With 2020 finally in the rearview mirror, we are all looking forward to a better and brighter 2021. Usually, we think of out with the old in with the new in terms of furniture, remodeling, and decorating, but like everything in this past year, even that has changed.
This year, out with the old in with the new doesn’t just mean changing things in your home but also means selling your old home and buying new.
One of the biggest surprises of last year is what happened to the housing market. Who would have thought back in March that in the midst of a pandemic our housing market would explode, but it sure did — with home prices at record highs and inventory at record lows.
There is nothing on the horizon to say the housing market in 2021 is going to change, although the increase in home prices is not expected to be as high as 2020.
The saying your home is your castle has never been more apt than it is today, and homeowners are spending more time and money into renovating their homes, making them the spaces they have always wanted, or transforming them into the spaces 2020 has caused them to need.
But homeowners are not just looking to improve their current home. We are seeing more homeowners taking advantage of the increased equity they now have in their home, and the strong seller’s market, and making the move. Whether it is downsizing, upsizing or just moving to find a better home, now is a great time to make the move to find that perfect home.
Downsizing
With children grown and out of the house, empty nesters just don’t need a big house anymore, or may be ready to change from a two story to a single-story home. Perhaps the high electric bills in the summer to cool a larger home, and the yard and pool maintenance, are just too much.
Whatever the reason, now is a great time to sell your home, take the equity that has accumulated (especially in the last year), and downsize to a more manageable home.
Upsizing
With more people working from home and children doing online schooling, many homeowners are starting to look for larger homes again. Even when life goes back to normal, our normal will be different from what it was before with more people still working from home some or all of the time.
The sentimental value of our home and what it means to us — the space we need, and the comfort and security it provides — have changed in 2020. Homeowners are willing to spend more money and buy bigger homes than they were before. They want the extra room to spread out, to have one or two home offices, and are even looking for an in-home gym or movie theatre.
Can You Buy a Home Before You Sell Your Current Home?
With such low inventory, buyers who need to sell their home in order to purchase a new one are reluctant to sell their home first. What if they sell their home and there isn’t a home they want to buy on the market? We are also in multiple offer situations on a lot of homes so they may not get the home they want.
If you need to sell your home before you buy another but don’t want to move twice or have to rent, there are several different ways this can be done, so please reach out to me anytime so we can discuss your options.
Refinancing
With the increase in home values along with the record low interest rates, now may be a great time for you to refinance your home. If your home is outdated or in need of repairs, you can take advantage of the low interest rates and the equity that has built up to refinance and take-out extra money to do the needed repairs or remodeling.
Depending on your current mortgage rate it may be worth refinancing at today’s lower interest rate just to reduce your monthly mortgage payment even if you don’t plan on taking out any equity. Before you do, make sure you get all the fees and out-of-pocket expenses from the lender before you pull the trigger. Depending on the difference in your monthly payment, how long you intend to stay in your home and the fees, the lower rate may not be worth the out-of-pocket expense.
Refinancing to Sell
Another option when you have equity in your home and are planning on selling is to refinance and take-out extra cash to do the remodeling and upgrades to increase your home’s value. In some markets, such as a slow or buyer’s market, this may not be the best choice. However, in today’s market buyers are looking for homes that have already been remodeled and they are prepared to pay a premium for that move-in ready home. It’s much easier for a buyer to pay a higher purchase price for a remodeled home versus coming up with the cash afterward to do the remodel themselves.
If you are thinking of buying and/or selling and want more information or would like a free consultation on updating/remodeling before you sell, please feel free to contact me anytime.
Lorraine is a Multi-Million Dollar producing agent, has been a full-time Realtor for over 12 years, is an Associate Broker of KOR Properties, a Certified Negotiation Specialist, and is on the Professional Standards Board. You can reach Lorraine at (602) 571-6799.