2020 Homebuying Checklist

2020 Homebuying Checklist

Presented as a public service by Joe Peters of Coldwell Banker

 

Some Highlights:

  • If you’re thinking of buying a home, plan ahead and stay on the right track, starting with pre-approval.
  • Being proactive about the homebuying process will help set you up for success in each step.
  • Make sure to work with a trusted real estate professional along the way, to help guide you through the homebuying steps specific to your area.

 

There is a lot here.  That is where your agent comes in. Having been through this hundreds of times with other satisfied buyers, I can act as your navigator and ensure you that we wont encounter any speedbumps along the way. And, the best part is that as a buyer,  it does not cost you anything for these services.  Joe Peters


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Smart Homes: Backed-Up Your Fridge Lately?

Smart Homes: Backed-Up Your Fridge Lately?

Presented as a public service by Joe Peters of Coldwell Banker

Computers may make life easier, but they don’t necessarily make things simpler or automatically safer.

This is very true for smart home technology or intelligent home automation which aims to combine internet-connected computers with every aspect of home life. According to Digital Journal, “the smart or automated home applies new technology to control and automate heating, ventilation, air conditioning and security, but can involve appliances as well such as refrigerators, stoves, washers, dryers and many other items.”

As Fall Home Shows start to roll out, expect to see familiar and new smart home technology showcased as the latest “must-haves.”

According to Statista.com, smart home household penetration is 32.0% in 2018 and is expected to hit 53.1% by 2022. The global market is projected to grow at a compounded annual growth rate of 14.5% between 2017 and 2022 to reach $53.45 billion by 2022.

Smart, connected appliances and systems can make life easier and more convenient for families, but not automatically simpler or safer.

Each year, smart technology appears in more incarnations, but we are a long way from industry-wide standards with significant cross-compatibility, avid consumer adoption, and problem-free systems and technologies.

When you explore smart home potential at a Home Show or online, here are key issues to consider:

1. Hacker target : Instead of being locked out of your computer if you don’t pay a cyber ransom, what if you were locked out of your smart house unless you paid up? Computers operating with out-dated software, like older versions of Microsoft’s Windows Operating System, are easy targets for hackers. These problems are further complicated by interconnectivity: infection spreads quickly through computers and networks, locally and globally. How will you ensure the nasty things that hackers can make happen to your laptop or smartphone won’t happen to the smart technology running heating, cooling, or security systems in your home—all of which

will probably be controlled by your laptop or smartphone?

2. Code flaws : The software driving smart home technology consists of millions of lines of code which, by their sheer number and complexity, are vulnerable to glitches and failures—many of which are hard to detect before significant damage occurs. Will software and system manufacturers take responsibility for ongoing investigation into glitches, correcting them, and providing online patches to reduce downtime and keep systems at top efficiency?

3. Multitasking systems : Before smart technology took hold, if the fridge died, you’d lose a tub or two of pistachio ice cream. As refrigerators become increasingly complex equipment—which may also monitor family wellness, check food inventory, pay bills, and fulfill other functions—cyber attacks may have even more impact on families. Back-up systems may be essential precautions. Home insurance will provide some security, but limitations will exist. Just as home policies may not pay on problems caused by poor maintenance or unlocked doors, out-of-date software may invalidate claims if home smart systems fail and cause damage.

4. Support failings : To reduce service costs, manufacturers rely on internet-connectivity for product maintenance, remote diagnostics, and online software updates. As the human-touch of tech support is replaced by AI (artificial intelligence), will homeowners receive the support they need to make living with smart home systems as effortless as expected? Privacy issues could be more far-reaching than those associated with laptops and smartphones since manufacturers value saleable user data. Subscription fees for apps and external monitoring may prove costly.

5. Equipment failure : Using a smartphone or iPad as a smart controller, homeowners can change room temperature, turn on the oven, or unlock the front door from miles away or as they pull into the driveway. However, if that mobile-computing device is lost, stolen, broken, or batteries die, there are two concerns: 1. could those and other essential smart-systems still be turned on or adjusted by the family, and 2. who else would have access to this information and your home? What back-ups are necessary when power fails? The other flaw in home security could be you. If you don’t set alarms, manage passwords, review data about system efficiency, and carry out maintenance system-wide and with individual equipment, your failure may undermine the security and efficiency of the smart system.

6. Transaction precautions : When smart technology is included as part of a home purchase or rental agreement, a detailed inventory of this equipment is essential. Model numbers and age are among the details necessary for estimates of value. If you are selling your home with its smart technology intact, erase your user, security, and payment profiles from each appliance and system by restoring factory settings, so you leave no data trail.

Soon it will be hard to buy an appliance that doesn’t incorporate smart technology, but integrating appliances and systems may remain a smart home challenge for a while.

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The #1 Reason It Is Difficult to Find Your Dream Home

The #1 Reason It Is Difficult to Find Your Dream Home

The headlines in real estate today all revolve around one major point: there is a shortage of homes available for sale. Price appreciation is accelerating again because there is a shortage of homes available for sale. First-time buyers are taking longer to purchase a home because there is a shortage of homes available for sale in the lower price points. Boomers are staying in their current homes longer because there is a shortage of homes available for sale to which they would move. In certain markets, affordability is becoming more challenging because there is a shortage of homes available for sale.

What’s the major reason for this lack of housing inventory?

The issue was examined in a recent article by the National Home Builders Association (NAHB). In the article, Robert Dietz, Chief Economist for NAHB, explained:

“Home building in the 2010s was a story of the Long Recovery. After the Great Recession, the number of home builders declined significantly, and housing production was unable to meet buyer demand…Years of population and household formation growth, combined with relatively reduced levels of home building, have left the market with a critical supply shortage.”

Here are the single-family home construction starts by decade for the last six decades:The #1 Reason It Is Difficult to Find Your Dream Home | MyKCMObviously, there’s a current shortage of homes for sale because not enough houses were built over the last ten years. To add to the challenge, the U.S. population expanded by more than 20 million people during the 2010s.

Below is a graph showing the number of starts per every million in population. The last decade shows that starts per population were less than half the average of the previous five decades.The #1 Reason It Is Difficult to Find Your Dream Home | MyKCM

There’s good news coming!

The NAHB article explains that there is light at the end of the tunnel.

How confident home builders are in the housing market is a great indicator of how much building is about to get started. The NAHB/Wells Fargo Housing Market Index (HMI) gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair,” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average,” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as “good” than “poor.”

Here are the HMI readings going back to 2008:The #1 Reason It Is Difficult to Find Your Dream Home | MyKCMThe 2019 confidence reading of 76 was the highest since 1999. The January 2020 index came in one point lower at 75. These readings indicate we should see an increase in new residential construction in 2020. Just last week, NAHB Chairman Greg Ugalde stated:

“Low interest rates and a healthy labor market combined with a need for additional inventory are setting the stage for further home building gains in 2020.”

The increase in housing starts has already begun. According to the January report from the U.S. Census Bureau and the U.S. Department of Housing and Urban Development, single‐family housing starts were up 11.2% and attained the highest level in thirteen years.

Bottom Line

Whether you’re a first-time buyer or a seller thinking of moving up or down, 2020 could be your year with more new construction homes coming to market.


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Housing Inventory Vanishing: What Is the Impact on You?

Real Estate Forecast

Housing Inventory Vanishing: What Is the Impact on You?

Presented as a public service by Joe Peters of Coldwell Banker

The real estate market is expected to do very well this year as mortgage rates remain at historic lows. One challenge to the housing industry is the lack of homes available for sale. Last week, move.com released a report showing that 2020 is beginning with the lowest available housing inventory in two years. The report explains:

“Last month saw the largest year-over-year decline of housing inventory in almost three years with a dramatic 12 percent decline, pushing the number of homes for sale in the U.S. to the lowest level since January 2018.”

The report also revealed that the decline in inventory stretches across all price points, as shown in the following graph:Housing Inventory Vanishing: What Is the Impact on You? | MyKCMGeorge Ratiu, Senior Economist at realtor.com, explains how this drop in available homes for sale comes at a time when more buyers are expected to enter the market:

“The market is struggling with a large housing undersupply just as 4.8 million millennials are reaching 30-years of age in 2020, a prime age for many to purchase their first home. The significant inventory drop…is a harbinger of the continuing imbalance expected to plague this year’s markets, as the number of homes for sale are poised to reach historically low levels.”

The question is: What does this mean to you?

If You’re a Buyer…

Be patient during your home search. It may take time to find a home you love. Once you do, however, be ready to move forward quickly. Get pre-approved for a mortgage, be ready to make a competitive offer from the start, and understand that a shortage in inventory could lead to the resurgence of bidding wars. Calculate just how far you’re willing to go to secure a home, if you truly love it.

If You’re a Seller…

Realize that, in some ways, you’re in the driver’s seat. When there is a shortage of an item at the same time there is a strong demand for that item, the seller of that item is in a good position to negotiate. Whether it is price, moving date, possible repairs, or anything else, you’ll be able to demand more from a potential purchaser at a time like this – especially if you have multiple interested buyers. Don’t be unreasonable, but understand you probably have the upper hand.

Bottom Line

The housing market will remain strong throughout 2020. Understand what that means to you, whether you’re buying, selling, or doing both.

 

If you’re wondering what’s happening in our local market, let’s get together today. My monthly market recap for both Hunterdon and Somerset County can be found here. Your particular situation depends on many things, including your location, price point and the condition of your house. Let me sit down with you and use my in-depth experience to do a professional analysis as to where you fit into the local market that your house is in and help you to understand how to best market your property in order to achieve the highest price and least time on the market. Joe Peters


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