore your options, discuss the benefits, and take the next step to start your home search.

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Real Estate Voted the Best Investment Eight Years in a Row

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In an annual Gallup poll, Americans chose real estate as the best long-term investment. And it’s not the first time it’s topped the list, either. Real estate has been on a winning streak for the past eight years, consistently gaining traction as the best long-term investment (see graph below):

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If you’re thinking about purchasing a home this year, this poll should reassure you. Even when inflation is rising like it is today, Americans agree an investment like real estate truly shines.

Why Is Real Estate a Great Investment During Times of High Inflation?

With inflation reaching its highest level in 40 years, it’s more important than ever to understand the financial benefits of homeownership. Rising inflation means prices are increasing across the board. That includes goods, services, housing costs, and more. But when you purchase your home, you lock in your monthly housing payments, effectively shielding yourself from increasing housing payments. James Royal, Senior Wealth Management Reporter at Bankrate, explains it like this:

A fixed-rate mortgage allows you to maintain the biggest portion of housing expenses at the same payment. Sure, property taxes will rise and other expenses may creep up, but your monthly housing payment remains the same.”

If you’re a renter, you don’t have that same benefit, and you aren’t protected from increases in your housing costs, especially rising rents.

History Shows During Inflationary Periods, Home Prices Rise as Well

As a homeowner, your house is an asset that typically increases in value over time, even during inflation. That‘s because, as prices rise, the value of your home does, too. And that makes buying a home a great hedge during periods of high inflation. Natalie Campisi, Advisor Staff for Forbes, notes:

Tangible assets like real estate get more valuable over time, which makes buying a home a good way to spend your money during inflationary times.

Bottom Line

Housing truly is a strong investment, especially when inflation is high. When you lock in a mortgage payment, you’re shielded from housing cost increases, and you own an asset that typically gains value with time. If you want to better understand how buying a home could be a great investment for you, let’s connect today.

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The History of US 30-Year Fixed Mortgage Rates

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Coming into this year, most experts projected mortgage rates would gradually increase and end 2022 in the high three-percent range. It’s only May, and rates have already blown past those numbers. As all eyes are on the 30-year fixed mortgage rate, it’s a great time to look back at historical fluctuations

  • Rates in 1971 were in the mid-7% range, moving up steadily until they were at 9.19% in 1974. They briefly dipped down into the mid- to high-8% range before climbing to 11.20% in 1979.
  • Interest rates reached their highest point in modern history in 1981 when the annual average was 16.63%. Fixed rates declined from there, but they finished the decade around 10%.
  • The average mortgage rate in 1990 was 10.13%, but it slowly fell, finally dipping below 7% to come in at 6.94% in 1998.
  • Mortgage rates steadily declined from 8.05% in 2000 to the high-5% range in 2003. As the GREAT RECESSION hit, mortgage rates fell almost a full percentage point, averaging 5.04% in 2009.
  • Mortgage rates entered the 2010’s around 4.69%, falling steadily and were in the mid-3% range by 2012. In 2013, rates went up to 3.98% when the bond market panicked a little bit when the Federal Reserve said it would stop buying as many bonds. Rates rose to 4.17% in 2014 falling back to 3.85% in 2015.
  • By 2016 they averaged 3.65%. Rates began to rise after the 2016 presidential election, reaching their peak at the end of 2018/start of 2019…. between 3.95% on the low end and 5.34% on the high end.
  • By January 2020 came around, the average rate for a 30-year fixed was about 3.7%. When COVID hit they dipped into the 2’s, hitting a low in December 2020 at 2.68%!

Whether you’re thinking about buying your first home, moving up to your dream home, or downsizing because your needs have changed, purchasing before mortgage rates rise even higher will help you take advantage of today’s homebuying affordability. That could be just the game-changer you need to achieve your homeownership goals.

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The BREATHTAKING US Economy

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What will the housing market hold for 2022? Is media hype obscuring our ability to make logical predictions? One thing that will always be a truthful and defining barometer for our markets will be the strength of the US economy. So today, let’s look at where things stand, reminding ourselves that our economy – and the work we do – mostly transcends politics and media hype. Here are some highlights that note strengths (and some weaknesses):

 

CORPORATE HEALTH

U.S. companies are recording some of their best ever financial results. Most companies’ sales are higher than where they were before Covid-19, often well above. The liquidity crunch many feared in 2020 never materialized, leaving companies with sizable cash cushions. 

  • Far fewer public companies filed for bankruptcy in 2021 than in the years before the pandemic. Big companies rebounded fastest. 
  • Large Corporations are holding record levels of cash too, almost $7 TRILLION globally! 
  • Corporate debt has swelled by $1.3 trillion since early 2020, creating an inverse risk if borrowing costs rise.

 

GROWTH

The Conference Board forecasts that 2021 US Real GDP growth will come in at 5.6% (year-over-year). Looking further ahead, they forecast that the US economy will grow by 3.5% in 2022 and 2.9% in 2023. 

  • U.S. GDP for 2021 is estimated to be around $21.5 trillion
  • In 2020 it was $20,936 trillion
  • In 2019 it was $21,433 trillion
  • In 2018 it was $20,611 trillion
  • In 2017 it was $19,542 trillion
  • Just 10 years ago it was around $15.5 trillion…..up over 38% in 10 years!

 

UNEMPLOYMENT

The number of Americans applying for unemployment benefits fell below 200,000, more evidence that the job market remains strong in the aftermath of last year’s coronavirus recession. Jobless claims dropped by 8,000 to 198,000. The 4-week average, which smooths out week-to-week volatility, fell to just above 199,000, the lowest level since October 1969. Altogether, 1.7 million Americans were collecting traditional unemployment aid the week that ended Dec. 18, lowest since March 2020 and down by 140,000 from the week before.

 

EQUITY MARKETS

All US equity markets are at or close to record highs:

  • The DOW is above $36,000 ….up almost 19%
  • The NASDAQ is above $16,000 …up about 27%
  • The S+P 500 is above $4,700 …up about 27%

 

WAGES/NET WORTH

  • US Real Median US household income was $57,732/year in 2011….in 2021 this was up to around $79,900……up about 38%. 
  • The TOP 5% of household’s average income is up around 50% in the last decade!
  • The 10 richest billionaires added $402.17 billion to their net worths in just one year, 2021. 
  • The 2021 overall median net worth of U.S. households was $121,700….a decade ago it was less than half.
  • The median balance among higher-income families (earning more than $68,896) was roughly 40% higher in September than two years earlier.
  • US household debt is over $15 trillion, mostly mortgages, about 20% higher than in 2008.

 

US NATIONAL DEBT

This is an area of concern: US debt has soared faster and further than GDP growth. Then again, COVID was somewhat akin to a world war.

  • 2017 $20,245 – Congress raised the debt ceiling
  • 2018 $21,516 – Tax cuts
  • 2019 $22,719 – Trade wars
  • 2020 $27,748 – COVID-19 & 2020 recession
  • 2021 $28,400 –  COVID-19 & American Rescue Plan Act

 

US BUDGET DEFICIT BY YEAR (past 5 years)

  • 2017 $665 billion, 3.4% debt-to-gdp ratio 
  • 2018 $779 billion, 3.8%  debt-to-gdp ratio
  • 2019 $984 billion, 4.6% debt-to-gdp ratio
  • 2020 $3,1 trillion, 14.4% debt-to-gdp ratio
  • 2021 $3 trillion, 13.2% debt-to-gdp ratio, high, yet half of what it was during WW2.

 

GROWING COMPANIES

  • In 2017 Tesla produced 103,000 vehicles. In 2021 – 5 years later – it delivered 936,172 cars!
  • In 2017 Amazon sold $177 billion. In 2021 estimates are around $550 billion…..more than TRIPLE!
  • In 2017 APPLE’s revenue was $ 229 billion ….5 years later in 2021 it’s up to $365 billion….up almost 60%!
  • In 2017 COMPASS sales volume was around $31 BILLION……by 2018 it had grown to $45.5 billion, up around 46%.  A year later in 2019 sales volume hit $97.5 billion up over 100% and in 2020 $151.7 billion…up 55%.

 

The US economy is not a reflection of the handful of politicians, media types or loudmouths that steal headlines daily. No individual, media entity or political party drives the US economy. The PRACTICAL, hard-working PEOPLE of the US that help drive this economy daily – YOU! – are the stars. Don’t forget it and I hope knowing this starts your year off on a good note.

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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Home-Equity

Take Advantage of Your Home Equity: Build Wealth Over Time

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Homeownership offers many advantages over renting, including a stable living environment, predictable monthly payments, and the freedom to make modifications. Neighborhoods with high rates of homeownership have less crime and more civic engagement. Additionally, studies show that homeowners are happier and healthier than renters, and their children do better in school.

But one of the biggest perks of homeownership is the opportunity to build wealth over time. Researchers at the Urban Institute found that homeownership is financially beneficial for most families, and a recent study showed that the median net worth of homeowners can be up to 80 times greater than that of renters in some areas.

So how does purchasing a home help you build wealth? And what steps should you take to maximize the potential of your investment? Find out how to harness the power of home equity for a secure financial future.

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WHAT IS HOME EQUITY?

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Home equity is the difference between what your home is worth and the amount you owe on your mortgage. So, for example, if your home would currently sell for $250,000, and the remaining balance on your mortgage is $200,000, then you have $50,000 in home equity.

$250,000 (Home’s Market Value)

$200,000 (Mortgage Balance)

______________________________

$50,000 (Home Equity)

The equity in your home is considered a non-liquid asset. It’s your money; but rather than sitting in a bank account, it’s providing you with a place to live. And when you factor in the potential of appreciation, an investment in real estate will likely offer a better return than any savings account available today.

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HOW DOES HOME EQUITY BUILD WEALTH?

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A mortgage payment is a type of “forced savings” for home buyers. When you make a mortgage payment each month, a portion of the money goes towards interest on your loan, and the remaining part goes towards paying off your principal, or loan balance. That means the amount of money you owe the bank is reduced every month. As your loan balance goes down, your home equity goes up.

Additionally, unlike other assets that you borrow money to purchase, the value of your home generally increases, or appreciates, over time. For example, when you pay off your car loan after five or seven years, you will own it outright. But if you try to sell it, the car will be worth much less than when you bought it. However, when you purchase a home, its value typically rises over time. So when you sell it, not only will you have grown your equity through your monthly mortgage payments, but in most cases, your home’s market value will be higher than what you originally paid. And even if you only put down 10% at the time of purchase—or pay off just a small portion of your mortgage—you get to keep 100% of the property’s appreciated value. That’s the wealth-building power of real estate.

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WHAT CAN I DO TO GROW MY HOME’S EQUITY FASTER?

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Now that you understand the benefits of building equity, you may wonder how you can speed up your rate of growth. There are two basic ways to increase the equity in your home:

1.) Pay down your mortgage.

We shared earlier that your home’s equity goes up as your mortgage balance goes down. So paying down your mortgage is one way to increase the equity in your home.

Some homeowners do this by adding a little extra to their payment each month, making one additional mortgage payment per year, or making a lump-sum payment when extra money becomes available—like an annual bonus, gift, or inheritance.

Before making any extra payments, however, be sure to check with your mortgage lender about the specific terms of your loan. Some mortgages have prepayment penalties. And it’s important to ensure that if you do make additional payments, the money will be applied to your loan principal.

Another option to pay off your mortgage faster is to decrease your amortization period. For example, if you can afford the larger monthly payments, you might consider refinancing from a 30-year or 25-year mortgage to a 15-year mortgage. Not only will you grow your home equity faster, but you could also save a bundle in interest over the life of your loan.

2.) Raise your home’s market value.

Boosting the market value of your property is another way to grow your home equity. While many factors that contribute to your property’s appreciation are out of your control (e.g. demographic trends or the strength of the economy) there are things you can do to increase what it’s worth.

For example, many homeowners enjoy do-it-yourself projects that can add value at a relatively low cost. Others choose to invest in larger, strategic upgrades. Keep in mind, you won’t necessarily get back every dollar you invest in your home. In fact, according to Remodeling Magazine’s latest Cost vs. Value Report, the remodeling project with the highest return on investment is a garage door replacement, which costs about $3600 and is expected to recoup 97.5% at resale. In contrast, an upscale kitchen remodel—which can cost around $130,000—averages less than a 60% return on investment.

Of course, keeping up with routine maintenance is the most important thing you can do to protect your property’s value. Neglecting to maintain your home’s structure and systems could have a negative impact on its value—therefore reducing your home equity. So be sure to stay on top of recommended maintenance and repairs.

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HOW DO I ACCESS MY HOME EQUITY IF I NEED IT?

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When you put your money into a checking or savings account, it’s easy to make a withdrawal when needed. However, tapping into your home equity is a little more complicated.

The primary way homeowners access their equity is by selling their home. Many sellers will use their equity as a downpayment on a new home. Or some homeowners may choose to downsize and use the equity to supplement their income or retirement savings.

But what if you want to access the equity in your home while you’re still living in it? Maybe you want to finance a home renovation, consolidate debt, or pay for college. To do that, you will need to take out a loan using your home equity as collateral. 

There are several ways to borrow against your home equity, depending on your needs and qualifications:

1.) Second Mortgage – A second mortgage, also known as a home equity loan, is structured similar to a primary mortgage. You borrow a lump-sum amount, which you are responsible for paying back—with interest—over a set period of time. Most second mortgages have a fixed interest rate and provide the borrower with a predictable monthly payment. Keep in mind, if you take out a home equity loan, you will be making monthly payments on both your primary and secondary mortgages, so budget accordingly.

2.) Cash-Out Refinance – With a cash-out refinance, you refinance your primary mortgage for a higher amount than you currently owe. Then you pay off your original mortgage and keep the difference as cash. This option may be preferable to a second mortgage if you have a high interest rate on your current mortgage or prefer to make just one payment per month.

3.) Home Equity Line of Credit (HELOC) – A home equity line of credit, or HELOC, is a revolving line of credit, similar to a credit card. It allows you to draw out money as you need it instead of taking out a lump sum all at once. A HELOC may come with a checkbook or debit card to enable easy access to funds. You will only need to make payments on the amount of money that has been drawn. Similar to a credit card, the interest rate on a HELOC is variable, so your payment each month could change depending on how much you borrow and how interest rates fluctuate.

4.) Reverse Mortgage – A reverse mortgage enables qualifying seniors to borrow against the equity in their home to supplement their retirement funds. In most cases, the loan (plus interest) doesn’t need to be repaid until the homeowners sell, move, or are deceased.

Tapping into your home equity may be a good option for some homeowners, but it’s important to do your research first. In some cases, another type of loan or financing method may offer a lower interest rate or better terms to fit your needs. And it’s important to remember that defaulting on a home equity loan could result in foreclosure. Ask us for a referral to a lender or financial adviser to find out if a home equity loan is right for you.

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WE’RE HERE TO HELP YOU

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Wherever you are in the equity-growing process, we can help. We work with buyers to find the perfect home to begin their wealth-building journey. We also offer free assistance to existing homeowners who want to know their home’s current market value to refinance or secure a home equity loan. And when you’re ready to sell, we can help you get top dollar to maximize your equity stake. Contact us today to schedule a complimentary consultation!

The above references an opinion and is for informational purposes only. It is not intended to be financial advice. Consult a financial professional for advice regarding your individual needs.

Sources:

  1. National Association of Realtors – https://www.nar.realtor/blogs/economists-outlook/highlights-from-social-benefits-of-homeownership-and-stable-housing
  2. Urban Institute – https://www.urban.org/urban-wire/homeownership-still-financially-better-renting
  3. Census Bureau – https://www.census.gov/library/stories/2019/08/gaps-in-wealth-americans-by-household-type.html
  4. Remodeling Magazine – https://www.remodeling.hw.net/cost-vs-value/2019/
  5. Investopedia – https://www.investopedia.com/mortgage/heloc/home-equity/
  6. Bankrate – https://www.bankrate.com/mortgage/reverse-mortgage-guide/

 

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