The Many Benefits of Aging in a Community

My husband and I both took care of our parents at various stages of the aging process.  We know how beneficial it is to plan ahead, even though you may not think it’s “time”!

The Many Benefits of Aging in a Community | MyKCM

There’s comfort in being around people who share common interests, goals, and challenges. That comfort in a community doesn’t wane with age – it actually deepens. Whether it’s proudly talking about grandchildren or lamenting the fact that our eyes aren’t as good as they used to be, it helps to be around people who not only understand what we’re saying but actually feel the same joys and concerns as well.

That’s why many boomers are deciding to move into an active adult community. In the latest 55places National Housing Survey, they were described by one out of three seniors as an “outgoing, social community of likeminded people.”

Bill Ness, Chief Executive Officer and Founder of 55places.com, explains:

“Baby boomers are now reaching the age when moving to an active adult community is the ideal opportunity for them…Many boomers now want to downsize, experience a maintenance-free lifestyle, and pursue more social opportunities. It’s exciting that there are so many choices for baby boomers.”

There’s still a desire, however, among many seniors to “age-in-place.” According to the Senior Resource Guide, aging-in-place means:

“…that you will be remaining in your own home for the later years of your life; not moving into a smaller home, assisted living, or a retirement community etcetera.”

The challenge is, many seniors live in suburban or rural areas, and that often necessitates driving significant distances to see friends or attend other social engagements. A recent report from the Joint Center for Housing Studies of Harvard University (JCHS) titled Housing America’s Older Adults addressed this exact concern:

“The growing concentration of older households in outlying communities presents major challenges for residents and service providers alike. Single-family homes make up most of the housing stock in low-density areas, and residents typically need to be able to drive to do errands, see doctors, and socialize.”

The Kiplinger report also chimed in on this subject:

“While most seniors say they want to age in place, a much smaller percentage of them actually manage to accomplish it, studies show. Transportation is often a problem; when you can no longer drive, you can’t get to medical appointments or to other outings.”

Driving may not be a challenge right now, but think about what it may be like to drive 10, 20, or 30 years down the road.

There are also health challenges brought on by a possible lack of socialization when living at home versus a community of seniors. Sarah J. Stevenson is an author who writes about seniors. In a recent blog post for A Place for Mom, she explains:

“Social contacts tend to decrease as we age for reasons such as retirement, the death of friends and family, or lack of mobility.”

Thankfully, research from the same article suggests if you’re spending time with others in a community, thus reducing the impact of loneliness and isolation, there’s less of a risk of developing high blood pressure, obesity, heart disease, a weakened immune system, depression, anxiety, cognitive decline, Alzheimer’s disease, and early death.

Though the familiarity of our current home may bring a feeling of warmth, comfort, and convenience, it’s important to understand that staying there may mean missing out on crucial socialization opportunities. Living with adult children, joining a retirement community, or moving to an assisted living facility can help us continue to be with people we enjoy every day.

Bottom Line

“Aging-in-place” definitely has its advantages, but it could mean getting “stuck-in-place” too. There are many health benefits derived from socialization with a community of people that shares common interests. It’s important to take the need for human interaction into consideration when making a decision about where to spend the later years in life.

How Trusted Professionals Make Homebuying Easier to Understand

How Trusted Professionals Make Homebuying Easier to Understand | MyKCM

In the spring, many excited buyers get ready to enter the housing market. Others continue dreaming about the homes they’d like to buy. The truth is, many potential buyers continue to dream longer than they need to, simply because they’re confused about the homebuying process. Thankfully, working with a trusted real estate professional can help ease those concerns and make the process to homeownership much easier to understand.

A recent survey conducted by Ipson and Freddie Mac reveals the confidence level of Gen Z and Millennial buyers regarding the homebuying process. The graph below shows the breakdown of the top results, clearly indicating there’s a significant portion of younger buyers who are not yet confident with some of the steps in the homebuying process.How Trusted Professionals Make Homebuying Easier to Understand | MyKCMBetween the homebuying process and the mortgage process, there are 230 possible steps in the transaction. With trusted professionals on your side, you certainly don’t have to know them all to have a successful experience.

There are many reasons why these steps can change as you move through each one. Depending on your personal circumstances, the term or your mortgage, and the type of loan you use, the path you take may need to vary. That’s why guidance and support from the experts is key.

In addition to the process itself, respondents in the survey definitely expressed concerns about understanding the types of loans available. Here are just a few of the basic loans to consider. Be sure to speak with your lender about the specifics of what will work best for you:

  • FHA: Loans guaranteed by the Federal Housing Administration for first-time buyers. They generally enable qualified borrowers to enter the housing market with a lower down payment.
  • Conventional: Loans that usually require a larger down payment. Repeat buyers usually use these types of loans since they have an established credit history as well as more money from the sale of their previous home (called equity) for a bigger down payment.
  • VA: Loans available for Veterans of the U.S. Armed Forces and their spouses. They are guaranteed by the Department of Veteran Affairs.
  • USDA: Loans for those living in rural and suburban areas. A qualified lender can issue a USDA home loan, and they are guaranteed by the United States Department of Agriculture (USDA).

Interest rates also popped up as a common area of confusion among Gen Z and Millennial respondents in the survey. With today’s rates hovering at near historic lows, it’s a fantastic time for buyers to get more house for their money in the current market. Why? When mortgage rates are this low and wages are increasing as they are today, overall affordability increases, enabling home buyers to stretch their mortgage dollars further. It’s just another area where a trusted professional can help simplify the process and give guidance along the way.

Bottom Line

There are many possible steps in a real estate transaction, but they don’t have to be confusing. To understand your best course of action, let’s get together today to ensure you have a trusted adviser who will help you feel confident and informed at every turn.

The Overlooked Financial Advantages of Home-ownership

The Overlooked Financial Advantages of Homeownership | MyKCM
There are many clear financial benefits to owning a home: increasing equity, building net worth, growing appreciation, and more. If you’re a renter, it’s never too early to make a plan for how home-ownership can propel you toward a stronger future. Here’s a dive into three often-overlooked financial benefits of home-ownership and how preparing for them now can steer you in the direction of greater stability, savings, and predictability.

1. You Won’t Always Have a Monthly Housing Payment

According to a recent article by the National Association of Realtors (NAR):

“If you’ve been a lifelong renter, this may sound like a foreign concept, but believe it or not, one day you won’t have a monthly housing payment. Unlike renting, you will eventually pay off your mortgage and your monthly payments will be funding other (possibly more fun) things.”

As a homeowner, someday you can eliminate the monthly payment you make on your house. That’s a huge win and a big factor in how home-ownership can drive stability and savings in your life. As soon as you buy a home, your monthly housing costs will begin to work for you as forced savings, coming in the form of equity. As you build equity and grow your net worth, you can continue to reinvest those savings into your future, maybe even by buying that next dream home. The possibilities are truly endless.

2. Home-ownership Is a Tax Break

One thing people who have never owned a home don’t always think about are the tax advantages of home-ownership. The same piece states:

“Both the interest and property tax portion of your mortgage is a tax deduction. As long as the balance of your mortgage is less than the total price of your home, the interest is 100% deductible on your tax return.”

Whether you’re living in your first home or your fifth, it’s a huge financial advantage to have some tax relief tied to the interest you pay each year. It’s one thing you definitely don’t get when you’re renting. Be sure to work with a tax professional to get the best possible benefits on your annual return.

3. Monthly Housing Costs Are Predictable

A third item noted in the article is how monthly costs become more predictable with home-ownership:

As a homeowner, your monthly costs are most likely based on a fixed-rate mortgage, which allows you to budget your finances over a long period of time, unlike the unpredictability of renting.”

With a mortgage, you can keep your monthly housing costs steady and predictable. Rental prices have been skyrocketing since 2012, and with today’s low mortgage rates, it’s a great time to get more for your money when purchasing a home. If you want to lock-in your monthly payment at a low rate and have a solid understanding of what you’re going to spend in your mortgage payment each month, buying a home may be your best bet.

Bottom Line

If you’re ready to start feeling the benefits of stability, savings, and predictability that come with owning a home, let’s get together to determine if buying a home, sooner rather than later, is right for you!

Homeownership Rate on the Rise to a 6-Year High

Homeownership Rate on the Rise to a 6-Year High | MyKCM

Regardless of the lack of inventory on the market, the U.S. homeownership rate has climbed to a 6-year high. The United States Census Bureau reported that it increased to 65.1% in the fourth quarter of 2019, representing the highest level in the past six years. See the graph below:Homeownership Rate on the Rise to a 6-Year High | MyKCMThis increase does not come as a surprise. According to realtor.com,

“The largest cohort of the millennial generation turns 30-years-old in 2020 and they are hitting the housing market in full force. At the end of the fourth quarter of 2019, millennials made up the largest generational segment of homebuyers, growing their share of home purchase mortgages to 48 percent.”

With so many Millennials entering a homebuying phase of life and getting into the market, the Millennial Report also explains,

“Homeownership is an even bigger goal for younger generations. Of those with savings, 41 percent of Gen Z and 40 percent of younger millennials are saving to buy a home.”

Today’s low interest rates are providing a break to new homeowners too, regardless of generation, making homeownership more desirable and achievable at the same time. Freddie Mac explains,

“The combination of very low mortgage rates, a strong economy and more positive financial market sentiment all point to home purchase demand continuing to rise over the next few months.”

The increase in homeownership rate was also represented by race and ethnicity of the householders. HousingWire explains,

“The homeownership rate for black Americans in 2019’s fourth quarter rose to 44%, a seven-year high, increasing from the record low it reached in 2019’s second quarter. The rate for Hispanic Americans was 48.1%, a two-year high, the Census data showed…The rate for white Americans was 73.7%, an eight-year high.”

See the graph below:Homeownership Rate on the Rise to a 6-Year High | MyKCM

Bottom Line

If you’re considering buying a home this year, let’s get together to set a plan that will help you get one step closer to achieving your dream.

Should You Sell Your House This Year? Yes!

Should I Sell My House This Year? | MyKCM

If one of the questions you’re asking yourself today is, “Should I sell my house this year?” the current Housing Opportunities and Market Experience (HOME) Survey from the National Association of Realtors® (NAR) should boost your confidence as it relates to the current selling sentiment in the housing market. Even with all the information overload in the media circling around talk of a possible recession, the upcoming 2020 election, and more, Americans feel good about selling a house now. That’s some news to get excited about!

As the graph below shows, as of Q4 2019, 75% of people surveyed indicate they believe now is a good time to sell a home:Should I Sell My House This Year? | MyKCMIn the case of those with a yearly salary of $100,000 or more, the results jumped even higher, coming in at an 82% positive sentiment.

When the study divided the outcomes by region, the results still consistently showed Americans feeling good about selling:

  • Northeast: 71% positive
  • Midwest: 76% positive
  • South: 72% positive
  • West: 81% positive

In addition to looking at income and region, the report also divided the results by generation, as shown in the graph below:Should I Sell My House This Year? | MyKCMAs you can see, many believe that, despite everything going on in the world, it is still a good time to sell a home.

According to NAR, the unsold inventory available today “sits at a 3.0-month supply at the current sales pace,” which is down from a 3.7-month supply in November. The current inventory is half of what we need for a normal or neutral housing market, which should have a 6.0-month supply of unsold inventory. This is good news for sellers, as Lawrence Yun, Chief Economist at NAR, says:

“Home sellers are positioned well, but prospective buyers aren’t as fortunate. Low inventory remains a problem, with first-time buyers affected the most.”

Bottom Line

If you’re ready to list your home, you can feel good about the current sentiment in the market. Let’s get together today to determine the best next step when it comes to selling your house this year.

First Time Buyers are Searching for Existing Homes

First-Time Buyers Are Searching for Existing Homes This Year | MyKCM

In the latest Housing Trends Report, the National Association of Home Builders (NAHB) measured the share of adults planning to buy a home over the next 12 months. The report indicates the percentage of all buyers that will be first-time buyers looking to purchase a home grew from 58% in Q4 2018 to 63% in Q4 2019.

The results revealed,

“Millennials are the most likely generation to be making plans to purchase a home within a year (19%), followed by Gen Z (13%) and Gen X (12%)…Prospective buyers in the youngest two generations are primarily first-time buyers:  88% of Gen Z buyers and 78% of Millennial buyers are reaching out to homeownership for the first time in their lives.”

With a high demand from first-time homebuyers and a shortage of inventory in the current market, selling your existing home this year might be your best move. Why? Because when homebuyers begin their search, they’re not all looking for new construction. Many are eager to find a little charm and character in a place to call home – possibly yours.

In fact, according to the same study, there is a significant demand for existing homes:

“In terms of the type of home these prospective home buyers are interested in, 40% are looking to buy an existing home and 19% a newly-built home. The remaining 41% would buy either a new or existing home.”

With showing activity up among buyers and more new construction coming to market, as a homeowner, you have the opportunity to sell your existing house now and move up into a new one, or downsize into a home that better fits your current and ever-changing needs.

Bottom Line

Not all buyers are looking for a newly built house. If you’re ready to take advantage of low mortgage rates and a high demand for your existing home, let’s get together to determine how we will market the charming details of your current house to potential buyers.

Six Pricing Myths Sellers Must Ditch Now (Part 3)

5.  A low ball offer isn’t worth considering.  Don’t waste my time.

Selling your home is a process.  An offer, even a low offer, is the start of that process.

When a seller is offended by a low offer, I usually respond by asking what the seller would do, if s/he were in the buyer’s place.  Would s/he offer top dollar right out of the gate?  Probably not.  So, don’t be offended when someone does exactly what you would do.

You can’t take a low offer personally.  It’s not an insult; it’s an invitation!  Don’t be stubborn….make a counter offer, for heaven sake.

Everyone wants a deal, so we start at market value and add a little bit of cushion for negotiating and for unexpected repairs.  And certainly, most homes will not sell above the list price unless it’s a super-hot seller’s market or the house is truly one-of-a-kind.

Take Away:  Don’t get emotional about the first offer.  It’s an invitation and you need to RSVP!

6.  My home needs updates, but buyers will look past that. Won’t they?

In a word, no.  No, they won’t look past dated features, unless the price encourages them to do so.

If your listing price doesn’t account for the floral wallpaper with coordinating border, the navy blue toilets, and the harvest gold carpet, the buyer will account for it.  As they tour the house, you can just hear their mental calculator making deductions….

strip the wallpaper and repaint  $_____ ching!

update the bathrooms                  $_____ ching!

replace the flooring                       $_____ ching!

MENTAL TOTAL                      $_____ cha ching!

And that MENTAL TOTAL will be deducted from the listing price when they prepare their offer.   I guarantee it!  I have this discussion with buyers all the time.  This is exactly how their minds work.

My advice: Look at a few decorating magazines and watch a couple episodes of Flip or Flop, or Fixer Upper.   If the “bones” of your house don’t look like these homes, be realistic and price your home with the needed updates in mind.  It’s not unusual to need updates, nor is it a reflection on you or your taste.

Take Away:  Home styles change pretty dramatically from one generation to the next.  (I know my kids wouldn’t want to live in my house!) Price your home with the reality in mind.

6 Pricing Myths Sellers Must Ditch Now (Part 2)

Part 2 of a 3-part Series entitled Six Pricing Myths Sellers Must Ditch Now

3.  If we price the home right at market value, we will be leaving money on the table.  Oh no!

This hasn’t been our experience!  Sellers react negatively to homes that are not priced in line with the market.  They either don’t tour the home; or when they do tour the home, they go out of their way to find, point out and put a price on every flaw:  “They should deduct $2500 for that ugly carpet”

What really happens, especially in a low inventory market like Evansville, is that buyers are eager to see reasonably priced homes.  So much so, that multiple offer situations are not unusual.  Multiple offers often result in above-market sale prices as the result of the bidding war that develops between hungry buyers!   Buyers of reasonably priced homes are willing to overlook the flaws that doom overpriced homes as buyers feel the pressure to make an offer or lose the house.

 Take Away:  You won’t sell a house no one looks at

4.  If I don’t get the price I want this spring, I’ll relist. No worries.

 The price of homes that sit on the market is like your favorite pair of jeans—they just get softer with time.  The longer a house is for sale, the more likely a buyer will think something must be wrong with it and chose to not even look at it.  Occasionally we even get the intrepid buyer who thinks:  Awesome—something must be wrong with it….I’ll get it way cheap!   (And that’s just what the frustrated seller starts to think too:  This offer is way too cheap!)  Your local multi-listing services show DOM (Days on Market) as do Zillow, Realtor.com and others.  It’s hard to hide this info from buyers and realtors.

Sellers also have to look at the costs of several more months of paying a mortgage, maintaining the home in tip top shape, and perhaps repairing the furnace when fall rolls around and the motor is burned out!

And when fall rolls around, your tired looking house will be out there competing with all of the gorgeous, newly listed homes that hit the market right after the kids went back to school.  Your competition has increased because you waited to right-price your house, making you worse off than you were last spring.  Sigh.

Take Away:  Home prices age like blue jeans….the older they are, the softer they get!

Six Pricing Myths Sellers Must Ditch Now  (Part 1)

 

Six myths that plague sellers:

  1. Let’s price the home above market value and see what happens.  Buyers love to negotiate and think they are getting a bargain!
  2. If I stand my ground, the buyer will eventually come to my price. So there!
  3. If we price the home right at market value, we will be leaving money on the table. Oh no!
  4. If I don’t get the price I want this spring, I’ll relist in the fall. No worries.
  5. A low ball offer isn’t worth countering. Don’t waste my time….
  6. My homes needs updates, but the buyers will look past that. Won’t they?

Let’s debunk these myths right now!  Getting to the truth now will save time and money when you list your house.  This is the first of 3 articles about myths that keep home sellers from getting great deals quickly and easily!

1. Let’s price the home above market value and see what happens.  Buyers love to negotiate and think they are getting a bargain!

Granted, there is some truth to the idea that everyone loves a bargain, but that assumes buyers won’t be put off by the asking price and exclude your home from their search.  The vast majority of sellers won’t look too far beyond their comfortable price range.  And, they won’t want to waste time looking at something the bank won’t qualify them for.  So overpricing your home will actually deter buyers.

This is not to say that you don’t want to leave a little wiggle room for the deal seekers. You also may need to make concessions for unexpected repairs discovered by the home inspection.  (Which makes the case for a pre-listing inspection.  But more on that at another time.)

But don’t be greedy, my dear sellers. (Remember this:  Pigs get fat, but hogs get slaughtered!).  The market is driven by what similar properties are selling for, or comps.  Comps are easier to find than ever …. they are found on the local MLS, Zillow, Trulia, Realtor.com and assessor’s websites, etc.  Buyers and the realtors will find them.  You can’t hide from the market.  Work with it, not against it.

Take Away 1:  You can’t negotiate with a buyer who never comes to see your house.  Price it appropriately from the get-go.

2. If I stand my ground, the buyer will eventually come to my price.

I wish this was true!  Self-proclaimed negotiation gurus often spew this kind of advice:  never split the difference; always be willing to walk away; aim high and expect the best.

I respectfully disagree.  Unless you are in a multiple offer situation, the seller usually has to negotiate on price, at least a little.  Nothing is worse that letting a buyer walk away, assuming there will be more on the doorstep tomorrow, only to see an empty doorstep tomorrow after tomorrow after tomorrow.

In my world, we often split the difference.  We often decide to not walk away but to submit another counter offer.  And while we expect the best, we settle on reasonable.

Take Away 2:  If you arbitrarily stand your ground, you may end up standing…all…alone!

Watch for upcoming posts on Myths 3-6!