Another Housing Market Crash WON’T Happen. Here’s Why.

There’s a lot of uncertainty hanging over us—the coronavirus closing businesses left and right, stock market volatility sending stocks plummeting, the Fed cutting interest rates to near nothing—but we want to reassure you that another housing market crash is not on the horizon.

Here’s Why We Aren’t In Store for a Housing Market Crash

not another housing market crash

After the major real estate market crash of 2008, it’s easy for buyers and owners alike to feel more than a little wary. Buying at the wrong time can be financially and emotionally devastating, so it’s not surprising that more than a few people are rethinking buying in this uncertain time.

But a housing market crash isn’t inevitable. Here’s why.

Mortgage standards are entirely different

qualifying for a mortgage

One of the reasons the housing market soared in the mid 2000s (and then inevitably crashed) was that it was incredibly easy to qualify for a mortgage. In fact, the Mortgage Credit Availability Index shows that it was almost five times easier to get a mortgage in the 2006 – 2008 range than it is today.

In translation: During the housing bubble, people who should not have qualified for a mortgage at all were buying homes they could not realistically afford.

Prices aren’t skyrocketing

rising prices

Over the course of the last six years, housing values have increased slowly and steadily over time—at an average rate of about 5%. Compare that to the soaring prices of the housing bubble—where rates soared to over 12%—and you’ll see that prices aren’t skyrocketing out of control as they did back in the early 2000s.

There’s an inventory shortage, not surplus

sold sign on a raleigh home

A “normal” market has approximately six months of inventory (homes for sale). Anything more than that is considered a surplus and will cause demand to lower and prices to drop. In 2007, the amount of inventory soared to over eight months—which caused prices to fall drastically. Today, however, we face the opposite scenario, with only three months’ supply of homes for sale.

Housing is much more affordable

calculating housing costs

Affordability of real estate is about more than price. The income of the purchaser and the available mortgage rates must also be taken into account to determine how affordable homes are. Prior to the market crash, prices were astronomically high, income was low, and mortgage rates sat at over 6%—making housing very unaffordable.

In contrast, today’s housing is significantly more affordable; though prices are still high, wages are also high and mortgage rates have decreased to as low as 3.5%. That means you’ll pay less for your mortgage and put less of your income towards it.

People have more equity

equity on a home

During the housing bubble, many owners withdrew equity on their homes as soon as it was available. When the market crashed and home values fell, owners found themselves instantaneously in debt. Many foreclosed on their homes, further worsening home values with a high number of discounted foreclosures and short sales.

This time around, however, owners are exercising a little more caution. In fact, homeowners have cashed out over $500 billion LESS than before.

The Bottom Line: A Housing Crash Isn’t Happening

Economic conditions aren’t the same as they were back in 2008, and buyers and owners are much smarter (partially thanks to hard-earned lessons) than during the housing market crash. These may be uncertain times, but real estate will stay strong regardless.

If you have any questions about how current conditions affect your homeownership, purchase, or sale, Linda Craft and Team is here to chat and share our expert options and advice.

3 Ways Pricing Your Home Right Makes a BIG Difference

The Raleigh area has been in a seller’s market for a while now, which is great news if you’re thinking of listing. Homes are in high demand and buyers are willing to pay for it. However, this does not mean you should price your home way above its value when selling.

Pricing Your Home Wrong Can Kill Your Sale

Because the market is so hot, and in listers’ favor, many home sellers incorrectly believe they can overprice their homes in hopes of making more money. Here’s why that’s not a good idea—even in a seller’s market.

The right price increases visibility

pricing your home to appeal to buyer searches

When you price your home at, or slightly under, market value, you actually increase the number of buyers who’ll see your home. Overpriced homes often end up in higher search brackets—competing with similarly-priced homes which, if correctly priced, will often also be higher-end or larger homes.

Correctly-priced homes will fall into search brackets with similar homes, where they’ll be seen by a greater number of buyers looking for such homes.

Correctly priced homes are exciting to buyers

excited buyer looking at a home

Seeing a great house at a great price is exciting to a buyer! And when a buyer is excited about a home, they’re more likely to want to take a closer look. More buyers getting excited about, and coming to look at, your home is great news—and could even lead to multiple offers!

Excited buyers are also the perfect environment for a bidding war—and the ability to drive a higher final sale price.

Incorrect pricing typically results in a correction

correctly pricing your home

Overpriced homes, because they’re often overshadowed by higher-end but similarly-priced homes, don’t typically attract a lot of buyer interest. That means they tend to sit on the market for a long time. And when homes sit on the market, they attract even less buyer interest. Usually at this point, sellers are forced to make a price correction.

The thing is, though, once a home’s been on the market for a while, even if the price is corrected, buyers are going to wonder why. What’s wrong with this home that no one’s wanted it and the price had to drop? The last thing you want is to give buyers any reason to be turned off!

Correct Pricing is Crucial to Home Selling!

The bottom line to successful home selling is that that right price is a critical first step! That’s why it’s especially beneficial to work with an experienced and local agent, one who’s going to be able to help you find that perfect selling price.

Selling in Raleigh? Let us help!

If you’re thinking of selling a home in the Raleigh area, let Linda Craft & Team help you find that price—and get the job done right. We’ll put our 350+ years of combined experience to work for you and your home.

Does “Aging in Place” Make the Most Sense?

Many homeowners nearing retirement age face a tough choice: to sell or to stay? For some, the decision is pretty easy—they’ve had their hearts set on Florida living or their empty nest is just way too much to care for. Plus, there are all kinds of interesting new 55+ and Active Adult communities out there. But for others, the thought of “aging in place” has more than a little appeal.

Aging in Place Certainly Has Its Benefits

happy seniors aging in place

If you’ve lived in your current home for a long time, the thought of moving might be more than a little daunting. You’ve likely accumulated a lot of personal belongings over those years (and if you have kids, there’s probably a whole lot more). Plus, you’ve made some good memories in your place, and you’ve grown comfortable not just with the home, but with your neighborhood, your neighbors, and your area.

So, the question is, why would you leave?

The Downsides to Aging in Place

an older home with a large backyard

Aging in place might be convenient—at least for now—but convenience is hardly your only worry when considering keeping your home after retirement. A recent report from the Joint Center for Housing Studies of Harvard University (JCHS) notes that 80% of homeowners aged 65+ live in detached single-family homes, the majority of which are at least 40 years old. And there are a few problems that come with an older home!

Older homes require more maintenance

repairing the roof

If your home is getting on in years, it’s likely in need of a little maintenance. And as you age, tackling those maintenance projects might not be as simple as they once were! You might find yourself calling for outside help on even small fixes—and that can start to add up. Not to mention that those larger repairs (think: a new HVAC system or roof) can definitely put a dent in your retirement.

Your home might be too large

an unused bedroom when aging in place

When you bought your home, how many people were in your household? If you had a couple of kids in tow, odds are, you’ve got a few extra bedrooms that aren’t doing much more than collecting dust. And while another room or two might not seem like much (as long as you don’t mind a little extra dusting), you shouldn’t overlook the extra expense of heating and cooling that extra space you’re not using.

Your home might not fit your needs

sitting in the backyard

Even if you don’t have kids, your needs when you first bought your home likely aren’t the same as they are now. You might’ve wanted a large yard with a pool or an out-of-the-way upstairs bedroom. But as you age, it might be more difficult to maintain that lawn, and climbing stairs could start to become a hassle.

Even the location might not be ideal anymore if you chose your spot to be close to schools, parks, or work.

What about renovations?

considering home renovations

Instead of selling their homes, many owners make aging in place more doable by remodeling—converting two bedrooms into a massive master suite, downgrading lawn maintenance with paving stones—but extensive alterations come with their own set of pros and cons.

For one, they’re expensive. For another, there’s really only so much you can change about a home, even with major renovations. And lastly, if you do eventually end up selling the home, odds are, you’re not going to recoup the same value you put into those alterations. In fact, you could even reduce the value by combining bedrooms!

So, Bottom Line: To Stay or Sell?

The bottom line about aging in place is one that’s not so unique in real estate—it really depends on the situation! For some homeowners, keeping your current home is the right move. For others, relocating or downsizing might be a more viable option. Either way, it’s important to carefully consider all your options, as well as the pros and cons of each.

Not sure which move is best for you? Ask us! Linda Craft and Team has over 350 years of combined real estate experience, so we’re pretty good at clearing up questions and concerns. And if you do decide to sell or downsize, we’re more than happy to put our expertise to work for you!

6 Key Real Estate Graphs that You Need to See

No matter what capacity you’re entering the Triangle area real estate market in—whether it’s buying, selling, or investing—it’s crucial to be prepared. By knowing all of the latest numbers on mortgage rates, median sales price, and average days on the market, you can gain a major advantage over your competition!

Since we want to ensure that each and every one of our clients is well-equipped to reach their goals, we wanted to give you a quick snapshot at all of the trends you need to know.

Here are the top 6 real estate graphs that you should study up on.

The Strength of the Current Market

Key takeaways:

  • Keeping an eye on the current status of the housing market is one of the best ways to make powerful and confident decisions when buying or selling a home.
  • Mortgage rates remaining near historic lows and houses selling in an average of only 29 days are just two key elements driving the strength of today’s market.
  • With the national data shown here, make sure to also determine what’s happening in your local market so you are fully informed when you’re ready to make your next move.

Navigate the Market with Linda Craft & Team REALTORS®

At Linda Craft & Team REALTORS®, we know the ins and outs of the local and national real estate market—and we’re more than happy to share that knowledge with you. Whether you’re buying and looking for a little help or selling and hoping for top dollar, our track record of satisfied clients shows that we have what it takes to lead you to success.

Ready to get started? Feel free to give us a call!

Ace Your Real Estate Experience: A+ Reasons to Hire an Agent

In a lot of ways, buying and selling a home is like a test. You want to make sure you study up on all of the materials and have the right supplies before you get started.

But maybe most importantly, you want to make sure you have a teacher that can guide you through the material in a way that’s easy to understand and sets you up for success.

If you’re on the fence about hiring an agent to help you buy or sell your home, here are a few ways we can help you ace the process.

Decode Contracts

Paperwork.

During the real estate journey, you’re going to have to deal with a lot of paperwork. Sometimes it’ll be easy to understand, but other times, all of that jargon will probably look like a foreign language—especially if it’s your first time.

We’ll make sure you’ll know exactly what the papers say, why they’re necessary, and what they mean for you.

Breeze through Negotiations

People shaking hands across a table.

If you aren’t used to negotiating, then this step in buying or selling a home can be tough to handle—especially since you’ll be emotionally invested in the process.

When you work with an experienced realtor, we’ll act as a buffer between you and the other party. Not only will we work to get the best deal possible for your wants and needs, but we’ll also provide a level-headed perspective.

Understand Pricing

People pointing at a laptop screen.

If you’re selling your home, then finding the right price is the key to success. Price too low, and you won’t maximize your investment. Price too high, and you’ll miss out on buyers—and maybe even have to bring your price down.

Luckily, we can make sure you have the right price from the get-go. With our home valuation, we’ll take into account all of the local and national real estate trends, as well as any updates you’ve made to your property.

When it comes to buying, we can also help you figure out whether you’re getting a fair price for your purchase. The last thing you want to do is spend your hard-earned money on a home that isn’t worth it!

Translate Market Conditions

People in a meeting.

Did you know we’re in a period of nearly unprecedented drops in mortgage rates? That home prices have been steadily ticking up this year? That more and more millennial buyers are entering the market?

We know all about the intricate details that make up the market conditions. These details can help decide everything from how high you can price your home to how long it’ll sit on the market. Before you even list or start searching, we can breakdown what the current conditions mean for your experience.

Benefit from Experience

People getting keys to a home.

Above all, we know the ins and outs of buying and selling. We’ve been around the block more than a few times—after all, our team does have hundreds of years of combined experience in real estate—so we know exactly what it takes to be successful.

You might have other options when it comes to real estate professionals in the Triangle, but if you get to know a little more about our team, you’ll start to understand why our clients swear by us.

Don’t Flunk Your Real Estate Journey

If real estate is like a test, then we think we can help you ace it. At Linda Craft & Team REALTORS®, we have years of experience with buying and selling homes in Raleigh—meaning we know exactly how to handle whatever the market throws at us.

Take some time to explore our resources, whether you’re buying, selling, or just exploring the area, and give us a call when you’d like to get started!

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!