The Hunter Reynolds Group Real Estate Blog

3 Things to Know About the Spring Real Estate Market

2018-04-27T09:42:00.001-07:00

Before hiring a real estate agent, you need to do some vetting. Here are the questions that we recommend you ask.

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Each year, spring is the hottest season for real estate. However, spring 2018 looks to be an especially important time for anyone looking to sell a home. Here are a few facts to get you thinking:

1. Demand continues to outstrip supply. The number of homes on the market is near an all-time low, and listings of existing homes have plunged 8.1% over the past year. While this means that the total number of sold homes has actually decreased, demand continues to be strong.

2. Home prices are still surging. Home prices are up 6.3% year over year in the last quarter for which we have data. It's not just Charleston that's doing well — areas around the country keep posting record highs for home values.

3. Mortgage rates are finally rising. The Fed increased its benchmark rate several times over the past year, but this did not translate to an immediate increase in mortgage rates. However, mortgage rates do seem to be finally responding, and the 30-year fixed rate is now hovering around 4.5%. While this is a four-year high, it is still near historical lows and makes mortgages affordable to would-be buyers.

Put together, what do these facts mean if you are considering selling your home?

First off, they mean that right now is a very good time to sell. That's because of the strong demand and the high level of current prices. In other words, if you were to put your home on the market right now, you could get top dollar, and you would be able to sell quickly and without hassle.

It’s not clear how long this favorable situation will last.

Second, it's not clear how long this favorable situation will last. As I mentioned, mortgage rates are on the rise. Currently, that is not enough to dampen demand. But if rates continue to rise, it might drive more buyers out of the market, eventually driving down prices and making it more difficult to sell your home.

Another thing to consider is the effect of the new tax plan. It's not entirely clear how it will affect the real estate market, but odds are good it will make home buying more expensive. That's because of a new cap on state and local tax deductions, which could combine with higher mortgage rates to push more buyers out of the market.

To sum up, if you have been considering selling your home, consider selling now. The current moment is very favorable, but it won’t last forever. If you have any questions for me about how to get started buying or selling a home, don’t hesitate to reach out and give us a call or send us an email. We look forward to hearing from you soon.

What Should You Know About an Agent Before Hiring Them?

2018-04-16T10:37:00.000-07:00

Before hiring a real estate agent, you need to do some vetting. Here are the questions that we recommend you ask.

Buying a home? Click here to perform a full home search

Selling a home? Click here for a FREE Home Price Evaluation

Buying or selling a home is a major project. Having a trustworthy agent to guide you through that project can be an invaluable asset. But how can you vet potential real estate agents to see who would be a good fit for you? Here are three important questions you should ask to get started:

1. "How many homes have you sold in the last 12 months?" Many real estate agents will tell you the number of years they have in the business. That's useful, but their recent activity can be more relevant than their total experience. Asking this question can tell you how well they know the market, as well as how successful you can expect them to be in your case.

Bonus Question: You will probably want to ask whether the agent works primarily with buyers or sellers, because many agents specialize to some extent in one or the other.

2. "Can I have the contact info for your last three deals?" Anybody can say they are a marvelously effective real estate agent. But talking to actual past clients can help you decide whether this is true or a bunch of hot air. When you do talk to a real estate agent's previous clients, you don't need to get too fancy to get useful information. Simply ask them to share their experience.

3. "What is your strategy for my specific needs?" As a buyer, you will want the agent to explain how they will search for your new home, how many homes you can expect to see, and how the agent handles multiple offers. As a seller, you will want to know how and where the agent will advertise your home.

You want to get a sense that this agent is somebody you can trust.

So what kinds of answers should you look for to these questions?

Ideally, you will want to get a sense that this agent is somebody you can trust and that you feel comfortable working with.

At the same time, you will want them to be experienced and diligent, as evidenced by recent successful deals and a concrete plan of action for your situation.

If you ever want to know how I measure up on these questions, you can always give me a call at (843)-256-8800. I'd love to hear what your specific situation is and whether I would be a good match to help you in the current Charleston real estate market.

What’s the Best Month to Sell Your Home?

2018-04-03T13:01:00.000-07:00

The best time of year to sell your home might not be when you think it is. Here’s what we mean.

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There's a bit of a controversy brewing among real estate experts. The topic is the best time of year to sell a home. On one hand, real estate agents across the country agree: Spring is the best time to sell your home.

However, do the facts actually support this view? The folks at real estate web platform HomeLight wanted to find out, so they crunched the numbers on actual home sales in different markets to see when the best time to sell a home actually was.

In general, spring did come out on top in many situations. However, there were also many exceptions.

For example, in Greenville, SC, the best month was July, beating out the average sales price by 150%. In Breckenridge, CO, February was the winner, with a 106% increase over the average. In Tomball, TX, homes sold in October for 133% more than the average for the year.

What does this all mean for you? If you want a broad recommendation for when to sell your home, then simply listing your home now at the very start of spring is a recommendation that can't be beat.

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It’s not as simple as saying that spring is the best time to sell your home.

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There are plenty of other details that go into the optimal decision. Weather is a big one. Recent real estate trends in the area would be another. The specifics of your own home and the kinds of homebuyers it is likely to attract is a third and crucial aspect. There are fewer homebuyers in the fall and winter, but they tend to be more serious and eager to find a home before the holidays. In the summertime, there might be added pressure to buy a home before the school season starts.

In short, it's not as simple as saying spring is the best time to sell your home. If you have any questions for me, give me a call or send me an email and we can discuss all the unique attributes your home, put them in the context of recent trends in the Charleston real estate market, and come up with a winning strategy of when you should list to get the best price. I look forward to hearing from you soon!

The Key Steps of a Mortgage Pre-Approval

2018-03-12T12:59:00.000-07:00

If you’re buying a home with a mortgage, you absolutely need to get a pre-approval first. Here’s why.

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There's no doubt about it. It's a very competitive market today if you are looking to buy a home.

Inventory is near record lows, and more and more homebuyers are entering the market. This means you need every advantage to grab that perfect home when you do find it.

One no-brainer is to get pre-approved for a mortgage. A pre-approval informs you of how much you can borrow and it's something you will need to do at a later point anyway.

A pre-approval can mean the difference between having your offer accepted or having to watch your dream home go to somebody else in a crazy market like this.

In spite of all these good reasons, less than 10% of buyers who got a mortgage get pre-approved by the lender who originated the loan. In other words, you can definitely get a leg up on the competition by starting your home search at the loan office rather than at the open house.

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A pre-approval definitely gives you a leg up on the competition.

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Here are a few things that you will need:

1. Proof of income. At a minimum, lenders will want to see pay stubs from the past 30 days showing your year-to-date income, two years of federal tax returns, and two years of W2 forms from your employer.

2. Proof of assets. You will need to present statements from your checking, savings, or investment accounts to prove that you have funds for the down payment and closing costs.

3. Good credit. Most lenders reserve the best rates for homebuyers with a credit score of 740 or above. You can still qualify for a mortgage with a lower credit score, but a good lender will also recommend ways that you can improve your credit and qualify for a better loan.

These are the biggest and most common things you will need to get pre-approved, though your lender might want to see some other documents as well.

Once you are pre-approved, the buying process will be faster, more convenient, and less stressful. Most importantly, it will make it more likely that your offer for that perfect home gets accepted.

If you have any questions for me or need any additional assistance, don’t hesitate to give me a call or send me an email. I look forward to hearing from you soon.

Why Tap Into Your Home’s Equity Now?

2018-02-21T09:15:00.002-08:00

Many homeowners are tapping into their home’s equity. Here’s why.

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Do you notice that pile of cash you're sitting on right now?

I'm not joking. 42 million homeowners with mortgages have equity in their home right now.

When added up, tappable home equity recently reached $5.5 trillion. That's about $3 trillion more than when the housing market bottomed out in 2012. "Tappable equity" here is defined as the amount a homeowner could borrow before they hit 80% of debt to value.

Many homeowners are tapping into their equity now.

Not surprisingly, many homeowners are looking to tap into these hidden reserves. As just one sign of this, mortgage applications are up 4.1% this January over last year. That's mostly been driven by mortgage refinances, as homeowners are looking to take advantage of low (but increasing) ratesto take out some of that equity as cash.

Another option to a mortgage refinance is a home equity line of credit (HELOC), a kind of checking account on your home. While HELOCs have been growing in popularity, they've hit a slight snag recently because the new tax bill eliminates the deductions for interest paid on such lines of credit.

What are homeowners who tap into their equity actually doing with the extra cash? Most people are spending it on making their homes even more valuable. According to one survey, 80% of borrowers would consider using that cash to renovate their home.

However, other homeowners are using their home equity to cover education expenses, to pay down other debt, or simply for investing, whether in stocks, real estate, or even cryptocurrencies.

So should you tap into your home equity?

I can't say either yes or no. It’s something you’ll have to decide on your own. However, if you have any questions or would like us to take a look at your specific situation to see what your best move is, we would be glad to help. Don’t hesitate to give me a call or send me an email anytime.

Interest Rates Will Be Rising Soon

2018-02-08T08:13:00.002-08:00

Interest rates are creeping up. Here’s how people are taking advantage of the market now.

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We're in for a very competitive stretch in the real estate market.

First off, mortgage rates have started increasing. For the first time since last summer, the 30-year average mortgage rate is now over 4%. This follows a long period when mortgage rates were near record lows.

This latest increase might be more than just a temporary bump. Some experts predict that we've seen the last of sub-4% mortgage rates, thanks to strengthening inflation and broad-based economic growth.

Second, mortgage applications are also increasing. Applications were up in January by 4.1% compared to last year. This has been led by people looking to refinance their homes, while mortgage applications by homebuyers remained at steadier levels.

Third, housing supply continues to be increasingly tight, with 10% fewer homes on the market than a year ago.

What do all of these numbers mean for you?

Homebuyers are looking to lock in the current, low rates.

The growth in mortgage rates shouldn't affect the number of eager homebuyers very much because there is so much more demand than supply right now. However, this rise in mortgage rates might actually reduce the number of homes for saleeven further.

Homebuyers should be looking to lock in the current, still fairly low mortgage rates. When mortgage rates increase further, homeowners will have less of an incentive to sell their current home and buy a new home, which will require a mortgage at a new, higher rate.

If you have any questions about where the current rates are at or you have any real estate needs we can assist with, please don’t hesitate to reach out and give me a call or send me an email. I look forward to hearing from you soon.

Tax Reform’s Effect on the Real Estate Market

2018-01-16T15:02:00.000-08:00

I’m sure you’ve heard a lot about tax reform lately. Here’s a few ways The Tax Cuts and Jobs Act will affect the real estate market.

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There's a lot of uncertainty about The Tax Cuts and Jobs Act and its effect on real estate. Let’s first take a look at the four key tax changes impacting the housing market at this moment:

1. Deductions for property taxes. Prior to the new tax bill, if you itemized your deductions, you could deduct all of your property tax. Going forward, this amount will be capped at $10,000.

2. Deductions for mortgage interest. The final bill reduces the limit on deductible mortgage debt to $750,000 for new loans taken out after 12/14/2017. Other loans of up to $1 million are grandfathered in.

3. Home sales exclusion for capital gains. If you sell your home and turn a profit, then up to $500,000 of that profit is exempt from capital gains tax. Although earlier versions of the bill required you to live in the home for five out of the last eight years, the final bill made no changes to the capital gains exclusion. In order to qualify for this exclusion, you must have lived in your home for two of the past five years to claim this exemption—just like before.

4. Deductions for moving expenses. The final bill repealed the moving expense deduction, except for those who are members of the Armed Forces.

The first two changes increase taxes on current homeowners and make homeownership less attractive. This is a part of why the National Association of Realtors claims that home prices could drop by more than 10% due to the new tax plan.

On the other hand, the last change makes it more expensive to sell your home. As a result, some potential sellers might shy away from the market.

These reforms may drive home prices down in the midterm.

We'll have to see how the different changes play out in reality and how they interact with other real estate conditions. However, there does seem to be a consensus among experts that current reforms might drive home prices down somewhat in the midterm.

On the bright side, home sellers do still get to take advantage of the home sales exclusion for capital gains. That is a major victory for real estate.

That's why if you've been thinking of selling your home, now might be a good moment to start the process. If you have any questions, whether you are buying or selling, you can always call me or shoot me an email. I can give you more specific recommendations based on your unique situation. I look forward to hearing from you soon.

3 Ways to Winterproof Your Home

2018-01-02T13:18:00.002-08:00

Here are three ways to winterize your home. Making these improvements will save you money and add value to the home.

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Winterizing your home can pay for itself and then some. It can help you save money on costly repairs. The right project could save you money directly in the form of lower utility bills. The right winterization project could significantly increase the resale value of your home.

But here's the thing: Not all winterization projects are equally valuable. That's why I've collected the top three projects that stand out in terms of the return they will give on your investment.

1. Fiberglass attic insulation. Each year, Remodeling Magazine releases its Cost vs. Value Report for various home upgrades. This year, only one project had an ROI of over 100% and that was fiberglass attic insulation. If you add insulation to your attic tomorrow and decide to sell your home right after, you can expect that you will be able to sell for a premium. Even if you aren't selling your home just yet, the improved attic insulation will accrue even more value, in terms of lower heating bills and increased comfort in your home.

New, energy-efficient windows bring a nice ROI.

2. Energy-efficient windows. A typical window replacement yields over a 70% return in terms of the resale value of your home. Depending on the shape of your current windows, you could save an additional 15% or more off your heating bills. Plus, new windows can add even more value to your home in terms of increased thermal and acoustic comfort, more light, and better design.

3. Gutters and downspouts. This last item won't save you money directly by cutting down your energy bills. It could, however, save you tens of thousands of dollars in terms of avoided repairs. Clogged gutters and downspouts can trap moisture. When the weather gets really cold, they can also help ice to form. This can ruin your roof and sidings, causing tens of thousands of dollars in damage. It will also impact the curb appeal of your home, which generates higher returns in terms of resale value than remodeling the inside of your home.

And those are three of the best winterization projects you can undertake to maximize your investment. If you have any questions for me about any of these upgrades or anything else related to real estate, give me a call or send me an email. We look forward to hearing from you soon.

3 Tips to Save You Energy This Winter

2017-12-14T11:33:00.001-08:00

We have a few different tips to help you save on your energy bills this winter. They’re surprisingly easy and inexpensive.

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Whether you love it or hate it, winter is here. You need to prepare your home properly in order to avoid big heating bills and freezing nights when the cold weather hits. Now, there are lots of large energy-saving projects out there, and they can all be worthwhile investments.

However, I want to share just three super simple tips with you today. Even though these tips are simple, they are still enormously effective in making you more comfortable at home while saving you money at the same time:

1. Get a draft snake (or two). The Department of Energy estimates that reducing drafts can lead up to 30% in energy savings. One simple way to reduce many of the drafts in your home is to install a "draft snake," which is a little cloth element that slips under your door. You can get a collection of draft snakes for just a few dollars each on Amazon, or you can fashion your own using nothing more than an old towel.

2. Reverse ceiling fans. Hot air rises, while cool air hangs around your feet. This can be frustrating in the wintertime, because you don't want to run the heating without getting the benefits of it. An easy way to fix this is to run your ceiling fans in reverse. Instead of pushing air towards you, the fan will move that hot air that's clinging to the ceiling, dispersing the heat and making you feel warmer while spending nothing more on heating.

Reverse your ceiling fans to start.

3. Flush your water heater. There are many things you can do to improve the efficiency of your water heater. However, simply draining your water heater can get rid of sediment and particles that are clogging up your heating machine and making it less efficient. Depending on the mineral content of your water, this could lead to a significant improvement in efficiency.

And there you have it, three simple and little-known tips to be a little more ready for the winter. If you have any questions for us about these tips or about anything else related to real estate, give us a call or send us an email. We look forward to hearing from you.

Should You Consider Refinancing?

2017-11-30T05:38:00.000-08:00

Refinancing your mortgage is a great idea, but it could affect your credit score. Here’s how.

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Mortgage rates are still at historic lows. For many homeowners, it's a great time to refinance. Refinancing allows you to pay off your current mortgage with a new mortgage at a lower rate. Refinancing means lower monthly payments and more money left in your pocket.

But here's something important that many people don't know: Refinancing can affect your credit score negatively. You see, when you refinance, the new creditor will do a "hard inquiry" about your credit history. This inquiry can actually lower your credit score. Looking for new credit lines (like a new mortgage) equates with greater credit risk.

A hard inquiry could decrease your score by five points automatically.

How much will a hard inquiry actually lower your credit score? This depends on several factors. In some cases, a hard inquiry might not lower your credit score at all. However, if you've recently opened up multiple new credit lines (auto loans, credit cards, etc.), then a hard inquiry could decrease your credit score by up to five points. This is true if you only have a short credit history. And if you shop around for the best rate for more than 45 days, you will get multiple hard inquiries. Each of them will contribute to the total effect on your credit score.

So what does this all mean for you? Unfortunately, there's no simple answer. It's going to be a part of the calculation you have to make for yourself, which will also include the refinancing fees, your own credit history, and how much you could be saving with a refinanced mortgage.

If you're looking for help in making this decision, give me a call. I can put you in touch with several top Charleston mortgage brokers.

As always, if you have any questions about the Charleston real estate market or if you want to talk about the finer points of mortgage rates and refinancing, give me a call as well. I’m here to help. Until next time, make it a great day!

Homebuyers Are Feeling Optimistic

2017-11-15T08:35:00.000-08:00

Why are homebuyers more optimistic than they have been in the past few years? Here’s what we found.

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Here’s a paradox for you: Right now, homebuyer confidence is at an all-time high, according to a survey performed by Fannie Mae. Furthermore, an increasing number of people, particularly renters, think now is a good time to buy a home. Yet at the same time, housing inventory remains very tight. It’s down 6.5% nationally from last year. Home prices are also up 6.9% nationally over last year.

In other words, homebuyers are optimistic at a time that the market seems to be favoring sellers. So, what's going on? Why are homebuyers so optimistic all of a sudden? Here are three possible explanations:

1. Lending is loosening up. Over the past several years, mortgage rates have seen historical lows. This has meant that homes are actually more affordable, in spite of the increase in prices. However, lending has been very tight. Fortunately, that’s changing. Lenders are approving mortgages at the highest rate since 2011, with 77% of mortgages for home purchases approved.

Lenders are approving mortgages at the highest rate since 2011.

2. Jobs are looking good. At the moment, fewer homebuyers are worried about losing their jobs, according to the same Fannie Mae survey. It's not just job security that's contributing to greater optimism about buying a home. Overall income is higher, making homes more affordable by comparison. The median household currently has 150% of the income needed to buy a median home, compared to a historical average of just 125%.

3. Long-time renters are ready to buy. Millennials, the generation of people born after 1980, have largely opted out of homeownership until now. They have been renting for a longer time, putting them higher up on the pay scale compared to previous generations of first-time homebuyers. But now, many millennials are finally hitting an age when they are willing to commit to buying instead of renting. This is reflected in the Fannie Mae report, which states that much of the increase in homebuyer optimism comes from current renters.

What all does this mean for you? If you're looking to buy a home, all of the above reasons should give you confidence that now is indeed the right time to buy.

If you’re thinking about buying or selling a home, click the links above to search for homes on the MLS or find out how much your home is currently worth.

And if you have any questions about the Charleston real estate market, whether you're thinking of selling or buying, give me a call. I'm here to help. I look forward to hearing from you soon.

How Will the Fed's Recent Decision Impact You?

2017-11-01T10:48:00.000-07:00

The Fed’s recent decision is going to have a big impact on our economy and real estate market. Here is everything you need to know.

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The Fed just announced a move that will have a big impact on sellers and buyers.

At the recent meeting on September 20th, the Fed decided to cut back their balance sheet. While this might sound boring compared to the usual news of Fed rate hikes, it’s actually a big deal.

The financial crisis we saw a decade ago caused the Fed to take emergency measures. So, they injected a huge amount of money into the economy by buying up various financial assets in an enormous sum.

These financial assets amounted to a sum of about 25% of the United States economy at that time. But now, the economy has recovered to the point where the Fed feels comfortable taking some of this money back.

As you can imagine, this is going to have a huge impact on our economy and real estate market. This change is going to put upward pressure on consumer borrowing costs such as mortgage rates.

This change is going to put upward pressure on consumer borrowing costs such as mortgage rates.

In other words, if you are thinking of buying a home you should know that the Fed’s most recent move will eventually make it more expensive to do so.

Also, sellers must be aware that this change could result in fewer interested buyers. This might lead to a decrease in prices, making it harder to sell.

However, this is not an immediate change. The rollback will be gradual, with the Fed taking back just $10 billion per month. Compared to the $4.5 trillion total that was borrowed originally, this is not a significant amount.

While the Fed’s move will not take effect immediately, you should act quickly if you have been thinking of buying or selling. Now is the time to make your move before the process of this change starts to escalate.

If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.

Is Fall a Good Time to Put Your Home on the Market?

2017-10-19T08:50:00.001-07:00

Contrary to popular belief, fall is a great time to put your home on the market. There are three reasons why.

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Fall is upon us, and with it the end of the high season for real estate.

However, if you're thinking you've missed your chance to sell your home, let me reassure you: This autumn actually presents a fantastic moment to sell. Here's why.

First off, housing inventory is still incredibly low. In fact, according to data from the Census Bureau and the National Association of Realtors, inventory remains well below historic averages, and is 50% less than its peak in 2006. In addition, the recent slump in new construction means demand for existing homes will stay high in the near future.

Second, while mortgage rates also remain very low, recent announcements by the Federal Reserve might cause them to finally start rising. This would make mortgages less affordable and might turn away a significant number of potential buyers. This is even more of a concern when you consider the continuing growth of home prices—6.9% in the last year alone.

Third, buyers in the fall are likely to be more serious because they have probably been searching for months without success. Also, because fewer homes are listed in the fall, this means there's even less competition than we’ve seen due to the general low inventory.

So what do you get when you put all those things together?

The time to list your home is now.

Well, if you were to list your home right now, chances are good that you would be able to sell it very easily and for a top price.

On the other hand, if you decide to wait, the situation might not be as favorable because mortgage rates might rise or because new construction might pick up.

That means the time to list your home is now.

If you’d like a precise estimate of what your home could sell for this fall or you have any other questions about the current Valleywide real estate situation, give me a call or send me an email. I'm here to help.

5 Real Estate Investment Techniques

2017-09-20T08:47:00.002-07:00

Real estate investing is on the rise. Here are five different ways you can get involved.

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Investing in real estate is no longer restricted to the super wealthy. According to a recent survey, real estate investors now make up 15% of the population. That translates to almost 50 million individuals who invest in at least one property other than their primary residence.

In fact, 89% of U.S. investors are interested in putting their money in real estate because of benefits such as cash flow, tax incentives, leverage, and value appreciation that come with investing in multiple properties.

Are you curious about investing in real estate? If so, here are five different ways you can get started:

1. Buy and rent

This is probably the most traditional way to invest in real estate. It simply involves buying a property and renting it out. Now is a good time for this kind of investing because rental rates are on the rise (8% since last year) but the downside of this investing approach is the time and effort needed to manage and maintain your investment.

2. Buy and sell

Also known as home flipping, this involves buying a property and reselling it soon after for a profit. Home flipping has offered a record-breaking 49% return in 2016.

HOME FLIPPING OFFERED A RECORD-BREAKING 49% RETURN IN 2016.

3. Real estate investment groups

Real estate investment groups are organizations that buy a set of properties and then sell them to individual investors. The main benefit of this approach is that you typically do not need to act as the landlord because the investment group handles property management for you (for a fee, of course).

4. Crowdfunding sites

Recently, there's been an explosion of sites such as Prosper and Lending Club, which allow individuals to invest in various real estate development projects. Through crowdfunding sites, you can be a part of a large-scale property investment while investing only a moderate amount of money. On the other hand, crowdfunding sites act as a middleman and charge fees which can eat into your profits.

5. REITs

Real estate investment trusts (REITs) are like mutual funds for real estate. They typically pay high dividends. However, they also do not offer all of the typical benefits of investing in real estate, such as increased leverage and tax benefits.

Each of these investing approaches offers a tradeoff between possible profits, risks, and costs.

The one constant is that you can minimize your risks with due diligence and by consulting with an experienced real estate professional.

If you have any questions for us or you’re interested in investing in real estate yourself, don’t hesitate to give me a call or send me an email. I look forward to hearing from you.

What Are the Best Benefits of Homeownership?

2017-09-06T09:11:00.001-07:00

There are many advantages to owning a home instead of renting one, and I want to spotlight five specifically.

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Here are the five most common advantages owning a home has over renting.

First, you can do anything you want with the property as long as it conforms with the HOA covenants. Owning a home means you can do things like paint your kids’ rooms any color you want, upgrade your flooring, install a fence, or add a deck without having to ask your landlord. Many of these improvements will also add value to your property.

Another advantage is the appreciation benefits, including the leverage of cash invested. Owning a home is an investment that many favor over owning stocks and other investment vehicles because they can see the tangible lifestyle benefits of living in a home. The financial benefits are also significant and can be more substantial than investing in the stock market. As your home appreciates, your investment accrues faster than a stock might because you get the appreciation on the home’s entire value—not just the gain on the cash down payment you invested.

Homeownership also provides tax benefits. Homeowners are allowed to deduct mortgage interest and property taxes when they file tax returns each year. That’s a significant amount of savings.

The fourth advantage is your mortgage cost stays the same over time, but rents increase. With a fixed rate mortgage on a home, your principal and interest payment will never change. As a renter, unless you’re in a rent-controlled building or neighborhood, your rent is at risk of rising every year. Since the mortgage payment is the bulk of your housing payment, that creates a lot of budgetary and financial stability.

Homeownership is a form of forced savings.

Lastly, homeownership is a form of forced savings. When a homeowner makes a mortgage payment, a portion of that payment each month is going to pay down the loan, thereby giving the owner more equity in their home. The loan payment is like a forced savings, whereas the entire portion of a renter’s monthly payment goes to the landlord.

If you have any questions about the benefits of buying a home or you’re looking to sell your home, feel free to give me a call or send me an email. I’d love to help you.

The Latest Numbers From Our Charleston Market

2017-08-18T12:31:00.003-07:00

Based on current projections, 2017 is set to wind up being Charleston’s busiest year in sales volume ever. Let’s take a look at a market update.

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What’s been going on in today’s Charleston real estate market so far this year?

To answer that, it’s time for a market update.

So far this year we’re up 4% in home sales and 6.6% in prices from where we were in 2016.

Additionally, 2017 is set to be the busiest year in sales volume in Charleston’s history—with a projected 18,000 homes expected to be sold this year.

Another thing to note is that right now with 75% of the MLS being in a seller’s market, inventory is low. In fact, it’s an average of 3.1 months across the entire MLS.

Kiawah Island, however, currently has the highest inventory—just over two years.

Understanding these market conditions will be key to any real estate transaction you plan on making in the near future.

Whether you’re buying or selling, it’s always important to stay informed.

Whether you’re buying or selling, it’s always important to stay informed. If you’re a seller, you should be happy to know that right now is a great time to list.

So, if you’ve been thinking of selling for a while, you may want to take advantage of our current low inventory and high demand.

Buyers, however, still have some opportunities as well. While it is definitely a seller’s market, buyers can absolutely succeed if they get pre-approved early on, work with the right agent, and make a strong offer with few contingencies.

So, what is happening with prices? We can actually make an educated guess about where they’re headed by examining current properties under contract and estimating their sales figures and then comparing those numbers to the median sales price for the past few months.

From this, we’ve been able to determine that prices are set to stabilize. This is good news for buyers, since inventory may rise soon.

If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.

What Does the Fed’s Recent Rate Hike Mean for the Real Estate Market?

2017-07-26T11:33:00.001-07:00

The Fed’s recent rate hike shouldn’t have any significant impact on our market. In fact, it might actually stimulate it.

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On June 14th, the Federal Reserve increased its federal funds interest rate by 0.25%. They’re also widely expected to raise rates once or twice more over the course of 2017. What does this mean for the real estate market?

While any action by the Fed always garners a lot of attention, I believe these increases will not have any significant impact on our market.

These increases will not have any significant impact on our market.

First of all, mortgage rates have actually trended lower in the wake of the Fed’s recent announcement. The 30-year mortgage rate recently hit 3.9%, the lowest level in 2017. In fact, it’s a common pattern for the mortgage rate and the Fed rate to move in opposite directions, and the same thing has happened the last two times the Fed raised rates.

Second, the economy continues to do well. The Fed decided to increase its rate because unemployment and inflation are low, household spending is picking up, and we’ve seen steady growth for the past nine years. This is good news for the real estate market. As expected, we continue to see strong demand and a corresponding increase in home prices.

Third, while the Fed’s rate increase is normally meant to cool off the economy, it might actually stimulate it in this case. Because interest rates were so low for such a long period of time, experts believe the recent increases might ease pressure on the financial system and encourage lending.

Case in point: since the Fed started raising its rate in December 2016, total mortgages are up 2.5% year over year.

In conclusion, while any move by the Fed is likely to lead to a lot of hand-wringing, I believe the real estate market will not be affected and will continue on its own healthy course. Nonetheless, it’s clear that right now is a uniquely good moment for everyone in the real estate market. Today’s low mortgage rates are good for homebuyers because they make homes more affordable.

If you have any questions about our market or you’re thinking of buying or selling a home, give me a call at 843-256-8800 or send me an email at Hunter@HunterReynolds.com. I’d love to help.

The Impact of Recent Rate Increases

2017-07-11T10:33:00.002-07:00

The Federal Reserve increased their funds rate recently. Here’s what that means for prospective homebuyers.

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I’m delighted to be joined today by Todd from Tabor Mortgage to talk a little bit about the impact of the latest Federal Reserve increase of interest rates.

The Fed recently raised their funds rate by 0.25% and a lot of people planning to buy a home in the future have been worried that this might affect their mortgage interest rate when the time comes. However, there is no direct correlation.

The Fed fund rates are short-term overnight lending rates. They impact short-term financing like credit cards and auto loans. However, mortgage loans have much less correlation because they are 30-year terms in most cases. In this particular instance, rates actually went down a little when the Fed hiked up their rate.

Keep an eye on mortgage-backed securities.

What is going to determine where interest rates are headed in the future? The answer is mortgage-backed securities. You can think of them like a stock. Everyone was anticipating this increase already, so it was priced into the market beforehand. However, the Fed has been propping up the mortgage market by buying these mortgage-backed securities nearly every month. They have announced that they are going to buy less of them, which should cause interest rates to increase in the long term.

That being said, rates are still extremely low now and you can lock them in for 30 years. If you have any questions for us about interest rates or about anything related to real estate, give us a call or send us an email. We look forward to hearing from you soon.

You Don’t Need a Down Payment

2017-06-13T09:17:00.001-07:00

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What's the biggest obstacle to homeownership?

According to a recent survey, "saving enough for a down payment" comes at the top of the list. A whopping 55% of prospective homebuyers cited this as their main stumbling block.

And with the continuing growth of home prices, things aren't getting any easier. In fact, homeownership rates reached a 20-year low last November.

It wasn't always like this. 

A decade ago, many lenders were offering easy, no-money-down mortgages. 

However, after the financial crisis, mortgage standards have become more restrictive. A typical mortgage now requires a 20% down payment. 

Here's the good news. 

If you have decent credit and a steady income, you might be qualified for a number of specialized programs that require no or very little down payment. Here are a few of the top options.

First, there's the USDA loan, which is valid for homes in certain regions, such as rural and suburban areas. 

With zero money down and lenient credit requirements, the USDA loan can be a great choice for many homeowners. 

Second, there’s the VA loan, which you can apply for if you or your spouse served in a branch of the military.

It's possibly the most generous zero-money-down mortgage because of low interest rates and low closing costs.

55% CITED THE LACK OF A DOWN PAYMENT AS THEIR MAIN STUMBLING BLOCK.

Third, there's the FHA loan. It does require a 3.5% down payment — still drastically more achievable than the 20% required for a conventional mortgage. 

Finally, there are a number credit unions and first-time homebuyer programs that might apply to your particular situation.

There’s one important thing you should know.  

If you get one of these no-money-down mortgages, chances are good you will be required to pay private mortgage insurance, which can drive up your monthly payments.

Fortunately, private mortgage insurance will disappear after your mortgage balance is under 80%. Also, the money you do pay will be tax deductible in most cases.
In short, there are lots of options to make owning a home a reality for you, even if you haven't saved up tens of thousands of dollars.

An Important Loan Program You Need to Know About

2017-02-24T08:05:00.001-08:00

The South Carolina State Housing Authority loan program can benefit you in many ways. Here’s how.

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Today I’m joined by Matt Mieras with Atlantic Bay Mortgage to talk about and review the South Carolina State Housing Authority loan program.

The state housing loan program is a third-party agency that provides down payment assistance for homebuyers in our area. There are income restrictions for targeted and non-targeted counties, but it’s a huge niche for first-time homebuyers in our market. The reason why is because state housing, depending on the time of year, will give up to $10,000 for a purchase. If you’re looking at a $150,000 purchase price, in theory you wouldn’t have to bring any money to buy the home—you can use that $10,000 for your down payment.

What’s unique is Berkeley and Dorchester are considered targeted counties. Charleston County is a non-targeted county but is still eligible for the program. The only difference is how much your income can be in your household. There’s a non-repayable category where you can receive the money as a true gift. There’s no repayment on it—you just have to stay in the house for 10 years. The other option is a repayable category, where you would typically pay around $45 to $50 a month.

This is a great program to get buyers into homes sooner rather than later.

In the payable category, you’re also required pay back the entire loan, but it’s really income-specific. People below the median area income typically receive that money as a true gift, and that’s not repayable. For people in a higher-bracketed income, it is repayable. The sales price maximum of the house is $250,000, but that will probably change in March or April. There will also be income restrictions for next year.

Palmetto Heroes is another important loan program you should know about. This one is more specific to state housing. The niche with this program is that they give more down payment assistance and a better interest rate. That money typically rolls out in April and is gone in about three months. This program applies primarily to those who work in the public service industry, but others can qualify as long as they meet the income restrictions and they’re a first-time homebuyer.

If either of these programs interest you, please don’t hesitate to reach out to us so we can put you in touch with Matt.

The PMI Premium Reduction That Never Was

2017-02-07T11:11:00.000-08:00

We recently saw some changes in the world of FHA mortgage insurance premiums, but the new administration shook things up. I've brought in my preferred lender Todd to help me explain.

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There have been some changes to FHA mortgage insurance premiums, so today, I've brought in Todd Sevier with Tabor Mortgage Group of ResMac to help me explain.

As Todd points out, HUD announced in early January that they would be reducing mortgage insurance premiums from the current factor of 85 basis points down to 60 basis points, effectively lowering FHA interest rates by about 0.25%. When the new administration came in, though, they suspended that reduction by executive order, leaving the current premiums in place.

So what's the impact for the average home buyers?

According to Todd, there's very little impact. A bigger deal has been made about it because it happened with the transition of presidents, but for the average FHA borrower in Charleston, that's about $40 a month.

The change only affects FHA borrowers.

These changes only affect FHA borrowers, and the change never actually went into effect. It was supposed to go into effect on January 27th but was suspended before that.

Thanks to Todd for joining us today for to help us understand this topic. If you have any questions for Todd, you can reach him at (843) 557-3926 or email him at todd.sevier@resmac.com.

As always, if you have any questions about the Charleston real estate market or you're looking to buy or sell a home, don't hesitate to give me a call or send me an email. I'm happy to help.

How Has the Election Impacted the Housing Market?

2016-12-16T07:56:00.001-08:00

How has the presidential election affected the housing market? I've brought in a mortgage expert to help me address this popular topic today.

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Recently, many people have asked us how the presidential election will affect the housing market here in Charleston, so I wanted to address this issue for you today. For an assist on this topic, I've brought in Matt Mieras, one of our preferred lenders.

Matt says the biggest post-election change was that the market basically turned upside down. All of his traders and most of the market expected Clinton to come in and keep the same fiscal policies that we've seen for the last eight years. However, since the election, interest rates went up 0.75%, putting them at the highest levels they've been in almost two years, Matt says. With the new administration, he added, there's a lot of talk about deregulation, which could impact lending guidelines and rates.

Buying power goes down 10% with every 1% increase in rates.

For every 1% that rates go up, buyers lose 10% of their buying power, Matt says. On a $200,000 mortgage, the payment would be $100 more expensive per month. However, statistics have shown that even with rate changes, 92% still plan to move forward and purchase a home next year with higher rates. He thinks consumers will be more responsible as far as spending and will be more rate-conscious. He's expecting a busy spring.

If you have any questions about financing for Matt, you can reach him at (843) 670-5512 or at mattmieras@atlanticbay.com.

If you have any real estate questions or you're thinking about buying or selling a home, give me a call or send me an email. I'd be happy to help.

How the Upcoming Housing Market Shift Affects You

2016-10-07T09:33:00.003-07:00

When the real estate market shifted in 2007, a lot of homeowners were unfortunately left out on the street. It looks like another market shift is coming up soon, but don’t be alarmed; it’s not expected to be as sudden or aggressive as it was nine years ago.

Lending guidelines are much more strict than they were back then, and this shift appears to be much more gradual. What might this potential shift mean to you?

First, it’s important to understand that there are four stages of a market shift cycle: The first stage is an incline in sales prices, the second is the peak of the market and dollar amount, the third stage is the decline of demand for more inventory, and the fourth stage is the drought itself.

Another market shift is coming.

Normally, it takes about seven years to complete a full cycle, and at this point, we’re likely nearing the end of stage two for the current market shift. This means that homes are selling for top dollar right now; however, in the next year, we expect the market to shift from a seller’s market to a buyer’s market. We’re already seeing some signs indicating this in certain areas and at certain price points.

We’re in the perfect storm right now. Whether you’ve been thinking about buying a home or selling one, it’s a great time to do either. Selling now means that you’ll get top dollar for your home while the demand is still high. At the same time, interest rates are still historically low, so it’s also a smart time to buy a home since mortgage rates will be lower now than they will when they inevitably increase as the shift happens.

Although a market shift may seem scary on the surface, you’ll have nothing to worry about if you’re adequately prepared. If you need help or have any questions about buying or selling in the Charleston area, give me a call or send me an email. I look forward to hearing from you.

The Newest Member of the Hunter Reynolds Group

2016-09-23T10:11:00.001-07:00

Allow me to introduce myself. My name is AJ Forlano. I just joined the Hunter Reynolds Group three weeks ago and wanted to give you a little bit of background information about myself.

I’ve only been an agent for three months now, but I have an extensive background in sales. I was in the food and beverage business for about 10 years, and I was in retail and grocery sales for about 11 years.

What sets the Hunter Reynolds Group apart from other teams is teamwork.

The biggest thing that sets the Hunter Reynolds Group apart from other teams is teamwork. We have an extensive team that works diligently together to provide the best customer service for anyone’s real estate needs.

I bring passion, enthusiasm, energy, and an overall customer service base to the team to allow my customers to have best possible real estate experience. The service I would bring to my clients would be based on follow-up communication and overall genuine compassion coming from a sense of contribution.

If you have any questions or concerns, please let me know. Just give me a call or shoot me an email, and I would be happy to help you in any way I can.

The 3 Answers to Seek in a Charleston House Hunt

2016-08-01T13:34:00.005-07:00

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There are three very important questions to ask during your home search in Charleston.

Say you're out looking at homes and going to open houses. When doing that, you want to have the right questions prepared. The first thing you should ask is about the area and the neighborhood itself. We typically recommend visiting a home during different times of the day and a few different days of the week to get a better feel for what it's like living in that area. Is there a lot of traffic or noise during parts of the day? You want to look out for things you may have missed the first time.

“

These questions help you find
things you originally missed.

”

Secondly, how are the schools in the area? There are some great online rating systems that will give you an idea of how a school performs compared to others in the area. Even if you don't have kids that will go to the schools, the district will impact your home's value.

Next, ask about insurance and utility costs. In Charleston, insurance rates can vary significantly, and end up creating a big difference in what it will ultimately cost to own a certain home. Certain areas have different utility costs that can affect your monthly expenses as well.

If you have more questions for us, we'd love to answer them for you. Send me an email or give me a call, and let's talk soon.