No, We are Not Headed Towards a Housing Crash: Here’s Why

In the past few months, you may have heard whisperings about an incoming housing market crash. We’re here to put you at ease: we are not headed towards a crash!

A lot of this concern comes from average home prices slowing in growth across the country. We wrote a blog about it last week, but this is not a bad thing! It just means the market is shifting back towards normal.

The Three Most Important Factors

A luxury home interior with a fireplace.

Today’s market is wildly different than the pre-crash housing market of the late 2000s. We’re going to show you why and how using three important metrics that measure the Raleigh real estate market.

Home Prices

Beginning in 2008, average home prices in the U.S. dropped almost 29% over a four year period. That’s drastic, and it’s what spurred the housing market crash!

Today’s average home prices are not depreciating. It’s just that the level of appreciation is slowing down. Over the last year, homes have increased by more than 4%.

While this is less than the 6-7% prices appreciated over years prior, it in no way indicates that we’re headed towards a crash!

Mortgage Standards

A white table with a checkbook and small stack of money.

In the current real estate market, it’s considered easier to get a loan from the bank than in years prior. Many are concerned that these “lenient standards” will contribute to a housing crash.

However, the Urban Institute’s Housing Finance Policy Center released a quarterly index that details the percentage of home purchase loans that are likely to default. When this rate is very low, it indicates that lenders are unwilling to tolerate defaults. This makes it much harder to get a loan.

When that percentage is higher, it indicates that lenders are more lenient so it is easier to get a loan.

In another report called the Housing Credit Availability Index, the Urban Institute also revealed that there is still ample space to expand the housing market credit box. Even if the current risk of default was twice what it currently is, it would still be well within the pre-crisis standard of 12.5%.

Foreclosure Rates

In the last 10 years, foreclosures and short sales have made up 35% of all home sales. That’s huge!

At the end of the fourth quarter of 2018, the percentage of loans in the foreclosure process was just 0.95%. It hasn’t been that low since 1996!

Ready to Explore the Raleigh Real Estate Market?

Linda Craft & Team REALTORS® is ready to help. Give us a call today to learn more about the best way to buy a home in the greater Raleigh market.

Rely on our expertise, our extensive resources, and our proven track record with buying homes in Raleigh. We’ll guide you towards a successful outcome in the Triangle, guaranteed.

A Quick Study Guide on What “Affordability” Means in Raleigh Real Estate

A calculator next to an outline of market trends.When we talk about “affordability,” a lot of definitions may come to mind. For real estate specifically, affordability is something of a hot topic.

While it is true that buying a home is less affordable today than it was at any other time in the past decade, that has a lot to do with the real estate market crash of 2008.

If you’ve been in the real estate game for a while, you probably remember the flood of distressed properties that hit the market at this time. Due to the poor state of the economy, foreclosed and short sale homes were going for a huge discount. This rush of distressed homes actually damaged the value of other homes within a neighborhood.

Lucky for everyone involved in the real estate industry, things have since changed!

The Market Has Changed Since Then

A woman holding a tablet and looking at how the market has shifted over the past 10 years.Over the past decade or so, the market has recovered and prices have gone up right along with it. This isn’t a bad thing! A strong economy is good for everybody, especially those trying to sell their home for what it’s worth in the Triangle.

As such, both home prices and mortgage rates have increased. To make the best possible decision in the Raleigh real estate market, it’s important to have plenty of resources to rely on.

So Mortgage Rates Have Shifted

An open door with a set of house keys hanging from the key hole.When most buyers think of a home’s “affordability” they’re picturing two things in particular: the listing price of the home and the mortgage rate they’ll have to pay.

According to a CoreLogic report written by Andrew Lepage in late January, the “typical mortgage payment is a good proxy for affordability because it shows the monthly amount that a borrower would have to qualify for to get a mortgage to buy the median-priced U.S. home…”

While mortgage rates are slowly increasing, they are nowhere near the gargantuan rates of the 2006 housing boom (think an average monthly payment of $1,275…)

By the end of 2019, experts have projected the typical monthly mortgage payment to be about $963.

What Does That Mean for Buyers and Sellers?

Whether you’re thinking of buying or selling a home in Raleigh, please know that this is one of the most advantageous times to invest in real estate!

At Linda Craft & Team REALTORS®, we have the market expertise necessary to help you make a highly valuable transaction in this area. Please give us a call today to learn more about your Raleigh real estate options.

How Going “FSBO” Costs You More Money in the Long Run

If you’re selling your Raleigh home, chances are you’re trying to maximize your profits. It’s normal for homeowners to look for ways to sell their home for the most amount of money possible, while limiting all of their costs.

However, time and time again, I see new sellers opting to list their home as “FSBO” in order to save a few dollars. Listing your home as “FSBO” means going “For Sale By Owner,” or choosing to sell your home without hiring a real estate agent.

While listing as “FSBO” means not having to pay an agent’s commission, it has a lot of hidden costs and pitfalls and will actually cost you more money in the long run!

An Agent is a Professional in the Real Estate Industry

A professional reviewing graphs.Did you know that a home sold with an agent typically nets 6% more than one sold as “FSBO”?

That’s because an agent knows the real estate market really well—it’s their job after all! They’re an expert in their field, which means they know all the tips and tricks for selling homes.

In addition, it’s their job to stay on top of market trends, housing inventory, and sales prices. An agent knows how to price your home for the market you’re selling in.

Sure, you could rely on an automatic home value estimator to price your home, but those services are famous for being highly inaccurate.

All the “Hidden Work” Agents Do

If you’re choosing to sell your home without an agent, be prepared for a lot of work. After all, when you work with an agent to sell your home, you have them by your side to negotiate on your behalf.

As you sell your home, you’ll probably have to negotiate with:

  • The Buyer
  • The Buyer’s Agent
  • The Buyer’s Bank
  • The Appraiser
  • The Inspection Company
  • The Title Company

And an agent’s work doesn’t stop there! Your real estate agent is your guide to the world of real estate. They’ll be able to provide you with home-selling resources, advice on how to stage your home, an effective marketing strategy, and emotional support during a busy time.

Agents Know How to Reach Buyers

Two people sitting side by side on a couch, one is one a computer and the other is on a tablet.More than 50% of buyers find their home on the Internet. As such, if you’re going to sell your home you need to have a thorough online presence for your home.

A professional real estate agent is more likely to have a comprehensive Internet marketing strategy, as well as a top-tier website where buyers can search for homes.

Selling Your Raleigh Home? Let’s Talk

Here at Linda Craft & Team REALTORS®, we want you to make the most amount of money possible when you sell your home. That’s why we offer an array of complimentary home-selling resources, and a specialized marketing plan designed to give your property maximum exposure.

Don’t just take our word for it! Check out our home-selling track record, and see what our clients have to say. There’s a reason we’re the Triangle’s #1 real estate team: we sell homes quickly and for more money, and we’ll help you achieve all of your real estate goals.

Interested in learning more? Give us a call today to get started.

The Pros & Cons of a Buyer’s Letter: Standing Out in a Busy Market

Imagine, after weeks of searching, that you’ve finally found your dream home. It’s in the perfect location with the right features and exactly the amount of space you need. But after requesting more information, your agent informs you that there are already several offers made on the house. How do you stand out in a busy market and snag your dream home?

When buyers are looking to make a lasting impression on sellers, they often opt to submit a letter to the seller. In fact, a recent study found that buyers who submitted letters were 9% more likely to have their offer accepted.

A Buyer’s Letter can work both with you and against you, so it’s important to understand what they are and when you should use one.

What is a Buyer’s Letter?

A man typing on a laptopA Buyer’s Letter is pretty much what it sounds like — a letter written by the buyer for the seller in order to stand out in a busy market. The letter is your chance to make a case for why you should get the home over other buyers.

Many people opt to write about how they envision their lives in the home, how well they would take care of it, how much owning this specific home would mean to them, and similar sentiments.

You might also use this space to talk yourself up, bringing up steady finances, your down payment, and job security — things geared towards making the seller confident in choosing you.

Advantages of a Buyer’s Letter

A man and a woman shaking handsA Buyer’s Letter sets you apart from the crowd and makes you more than just an offer on a sheet of paper — it allows you to connect with the seller on a personal level. In a constantly growing and changing market, being able to stand out or connect puts you a big step ahead of other buyers.

Is the home close to a golf course? Does the seller have bikes in their garage? Are there signs of pets in the home? If you notice you have common interests, including them in the Buyer’s Letter can elevate your standing.

When you choose to forgo a Buyer’s Letter, you miss out on the chance to advocate for yourself, which can go a long way in the seller’s final decision.

Disadvantages of a Buyer’s Letter

A woman writing in a notebook. While there are plenty of pros to using a Buyer’s Letter, there are also pitfalls to consider. Making your case is great, but it does give the seller leverage. If you really love the house as much as you say, then what’s to stop the seller from raising the asking price?

Maybe the seller accepts your offer, and you move to the home inspection stage. If issues turn up, then the seller might refuse to make costly repairs, assuming that you’ll buy the house no matter what.

Another unexpected con of a buyer’s letter? It can be tricky for sellers to navigate around discrimination issues. If a seller picks a buyer of a certain race, religion, gender, or family status instead of another, they could face backlash. Be aware of this when writing your letter so as to not put the seller in an uncomfortable position.

Need Help Standing Out?

If you’re kicking off the home-buying process and need help standing out, we’ve got you covered. When you work with Linda Craft & Team REALTORS®, you’re enlisting the help of the Triangle’s #1 real estate team. We know exactly how to help you purchase the home of your dreams.

Get in touch with us today, and we’ll help you secure your dream home, and answer any and all of your questions in the process.

Want to Build Your Wealth? It’s Time to Buy a Home in Raleigh

The most surefire way to begin building your wealth in the NC Triangle? Become a homeowner.

Buying a home essentially forces you to build wealth. To purchase a home, you have to apply for a mortgage loan to pay for it. Then, every month, you pay off a percentage of that mortgage. Each mortgage payment brings you a little bit closer to fully owning the home on your own, and makes your equity a little big bigger. To be honest, your home is really just one big savings account.

So, owning a home and paying your mortgage every month builds your wealth for the long run.

Owning a Home Leads to Financial Security

A white table with a checkbook and small stack of money.According to many housing experts in the real estate industry, buying a home before the age of 35 leads to being better prepared for retirement at age 60.

If you’re a millennial in the greater Raleigh area, you may believe that you can’t afford to buy a home because of the massive down payment or the high mortgage interest rates. However, that’s not actually true!

If you can afford to pay rent every month, you can afford to buy a home. Plus, with so many different mortgage options available, it’s not always necessary to pay a huge 20% down payment!

Navigate the Triangle Real Estate Market

Cute interior decor.It’s never too early to begin planning for your retirement. And, the sooner you begin saving, the better off you will be when it’s finally time to retire!

It’s no secret that housing wealth is the largest single source of wealth currently available. Plus, the emotional benefits that come from buying a home are on the same level as the financial benefits!

If you’re interested in building your wealth by buying a home in the greater Raleigh area, then it’s time to contact Linda Craft & Team REALTORS®.

You Deserve a Successful Real Estate Transaction

When you choose to work with Linda Craft & Team REALTORS®, you’re enlisting the help of an all-star team that will stop at nothing to make sure you achieve success in the Triangle real estate market.

As the Triangle’s #1 Ranked Real Estate Team, we know exactly how to help our clients find the perfect home. Give us a call today to explore your real estate options in the greater Raleigh area!

When’s the Best Time to List Your Home? NOW!

If selling your home is at the top of your New Years Resolutions, then it’s time to get started. Although the market is thought to “slow down” during the cold winter months, that doesn’t mean it’s not an advantageous time to sell your home.

In fact, now is the best time to sell your Raleigh home! Want to know why? Because homes are highly in demand, and inventory is at an all time low.

It’s a Seller’s Market

A luxurious outdoor pool with two red lounge charis.While the number of buyers has decreased over the past few months, inventory has been at an all-time low since November of 2018. Truthfully, there just isn’t enough inventory to satisfy what buyer demand there is.

For the last five months, the number of homes for sale has decreased substantially.

According to the National Association of Realtors, the number of homes for sale in the country decreased by about 190,000 from June to November of last year. While demand for homes has decreased slightly over the years, it still far exceeds the current inventory available.

What’s the Bottom Line?

Two professionals reaching across a table to shake each others hand.Now is the time to sell your home! Across the board, the best time to sell your home is when there’s less competition. In a market as competitive as the Triangle, where motivated buyers far outweigh current sellers, now is an incredible time to sell your home!

Selling your home during a “seller’s market” typically guarantees you a better price for your home, fewer hassles in the transaction, and a stress-free selling experience.

Ready to Sell Your Raleigh Home?

Linda Craft & Team REALTORS® are ready to help. We offer a number of different home-selling programs, designed to meet your unique needs as a seller.

Want to receive an instant offer on your Raleigh home? We can help with that, too. You can also research the market, see what homes are selling for in your neighborhood, and get specific home staging tips to make your home sell even faster.

Market Update: Are Low Interest Rates Going to Stick Around?

If you’ve been eyeing the Triangle real estate market for a while, you’ve probably noticed interest rates rising in 2018. As we enter the first quarter of the new year, it’s important to stay on top of changing mortgage interest rates.

Right now, interest rates for mortgages in the United States are on a downward trend. As 2019 began, the interest rate for a 30-year fixed-rate mortgage dropped to just 4.51%. In addition, the growth of home prices are expected to slow.

So, what does it all mean?

It’s a Great Time to Buy a Home in Raleigh

A couple receiving the keys to their new home.If interest rates remain low, now is a wonderful time to apply for a mortgage and buy a home in Raleigh! As interest rates increased in 2018, many homebuyers decided to pause their search for a new home.

But, if you’re in the Raleigh real estate market, now is the time to pick the search back up! As we continue through 2019, the inventory of homes for sale in Raleigh is expected to pick back up, while interest rates are expected to grow slowly from 4.77 to about 4.93 by the end of the year.

How Much Will Interest Rates Increase in 2019?

A man and a woman meeting with a bank lender.Organizations like the Mortgage Bankers Association, Fannie Mae, and the National Association of Realtors project that interest rates will increase in 2019. However, they will not increase as rapidly or dramatically as they did in 2018.

The bottom line: if you’ve been hesitating on buying a home in Raleigh, it’s time to dive into the real estate market. Low interest rates, a growing inventory, and the slow growth of home prices have created ideal conditions for home buyers in Raleigh!

Ready to Find the Perfect Home in Raleigh?

Linda Craft & Team REALTORS® are here to help. With a combined 30 years of real estate experience in the Triangle, our team possesses the unique expertise necessary for making a highly successful home purchase.

We’re the #1 Triangle Real Estate Team for a reason. We offer customized services, in-depth real estate resources, and extensive real estate expertise to our Raleigh homebuyers. If you’re ready to expand your home search in Raleigh, then it’s time to give Linda Craft & Team REALTORS® a call.

Still Renting Your Home? There Are Better Options Available!

2018 is quickly drawing to a close, which means it’s time to start planning for the new year. If you’re still renting a home in the Triangle, please know that you have better options available!

Have you been dreaming of becoming a Triangle homeowner? You’re not alone! This is a wonderful area to invest in, and an ideal time to buy a home. Home values in the Triangle are expected to increase over the coming years. This makes now the time to act!

Take a look at our complimentary home-buying tools to get an idea of your options in the Triangle. Oftentimes, it’s less expensive to pay a mortgage every month than it is to keep up with annual rent increases, and all the other fees associated with leasing!

What Do You Dislike About Renting?

Young couple thinking and looking at a laptop computerAccording to a 2018 Bank of America Homebuyer Insights Report, 75% of millennial renters plan on buying a home in the next 5 years, and 38% are planning to buy in the next 2 years!

Those surveyed were also asked what they disliked about renting. 52% said rising rental costs were their biggest reason. Other factors included “not building equity,” “feeling like I’m paying my landlord’s mortgage,” and “not being able to have pets.”

There’s plenty of merit to that concern, as the median asking rent has risen steadily every year since the 1980s.

Common Misconceptions About Buying a Home

Bright living room interior with huge windows.If you plan out your budget every month, you’ve probably heard of this rule “don’t spend more than 30% of your monthly income on housing expenses.” Did you know that almost half of all renters surveyed in the Bank of America Report spend much more than that on their monthly rent?

When asked what was stopping them from buying a home, many responded that they “weren’t able to save the 20% down payment.”

However, this is one of the biggest misconceptions about buying a home! It is possible to buy a home without putting 20% down.

Ready to Explore Your Triangle Home Buying Options?

Allow our team of experienced Triangle real estate agents to guide you through the process. For more information about what kind of homes are available in the Triangle, and what your options are as a buyer, please get in touch.

As the #1 Real Estate Team in the Triangle, Linda Craft & Team, REALTORS® are fully prepared to find you the home of your dreams and negotiate an excellent price on your behalf.

Top Things Discerning Luxury Home Buyers Want

the exterior of a large brick suburban home in raleigh north carolina

Luxury home buyers are getting very smart.

This particular group of buyers are quickly becoming more discerning. They’re making wise choices about what their luxury home needs to look like, and it’s definitely affecting the way you should sell your luxury home.

Here’s what we mean:

Bigger is Not Necessarily Better!

Today’s luxury home buyers are looking at quality over quantity. They are forgoing outrageous amounts of square footage for exceptional building quality, tasteful finishing elements, unique attributes, and mindful, creative uses of space.

Number one on their list of amenities is making use of outdoor space in a way that accommodates their family’s lifestyle. That might mean:

  • a backyard pool area or tennis court
  • an outdoor living room
  • a classy bar area
  • fireplace or pit with cozy chairs
  • gourmet outdoor cooking facilities

Or it could mean all of the above. Houses with these elements tend to sell faster and for more money because of the valuable lifestyle amenities they offer.

Kitchens are Still King! 

Luxury kitchen with big windows and white granite counters.More than any other room in the house, the kitchen needs to be carefully planned to meet the needs of today’s Luxury Home Buyers. It is the heart of the home and whether or not the buyer cooks regularly, they are looking for a spacious kitchen with quality fixtures and top-of-the-line appliances. A highly functional island is a must; housing creative storage to hide small appliances as well as adequate seating.

But that’s not all. We all know everyone ends up gathering in the kitchen. It’s the place kids go after school for a snack and to have a conversation about their day. It’s where friends park themselves when they come over for a cup of coffee and a chat. Most of all, it’s where family gathers to help with Thanksgiving dinner. This area needs to include enough room for daily meals as well as comfortable space for entertaining.

Tech-Savvy Homes are the Norm, Not the Exception

There is literally an app for everything today. Being able to control elements of your home like temperature, lights, security, and entertainment from a mobile device through one app or another is a must in the luxury home market.

Buyers in this market prioritize smart home functions over custom window and wall treatments in a heartbeat.

Work-Live-Play vs. Remote and Inconvenient

Pair of hands on the steering wheel of a new car.Buyers in the Raleigh luxury market today are looking for convenience wherever they can find it to save them time and make their quality of life rich. Where buyers once looked for remote, private places to live, most are looking to reduce the travel time to activities they enjoy; dining, entertainment, shopping, and services.

It’s even more important to them that they be located close to work so the daily commute time is minimized.

Charm is in the Finish and Functionality

It’s almost like the luxury home buyer of today is looking for a house that makes common sense for their families and their lives.

They love the uniqueness of a home and are intensely attuned to details that not only add functionality but also make their home distinctive. Quality is everything; from kitchen cabinets to bathroom fixtures and even garage storage.

Price it Right from the Get Go! 

 Sometimes pricing a home in the Triangle’s luxury market defies the rules of logic. Sellers often think their home is so huge and amazing that they will place a robust price tag on them without considering how usable all that space is. A well-designed 5,000 sq. ft. home with incredible functionality is a more desirable home in this market than a 10,000 sq. ft. home with a lot of wasted space that doesn’t get lived in.

Builders who short charge on the quality and workmanship will rarely fool anyone in this market. As stated before, quality is everything and the lack of it will never do!

Choose Linda Craft & Team REALTORS

No matter what price range you’re looking at for your next home, Linda Craft & Team can provide a level of expertise that only comes with decades of experience in the Greater Raleigh market; 33 years to be exact!

We know this market and understand what home buyers want. So whether you are ready to sell your home or if you’re in the market to buy, we’re the team to give you an edge and help you achieve your real estate goals. Give us a call at 919-235-0007 or visit us at lindacraft.com.

Keeping a Healthy Credit Score – DOs and DON’Ts

How many times have you been told how important it is to keep a healthy credit score? The biggest benefit of keeping a healthy credit score is that you will enjoy the benefits of lower interest rate, especially when you go to finance a home, buy a car, or invest in property for your business.

There are five things that influence your credit score:

  • Payment History – 35% – bills you’ve paid on time
  • Level of Debt – 30% – how much you owe and how it is used
  • Credit Age – 15% – average amount of time credit line is open
  • Mix of Credit – 10% – credit cards, loans, and other credit accounts
  • Recent Credit – 10% – credit inquiries – several in a short period of time can damage your credit

There are also several DOs and DON’Ts that can affect these five credit score components. Here’s Linda to tell you about them.

 

DOs

  • Pull a credit report – you pulling a credit report will not affect your credit so it’s good to do this once a month to make sure it is correct. The credit bureau does get things wrong from time-to-time.
  • The rule of thumb for credit cards is to only use 30% of your available credit and pay it off every month.
  • Collections can kill your score. If you have them, settle as soon as possible with the company you owe and then ask for a Letter of Deletion (not a Letter of Satisfaction) for the Credit Bureau. This permanently deletes that collection from your account and will increase your credit score.
  • If you want to buy a home, choose a mortgage lender that uses a credit simulator. They can really help you manage your credit to your best advantage.

DON’Ts

  • Don’t open new accounts
  • Don’t cancel credit accounts
  • Don’t consolidate credit – this really damages your score

If you would like help finding a mortgage lender in the Raleigh area with a credit simulator to help you achieve a very healthy credit score, give us a call. It doesn’t cost a thing to take steps to increase your credit score whether you are looking for a home or a space for your business. We’re here to help! For residential real estate assistance, call 919-235-0007 or visit LindaCraft.com. For commercial real estate assistance, call 919-466-5000 or visit CraftCommercial.com.