In late November, the National Association of Realtors (NAR) reported that home sales could reach a 15-year high in 2021, in excess of 6 million existing homes sold. And despite rising interest rates on mortgage loans, the activity does not look ready to recede yet. In all the major regions of the U.S., homebuyers continue to write contracts undeterred by high home prices.1
Remember that even if you are not interested in selling your home, the equity that has built up recently is an asset, and one you can tap if you ever need it. Owning your own home provides a sense of security, the same as having insurance does. You may never need it, but having an insurance asset to back up your income is a prudent way to shore up your long-term financial security. If you’re looking for ways to do this, we have ideas. Please feel free to contact us to learn more.
The past two years have been a bit of a seesaw. On one hand, we have experienced the first global pandemic since the early 1900s, accompanied by a swift economic decline. But on the other hand, the U.S. has enjoyed robust market performance and unprecedented growth in home values. In fact, the pandemic has actually reshaped the housing market to reflect new homeowner preferences that are expected to endure.2
For example, did you know that most U.S. homeowners are middle-aged and married with at least some college, and more than a third of homeowners (38%) live in the South? Today, only 13% of homeowners are in their 30s, and only 17% are in their 40s.3
The typical home is over 1,700 square feet and has three bedrooms and two bathrooms. Just under half (44%) of homeowners live in the first home they bought, while a quarter are in their second home. The majority of homebuyers who already own a home say they’re looking for more upgrades or a different neighborhood. A large number — 78% — say they want to move for family reasons. However, some homeowners are hesitant to put their homes up for sale because they don’t think they’ll be able to find another one.4 After all, if you sell your home now to take advantage of high market prices, where will you live then?
Real estate experts do not expect the typical seasonal slowdown to occur this winter. Particularly in more affordable areas of the country, such as the Midwest and the South, there is an unusual amount of activity in home-showing traffic for this time of year.5
As for new trends in residential real estate, it’s not surprising that homebuyers are looking for a dedicated office or workspace as part of their criteria. The good news is that today’s remote worker no longer needs a large space for storage and filing needs, now that most documents are paperless and cloud-based. That means an office can be tucked into a nook in a spare bedroom, the living room or even the dining area.6
However, many work-from-home employees are conscious of an appropriate background for their video conference calls. The ideal “Zoom room” should be a quiet space with a background that is both reasonably neat and professional but with enough personal items to demonstrate character and relatability. After all, with fewer people interacting in the office, it’s important to establish amiable working relationships from a distance.7
Other trends in real estate include the growing popularity of solar panels or modules that convert sunlight into electricity and even conserve energy through battery storage. Solar heating was first discovered back in the 1950s by researchers at Bell Laboratories. But over the past decade, solar power has grown by an average of 50% per year and is likely to increase exponentially. Some areas have mandates for renewable energy; for example, California has passed legislation that will require developers to include solar power and battery storage in new commercial and high-rise residential projects starting in January 2023.8
For context, note that the return on a solar investment may be pretty good for homeowners. It typically costs between $15,000 and $25,000 for equipment and installation for a residential solar panel system. If paid out of pocket, that could take up to 10 years of power savings to get a return on your investment. However, homeowners can lease a system for less and save on the upfront investment. In terms of residential sales, homes with solar systems already installed tend to sell faster than those without.9