home sales Archives -

May 6, 2022May 5, 2022

The real estate boom and the baby boomer

If you’re a baby-boomer or senior and you aren’t sure what to do about downsizing, you’re certainly not alone. In a recent Atlanta Seniors Real Estate survey, we found:

67% of respondents are planning to move
40% of respondents say they will be downsizing
40% say they’re looking for an owner’s suite on the main level or a ranch style home

With inventory low, you know you can easily sell your home, but what then? Where do you go? Will you be able to find a home that meets your needs? And, with interest rates on the rise, you’ll likely be paying more than you expected just a few months ago.

So, is this a hopeless situation for seniors hoping to sell and move into something smaller?

Absolutely not.

One positive for seniors is that they have seen much higher interest rates in their lifetime, so the fluctuations aren’t as much of a shock to them as it is to younger buyers. And the plusses don’t stop there.

Atlanta Seniors Real Estate owner and Senior Real Estate Specialist (SRES) Hilary Walker, says her clients are in a strong situation if they can just find a home they like and are comfortable moving into. She explains, “In the case of these kinds of buyers, interest rates don’t bother them too much since, in most cases, they plan to use the equity they have in their current home to purchase the next home or they only plan to keep the mortgage for a few years before they pay it off and live mortgage free. In a couple of cases, they are choosing to use a Reverse Mortgage to help stretch their wealth, therefore, the interest rate is not an issue since they can choose not to make any mortgage payments on a monthly basis.”

True that higher interest rates will not necessarily mean more houses on the market, but it may mean 10 offers instead of 20. So, don’t hesitate to begin the process and sign on to work with an SRES agent who is familiar with all of the issues associated with baby-boomers selling and buying real estate.

Contact Hilary Walker today for a complimentary consultation.

>>You can still participate in the Atlanta Seniors Real Estate survey and qualify for a $25 Visa Gift Card. Click here to take part in the brief survey.

May 3, 2022May 3, 2022

What will rising interest rates mean for senior home sellers and buyers?

What my clients are saying

My mature and experienced clients know that rates have been much higher than they are today (just 20 years ago they may have purchased a house with a 7% rate). So, today’s rate at just over 5% is still a good rate in their minds, although we’ve been spoiled with those extremely low 3% rates in recent years.

These clients are savvy and experienced to know also that increasing rates can be a detraction for buyers who want to buy now or very soon. So, now the baby boomers and older homeowners in my circle are calling to ask the very serious question…”How quickly do you think my home will sell if we put it on the market now and where do I go if I sell now?“

Here are two scenarios that I’ve seen first-hand.

First Scenario

A first-time home buyer (over 65) approved for a loan in late March prefers purchasing rather than renting because rent has increased by a significant amount for the last 3-years. We have been on the lookout for a home but have not yet found anything suitable.

Reasons for a delayed purchase in this case are:

wanting a home with all spaces on one level
low inventory in the area of choice with only one or two potential homes coming on the market each week
multiple offers on those few homes or they are in disrepair
and the buyer is searching with a lower-than-average price point (average house values for our local area rose from $278k to $338k)

The first week of May, the lender informed us that the interest rates went up over a quarter percent since the buyer was approved in March so there will be an increase in mortgage payments. This makes the buyer nervous because they are on a fixed income. An interest rate hike above 5.5% may force this buyer out of the homeownership market so time is of the essence.

Second Scenario

Most of my clients are already retired, on a fixed income, or have a budget they are adamant to stick to, so overspending for another home is hard to do. I say “overspending” because that is the word of choice among some of my clients who have watched the market take an unprecedented boom of house prices and, while that is fantastic for the seller, it is a hard pill to swallow for the mature buyer.

However, those who need to move are acknowledging this is the market they are in and must move forward regardless. I have a few clients who are in the situation of needing to sell the large home where they raised their families or enjoyed their mid-life empty nest, replacing the space with their hobby or 2nd career or entertaining friends and family periodically. But the time has arrived that the house is simply too large. They are heating and cooling, and cleaning spaces they rarely use so they want to downsize or resize while they can get a good price for their home.

One of my clients wants to move out of their 5,000 square foot home while identifying a comparable smaller home at a mid-range price point – reasonable, at least so we thought.

The search was difficult for these reasons:

in the madness of the real estate frenzy of 2021/22 even homes in the higher price points were not presented as well as they should have been – a stark difference between photos online and in person
almost every decent home that came on the market received multiple offers within a day or two
their competition was no longer just another occupant buyer but now it was large fund investors vying for that property, too

In the case of these kinds of buyers, interest rates don’t bother them too much since, in most cases, they plan to use the equity they have in their current home to purchase the next home or they only plan to keep the mortgage for a few years before they pay it off and live mortgage free. In a couple of cases, they are choosing to use a Reverse Mortgage to help stretch their wealth, therefore, the interest rate is not an issue since they can choose not to make any mortgage payments on a monthly basis.

If you want to know more about how interest rates may affect your decision or that of a loved one to move forward with a sale or purchase, feel free to contact me.

March 10, 2022March 12, 2022

Russian Invasion May Impact Mortgage Rates

The 30-year fixed-rate mortgage climbed by 37 basis points over the first two full weeks of February, according to Freddie Mac. But last week, as Russia invaded Ukraine, rates dropped to 3.89% for the 30-year fixed-rate mortgage.

“When global investors sense increased uncertainty, there is a ‘flight to safety’ in the U.S. Treasury bonds, which causes their prices to go up, and their yield to go down,” says Odeta Kushi, deputy chief economist at First American. “Consequently, amidst heightened uncertainty due to the worsening events in Ukraine, there is a possibility that investors flock to U.S. Treasury bonds, which may result in a temporary, short-term decline in mortgage rates.”

The Federal Reserve has announced it would be raising the funds rate multiple times this year and says it will address this more at its next meeting, March 15 and 16. But how aggressive the Fed is with rates could change, predicts The Mortgage Reports. The Fed’s key rate does not directly affect mortgage rates but can influence them.

Published by the National Association of Realtors. Source: “How Russia Invading Ukraine Could Impact U.S. Interest Rates,” The Mortgage Reports (March 1, 2022)