Category Archives: Market Value

What’s Your Home Actually Worth?

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What's Your Home Actually Worth? What's your home is actually worth determining fair market value vs. appraised and assessed value and the factors used to determine fair market value.

It’s easy to know how much money you have in your savings account or the real-time value of your stock investments. But, determining what your home is actually worth is trickier.

As a seller, knowing what’s your home actually worth, helps you price it correctly when you put it up for sale. If you price it too high, it may sit on the market. But price it too low and you may be losing out on a good chunk of money (nobody wants that!). For buyers, it’s important to know a home’s worth before you make an offer. You want your offer to be competitive, but you don’t want to overpay for the property. 

As a current homeowner you might just be curious about the value of your home. Keeping track of what’s your home is actually worth year over year helps you understand the trends in your market. So when you are ready to sell, you can take advantage of a good window of opportunity. 

A trained real estate agent, who understands your particular neighborhood—can determine the true market value of your property … and at no cost to you!

THE THREE TYPES OF HOME VALUES 

When buying or selling a home, you’ll frequently hear the words appraised value, assessed value, and true market value. It’s important to know the difference between each one so you can make better, informed decisions. 

Appraised Value

A professional appraiser is in charge of determining the appraised value of a home. Lenders require appraisals when a buyer finances a property. And while the lender is the one requiring this information, the appraiser does not work for the lender.1 An appraiser is a licensed professional who is impartial to the buyer, seller, or lender—no matter who pays.

An appraised value assures the lender that the buyer is not overpaying for the property. For example, imagine a seller lists a home for $400,000. They reach a deal with the buyer to sell the home for $375,000. Should the appraised value come in at $325,000, the lender will not lend higher than the appraised value of $325,000.2

Appraisers will compare similar homes in your neighborhood. Evaluating, location, square footage, appliances, upgrades, improvements, and the interior and exterior of the home.  

Assessed Value

Your local municipal property assessor determines the assessed value of your home. This value matters when your county calculates property taxes each year. The lower your assessed value, the less property tax you’ll pay.3 

An assessor evaluates neighborhood homes sold, similar to the size of your home, age, overall condition, and improvements made. Assessors have limited information as they don’t have full access to your home. 

Annual assessments determine how much property tax you owe. Many counties use a multiplier (typically between 60%-80%) to calculate the final assessed value. When the assessor determines the value of the home is $300,000, and the county uses a 70% multiplier, the assessed value of the home would be $210,000 for tax purposes.4

If your assessed value isn’t as high as you envisioned, don’t sweat it. Many homeowners appeal their assessment in favor of a lower valuation so that they can save money on property taxes. Let us know if you want to appeal your property tax assessment. We offer complimentary assistance and would be happy to help you build your case.

True Market Value

Real Estate agents establish true market value. It basically refers to the value that a buyer is willing to pay for the property. A expert real estate agent determines true market value because they have hands-on experience buying and selling properties. They understand what buyers want in your market and know what they’ll pay for a desirable house, townhouse, or condo.

For sellers knowing the true market value importance helps you choose how much to list your property for. It also helps you know any improvements needed to your home before putting it on the market. Your agent can help determine which updates and upgrades will have the biggest impact on your true market value.

WHAT’S THE DEAL WITH ONLINE CALCULATORS? 

You may be looking for answers from Zillow, Redfin, and Trulia to learn what your home is actually worth? When you use an online calculator to determine your home’s value on these sites, it is just an estimate. These sites use their own algorithms for coming up with their estimates. Zillow comes up with “Zestimates” by calculating “public and user submitted data, calculating special features, location, and market conditions.” 5 

Online estimates can be a great starting point to a conversation with your real estate agent about your home’s worth. Zillow recommends that you use a real estate agent for coming up with the actual market value of your home. The site that after you get a “Zestimate,” you should get “a comparative market analysis from a real estate agent.”

It’s essential to have an agent involved in the process because they understand the market better than a computer ever could. They show properties in your city daily, and they know the particular preferences of buyers and sellers in the area. Young professionals, large families, empty nesters, and other groups are all looking for different things in a home. A local agent has buyers, they understand what every buyer segment in your market is specifically looking for. 

HOW AN AGENT FINDS YOUR HOME’S TRUE MARKET VALUE

So, how does an actual real estate agent determine true market value to determine what your home is actually worth? They’ll start by doing a comparative market analysis (CMA). This means they’ll compare your home’s features to similar properties in your area. For the CMA, the agent looks at the below factors to influence their assessment of your home’s worth:6 

  • Neighborhood sales – Your agent factor recently sold homes prices and what they have in common with your house. 
  • The exterior – How does the house look when walking or driving?
  • The interior – This is everything inside the walls of the house. Square footage, number of bedrooms and bathrooms, appliances, and more all influence the overall market value.
  • Age of the home – A newer or older home affects the list price as part of their assessment. 
  • Style of the home – The style of your home is important because buyers in different markets have different tastes. If buyers prefer ranch-style homes and you have one, then your home may sell for a premium (aka more money!). 
  • Market trends – An experienced agent knows your area’s trends and what buyers are willing to pay for a similar home. 
  • Location, location, location – This one’s probably the most obvious. Your agent will think about how popular the area is, how safe it is, and what schools are like. 

A computer algorithm simply can’t take all of these factors into account when calculating the value of your home. Nothing beats having a real estate agent or professional appraiser when it comes to determining a home’s true market value.

YOUR AGENT IS THERE EVERY STEP OF THE WAY

Determining a home’s true market value is a real estate agent’s forte. For seller’s, your agent will help determine your home’s market value so you can list it at the right price. 

For buyers, your agent will help you determine the value for a fair offer and you don’t pay too much. They will set you up with an email search from the Multiple Listing Service of homes that meet your criteria. It will show what homes are available within your criteria and their pricing. 

Get a Complimentary Report With Your Home’s True Market Value

Curious about your home’s true market value? Call us or fill out the form below to request a free, no-obligation Comparative Market Analysis to find out exactly how much your home is worth!

Sources:

  1. Chicago Tribune –https://www.chicagotribune.com/suburbs/chi-ugc-article-what-is-the-difference-between-market-value-a-2013-09-30-story.html
  1. SFGATE – https://homeguides.sfgate.com/market-value-vs-appraised-value-1206.html
  1. ValuePenguin – https://www.valuepenguin.com/mortgages/what-is-the-assessed-value-of-a-house
  1. Movoto – https://www.movoto.com/blog/homeownership/assessed-value-vs-market-value/
  1. Zillow – https://www.zillow.com/how-much-is-my-home-worth/
  1. Realtor.com – https://www.realtor.com/advice/sell/assessed-value-vs-market-value-difference/
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Related posts on Home Staging:

  1. What Is A Real Estate Bubble?
  2. Is the Real Estate Market Going to Crash?
  3. The New Normal: A Strong Housing Market Expected to Continue into 2021

What Is A Real Estate Bubble?

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What Is A Real Estate Bubble?

💥 What is a real estate bubble? 💥 

A real estate bubble occurs when there is a rapid and unjustified increase in housing prices. Often this is caused by speculating investors blowing some hot air 🌬️

Like an overfilled balloon 🎈, the bubble eventually pops, and then a swift drop 📉 in home values occurs. This leads to reduced equity or, in some cases, even negative equity 😱

Fortunately, economists don’t foresee that happening! 🔮

Prices are going up because there’s a very low supply (homes for sale) and high demand (lots of buyers). And those market dynamics aren’t expected to change any time soon.

🏁 Looking for guidance as you navigate this fast-moving market? Contact our team to learn more about current real estate trends and whether now is a good time to buy or sell. 

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Related posts on Home Staging:

  1. What’s Your Home Actually Worth?
  2. Is the Real Estate Market Going to Crash?
  3. Is Now a Good Time to Buy or Sell Real Estate?

Is the Real Estate Market Going to Crash?

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While many areas of the economy have contracted, the housing market has stayed remarkably strong. Can the good news last?

COVID-related shutdowns began in March, real estate brokers and clients scrambled to respond to the change. Record-low interest rates led lenders to stop new underwriting, and homeowners debated whether to put their homes on the market. At the end of the year, average home prices were up 13.4% from the previous year, and with 13 fewer days on market .1

Now, as the spring market approaches, you may wonder whether the reliable times can continue. If you are a homeowner, should you take advantage of this opportunity? If you are a buyer, should you jump in and risk paying too much? Below, we answer some of your pressing questions.

Todays market vs. the 2008 meltdown?

Pandemic fears of an economic recession and a subsequent mortgage meltdown were at the forefront of homeowners. For buyers and sellers the two seemed to go hand in hand, as they did in the 2008 economic crisis.

The conditions of 2008 recession differ from the current downturn, with the housing market the source of good news.2 Historical patterns of housing prices remain stable. Homeowners are staying put, and investors are investing money in bricks and mortars to avoid an uncertain the stock market.

Lessons of 2008 show banks better funded, homeowners holding more equity, and economic activity focused on financial factors outside the housing market. As many industries quickly pivoted to work from home, early fears of widespread job-loss foreclosures have failed to occur. The Federal stimulus and the Paycheck Protection Program helped offset some of the worst early effects of the shutdown.

Are we facing a real estate bubble?

A real estate bubble occurs with rapidly rising housing prices and investor spectulation. When the values drop rapidly the real estate bubble pops. This leads to lower equity, or in some cases negative equity conditions.

Low-interest rates and lack of homes are attributed to current rising home prices. The principle of supply and demand works as it should. Experts predict a strong seller’s market for 2021, with increases in new construction.3 Allowing supply to gradually rise to meet demand, slow down rising home values, and offer a gentle correction.

Effects of low interest rates

Freddie Mac states, projected rates to continue at current low levels throughout 2021.4 Contributing to home affordability in markets considered overpriced. These low interest rates should keep the market lively and moving forward for the foreseeable future.

Effects of low inventory

Low inventory with high demand attribute to higher average home prices.5 Home prices will gradually ease, vaccinations rollout, buyer demand drives homeowners with delayed sales, and new home construction increases to meet demand.6

Aren’t some markets and sectors appearing soft?

Stories of young professionals and families fleeing attached dwellings, high-priced urban areas to move to wide-open spaces of suburban and rural markets. Along with reinforced work-from-home policies that became permanent at some of the country’s biggest companies.

The death of the city and the end of the condo market rumors of these two residential sectors were greatly exaggerated.

With vaccine rollouts, renters returned to major urban areas, attracted by the rise in available inventory and discounted rental rates.7 Laser-focused buyers looking for a single-family home now take a second look at condos.8 Nationwide condo prices lag behind those of detached homes. Observed are significant price increases and days fewer days on the market year over year.

The 2020 migration has spread the economic wealth to suburban and rural enclaves that normally don’t benefit from increases in home values or an influx of new investment. As many of these new residents set up housekeeping in their rural retreats, they’ll revitalize the economies of their adopted communities for years to come.

How has COVID affected the “seasonal” real estate market?

The real estate market is a seasonal phenomenon. The widespread shutdown in March 2020, which came at the beginning of the market’s growth cycle in many areas, has led to a protracted, seemingly endless “hot spring market.”

Fannie Mae’s chief economist Douglas Duncan predicts slower growth from 2020 historic numbers, the outlook is positive as we embark on the 2021 spring selling cycle. Duncan expects an additional boost in the second half of 2021, as buyers return to business as usual and expect to put some of their pandemic savings to work for a down payment. We’re looking at a longer than usual, hot real estate market.

How will a Biden administration affect the real estate market?

A projected housing policy promises to boost the real estate market in many cases.10 Real estate investors bemoan proposed changes to 1031 Exchanges, the Biden plan for a $15,000 first-time homebuyer tax credit aims to increase affordability and bring eager new home buyers into the market. Biden’s policy identifies low inventory as the driving factor of unsustainable home values and geared towards affordability through investments in construction and refurbishment.

According to most indicators, the real estate news will be overwhelmingly positive throughout 2021, and possibly beyond. Pent-up demand, consumer-oriented policies, and a sustained low-interest environment and rising inventory, should help homeowners maintain their increased equity without unbalancing the market. The increase of long-term work from home policies promises to boost many markets now and in the years to come.

HAVE QUESTIONS? WE HAVE ANSWERS

Economic indicators and trends are national, real estate is local. We are here to answer your questions and help you understand what is happening in your neighborhood. Reach out to learn how these larger movements affect our local market and the value of your home.

Sources:

  1. Realtor.com –
    https://www.realtor.com/research/december-2020-data/
  2. New York Magazine –
    https://nymag.com/intelligencer/2020/06/why-this-economic-crisis-wont-be-as-bad-as-2008.html
  3. Washington Post –
    https://www.washingtonpost.com/business/2021/01/11/2021-housing-market-predictions/
  4. Freddie Mac –
    http://www.freddiemac.com/research/forecast/20210114_quarterly_economic_forecast.page?
  5. Wall Street Journal –
    https://www.wsj.com/articles/housing-market-stays-tight-as-homeowners-stay-put-11611226802?mod=re_lead_pos1
  6. Marketwatch –
    https://www.marketwatch.com/story/new-home-construction-activity-soars-to-highest-level-in-over-a-decade-as-builders-rush-to-produce-single-family-homes-2021-01-21
  7. Forbes –
    https://www.forbes.com/sites/noahkirsch/2021/01/14/signs-of-a-rebound-new-york-city-rent-prices-are-climbing-back
  8. Washington Post –https://www.washingtonpost.com/business/2021/01/07/condo-sales-rebound-amid-dwindling-inventory-houses/
  9. Mortgage Professional America –https://www.mpamag.com/news/fannie-mae-chief-economists-forecast-for-us-economy-housing-market-in-2021-244045.aspx
  10. Inman –
    https://www.inman.com/2020/11/09/what-a-joe-biden-presidency-means-for-real-estate-and-housing/

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Related posts on Home Staging:

  1. The New Normal: A Strong Housing Market Expected to Continue into 2021
  2. What Is A Real Estate Bubble?
  3. Is Now a Good Time to Buy or Sell Real Estate?

5 Inspiring Home Design and Remodeling Trends for 2021

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5 Inspiring Home Design and Remodeling Trends for 2021

We’ve all spent a lot more time at home over the past year. Our homes have become our office, our classroom, our gym—and most importantly, our haven. It’s no surprise to discover that 5 Inspiring Home Design and Remodeling Trends for 2021 revolve around soothing color palettes, cozy character atmosphere, and quiet retreats.

We advise our clients to take modern design preferences, over-personalized or unpopular renovations can lower your property’s value. And selecting out-of-style fixtures and finishes could cause your home to feel dated quickly.

To help inspire your design projects this year, we’ve rounded up five of the hottest trends.  Keep in mind, not all of these will work well in every house. If you plan to buy, list, or renovate your property, give us a call. We can help you realize your vision and maximize the impact of your investment.

1. Uplifting Color Design

Colors are gravitating toward warm and happy shades that convey a sense of coziness, comfort, and wellbeing. This year’s palettes draw from earthy hues, warm neutrals, and soothing blues and greens.1

White and gray colors are safe options. However, neutrals are increasing in popularity for walls, cabinets, and furnishings in 2021. For a fresh and sophisticated look, try one of these 2021 paint colors of the year: 

  • Aegean Teal (coastal blue) by Benjamin Moore
  • Urbane Bronze (brownish-gray) by Sherwin-Williams 
  • Soft Candlelight (muted yellow) by Valspar 

On the opposite end of the spectrum, indigo, ruby, sapphire and plum are showing up on everything from fireplace mantels and floating shelves to fabrics and home accessories. These classic, rich hues can help bring warmth, depth, and a touch of luxury to your living space.

To incorporate these colors, designers recommend using the “60-30-10 Rule.” Choose a dominant color to cover 60% of your room. First, walls, rugs, and sofa might be varying shades of beige or gray. Layer a secondary color for 30% of the room. This might include draperies and accent furniture. Third an accent color for 10% of your room, showcased with artwork and accessories.2

2. Curated Design Collections

After a decade of minimalism, there’s been a shift towards highly-decorative and personalized interiors that incorporate more color, texture, and character. Clearly defined styles of mid-century modern, industrial, and a curated style replace modern farm homes with furniture, fixtures, and accessories that seem to have been collected over time.3 

This trend has extended to the kitchen, where atmosphere has become as important as functionality. The ubiquitous all-white kitchen is fading in popularity as homeowners opt for unique touches that help individualize their space. If you’re planning a kitchen remodel, consider mixing in other neutrals—like gray, black, and light wood—for a more custom, pieced-together look. Replace Moroccan square tiles for a modern alternative with old-world flair.4

3. Reimagined Remodeling and Design

The pandemic forced many of us to rethink our home design. From multipurpose rooms to converted closets to backyard cottages, we’ve had to find creative ways to manage virtual meetings and school. And designers expect these changes to impact the way we live and work for years to come.

Home builders predict the end of open-concept floor plans as we know them.5 Buyers are looking for separation and privacy. Cue the addition of alcoves, pocket doors, and sliding partitions that enable homeowners to section off rooms as needed.4 

The necessity of a home office space is also here to stay. But what if you don’t have a dedicated room? Alternative workspaces have become increasingly popular. In fact, one of the biggest trends on Pinterest this year is the “cloffice”—essentially a spare closet turned home office. Searches for “home library design” and “bookshelf room divider” are on the rise, as well.6

Inspiring Staycation

With travel options limited right now, more homeowners are turning their vacation budgets into staycation budgets. Essentially, recreate the resort experience at home—and enjoy it 365 days a year!

Bedrooms should be a soothing sanctuary for rest and relaxation. Minimalist decor and muted colors give way to bolder statement pieces. To create a “boutique hotel” look in your own bedroom, start with a large, upholstered headboard in a rich color or pattern. Layer organic linen bedding, a chunky wool throw, and finish the look with matching wall lights..7 

Carry those vacation-vibes into your bathroom with some of the top luxury upgrades for 2021. Curbless showers and freestanding tubs continue to be popular choices that offer a modern and spacious feel, and large-format shower tiles with minimal grout lines make clean up a breeze. Add a floating vanity and aromatherapy shower head for the ultimate spa-like experience.4

5. Outdoor Design Upgrades

Homeowners want to use outdoor their spaces. Backyard swimming pool sales skyrocketed in 2020, with many installers reporting unprecedented demand.8 New pools aren’t the only way homeowners can increase their outdoor areas this year.

The home design website Houzz recently named 2021 “the year of the pergola.” They’re a relatively quick and affordable option to add shade and ambiance to your backyard.4 Decked-out, custom playgrounds for exercising (and occupying) the youngest family members who may be missing out on school and extracurricular activities.9 

Don’t limit your budgt to the backyard, landscapers are reporting an increase in front yard enhancements, including porch additions and expanded seating options. Social front yards enable neighbors to stay connected and observe social distance guidelines.10

DESIGNED TO SELL

Learn how upgrades impact a homes value. Buyer preferences vary by neighborhood and price range. We can share our insights and offer tips on how to maximize the return on your investment. And if you’re in the market to sell, we can run a Comparative Market Analysis on your home to find out how it compares to others in the area. Contact us to schedule a free consultation!

Sources 5 Inspiring Home Design and Remodeling Trends for 2021:

  1. Good Housekeeping  –
    https://www.goodhousekeeping.com/home/decorating-ideas/g34762178/home-decor-trends-2021/
  2. The Spruce – https://www.thespruce.com/timeless-color-rule-797859
  3. Homes & Gardens – https://www.homesandgardens.com/news/interior-design-trends-2021
  4. Houzz –https://www.houzz.com/magazine/36-home-design-trends-ready-for takeoff-in 2021-stsetivw-vs~142229851
  5. Zillow –https://www.prnewswire.com/news-releases/the-end-of-open-floor-plans-how-homes-will-look-different-after-coronavirus-301080662.html
  6. Pinterest –https://business.pinterest.com/content/pinterest-predicts/more-door/
  7. Homes & Gardens –https://www.homesandgardens.com/spaces/decorating/bedroom-trends-224944 
  8. Reuters –https://www.reuters.com/article/us-health-coronavirus-pools/pool-sales-skyrocket-as-consumers-splash-out-on-coronavirus-cocoons-idUSKCN2520HW
  9. Realtor.com –https://www.realtor.com/advice/home-improvement/2021-design-trends/
  10. Realtor Magazine –https://magazine.realtor/daily-news/2020/12/09/4-outdoor-home-trends-that-may-gain-steam-in-2021

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Related posts on Home Staging:

  1. Is the Real Estate Market Going to Crash?
  2. The New Normal: A Strong Housing Market Expected to Continue into 2021
  3. Top 5 Design Trends For The New Decade

Homeownership Resolutions for 2021

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The start of a new year always compels people to take a fresh look at their goals, from health and career to relationships and finance. But with historically low mortgage rates, increased home sales and price growth, and a tight housing inventory, the time is right to also make some homeownership resolutions for 2021. Check out how to discover key action steps to take to achieve your homeownership goals this year, whether you’re a home buyer, home seller, or a homeowner not yet planning on moving.

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Related posts on Home Staging:

  1. The New Normal: A Strong Housing Market Expected to Continue into 2021
  2. What’s Your Home Actually Worth?
  3. Is the Real Estate Market Going to Crash?