Will 2020 Be the Year of Luxury Real Estate?

Luxury homes weren’t seeing too much interest at the end of 2018. The US real estate market was comprised heavily of first-time buyers searching for lower-priced homes, and the luxury market slowed considerably. But a shift in the market and buyer interest shows that luxury real estate might be poised to make a comeback in 2020.

What Is Luxury Real Estate?

luxury real estate in raleigh

From a general real estate standpoint, homes priced in the top 25% of a price range for a particular area are considered “premium” or “luxury” homes. That being said, the definition of luxury living will vary from city to city, region to region, and even buyer to buyer.

Here in the Triangle, that “premium” price tag could even start as low as $750,000.

Luxury is back on the market

According to the Institute for Luxury Home Marketing (ILHM), there has been a definite upswing in both luxury single-family and condo sales, so it’s a good time to make a move in the high-end price range.

It’s a Smart Time to Enter the Luxury Market

a beautiful luxury bedroom

If you’ve been considering investing in a high-end property or trading your old home for something with a bit more space, now is the time! High inventory and favorable buying conditions make 2020 a fantastic year to invest in premium real estate.

Interest rates are low

In fact, interest rates aren’t just low; they’re near historically low—which means it’s a pretty ideal time to invest in any kind of real estate. At any price point, you will ultimately be paying less for your loan when rates are this low. And when you’re working in a luxury price range, that translates to a lot of money.

Inventory is high

Lower-priced homes have been in high demand for some time now, which has led to a shortage in inventory. The high-end market, however, is not experiencing this same deficit, thanks, in part, to the market slowdowns of 2018 and early 2019. For buyers, this means that despite the increasing competition, there are still plenty of choices!

Buying power & affordability are increasing

Despite a steady rise in home values over the course of the last handful of years (great news for homeowners!), homebuying is actually becoming more affordable for many buyers! How is this possible? Well, for one, lower interest rates make mortgages more accessible. And for another, an increase in average wages gives buyers more room in their budgets to spend on housing.

Luxury Real Estate in Smaller Cities

luxury real estate in the Triangle

Not only is luxury investing making a comeback, it’s growing in popularity in smaller cities, too. Because prices in smaller cities tend to be more affordable, buyers are able to find better deals and purchase more house at the same cost.

Luxury investing in Raleigh

Raleigh is a great example of where small-city luxury real estate is really flourishing. Affluent communities like North Raleigh, Cary, Chapel Hill, and Wake Forest have strong, yet affordable, high-end markets with price tags starting in the low to mid $700s and climbing into the multi-millions.

One of the great things about investing in the Triangle is how much value you really will get, especially compared to larger markets. A million dollars, for example, might get you a lakefront estate or a brand-new ultramodern condo in Cameron Village. It might get you a historic stone manor or backyard tennis courts or 60+ acres of breathtaking countryside complete with horse facilities. There’s a lot out here… and the prices are fantastic.

Ready to Get in on the Luxury Market?

If you’re thinking of investing in a luxury home in Raleigh or the Triangle, Linda Craft & Team is here to help! Our partnership with Luxe Global, coupled with our 350+ years of combined experience, gives us a highly competitive edge—and you an unparalleled investment experience. Contact us today to learn more or get started.

50 Years of Homebuying: A Look at Interest Rates Over Time

We all know that home prices change over time. It’s one of the reasons we invest in real estate in the first place—because we know that a home you buy today is likely going to be worth a lot more tomorrow! But did you know that interest rates have also changed a lot over time… and it’s not how you might think!

Interest Rates Over Time Might Surprise You!

infographic of interest rates over time

If you think your parents or grandparents probably had much lower interest rates than you will, you’re actually pretty far from the truth. Interest rates have fluctuated a lot over the past 50 years, and definitely not how you might think.

The 70s saw sky-high rates

You don’t have to know what today’s rates are to know that interest rates of 8.86% are pretty high. That’s high for a car loan… but it’s also sky-high for a house. One of the reasons for these astronomical rates was inflation, which began rising in the early to mid 70s.

… But the 80s were even higher

Inflation continued to climb into the 80s, and lenders raised rates to combat the economy’s flagrant boom. Rates hovered around 12.7%… with highs climbing to over 18% in 1981!

Rates dropped in the 90s… a little

The interest rate hike did improve inflation, and the economy eventually leveled off. In the 90s, rates fell back into the 8% range—still high, but definitely more manageable than the rates of the 80s.

Rates continued to fall into the 2000s

From the 90s into the 2000s, rates continued to drop into the low 6% range, heading into the housing boom prior to the 2008 market drop. During this time, the combination of low interest rates and low home prices lead to a housing “bubble” that encouraged risky home buying, and ultimately lead to the 2008 housing crisis. Following the collapse, interest rates climbed again, though not significantly.

The 2010s saw all-time historic lows

historic lows of interest rates over time

After the 2008 collapse, the real estate market slowed considerably. Many previous owners had foreclosed on their homes, while others were forced into short sales (selling for less than they owed), and once-likely buyers were wary of trapping themselves into a similar scenario.

To bolster the market and encourage buying, the Federal Reserve continued to lower rates until they reached an all-time historic low of 3.31% in 2012. This did the trick, and the market started to pick back back up… until 2016 once again saw a booming and robust housing industry.

Today’s rates are almost historically low again!

Rates in the late 2010s began a climb upwards from the 2012 low, with rates in 2018 hitting highs close to 5%. Experts predicted 2019 would see rates over 5%, but in a surprising twist, rates actually fell!

Now, even with mortgage rates expected to increase a bit over the next year, they’re currently hovering near a five-decade low. In fact, rates are just 3.49% today… which approaches the all-time low of 3.31%. So while your home likely is going to cost you more than your parents’ or grandparents’ homes, your loan is going to cost you significantly less… and that’s a pretty big deal.

Interest Rates Are a Big Deal!

calculating interest rates over time

Just how much do interest rates matter? Let’s say that your parents bought a $100,000 home at the 1981 peak rate of 18.63%, and you buy your home—also $100,000—at the 3.49% rate of 2020. Your parents would be paying $1,558 a month for their home… while your mortgage payments would be just $448. That’s $1,110 LESS a month, $13,320 LESS a year, and $399,600 LESS over your 30 year loan.

That’s a tremendous difference. Interest. Rates. Matter. Big time.

Want to Buy a Home in Raleigh While Rates Are Low?

Ready to buy while the market is in your favor? Then it’s time to contact Linda Craft & Team and let us put our 350+ years of real estate experience to work for YOU! First home? Tenth home? Doesn’t matter; we’ll work hard to make sure you find the perfect home in just the right spot.

Rental Prices Are on the Rise—Here’s What That Means for You

If you’ve been hesitating to buy a home because you’re afraid you can’t afford it, 2020 might be the year you reconsider. Falling mortgage rates and rising rental prices indicate that buying could actually become more affordable than renting—in addition to the numerous other benefits of owning a home.

Here’s what rising rental prices could mean for you.

Rental Rates Rise While Homeownership Becomes Affordable

rental prices rising

Real estate and rental professionals predict that 2020 could be a strong year for homeownership thanks to a number of factors. According to Freddie Mac, mortgage rates are expected to remain low, holding steady at an average of about 3.8%.

On the flip side, the national rent index increased by 1.4% year-over-year, according to the National Rent Report, and is expected to continue its climb.

Increasing rental rates add up fast

calculating rental rates

An increase of 1.4% might not sound like much—but the math is pretty powerful, especially considering that rental rates have been on a steady rise since 2012. In fact, in 2012, rental prices sat at an average of $1,300 per month. Today, eight years later, they’ve risen to $1,600 a month—an average of $300 more.

When you break down the math, those numbers become even more eye-opening. At $1,300 a month, you pay $15,600 a year for housing. At $1,600, that number climbs to $19,200. That’s a pretty huge difference!

Mortgage rates don’t change

happy buyers outside a home

One of the biggest financial advantages to homeownership, besides building equity, is the stability of monthly payments. Since most homeowners use a fixed-rate mortgage, your rates do not change. So if your monthly payment is $1,500 at the beginning of your payment, it will still be $1,500 eight, 10, 20, and even 30 years from now.

The bottom line: Buying is becoming affordable!

searching for a home for sale

The bottom line for many is that skyrocketing rental prices are making it more and more difficult to find decent housing at an affordable price. Buying a home is quickly becoming a more appealing—and at times, more viable—option for many, thanks to low and predictable interest rates.

Thinking of Buying a Home in Raleigh?

Are you thinking of buying a home in the Triangle area? Linda Craft & Team would love to help! Contact us today to learn more about how we can use our 350+ years of combined experience to help you find the perfect home in just the right spot.

The #1 Misconception in the Homebuying Process

There are a lot of myths and misapprehensions about the homebuying process and real estate investing in general—how Fed rates affect mortgage rates, how inventory affects buyer demand, how the economy as a whole affects the real estate market. But this might be the #1 misconception of the whole process.

Homes Values & Affordability: A Major Misconception

#1 misconception about homebuying affordability

Towards the end of 2018, home prices and values were on a major rise. Then, in 2019, the combination of government shutdowns, a minor stock market slump, and rising interest rates caused the market to slow. Economists predicted an increase in home inventory and a subsequent decrease in prices.

This was not the case.

The new year ushered in a few surprising turns of events—like decreasing interest rates—that brought many buyers back into the market, drove inventory down, and brought home values back up. This reacceleration of home values caused many buyers to believe that owning a home was becoming less affordable.

Rising values don’t mean decreased affordability

How could a higher price tag not mean decreased affordability? In short, because there’s more to affordability than home value. Interest rates, for example, have decreased significantly since the end of 2018, which despite rising prices, has actually increased affordability for many buyers.

Interest rates hugely affect home affordability

In fact, a study by Mortgage Monitor revealed that, although average home prices increased nearly $13,000, the monthly mortgage payment needed to buy that same home actually dropped 10% thanks to falling interest rates.

Income also affects affordability

Not only have interest rates decreased, but median family income has actually increased by 5% over the past year. This gives buyers even more buying power and increases the overall affordability of buying a home.

The #1 Misconception: High Prices Mean Decreased Affordability

House with keys

The bottom line: just because home prices and values are increasing does not mean that homebuying is becoming less affordable. If anything, the contrary is true—which makes it a particularly good time to buy.

Increased values + Increased affordability = A great time to buy

What happens when home values are up AND affordability is up? It’s a recipe for the perfect time to buy a home! Not only will you be paying less, you’ll also reap the benefits of instant equity as home values continue to rise throughout the year. In short, there’s never been a better time to buy.

Ready to Buy in the Triangle?

If you’re thinking of buying a home in the Triangle, now’s the time to act! Contact Linda Craft & Team and let us put our 350+ years of combined experience and expertise to work to find you the perfect home… in just the right spot.

3 Oft-Overlooked Financial Advantages to Homeownership

Buying a home comes with a lot of perks, both financial and personal—building equity, finding a place to belong long-term, becoming part of a community—but there are some overlooked financial advantages to homeownership, too.

Financial Advantages to Owning You Didn’t Know About

financial advantages to homeownership

If you’re still renting or haven’t owned a home recently, you might not know about all the hidden benefits to owning! Here are three financial advantages to homeownership you might not’ve thought about.

Someday, you won’t have a housing payment

paying off a home loan

When you first buy a home, you’ll likely have a mortgage, and it will probably be comparable to your current rent payment. But starting from that first monthly payment, your money will no longer be going into your landlord’s pocket; it’ll be paying down your mortgage.

And believe it or not, if you stay in your home long enough, there will come a day when you don’t have a monthly housing payment.

Homeowners get tax breaks

tax benefits of homeownership

As a renter, you might not be aware that owning a home comes with a few nice tax benefits. In fact, both the mortgage interest and your property taxes are tax-deductible—which can be a pretty big break when tax season rolls around! And it’s certainly a benefit that renters cannot enjoy.

Monthly housing costs are predictable

budgeting monthly costs

When you rent a home, the amount you pay per month depends on the rates your landlord sets, and since most leases are terms of a year or two, that rate can change from year to year. But when you own a home, such is not the case.

The majority of homeowners use a fixed-rate loan, which means that your rates stay the same throughout the duration of your loan. Your property taxes and homeowner’s insurance may fluctuate over the years, but what you pay for your mortgage will not. Not only does that make budgeting a breeze, but it also ensures that you’re protected against things like inflation and skyrocketing rental rates.

Convinced to Buy?

If you’re ready to buy a home in the Triangle, or even if you’re still on the fence, Linda Craft & Team is here to help! Let us put our expert local knowledge, our extensive network, and our 350+ years of combined experience to work to find the perfect home for you.

Great News for Renters Who Want to Buy a Home!

For many renters, the dream of owning a home seems like just that—a dream. And with rental rates rising in recent years, saving for a down payment while continuing to pay more and more in rent has become almost impossible. But there’s good news on the horizon for would-be buyers!

Stable Rental Rates Mean More Savings for Future Buyers!

renters saving to buy a home

Recent studies from four major rent indices indicate that rental rates could be stabilizing in the near future… after years of constant increases. That means renters who’ve struggled to find extra money to set aside for a down payment may once again be able to contribute to a savings account.

Rents have been soaring in past years

increasing rental rates

Despite a rise in buyer demand and new construction homes, rental markets across the US have remained extremely competitive over the past handful of years. Vacancy rates are low, which has caused rents to climb at steep rates—soaring from a national average just around $1,300 to over $1,600 between 2012 and today.

Leveling rental rates are in the forecast

renters searching for a house

Four major rent indices—Zillow Rent Index, RENTCafe, CoreLogic, and The Apartment List National Rent Report—all predict there could be a much-needed slowdown in the rise of rent prices. In fact, all four have already shown a definite slowing in the increase of rental rates.

Spend less, save more

saving for a down payment

If you’ve been dreaming of leaving the rental life behind and buying a home of your own, good news is on the horizon. With rental rates stabilizing, you might not find yourself handing over the majority of your paycheck to your landlord—leaving you with more room to put aside money for your down payment.

Dreaming of Buying in the Triangle?

Have you been thinking of buying a home in the Triangle of North Carolina? Linda Craft & Team is here to help! With over 350 years of combined real estate experience, we’ve got what it takes to ensure you find the right home at the right price in the right location! Give us a call and let’s get started.

Have You Outgrown Your Home? What to Do When It’s Time to Move On

As years go by, our priorities naturally change. Perhaps your household size has increased or decreased, or you’ve seriously downsized your number of possessions. Whatever the circumstances might be, it is important that your home matches your current needs.

It may see tough to initially admit that you are ready to make such a significant change, but the good news is, we are here to help you figure out the next steps when it’s time to move on.

Now’s the Time to Sell

Sell your Triangle home.

If you are in the market to sell, then there’s even more good news for you: now is the perfect time. According to the most recent Home Price Insights report from CoreLogic, home prices have gone up by 3.5% year-over-year. Not only that, but research from the National Association of Realtors found that housing inventory has dropped by 4.3% since just last year.

This is not just a coincidence—these two trends are closely related. As overall inventory has decreased, demand has only increased, which has caused a surge in housing prices. By selling now, you stand to make a much higher profit than you would if you choose to wait!

Beginning Your Home Search

Starting your Triangle home search.

Of course, once you sell your home, you will have to revisit the home search process, perhaps for the first time in years (or maybe even decades!). Since the motivation behind selling your home is to find one that is more appropriate, then you should be sure to put plenty of careful thought into your decision.

Luckily, the Linda Craft Team can help! Get started by using our specialized search tool to narrow down your options based on everything from price and size to features and location. Once you’ve sorted out your wants and needs (and maybe even found a few options), give us a call. We’d love to use our database to find any homes in the Triangle area that fit your priorities!

Navigating the Home-Buying Process

Two people shaking hands.

There is much more to the buying process than just searching—but we’ll be around to help every step of the way. Wondering what your options are, from luxury to new construction? Check out our listings for each. Need a little help with the moving process? We’d be more than happy to send you our free guide on relocating to the Triangle area!

Whether you need help finding your perfect neighborhood or have a few questions about the mortgage process, you’ll find that we have a resource for your every home-buying need around the Triangle.

Ready to Find Your New Triangle Home?

Don’t settle for a home that doesn’t fit your lifestyle—make today the day that you being your new journey. When you work with Linda Craft & Team, REALTORS® , we’ll put our over 350 years of combined real estate experience to work, whether it’s netting top dollar on your home sale or finding your dream home for a dream price.

Take some time to browse what we have to offer. Ready to get started? We’re just a phone call away!

Real Estate Ranked as the Best Investment for Americans

Over the past year, experts have been going back and forth over whether or not the United States is headed for a recession. More recently the risk of a recession has waned, but even with the possibility on the horizon, real estate remained strong.

In fact, real estate was ranked by Americans as the safest investment over the next ten years! Check out the numbers from Porch.com’s poll, and learn why now is the prime time to buy.

The Best Investment? Real Estate.

A row of homes.

Porch.com is a site dedicated to helping homeowners complete home renovations big and small, and they recently conducted a survey on generational housing outlooks. One of the questions on the survey? “What do you believe is the safest investment over the next 10 years?”

U.S. housing took the number-one spot, coming in as the response for 27.2% of those surveyed. It was closely followed by savings accounts, with 21.8%, then gold (16%), U.S. bonds (10.6%), and U.S. stocks (10.4%). Additionally, every generation overwhelmingly agreed that owning a home was a good investment, and most also expected the housing market to rise in the next ten years.

And Other Surveys Agree!

It’s not just Porch.com‘s survey that paints the housing market optimistically; there were two additional, unrelated studies that found similar results.

  • The Federal Reserve Bank’s 2019 Consumer Expectations Housing Survey discovered that 65% of Americans believe owning a home is a good investment, a number that has been steadily increasing over the past four years.
  • A Gallup survey also showed that Americans have picked real estate as the best investment for the past six years in a row.

Why Now Is the Prime Time to Buy

Two people shaking hands.

If you’re interested in starting to grow your investment, then now is the perfect time to start your home search. Mortgage rates—which have already been at near-record lows for most of the year—are expected to stay low into 2020. Buying a home now as opposed to waiting a few months could end up saving you a significant amount!

And it’s not only the financial side of things—since winter is typically a slower time for real estate, you won’t have to compete with nearly as many buyers in the Triangle area as you would in the spring. That means you can take your time and find a home that perfectly fits your wants and needs.

Navigate Triangle Real Estate with Linda Craft & Team

With over 350 years of combined real estate experience, Linda Craft & Team, REALTORS® has been helping Triangle residents successfully buy and sell homes for decades. If you’re ready to start growing your investment, then we’re here to help!

Take some time to browse our resources for buyers, use our specialized home search tool to narrow down your options, and give us a call when you’re ready to get started.

Online Home Searching is Good—But Here’s Why Using an Agent is Better

These days, it’s easier than ever before to search for a home online—and tons of buyers are doing it. In fact, 93% of buyers start their search on a website…but that doesn’t tell the full story. In addition to websites, 86% of buyers are also still using a real estate agent to find out more about homes for sale in the area.

So, with so much technology at our disposal, what is it about real estate agents that keeps people coming back?

 1. There’s More to Real Estate Than Finding a Home Online.

People pointing at homes for sale on a laptop screen.

Guess how many estimated steps you’ll take during the real estate process. Have a number in your head? It’s likely not high enough. In reality, there are around 230 possible actions that can take place in a successful real estate transaction, and the search process is just a drop in the bucket!

Touring homes, submitting an offer, getting in-depth info on a property, setting up an inspection—it’s a long list of to-dos, and not many of them can be taken care of online. You’ll want someone by your side who’s already been through it all!

2. Negotiations are Tricky.

People shaking hands in front of a white brick wall.

Want to save thousands on your home purchase? It’ll take some stiff negotiating. There are several places during a sale where there’s opportunity to open and reopen negotiations, from the initial offer, to the appraisal, to post-inspection. If you want to capitalize on the potential for a lower price, you’ll need to work with a real estate agent who knows exactly what to say and exactly when to say it.

3.  Your Offer Needs to Set You Apart.

People discussing an offer on a home.

You may not realize it now, but the offer you submit determines whether or not you make it to the seller’s next round of considerations. Are they offering a fair price? Should you offer over or under? Does it make sense compared to other local sales trends…or are they trying to get more than their home’s worth?

An offer is a lot more than just a number—it’s your entryway to the rest of the buying process. Working with a real estate agent who knows their way around market trends is the best way to confidently know that your offer is competitive enough.

Enlist the Help of Local Real Estate Agents

From the online search to the closing negotiations, you can trust Linda Craft & Team, REALTORS® to be there through every step of your buying journey. Don’t go into your real estate experience underprepared—let us help you find your dream home for a dream price.

Whenever you’re ready to get started, we’re just a phone call away!

Find Out Why More Than Half of Buyers are Wrong About Down Payments

True or false: if you’re buying a home, you need to have at least a 20% down payment? If you answered true, you aren’t alone—so did 62% of Americans.

But in reality, that couldn’t be further from the truth—and you don’t have put off your home-buying dreams just because you can’t come up with 20% down!

While a 20% down payment will help you avoid private mortgage insurance (PMI), it isn’t some sort of home-buying hurdle that you must clear in order to buy. In fact, it’s far from the most common amount that U.S. buyers put down!

Here’s the truth about down payments—and why you shouldn’t let that 20% number prevent you from reaching your buying goals.

The Truth about Down Payments

A piggy bank standing against a white background.

According to NerdWallet’s 2019 Home Buyer Report, around 6 in 10 Americans think you need a 20% down payment in order to buy a house. Because of this, they also tend to think that it takes several years to come up with the necessary funds for buying.

Unfortunately, this way of thinking unnecessarily postpones plenty of people’s home-buying dreams!

The truth? The most common down payment amount—put forward by around 32% of buyers—was just 5% or less. Put that in terms of concrete amounts, and it translates to just $7,500 on a $150,000 home or $15,000 on a $300,000 home.

Other Common Down Payment Amounts

A single dollar bill sitting on a wooden surface.

While 5% or less is the most common down payment amount, it’s still just one of the many options that buyers choose. Here’s how the rest of the numbers break down:

  • 16% of buyers put down 6 – 10%
  • 23% of buyers put down 11 – 20%
  • 18% of buyers put down more than 20%
  • 10% of buyers bought their home outright

A 20% down payment is a great goal, but you don’t have to feel locked into that amount! Instead, consider how much money you’d feel comfortable with putting down, then work from there.

Buyers are Optimistic

A woman packing up her home and writing on a cardboard box.

Despite prevailing misconceptions about down payments, buyers are still feeling optimistic about the market. Around 42% of Americans feel better about their home-buying prospects this year, which is up almost 20% from last year.

Additionally, 44% of people say that the current economic and political conditions make them more likely to buy in the next year, which is around a 10% increase from last year.

Long story short? Now’s a great time to buy!

Find Your Dream Triangle Home

Buying a home is major step, so it’s important that you have trusted and experienced professionals on your side. At Linda Craft & Team REALTORS®, we have over 300 years of combined real estate experience, making us well-equipped to provide you with everything you need to find home-buying success.

Take some time to explore our resources for home-buyers, learn a little more about what our past clients have to say, and use our specialized search tool to narrow down your options. Once you’re ready to get started, we’d love to talk details!