Although home prices remain strong, the volume of home sales has dropped off during June. This is causing some in the media to exhibit “housing derangement syndrome” by reporting a pending housing collapse. However, there is a more sensible answer and that may be “home buyer fatigue.” Buyer fatigue is not solely used in real estate; rather it’s a term to describe consumers who do not engage in a market sector for a short duration for various reasons. Home buyer fatigue has occurred multiple times since 2013 after a period of sustained home price increases.
It’s no secret that housing is expensive. Home prices are relentlessly marching forward, making it more difficult for first-time home buyers to purchase a home. One of the contributing factors is the low inventory of homes for sale.
The deficiency of homes on the market is limiting options and stoking competition among determined home buyers, many of whom are willing to offer slightly more than then their cohorts.
The tradition of having an open house, like other real estate customs, has recently become a source of debate over its value and effectiveness. According to Rachel Stults, the tradition began over one hundred years ago when brokers allowed prospective buyers to “inspect” the house by having it open to the public (A Brief History of Opening Our Homes to Total Strangers; realtor.com; April 21st, 2015).
It’s been eleven years since Maryland forced all qualifying homeowners to reapply for the Homestead Property Tax Credit.
Prior to the change in the application, applying for the Homestead Property Tax Credit was almost automatic for homeowners who claimed a primary residence.
However, many abused the program to get tax credits on non-principal residences by claiming multiple properties or rental properties as their primary residence. The 2007 change was implemented to reexamine ownership, so as to stop the abuse of the property tax credit program.
In this time of divisiveness, let’s come together to celebrate our independence. Having innate and inalienable liberties is the foundation of this country. The concept of independence is abstract and usually expressed as intangible actions, such as the freedom from the tyranny of others. However, homeownership has become an icon of freedom that is tangible and obtainable.
Last month I wrote about a few of the benefits of owning a home as part of the recognition of National Homeownership Month. Besides being wealthier, home owners tend to be healthier and happier than their renter counterparts. The history of owning land has been one of wealth and luxury. Renting on the other hand has been associated transition, difficult times, and a hard life. This can be traced back to the middle ages, when serfdom was associated with leasing.
Timing, as they say, is “everything.” Predicting the housing market is tricky. Even the best economists can get it wrong. Aptly, however, there is that group of naysayers who always believe the housing market is overpriced and in bubble status. And you know what they say about a broken clock, it’s correct twice a day.
There’s no way around it, housing market trends are cyclical. Eventually, the housing market will crash and home prices will recede. But, like the phoenix, will again be reborn to go through its life cycle. According to Harvard’s Teo Nicolais (extension.harvard.edu/facultydirectory/teo-nicolais), there are four phases to the housing cycle. The cycles were described in 1876 by economist Henry George and modernized by Glenn R. Mueller to include recovery, expansion, hypersupply, and recession. Nicolais predicts that, aside from the occasional slowdown, there won’t be an honest to goodness housing crash until 2024.
I often preach about regular home maintenance. However, home owners should also have basic repair skills too.
Basic repairs are those items that you can do safely, and usually don’t require a professional. Basic repair skills are sometimes useful as an emergency stopgap before the licensed contractor can make it to your home.
June is National Homeownership Month. In recognition, National Association of Realtors President Elizabeth Mendenhall stated in a June 1st press release that “National Homeownership Month is a time to celebrate and promote the modern American Dream of owning a home. Homeownership changes lives and enhances futures, and many Americans see it as one of their greatest hopes. These individuals are counting on the nation’s 1.3 million Realtors to champion and protect homeownership and help make it more affordable, attainable and sustainable (nar.realtor).”
Prior to the Great Recession, home owner spending for remodeling and renovations was very strong. Besides remodeling the kitchen and bathrooms, many home owners also created specialty rooms (also known as special function rooms) in their homes. Specialty rooms such as home theatres and media rooms were not just trendy because they were cool to have in the house, but they were also added for resale value. According to Harvard’s Joint Center for Housing Study’s Leading Indicator of Remodeling Activity (LIRA), post-recession home remodeling spending dropped off by as much as 28 percent between 2007 and 2011. That spending decrease meant that while home owners focused on saving and paying their mortgages, specialty rooms were no longer a necessity.