What Ted Said

What Ted Said

If you’re exhausted with media hurtling dire economic forecasts with a political agenda, you want to know What Ted Said.

If you don’t know who Ted Jones is, you might want to listen up. He is the chief economist for Stewart Title, internationally known as an applied real estate research expert, and gives 150 talks a year to major real estate organizations. There is a long, rich, resume in the fine print.

He was in town for two presentations, I attended on Tuesday, 11/19.

All of us are plagued with pundits whose opinions have an agenda to keep us on edge for political gain. What Ted Said quells the false storm. Key indicators are jobs and cheap energy.  We have both.

So, what did Ted say?

  • THERE ARE NO INDICATORS OF RECESSION. Recession is defined as 2 + quarters of negative growth. It isn’t happening, nor does it seem to be looming over 2020.

Retail sales are 68% of the GDP, and it’s up 4.5% YoY September 2018-2019. That’s the highest rate that they have ever been. Old Navy announced plans to open 800 new stores in 2020. Online sales jump 36% when linked to brick and mortar, storefronts aren’t going away. Unemployment is at the lowest point in 50 years, 3.5%. In Minnesota, it is 2.4%. Wages increased by 1.8% in the last 12 months, the highest in 10 years. Hospitality and Leisure jobs surged +2.4% year over year to meet demand. Leisure spending shows consumer confidence.

  • Real estate gained 6% in sales YoY. There were 521,000 sales in October 2018 and 552,000 as of October 2019. That’s a +6% gain. Average home prices also increased to $272,000 a +6% gain. Interest rates are forecasted to slide into the 3-4% range. There will be 1.5 million new households in 2020, adding more pressure to find affordable housing. Boomers and Millenials are looking for the same thing, smaller, low maintenance, and affordable homes. McMansions are a thing of the past.
  • The i Buyer slice of sales is about 1%. I buyers are not new, “We Buy Ugly Houses,” Hedge funds like Blackstone (bought 1200 homes in MN during the recession), and investors have been around for a very long time. What’s different is the institutional buyer on a bigger scale. Even if Zillow reaches its goal of buying 5000 homes a month, it’s still only 1% of the market. It boils down to how much people are willing to pay for convenience. So far, the cost vs. benefit isn’t wildly appealing for most homeowners.
  • Minnesota economy is strong, with a few weak spots. Out of the 52 states, MN is ranked #45 in tax friendliness. Texas does way better, they have a 3% real estate tax, that’s it. The Texas Constitution doesn’t allow spending more than it takes in. Isn’t that an exciting thought? MN lost 14,000 jobs, and we have a 17% spike in mortgage delinquency. Farmers are being squeezed, but the tech and medical sectors are very growing.

Politics and economics are two separate entities, but politicians use the economy to scare you, threaten you, or even bribe you. Follow independent thinkers who offer information without a bone to pick. Ted Jones isn’t the only economist with a perspective, but one you might pick up a nugget or two. Check out the blog: http://blog.stewart.com, or his twitter account drtcj.

Give me a jingle if you’re thinking of making a move, or if you have friends or family that might need some help. Ph: 612 384 1360 Email: mj@maryjoquay.com

Will Your Current House Fit Your Needs in Retirement?

Will Your Current House Fit Your Needs in Retirement?

As more and more baby boomers enter retirement age, the question of whether or not to sell their homes and move will become a hot topic. In today’s housing market climate, with low available inventory in the starter and trade-up home categories, it makes sense to evaluate your home’s ability to adapt to your needs in retirement.

According to the National Association of Exclusive Buyers Agents (NAEBA), there are 7 factors that you should consider when choosing your retirement home.1

1. Affordability

“It may be easy enough to afford your home today but think long-term about your monthly costs. Account for property taxes, insurance, HOA fees, utilities – all the things that will be due whether or not you have a mortgage on the property.”

Would moving to a complex with homeowner association (HOA) fees actually be cheaper than having to hire all the contractors you would need to maintain your home, lawn, etc.? Would your taxes go down significantly if you relocated? What is your monthly income going to be like in retirement?

2. Equity

“If you have equity in your current home, you may be able to apply it to the purchase of your next home. Maintaining a healthy amount of home equity gives you a source of emergency funds to tap, via a home equity loan or reverse mortgage.”

The equity you have in your current home may be enough to purchase your retirement home with little to no mortgage. Homeowners in the US gained an average of over $16,300 in equity last year.

3. Maintenance

“As we age, our tolerance for cleaning gutters, raking leaves and shoveling snow can go right out the window. A condominium with low-maintenance needs can be a literal lifesaver, if your health or physical abilities decline.”

As we mentioned earlier, would a condo with an HOA fee be worth the added peace of mind in knowing that you do not have to do the maintenance work yourself?

4. Security

“Elderly homeowners can be targets for scams or break-ins. Living in a home with security features, such as a manned gate house, resident-only access and a security system can bring peace of mind.”

As scary as that thought may be, any additional security and an extra set of eyes looking out for you always adds to peace of mind.

5. Pets

“Renting won’t do if the dog can’t come too! The companionship of pets can provide emotional and physical benefits.”

Evaluate all of your options when it comes to bringing your ‘furever’ friend with you to a new home. Will there be necessary additional deposits if you are renting or moving in to a condo? Is the backyard fenced in? How far are you from your favorite veterinarian?

6. Mobility

“No one wants to picture themselves in a wheelchair or a walker, but the home layout must be able to accommodate limited mobility.”

Sixty is the new 40, right? People are living longer and are more active in retirement, but that doesn’t mean that down the road you won’t need your home to be more accessible. Having to install handrails and make sure that your hallways and doorways are wide enough may be a good reason to look for a home that was built to accommodate these needs.

7. Convenience

“Is the new home close to the golf course, or to shopping and dining? Do you have amenities within easy walking distance? This can add to home value!”

How close are you to your children and grandchildren? Would relocating to a new area make visits with family easier or more frequent? Beyond being close to your favorite stores and restaurants, there are a lot of factors to consider.

Bottom Line

When it comes to your forever home, evaluating your current house for its ability to adapt with you as you age can be the first step to guaranteeing your comfort in retirement. If after considering all these factors you find yourself curious about your options, let’s get together to evaluate your ability to sell your house in today’s market and get you into your dream retirement home!

The #1 Reason to Put Your House on the Market TODAY!

The #1 Reason to Put Your House on the Market TODAY!

The National Association of Realtors (NAR) released the results of their latest Existing Home Sales Report which revealed that home sales declined 0.6% to a seasonally adjusted annual rate of 5.38 million in June from 5.41 million in May, and are 2.2% below a year ago. Some may look at these numbers and think that now is a bad time to sell their house, but in fact, the opposite is true.

The national slowdown in sales is directly tied to a lack of inventory available for the buyers who are out in the market looking for their dream homes! In fact, the inventory of homes for sale had fallen year-over-year for 36 consecutive months before posting a modest 0.5% gain last month and has had an upward impact on home prices.

NAR’s Chief Economist Lawrence Yun had this to say,

“It’s important to note that despite the modest year-over-year rise in inventory, the current level is far from what’s needed to satisfy demand levels. Furthermore, it remains to be seen if this modest increase will stick, given the fact that the robust economy is bringing more interested buyers into the market, and new home construction is failing to keep up.”

The few houses that are on the market are selling fast! According to NAR’s Realtors Confidence Index, properties were typically on the market for 26 days.

Bottom Line

If you are one of the many homeowners who is debating listing your house for sale this year, the time is now! Let’s get together to discuss the specifics of our market!

Demand for Homes to Buy Continues to Climb

Demand for Homes to Buy Continues to Climb

Across the United States, there is a severe mismatch between the low number of houses for sale and the high demand for those houses! First-time homebuyers are out in force and are being met with a highly competitive summer real estate market.

According to the National Association of Realtors (NAR), the inventory of homes for sale“has fallen year-over-year for 36 consecutive months,” and now stands at a 4.1-month supply. A 6-month supply of inventory is necessary for a balanced market and has not been seen since August of 2012.

NAR’s Chief Economist Lawrence Yun had this to say,

“Inventory coming onto the market during this year’s spring buying season – as evidenced again by last month’s weak reading – was not even close to being enough to satisfy demand.

That is why home prices keep outpacing incomes and listings are going under contract in less than a month – and much faster – in many parts of the country.”

Is There Any Relief Coming?

According to the CoreLogic’s 2018 Consumer Housing Sentiment Study, four times as many renters are considering buying homes in the next 12 months than homeowners who are planning to sell, “which is the crux of the available housing-supply imbalance.”

As more and more renters realize the benefits of homeownership, the demand for housing will continue to rise.

Do homeowners realize demand is so high? With home prices rising across the country, homeowners gained over a trillion dollars in equity over the last 12 months, with the average homeowner gaining over $16,000!

The map below shows the breakdown by state:

Many homeowners who have not thought about listing their homes may not even realize how much equity they have gained, or the opportunity available to them in today’s market!

Bottom Line

If you are one of the many homeowners across the country who hasn’t quite found their forever home, now may be a great time to list your house for sale and find your dream home!