What does it mean to build a home at $800K+? How do those homes look? Are those custom built homes or nah? Join me as a I take sir down with Taylor Robinson to discuss luxury homebuying in Dallas with a production builder.
Should You Renovate or Move?
The last 18 months changed what many buyers are looking for in a home. Recently, the American Institute of Architects released their AIA Home Design Trends Survey results for Q3 2021. The survey reveals the following:
- 70% of respondents want more outdoor living space
- 69% of respondents want a home office (48% wanted multiple offices)
- 46% of respondents want a multi-function room/flexible space
- 42% of respondents want an au pair/in-law suite
- 39% of respondents want an exercise room/yoga space
If you’re a homeowner who wants to add any of the above, you have two options: renovate your current house or buy a home that already has the spaces you desire. The decision you make could be determined by factors like:
- A possible desire to relocate
- The difference in the cost of a renovation versus a purchase
- Finding an existing home or designing a new home that has exactly what you want (versus trying to restructure the layout of your current house)
In either case, you’ll need access to capital: the funds for the renovation or the down payment your next home would require. The great news is that the money you need probably already exists in your current home in the form of equity.
Home Equity Is Skyrocketing
The record-setting increases in home prices over the last two years dramatically improved homeowners’ equity. The graph below uses data from CoreLogic to show the average home equity gain in the first quarter of the last nine years:Odeta Kushi, Deputy Chief Economist at First American, quantifies the amount of equity homeowners gained recently:
“Remember U.S. households own nearly $35 trillion in owner-occupied real estate, just over $11 trillion in debt, and the remaining ~$24 trillion in equity. In inflation adjusted terms, homeowners in Q2 had an average of $280,000 in equity- a historic high.”
As a homeowner, the money you need to purchase the perfect home or renovate your current house may be right at your fingertips. However, waiting to make your decision may increase the cost of tapping that equity.
If you decide to renovate, you’ll need to refinance (or take out an equity loan) to access the equity. If you decide to move instead and use your equity as a down payment, you’ll still need to mortgage the remaining difference between the down payment and the cost of your next home.
Mortgage rates are forecast to increase over the next year. Waiting to leverage your equity will probably mean you’ll pay more to do so. According to the latest data from the Federal Housing Finance Agency (FHFA), almost 57% of current mortgage holders have a mortgage rate of 4% or below. If you’re one of those homeowners, you can keep your mortgage rate under 4% by doing it now. If you’re one of the 43% of homeowners with a mortgage rate over 4%, you may be able to do a cash-out refinance or buy a more expensive home without significantly increasing your monthly payment.
First Step: Determine the Amount of Equity in Your Home
If you’re ready to either redesign your current house or find an existing or newly constructed home that has everything you want, the first thing you need to do is determine how much equity you have in your current home. To do that, you’ll need two things:
- The current mortgage balance on your home
- The current value of your home
You can probably find the mortgage balance on your monthly mortgage statement. To find the current market value of your house, you can pay several hundreds of dollars for an appraisal, or you can contact a local real estate professional who will be able to present to you, at no charge, a professional equity assessment report.
Bottom Line
If the past 18 months have refocused your thoughts on what you want from your house, now may be the time to either renovate or make a move to the perfect home.
McKinney Home for Sale: 2305 Collier Drive
This new McKinney home for sale is one that is perfect for someone searching for their first home or looking to down-size. It has a comfortable space without being overwhelming but plenty to fill it up with love. You’ll love this charming, 1-story home. This 3 bedroom, 2 bathroom home will give you 1,742 sq ft of generous space. It features two living and dining areas for the perfect open concept space. Owners have taken pride in this beauty. It’s situated in the friendly and quiet community of Sandy Glen and within minutes of Highway 75 and local shopping.
The current owners purchased the home in 2004 and are the original owners. When asked what was it that the loved about the home? Originally it was the space, schools, and the fact that they had a home for their then 3-month year old daughter. You could tell from our conversation that they loved the neighborhood as well as their neighbors are very caring and great neighbors too. I noticed this as we hosted the Open House on Saturday and neighbors were sad to see them go. One even suggested parking their additional car in his yard so that the future homeowners could drive up to the home.
That proved to me that the new homeowners will feel connected to the home and neighborhood. I always illustrate that not only are you buying the home, you are buying the neighborhood as well. Sandy Glen is one close-knit neighborhood that really makes a difference in home buying.
Serene Community at the Wildridge (Oak Point, TX)
This past week I was invited to a VIP Realtors’ Grand Opening for the Wildridge Community in Oak Point, Texas. Where’s Oak Point, you ask? Well it is just Little Elm’s quiet cousin to the northwest. This community is so serene in nature and environment. As the community’s website claims, “Tucked away in a pristine oasis created on the quiet peninsula of Lake Lewisville in one of the best school districts in Texas. Wildridge is a place where real friendships are born and grown, where walks and talks are part of every day living, and where life is surrounded by wide open spaces and natural rolling hills, blanketed with wildflowers and shady trees. It’s a spontaneous world of natural beauty, perfect for outdoor and waterfront lifestyle. With peaceful parks that inspire you to slow down and enjoy an authentic way of life. Wildridge, a place where you can enjoy the simple pleasures of life, naturally.”
How peaceful does that sound? The best part of this community that I love is that you are so close to everything but yet so far when it comes to the quiet peace of mind that your home gives. Check out the videos below as I talk about the grand opening and walk through one of the models.
Are you interested in this community? Let’s schedule a time to have a tour of the model homes of Plantation Homes, Highland Homes, or K. Hovnanian by contacting me at 972.813.9788 or [email protected]. I specialize in new home communities in Little Elm, Aubrey, and the surrounding areas.
How Will Mortgage Rate Hikes Impact Home Sales?
When mortgage interest rates begin to climb, experts immediately begin to discuss home affordability indexes. They calculate how an increase in rates will slow home purchases as more and more potential buyers are priced out of the market. Today, with home prices also increasing, many believe that home sales may slow down rather dramatically.
This may prove to be true in the long term. However, in the short term, increasing mortgage rates may have the opposite effect. Many buyers who have been sitting on the fence may realize that delaying their purchase no longer makes sense.
Last week, in a CNBC article, Matt Weaver of Florida-based PMAC Lending explained the impact an increase in rates will have:
“These increases really help the home-buying market. It really gets buyers to really understand that ‘wait a minute, rates are at an all-time low, let’s react now, let’s react before they go higher’.”
As an example, we can look to 2013 when interest rates spiked up by a full percentage point over a two month period. The result is that many buyers rushed to the market on the fear that rates would continue to climb. It didn’t necessarily increase the number of sales that year dramatically.
However, it did seem to move some sales up in the year as evidenced by the chart below:
We can see that the sales cycle did not follow a more normal cycle (2014) with more sales being pushed into July and August and slightly less sales in September and August.
Bottom Line
If you are waiting to put your house on the market, think twice. Now may be the perfect time to sell as buyer competition will continue to heat up as more purchasers jump into the market. You may also save a pretty penny on the monthly mortgage payment of your next home by selling now before rates shoot up.
There’s No Place Like Home
Last week, I reported on the financial reasons purchasing a home in today’s market makes sense. The Joint Center for Housing Studies at Harvard University performs a study every year surveying participants for the reasons that American’s feel are most important in regards to homeownership.
The top 4 reasons to own a home cited by respondents were not financial.
1. It means having a good place to raise children & provide them with a good education
From the best neighborhoods to the best school districts, even those without children at the time of purchasing their home, may have this in the back of their mind as a major reason for choosing the location of the home that they purchase.
2. You have a physical structure where you & your family feel safe
It is no surprise that having a place to call home with all that means in comfort and security is the #2 reason.
3. It allows you to have more space for your family
Whether your family is expanding, or an older family member is moving in, having a home that fits your needs is a close third on the list.
4. It gives you control over what you do with your living space, like renovations and updates
Looking to actually try one of those complicated wall treatments that you saw on Pinterest? Want to finally adopt that puppy or kitten you’ve seen online 100 times? Who’s to say that you can’t in your own home?
The 5th reason on the list, is the #1 financial reason to buy a home as seen by respondents:
5. Owning a home is a good way to build up wealth that can be passed along to my family
Either way you are paying a mortgage. Why not lock in your housing expense now with an investment that will build equity that you can borrow against in the future?
Bottom Line
Whether you are a first time homebuyer or a move-up buyer who wants to start a new chapter in their life, now is a great time to reflect on the intangible factors that make a house a home.
“There’s No Place Like Home.” Keeping Current Matters. N.p., n.d. Web. 30 Apr. 2015.
THE CROWN JEWEL — 901 CLACK DR
Have you ever walked into a home and thought this is it? Of course every home buyer gets that feeling when purchasing a home. In most cases, you are hoping that when you get that feeling, that will be the home you purchase.
Well this home will have you have that feeling as soon as you enter the front door. As the second listing agent for this property, I definitely felt that as I entered the home. I fell in love instantly BUT the home is on the market for a new king/queen of the castle. Will this home be your crown jewel? Schedule your showing today.
View more photos here: http://goo.gl/RBcl2E
Gorgeous Home in Caruth Terrace: Review of an Open House
A few weeks ago I was asked to host an open house for a listing by a fellow agent in my Keller Williams office. This home was in an ideal neighborhood in Dallas. If you’ve ever wanted to live in Dallas (not its suburbs) then this location would be ideal.
This home is nestled near some of the hot places in Dallas like near Greenville Ave and Mockingbird Station but still feel like it’s away due to the nature of the neighborhood. During the open house I was able to chat with neighbors about the neighborhood. They loved the quiet neighborhood and ability for their children to play outside. I mean a great place for schools, local attractions, and great neighborhood, what else is needed in the world?
Potential buyers loved the flow of the home and one neighbor’s son loved the circle flow of the home that he tired himself out from running around. This home is a perfect 2 BR/2 BA (gorgeous remodel) home with two living rooms and spacious backyard. Here’s some pictures I took from the open house.
Can you picture spending a relaxing Saturday morning here? That window in the living room is amazing for a relaxing Saturday and tea with family and/or friends. Let’s chat and talk about this home as your next home. I can’t wait to show it to you.
