Monthly Archives: January 2020

Kansas Housing Stats

“With the strong sales in January, inventories are the tightest they’ve ever been for this time of year,” said KAR president, Marsha McConnell with Plaza Astle Realty in Hutchinson. “At the end of the month there was only a 2.4 months’ supply of homes available for sale across the state.”

Home sales in Kansas rose by 6.4% percent in January 2020 compared to the same period last year.

Home prices continue to increase across the state. The statewide average sale price in January was $212,034 a 5.6% increase compared to last year.

There are currently 8,386 active listings in the state compared to 9,828 listing last year.

NFIP Temporarily Extended, but Lawmakers Seek Long-term Answer

Homeowners and business owners who rely on the National Flood Insurance Program to cover potential losses from a natural disaster are breathing a sigh of relief, albeit a temporary one.

When Congress passed its budget bill in late December, it extended the National Flood Insurance Program (NFIP) through Sept. 30.

Congress has passed sixteen short-term extensions in over the past two years, as members of Congress debate major reforms.  This is the longest extension since September 2017.  Because the NFIP has been attached to the budget, Congress has effectively reduced the chances of a lape.

It has lapsed previously – for about two months in 2010, when approximately 40,000 property sales were put on hold since homeowners with mortgages were unable to secure mandated flood insurance to close a deal. Since then there have been a few brief lapses as Congress and President Donald Trump have negotiated over appropriations for the federal government.

“Flooding is a humbling and equalizing force,” said House Financial Services Committee Chair Maxine Waters in a press release. “In the wake of the many catastrophic natural disasters we experienced just in the last three years, we’ve seen the best of America during the worst of times, with everyone putting aside their differences, to come together to help one another in a time of need. Now it’s time for Congress to do the same thing.”

Waters introduced the NFIP Reauthorization Act of 2019 in Congress and that bill (HR3167) has bi-partisan support and has the best chance of any flood bill of coming to fruition.

“[It will] provide a… long-term and responsible reauthorization of the NFIP and make sure affordable flood insurance continues to be available to communities across our country.

“NFIP is now in the process of modernizing its pricing system dubbed “Risk Rating 2.0,” to enable the agency to begin aligning its rates to the specific flood risk of each individual property.”

Originally established in 1968, the NFIP is the primary provider of flood insurance in the country.  There is an emerging private market in some parts of the country, but the Federal Emergency Management Administration (FEMA), which runs the NFIP, which is the largest provider of flood insurance at the present time.

While Congress debates reforms, FEMA is working on changing the way it calculates insurance rates in 2020. Part of that reform would include better mapping and mitigation.

Currently, the rates are determined by using national averages, which overcharge the lower value and risk properties while undercharging the rest.  The technology used to set these rates is over 50 years old.  NFIP is now in the process of modernizing its pricing system dubbed “Risk Rating 2.0,” to enable the agency to begin aligning its rates to the specific flood risk of each individual property and charge a much more accurate and reliable rate down to the property specific level.

It generally takes 30 days for a flood insurance policy to take effect after it is purchased with notable exceptions including at the time of property purchase.

Last fall FEMA delayed this Risk Rating 2.0 initiative until Oct. 1, 2021 to ensure they can roll it out for the entire country at once.  Officials indicated that their priority is to get it right and this newest extension would buy FEMA the time to work out details and other potential reforms which would help close the insurance gap in the U.S.

“We urge Congress to use the time afforded by this agreement to work toward sustainable, bipartisan solutions to programs like the NFIP, which protect millions of Americans every year,” said Vince Malta, the 2020 President of the National Association of REALTORS® in a press release.

3 Ways to Make Selling Your Home During the Winter Months Easier

Preparing and listing your home for sale during the winter months can feel overwhelming. The holiday preparations and gatherings of the past few months haven’t given homeowners much free time to prepare their house for the winter market. Maintaining a house that is cleaned and staged to attract buyers can also be tough when snowy sludge and salt are tracked into the house every day.

Fear not. Below are three ways that you can make this winter’s home selling process less stressful.

Let it Go

Of course, you want to get the largest return possible when selling your house – it’s one of the biggest investments many of us make in our lives. Making sure the snow is cleared, floors gleam and your closets look nicer than they ever did the entire time you lived there is one of the ways sellers get their asking price. That said, this is the time of year to make things easier, not harder, on yourself.

Consider hiring a snow removal and cleaning service if you don’t have them in place. Even if it’s a point of pride that you clean your home and shovel your driveway better than anyone else, it may be unrealistic to expect yourself to keep your house and walkways in perfect shape for buyer visits during the winter months.

Amazon hosts a marketplace with home cleaning and snow removal services where you can comparison shop. Your local Facebook community page can also be a great source of referrals.

Less Stuff Means Less Work

Stash away what you don’t need so there is less clutter to tidy up. Companies like PODS will bring a furniture-sized storage container right to you and then take it away once it’s full. Consider pairing everyday items down to the essentials. Place things like toys, dishes, blankets – anything that creates extra work for you to do while tidying up or doing laundry in your storage container.

HGTV suggests that this may be the year that you scale back your holiday decorations as well. “Adornments that are too large or too many can crowd your home and distract buyers. Also, avoid offending buyers by opting for general fall and winter decorations rather than items with religious themes.”

Join Forces with Your REALTOR®

The winter holidays can be an especially busy time of year for both you and your REALTOR®, so the more you can do to make sure you’re both on the same page, the better.

  • Sync your calendars. Sit down and talk about which days will be off-limits for buyer visits and open houses. Your REALTOR® is willing to go the extra mile to be available for you, but you may need an occasional break. Map out a few days where you can count on having the house to yourself to regroup.
  • Have your phone at the ready and carry a spare charger so you aren’t caught with a dead battery. Your REALTOR® needs to be able to communicate with you and vice versa.
  • Grab a coffee and ask for tips. If you’re working with a seasoned REALTOR®, this won’t be their first off-season listing. Ask them what you can do to help them sell your house faster and be open to suggestions. Each area may have unique tricks to help you optimize your home. For example, sellers on the East coast or Midwest may need to keep their thermostat cranked up a bit higher than they normally would at this time of year to ensure their house is always cozy and welcoming.

Selling your home during the holidays, and winter months that follow, doesn’t have to take over your life. Strike a balance by outsourcing what you can, making less work for yourself and taking advantage of your REALTOR’S® time and advice.

How Massachusetts’s Hiring Boom is Impacting Home Buyers

Massachusetts has been enjoying an impressive hiring boom since the unemployment rate dropped to 3.4% in 2018, the lowest it’s been in 15 years. The current unemployment rate is 2.9%, demonstrating that the state’s job market continues to thrive. Labor and Workforce Development Secretary Rosalin Acosta reported that “Over the last year, the labor force has increased by 18,000.”

“Governor Baker’s administration has been taking a proactive approach to help the Massachusetts housing market find balance.”

While these statistics are great news for job seekers, the employment boom is actually making it harder for new and existing residents to find an available and affordable home to buy. Northeastern professor Alicia Sasser Modestino’s recent housing study directly connects the increase in jobs with the difficulties prospective homeowners are experiencing.

“We’ve had a lack of supply that’s been a chronic problem for decades, but when you combine that with a booming economy that’s drawing in more residents from other parts of the United States as well as abroad, then that just means that prices and rents skyrocket.”

The higher cost of land in business-heavy areas like Boston means that developers are more apt to invest in the construction and redevelopment of homes and multi-family rental units that will yield a large return. This approach has improved the inventory of higher priced homes, while leaving a gap in the middle market.

Governor Baker’s administration has been taking a proactive approach to help the MA housing market find balance. Back in May of 2018, Baker signed a housing bill dedicating $1.8 billion dollars to the state’s Workforce Initiative Program. Program funds go directly towards the “production and preservation of affordable housing for low- to moderate-income households, supportive housing and housing serving vulnerable populations.”

When the GE Headquarters were sold, the administration invested a large portion of the state’s profits into the program, contributing an additional $86 million – $60 million of which went directly towards the creation of workforce housing. The state plans to create “500 new workforce homes that will be affordable and accessible for moderate-income, first-time homebuyers. The remaining $26 million will support the creation of roughly 260 new workforce housing rental units.”

MassHousing, a semi-public agency dedicated to providing loans for affordable housing projects in MA, has also been working to bring solutions to the state’s housing shortage. Most recently, they’ve committed $7.9 million to The Neighborhood Developers (TND) and $35.8 milion to Trinity Financial. Both organizations are using the funds to build affordable housing complexes. Combined, the two projects will bring more than 160 attainable housing units to residents.

There is no denying residents are still feeling the housing crunch, especially in population dense areas like Boston. However, with the state and agency’s like MassHousing continuing to invest in housing solutions, prospective home buyers may just find the process will get easier over time.

3 Ways Winter Benefits Home Buyers

Most people think of springtime as the ideal time of year to search for a new house. However, the winter season offers some unique advantages to homebuyers. Below, are three of the top reasons why the off-season can actually be a great time to explore the market.

1. Sellers Are Motivated

The National Association of REALTORS (NAR) reports that November, December, January and February are the slowest month for sellers. This means that sellers choosing to list during these times, rather than the busy, competitive spring months, are highly incentivized to sell.

Shannon Kutchek, Broker SRES at Smother’s Realty Group in Illinois shares, “The sellers that I work with during the winter months are usually listing in the off-season because of a life change such as a job relocation. Because they need a faster sale, they’re more open to negotiating a lower price.”

The article “10 Best Days to Buy a Home” by ATTOM Data Solutions, a leading property data company, confirms Shannon’s experience, noting that buyers can expect to save an average of 11.3% by buying a home on December 26.

2. Fast, Cheap Home Financing

NAR’s Chief Economist Lawrence Yun reports that mortgage rates are currently at historically low levels. At the time this article was written, Bankrate.com was listing 30-year fixed mortgages at 3.70% with an APR of 3.81%.

In addition to the low rates, winter home shoppers can obtain approval for their home loans faster than ever before. Bankrate.com found that “LoanDepot is offering what may be the fastest quick-closing mortgage in the race. Their new product mello smartloan, an end-to-end digital mortgage, offers qualified borrowers a home loan in as few as eight days.”

Buyers can help the loan process go faster by gathering materials together before they approach a lender. Typically, lenders want to see: W-2 forms, bank statements and pay stubs. Buyers should look up their FICO® credit scores for Experian, TransUnion and Equifax so they know ahead of time what kind of rate they’ll be eligible for.

3. Cold Weather Preview

Shannon tells her Midwestern buyers, “The winter months are a great time of year to see how a home is faring in colder, harsher weather conditions.” Buyers can see how well the home is insulated, a chilly surprise that buyers of older homes often discover during their first winter. They can also note how well the heating system is performing and if windows are drafty and need to be replaced.

These insights not only give home buyers the full picture but may help with negotiations. For example, if the home heating system will need to be replaced that cost can be factored into the final offer.

Don’t wait to start house hunting in the spring when the competition is higher, and houses are going off the market faster. Take advantage of the off-season’s benefits and see what’s out there now.

Buyer demand continues to be strong in New York State

In 2019 home prices were up again in most markets. Buyer demand continues to be strong but with tepid seller activity still in many locations, total sales are lower than they would normally be in a more balanced market. While up from their recent lows a few months ago, mortgage rates end the year close to three-quarters of a percent lower than a year ago, helping to improve affordability and offset rising home prices.

Read more: “Economic expansion, low inventory fuel 2019 NYS Housing Market” from the New York State Association of REALTORS®.