About Wendy Wilmowski

Real estate agent at Two Crown Home Team. Serving clients in Pennsylvania and Maryland.
4 01, 2022

What to Expect in the 2022 Pennsylvania Housing Market

By |2022-01-10T14:33:40-04:00January 4th, 2022|Blog, Buying a home, Selling a home, Uncategorized|0 Comments

What to Expect in the 2022 Pennsylvania Housing Market

2022 Housing Market in Pennsylvania

The Pennsylvania Real Estate Market in 2022

Pennsylvania single-family homes on the market are expected to continue to sell quickly due to a limited supply and high demand. In addition, homes are not as likely as before to get sold without making any necessary repairs or updates. Buyers who are paying the asking price, or over the asking price, are less likely to want to fix problems or do renovations after purchasing their new home.

Competition has been fierce among buyers trying their best to win bidding wars. A real estate bidding war is a situation in which more than one party expresses interest in purchasing the same piece of property. The parties involved will then make offers on the property in an attempt to win it over the other. We expect bidding wars to continue into 2022.

Housing Prices

Supply and demand is the single most important factor in determining price. So with limited single-family homes on the market, and many buyers fighting for them, prices are expected to stay stable after the red hot market of 2021.

According to Lawrence Yun, the National Association of Realtors®’ chief economist, “home price increases are also expected to ease with an annual appreciation of less than 6%”.

There were 6 million existing-home sales in the US in 2021. The best in 15 years. Lawrence Yun predicts that sales will decrease slightly in 2022, due in part to the expected increase in interest rates. Also, there should be a modest increase in new home construction as the supply chain backlog improves.

Interest Rates and Mortgages

The national average 30-year fixed mortgage APR is 3.560% as of January 10, 2022.

An important rate to keep track of for determining what mortgage interest rates might be in 2022 is the Federal Funds Rate.

The Federal Funds Rate is the interest rate at which depository institutions lend federal funds to other depository institutions overnight. The Federal Reserve can influence this rate by buying or selling U.S. Treasury securities.Housing Loan

Mortgage rates are influenced by the Fed Funds Rate because they are typically tied to the 10-year Treasury yield. When the Fed Funds Rate goes up, mortgage rates go up, and when the Fed Funds Rate goes down, mortgage rates go down.

The Fed Funds Rate is currently at 0.25%. That’s the rate it has been at for the last year.

The Fed has signaled that it will increase the Federal Funds Rate this coming year, and the consensus among economists is that it will increase 0.50% in 2022. If this happens, then mortgage rates should increase as well.

Here are 5 reasons that interest rates affect mortgages:

  1. The cost of borrowing money: Interest rates are the amount of money people have to pay for borrowing money. When interest rates go up, it costs more to borrow money. This means that people have to pay more for mortgages and other loans.
  2. The availability of credit: People have to pay more for mortgages and other loans when interest rates go up. This means that it is harder for people to borrow money.
  3. Inflation and the level of interest rates: Inflation is when prices for things go up. When it happens, interest rates will often go up as well due to the influence of the Federal Reserve. One of the main goals of the Federal Reserve is to control inflation. The Fed can influence inflation by changing the Federal Funds Rate.
  4. Risk premiums for different types of borrowers: A risk premium is an extra amount of money that a borrower has to pay when they borrow money. This is because the lender perceives the borrower as being riskier. The riskier the borrower is, the higher the risk premium will be. An example of how risk premiums affect home mortgages is when a lender requires a higher interest rate for a mortgage if the borrower has a low credit score. This is because the lender perceives the borrower as being riskier. The higher the interest rate, the more money the borrower will have to pay in total.
  5. The liquidity of the mortgage market: The liquidity of the mortgage market is the ability of a lender to quickly and easily sell mortgages. This makes more capital available to lenders.

Buying a House in Pennsylvania

Buying a house is one of the most important choices many people will make in their lifetime. It’s helpful to keep in mind that buying a house is also an investment, which means buying at the right time can be crucial for maximizing your buying power. Purchasing real estate isn’t something you do on a whim; it takes serious consideration and long-term planning.

When thinking about buying a house, Pennsylvania buyers should consider the following:

  1. How much can I afford to spend?
    If you want to buy a home, it is good to have a mortgage that is about 30% of your income.
  2. What are my needs vs. what are my wants?
    Making a list of your needs and wants helps to clarify what is truly important. No home is perfect. So having a clear idea of those items that are non-negotiable before writing an offer is very helpful in the purchasing process.
  3. What kind of mortgage do I need?
    For example, a 30-year fixed-rate mortgage vs. a 15-year fixed-rate mortgage. The VA loan is available to those who served in our country’s military. FHA loans have a lower down payment and tend to approve buyers with lower credit scores.
  4. Can I really afford a monthly mortgage payment and other associated costs (property taxes, homeowners insurance, homeowners association, etc.)?
  5. What will happen to real estate prices, inflation, and interest rates in Pennsylvania in 2022?

Selling a House in Pennsylvania

The market for selling a house in Pennsylvania in 2022 is expected to remain strong. Housing inventory remains low compared to the number of first-time homebuyers as well as seasoned home buyers looking to move.

First-time homebuyers are driving a lot of the demand. Millennials – those born between 1982 and 2000 – continue to age into the home-buying market. This generation holds a significant number of people aged 24 through 44 who are ready to purchase their first home.

Selling a house in Pennsylvania

Here are 5 tips for selling a home in Pennsylvania in 2022:

  1. Your home must be in great condition and updated if you want to get top dollar. You want to get as much money for your home as possible.
    For example, consider painting your walls. Fix anything that’s broken. Replace the roofing if it’s near the end of its life. HVAC stands for heating, ventilation, and air conditioning. It’s a system that regulates the temperature in a building or vehicle. Make sure the HVAC system is up to date.
  2. Price your home correctly from the beginning – it’s important to have realistic expectations.
  3. Stage your home so that it looks its best, emphasizing its selling points.
    It’s important to make your house look clean and declutter before you start showing it to buyers. Remove overly personal items such as family photos. You want buyers to be able to imagine what it would be like to live there and to visualize their furniture and decorations in each room. At this point, your home is your investment and you need to see the sale as a business transaction.
  4. Use a real estate agent who knows the market inside and out.
    When you try to sell your house yourself, it’s called FSBO. It can be a bad idea because it’s hard to know what to do and how to do it. You also might not get as much money as if you used a real estate agent.
  5. Be prepared to negotiate with potential buyers.
    When you want to sell your house, you need to be prepared to negotiate with the people who might want to buy it. Your real estate agent will help you do this.

The Real Estate Market in Pennsylvania is Solid

There are a lot of questions about what the future holds for Pennsylvania’s housing market and we can help answer them. Subscribe to our newsletter to stay up-to-date on developing trends in real estate, including new developments happening this year that will affect your home purchase or sale decisions. We can also help you get expert advice on how interest rates, inflation, and other factors may impact you as a homeowner.

Featured photo courtesy of Ralph Kelly on Unsplash.

7 12, 2018

Real Estate Market Trends for Montgomery County Pennsylvania

By |2021-11-04T14:41:24-04:00December 7th, 2018|Blog, Buying a home, Selling a home|0 Comments

Real Estate Market Trends for Montgomery County Pennsylvania

Real Estate Market Trends for Montgomery County Pennsylvania October 2018

Recent Real Estate Market Trends

It’s important to watch market trends to get an idea of where the real estate market is heading. The October 2018 report on real estate market trends for Montgomery County Pennsylvania has data worth looking at.

Home Buyer Interest Compared to Appointments

Ever wonder how the interest of buyers compares to the actual appointments made online to see
properties they’re interested in? Check out the Buyer Activity Report below that compares
showing appointment activity to pending sales and active inventory for the month of October
2018. This latest report also breaks appointments down by list price range, giving a picture of the
current market.

Montgomery County Real Estate Report Two Crown Home Team

Showings According to Price Range

In Montgomery County, PA inventory is strongest with 32% of the market with homes listed in the $300,000-$500,000 range. Showings were robust in this price point at 28%. Following close behind were homes listed in the $200,000-$299,999 range at 23% with 29% showings. Luxury homes listed for more than $500,000 are 25% of the inventory, yet yielded only 13% of the showings.

The median sale price for a home in Montgomery County Pennsylvania in 2018 is $305,000. So homes with ranges above and below that sold price continue to have a lot of activity for showings.

Montgomery County Real Estate Report Buyer Activity

Purchasing Before the Spring Market

Overall, there is a slight deficit in the number of homes listed for sale this year, compared with last year. Generally, inventory is low in the winter months, which can also work to a buyer’s advantage, as sellers may be more willing to negotiate, especially if their home has been on the market for many months.

The perception is that the longer a home sits on the market, the more desperate the sellers will be to unload it.  While this isn’t always the case, and there are many reasons why a home may be languishing on the market, the chances of a buyer getting a better deal increase in the winter months.

Another advantage to buyers is that there is less competition in the winter than the spring and summer, which means less chance of a bidding war.  It also translates into a potentially easier closing as title companies are less busy and can devote more attention to the transaction. Other service providers, such as appraisers, home inspectors, and contractors are also less busy in the winter months.  

While inventory is lower, the opportunities abound for the savvy buyer, ready to purchase a home before the crush of the spring market.

Graphs courtesy of TREND as Bright MLS.
Featured photo courtesy of Aaron Huber.

7 12, 2018

How Snowbirds Can Winterize Home Pipes

By |2021-11-04T14:42:52-04:00December 7th, 2018|Blog, Home Maintenance|0 Comments

How Snowbirds Can Winterize Home Pipes

Preparing Your Home for Winter Months

Tips for Snowbirds: How to Prevent Frozen Pipes

Winter is coming and in the middle of all of the hubbub of the holiday season, you’re looking forward to heading south for the winter to your new beachfront property. You’ve taken care of home security systems, newspaper delivery, the refrigerator, and freezer. And you’ve wired your gutters to prevent ice dams. Your friends and family have your contact information. An important home maintenance issue as well is to make sure that you winterize your water pipes. The last thing you want is to return home to water damage and broken pipes. Here are some tips on how snowbirds can winterize home pipes.

Set Your Home Temperature

Make sure your heating system is set to be no lower than 55 degrees. This will help ensure that your indoor plumbing keeps from freezing. The problem with freezing pipes begins when the outside temperature goes down to 20 degrees or below. Pipes conduct heat. So those that are relatively warm inside, for example, pipes that are 55 degrees or more, will carry some of that heat outside. In turn, this will help keep the portion of the pipe that is outside from freezing.

Keeping water heaters running will also help the hot water lines. Save money by turning down the hot water heater thermostat from where you normally have it but don’t turn the water heater off completely.

It’s not a good idea to turn your heating system off completely. While that will save money and energy, it could lead to a very expensive cleanup and repair should a pipe crack and start leaking.

Winterize Your Drains

Drain pipes can freeze as well. So again it is important to keep your thermostat at 55 degrees or above.

You should also treat your drains before you leave. A natural drain treatment is to use 1 cup of salt, 1 cup of baking soda, and 1/4 cup cream of tartar. Follow that up after a period of time with two cups of boiling water.

If you have a bathroom in a cooler part of the house, take extra care to treat the tank and bowl. The DIY Network has excellent advice here on how to winterize a toilet.

Shut off the Water

Shutting off the water is the single best thing you can do to prevent frozen pipes inside your home. Find the main shutoff valve for your home water supply and turn it off.

Open Outdoor Spigots

Leaking Outdoor Faucet

After you turn off your main water supply valve, go ahead and open your outdoor spigots. Water expands when it freezes. By opening your outdoor spigots, you’re releasing any built up pressure that’s in the pipes.

That way should ice start forming in your outdoor pipes, it won’t be forming in pipes that are already under pressure. That will help prevent the pipes from cracking and forming leaks.

Enjoy Your Time in the Sun!

Enjoy your extended period of time away from your home. You’ve earned it! Enjoy it with the peace of mind that comes from having prepared it for the cold weather. Alarm systems can tell you if an emergency has occurred, but it’s better to have prepared your home to minimize any emergency.

Featured photo courtesy of Sam Beasley.

30 11, 2018

Tips on Selling Your Parents’ Home

By |2021-11-05T10:55:07-04:00November 30th, 2018|Blog, Selling a home|0 Comments

Tips on Selling Your Parents’ Home

Tips on Selling Your Parents' Home

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Many of my real estate client’s parents are elderly.  I get a lot of calls asking my advice about what to do with their childhood home when it comes time to move their elderly parents to some type of retirement home, or when they pass away.  It’s a good idea to have a plan in place, especially if there are siblings involved, so that selling the house can go as smoothly as possible and the siblings don’t end up hating each other in the process.

I came across an informative article on Realtor.com by Margaret Heidenry that gave some great tips on selling your parent’s home.  https://www.realtor.com/advice/sell/how-to-sell-parents-home-with-your-siblings/

Should you keep the home or sell it?

The first decision to make is if you will sell the home or keep it – either as a family home or a rental.  Michael Mazek, a Chicago area attorney, points out that when it comes to deciding about the estate, there’s usually one sibling who doesn’t want to sell.  

“The challenge is that essentially puts all the siblings into a business partnership,” says Mazek.   And that’s the first potential landmine.

Usually what happens when siblings decide to keep the home is that the workload isn’t evenly divided amongst them, especially if someone lives in another part of the country.  It can set the stage for a battle between brothers and sisters over money or who’s doing the most work.

“That’s why it’s usually best to sell the property and use those funds to purchase individual investments or simply keep the profits,” says Mazek.

What if one sibling refuses to sell?

Says Heidenry:  “If one sibling wants to keep the home, he or she can buy the others out for their share of the home’s fair market value. However, if a buyout isn’t an option, even just one sibling generally has the right to force a sale even if the majority are against it.

The process is called “partition by sale,” and the net proceeds are divided among the owners.

“Generally the property will be sold at a sheriff’s sale, which is a court-ordered sale most frequently used in foreclosure auctions,” says attorney Richard Winblad of WinbladLaw.com, in Edmond, OK. The minimum winning bid must usually equal at least two-thirds of a home’s value. For instance, a property worth $200,000 can sell for $133,333.

Still, a partition by sale is hardly ideal, since you could have sold the house at market rate and made a whole lot more! This is why siblings should do their best to cooperate in order to avoid a courtroom drama.”

Is it better to sell the house “as is” or for top dollar?

One of the most important decisions to make if you decide to sell your parent’s home is to determine what the condition the house is in to sell it.  If the house is sold “as is” without making any upgrades, then chances are good that the home will sell for a lower asking price. It can make sense to sell the home “as is” if the siblings live out of the area and can’t manage the home improvements required prior to the sale.

Another consideration is how much work will need to be done to the home.  If it’s a complete renovation, then selling it “as is” makes more sense. Major renovations take time, money, and patience.  If the stress of selling the home is already having a negative impact, then selling “as is” for a lower cost can be a lifesaver.  

Many people like the idea of buying an estate sale and then making the changes to suit their style.  My husband and I specifically looked for an estate sale when we bought our first home together. We wanted a home that had good bones but needed cosmetic updates.  We purchased at a good price and we know that we will not over-improve for the neighborhood when we renovate our home. It was a win-win for us and for the siblings selling their parent’s home.  

However, if the necessary renovations are easy and quick, and it’s possible for the siblings to do them, then it makes sense to do them to get a higher asking price.  Whoever pays for the upgrades should get a refund at settlement.

Can’t agree on a price? An appraisal will resolve the issue

Emotions can run high and sentiment surrounding a family home may make determining the sales price a challenge.  One way to have an unbiased assessment of the home’s value is to have an appraisal done.

While appraisers typically work for lenders to determine if a property is worth backing with a mortgage, they can also work directly for sellers to come up with a fair price for the home.  The few hundred dollars spent on an appraisal will go a long way in having the home priced appropriately and avoiding conflict with siblings.

Of course, the real estate agent that will list the home can also show you comparable sales and help determine the listing price.  But if the home is unique or in an area where comps aren’t readily available, or if the siblings want someone who’s more objective to suggest the price, then an appraiser is definitely worth the $300-$400.

If you decide to sell, chose one person to oversee the transaction

“We all know the saying about too many cooks in the kitchen. So siblings should decide on a point person who will communicate with both the family and the real estate agent, and generally manage the transaction from the selling side. If multiple siblings give instructions, your agent and potential buyers may get conflicting information that could derail the transaction.”

Margaret Heidenry is a writer living in Brooklyn, NY. Her work has appeared in the New York Times Magazine, Vanity Fair, and Boston Magazine.

Featured photo courtesy of Elien Dumon.

29 11, 2018

4 Tips for Second Time Home Buyers

By |2021-11-05T10:44:23-04:00November 29th, 2018|Blog, Buying a home, Selling a home|0 Comments

4 Tips for Second Time Home Buyers

Tips for Second Time Home Buyers

Home buying the second time around comes
with a mix of unique opportunities and
challenges

When it comes to stress, home buying is an equal opportunity experience. No matter how many times you go through the process, and no matter how fantastic your professional team is, some aspects of the transaction are virtually guaranteed to increase your heart rate.

There are some challenges that affect all buyers equally, including second-time home buyers. For example, a shortage of available homes will spell a highly competitive market for anyone who is looking to buy. Second-time home buyers may even have a slight advantage in a fast-moving market. After all, they are often experienced house-hunters with a sharp eye for problems and confidence to make decisions quickly.

However, second-timers also face a unique set of difficulties. Here are a few ideas and tips for second-time home buyers that could make the process a little easier.

Tip #1 for Second-Time Home Buyers: Save Up
for the Down Payment

Let’s begin by acknowledging that saving up for a down payment is difficult for first time buyers too. According to a recent survey from the National Association of REALTORS13% of buyers think it was the most difficult part of the process! However, second-time home buyers can be at a disadvantage when it comes to the down payment. First, they cannot dip into their IRA penalty-free, as that perk is reserved for first-time home buyers. Second, life tends to get more complicated as it goes, which can jeopardize consistent savings.

What should they do? The most obvious (and hardest to implement) answer is to use a budget.

Budgets get a bad rap, but getting a strong understanding of your inflows and outflows is an excellent starting point to building up your savings. Automate good behavior as much as you can: apps like Betterment and Digit make it easy to set up periodic withdrawals from your main account. It is also a good idea to save one-time windfalls like tax refunds, large bonus checks, lottery winnings, and gainful outcomes from a particularly lucky night in Las Vegas.

Another way to boost your capacity to handle a down payment is to sell your first home first. This path works well if you can manage the timing of the sale and subsequent purchase (more on that next).

Tip #2 for Second-Time Home Buyers: Manage Two Mortgages

In the perfect world, the sale of the first home and the purchase of the next one would be seamless. You would not have to worry about a transaction falling through because the buyer did not qualify for a mortgage or got cold feet at the last moment. Unfortunately, the real world can be unpredictable, and your first home may not sell as planned. Making two mortgage payments next month is a possibility that many budgets cannot handle.

What can you do to avoid this scenario? Unfortunately, the only way to guarantee the timing is to sell your current home first (i.e. not just get an offer but go through the whole process to closing). This strategy does address the uncertainty, but it also requires you to deal with the logistics of finding an interim place to live while you look for your next home.

If that path is not for you, consider boosting your emergency savings to draw upon if you find yourself with two mortgages. The more reserves you have, the better equipped you are to wait for the right offer (instead of settling for a low offer just to stop the hemorrhaging).

Tip #3 for Second-Time Home Buyers: Don’t Sell Your Current Home Too Quickly

The timing of the sale on your first home is a two-sided coin. If it does not happen as quickly as you had hoped, you risk being stuck with two mortgages. However, selling the first home too quickly can also backfire, especially if you don’t have a plan.

One idea to manage timing is to make the sale of the first home contingent upon the closing on your next home. If the purchase of your second home falls through, you would still have your current home. It may sound like the best of both worlds for you, but it also puts the buyer of your current home at a disadvantage. In a fast-moving market with plenty of properties to choose from, buyers may not be comfortable with that contingency, so be sure to consult with your realtor to understand all the risks.

Even if you are not facing the imminent possibility of being out of your first home with no second home in sight, it is smart to create a backup plan. Spend some time thinking of a few alternatives, such as renting a furnished apartment, negotiating with a buyer who might let you rent your old home for a couple of months, or moving in with local family or friends. That way, you’ll have some ideas to explore if the unexpected happens.

Tip #4 for Second-Time Home Buyers: Learn How To Manage an Expedited Move

By the time they own their first home, most people have had their share of moves and know why moving is one of the top five most stressful situations you can experience. All moves are challenging, hectic, and disruptive. However, there is an argument to be made that moving between homes is tougher than dealing with an apartment move. You often have more boxes to pack, more decisions to make, and often a tighter timeframe to do it in. Is there a better way?

The answer is to do your prep work early. That includes decluttering your home well before you list it for sale. Go through every room and closet, tossing out things you have not used in the past year or two. Don’t forget about the attic and the garage, as they are often convenient hiding place for boxes you have not unpacked since you moved in. Clothes, toys, books, and house gadgets in good condition could be sold or donated. If you are looking for inspiration on lightening up your load before the big move.

Second-Time Home Buyers Also Have Some Advantages Over First-Timers

Despite the unique challenges that face second-time home buyers, the status also comes with some advantages. You might discover that you have an edge over the first-time buyers because you have done it before. Your experience will guide you around common mistakes, give you confidence to make decisions, and provide perspective to manage your emotions through the highs and the lows of the process.

Just as a first-time transaction, remember that choosing a real estate agent is a critical component of your experience. Whether you are looking for a larger home to accommodate the kids, a multi-generational home that will have a place for your aging parents, or downsizing, the team at Two Crown Home Team is here to help!

Featured photo courtesy of rawpixel.

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