Hopefully everyone will have a healthy and prosperous 2018. It certainly seems to be shaping up that way so far. The Dow, has broke 26,000, dropped below 25,000 and closed up over 300 points today. We have experienced well in excess of $1 trillion of new wealth in the stock market in the past twelve months. That is a good thing. It is not just the wealthy, the stockbrokers, and other “big shots” that realize this increase in wealth from the stock market. It is the little guy too. The laborer/teacher/police officer/fireman who has paid into to a union pension reaps these benefits too. The pensions invest in the stock market, bonds, real estate and other assets. As do many mutual funds, some directly and some indirectly. The word “Wealth” has, in many sectors of society, been erroneously associated with “evil”, “greed”, and other nefarious behavioral traits. Increasing your wealth is not a bad thing for you, your family and your heirs. Pretty much everyone wants to make it “easier” for our children to have a better life than we do. Which brings us to the whole “transfer of wealth” issue. Full disclosure, I was raised in a family that owned a small business. My parents, aunts, and uncles all worked hard to assure that their families could be supported by the business. Was it easy? I don’t think so; trying to sell musical instruments when interest rates were 18% must have been a challenge. But they did it, they worked hard to increase the value of the business every year. When the time comes that they pass on they will have the value of their business as a part of their estate. An estate that is composed of assets (typically cash, stocks, bonds, real estate) that are taxed annually. Why does it make sense that upon their death, the estate should have to pay a tax on these assets yet again? This the government acting like a silent partner, reaping the rewards of decades of hard work without ever participating in the “work” aspect of the business. So the “wealth” of a small family-owned business will be transferred to the heirs, after the proverbial “pound of flesh” is taken by the government. We are not talking Kennedy/Rockefeller/Getty wealth, but small time family business “wealth”. This scenario is repeated millions of times across the country with immigrant families, first and second generation American families, who work hard to build something of value that could be decimated by estate taxes. This confiscation of wealth is not a good thing. It discourages hard work for the delayed gratification of leaving children and grandchildren in a better financial position than their predecessors. Is that good for America?
Communication is important – it is how we convey information to each other. To communicate effectively, and be successful in conveying the information accurately, we need to do a few things well:
- Word Choice, use language your audience can understand. If I am trying to explain something to an audience (even if it’s one person,) I should be less concerned with trying to impress them with my knowledge and more concerned with them understanding and comprehending my message. If I use “$2 Words”, and no one else knows what they mean, what did I accomplish other than wasting everyone’s time?
- Spelling, homonyms can be tricky for many. Are you drinking “Sweat Tea” or “Sweet Tea”? Both are spelled correctly but mean something totally different. Allowed and aloud are others that have different meanings but sound the same. Then there are the plain-old typos and misspellings. Some of my favorites are: “Peeface from the Editor”, “Panty stuffers”, and “School of Pubic Affairs”;
- Punctuation, “Did the Bear eat John?” or “Did the bear eat, John?” and everyone has seen “Let’s eat Grandma!” instead of “Let’s eat, Grandma” …a comma CAN save a life.
Perhaps errors like these should be expected from grammar school students, but what drives me bonkers is when the NY Times, the Providence Journal, and GolocalProv make these errors. Spellcheck is not adequate, and is for lazy writers. Why don’t these writers check their own work with their own eyeballs? After-all, it has THEIR name on it. I submit to you that it is due to a lack of self-pride. They are not proud of themselves, and they are not proud of their own work which represents them. What do you think?
Secret Santa has brought your gift early this year. A holiday recipe for finding the best deal on your home purchase this year: sauté •strong demand with •less competition from other listings marinate in •low interest rates and add a dash of •Holiday Season. The result? The perfect blend for an Artisan deal.
The Holiday Season is upon us, and everyone’s mind is occupied with shopping, parties, sending out cards and wrapping gifts. But, all holiday shopping isn’t done on line, or at the mall, or at that swanky boutique…
In fact, there is a significant amount of home-buying that happens during the “holiday shopping season”. Last year there were almost 1,000 Rhode Island houses that went Pending between November 15, 2016 and January 15, 2017! This “shopping List” was valued at OVER $317 million …THAT is a lot of shopping!
Why is it good to go House Shopping during the Holiday Season??? Well to start, there is less competition from other buyers, so it is less likely that that there will be a “Bidding War” for your dream house – as has happened throughout the year with some houses in high demand areas. The same holds true for putting your house on the market during the Holiday Season. There are fewer active listings as the temperature drops; but according to the National Association of REALTORS, demand for houses remains strong through the Holiday Season. Additionally, interest rates are still below 4% for a 30-year fixed rate mortgage. This is half of the historical average of 8% for a 30-year fixed rate mortgage.
Strong demand, less competition from other listings, and low interest rates. That is a holiday recipe for getting an excellent value on a home purchase.
While the average buyer has pushed the average price for a single-family home in Rhode Island almost to the $270,000 marker, there are houses that sell for a multiple of that as well. In fact, Little Rhody, The Biggest Little State In The Union, has had its fair share of “celebrity” buyers too. The most recent was the announced purchase of The Seafair by Jay Leno and his wife Mavis for $13.5 million. This year it is the highest so far, and the highest since The Fairholme Estate in Newport sold for $16.1 million in 2016. And get this, for $13.5 million, he didn’t even get the whole house! (He bought 4 condo units.) So technically, since it was bought in parcels totaling $13,500,000, this year’s record stands at $11,650,000 for a single-family sale in Newport.
For the entire state of Rhode Island, Single Family sales greater than $1 million increased to 232 houses from 183 houses last year. As for Condo sales over $1 million this year there were 16 in 2017, up from 10 last year.
There were five single-family sales greater than $5 million through November 30 of this year; which is the same as 2016.
If you have any questions about the real estate market in your area, the value of your house or any real estate questions whatsoever, call a REALTOR. If you are going to engage in the largest financial transaction of your life you deserve the guidance of an experienced, ethical, real estate professional.
As of the publication of this Premier Issue of Real Estate Today, there are 80 properties priced over $1 million listed on RILiving.com – a really good place to do your Holiday Shopping.
Five Crucial Home Selling Decisions if You Want to Sell in 2015
If you’re planning on selling your home in 2015 there are five crucial decisions that can help you maximize your sale price, get your home sold quickly and do it all without the mountain of stress that often comes with the sale of your home.
Decision #1 – Decide to prepare sooner than later. Home sellers who wait until spring to get their home “ready” are already behind the curve. The real estate year is in full swing by March 1st and homes that sell quickly and for top dollar during the “selling season” are the homes where the owner had a plan, got their home ready, staged, and listed early in the year.
Decision #2 – Decide to prepare yourself emotionally. Selling your home can be very emotional. When you receive an offer for less than you think your home is worth, it generates a whole host of negative emotions. You can feel angry, frustrated, and think everyone is trying to steal your home from you.
Well, they’re not. Buyers just want to know they’re getting the best price. We all feel similar when we make a big purchase. So be careful to manage your emotions. And if you get a “low-ball” offer rely on the help of a trusted professional. A good agent can often gently negotiate the price into a range where everyone wins. The key is to keep your emotional swings in check.
Decision #3 – Be realistic and price your home accordingly. One of the big keys to getting your home sold quickly, for the most money, is pricing it correctly. If you price your home too high, thinking you’ll “test the market,” it can be costly. Your home can sit on the market too long and get labeled as a “no-need-to-show” because you’re viewed as being unrealistic.
You see it all the time. Sellers think they are going to “hold out” and get a better price. Well, you need to consider how soon you want to sell? The reality is you can get just about any price you want if you’re willing to wait long enough. If you wait 5-7 years your home will very likely sell for a more than it will today. But if you want to sell in 90-120 days for top dollar, pricing is a crucial issue that you should discuss at length with a trusted real estate professional.
Decision #4 – Reconcile reality quickly. This is somewhat similar to decision #2, but it’s actually more practical and actionable. Emotions can be hard to define and control, like in point #2. But what is fairly easy to judge is your market’s numbers, and the realities of value.
Agents always hear things like, “But my home has this, this and this. Therefor it should be worth a lot more.” In theory that’s somewhat true. However, the reality you have to be prepared to reconcile is, if people won’t pay more for those things, it doesn’t make your home worth more.
Now don’t get me wrong. I’m not trying to soften you up so you give your home away. The goal is to help you get the highest possible price, in the shortest time, with the fewest hassles. But something that’s very important to deal with is reality, not wishful thinking. Wishful thinking backs tens of thousands of home sellers into very difficult positions every year.
Having a clear objective view of reality, as well as a trusted professional to help guide you through the emotional ups and downs, can help you avoid a massive mountain of emotional stress, while your home just sits on the market.
My encouragement is, prepare yourself for the true realities, while maintaining high standards throughout the process. It’s a balancing act that with the help of a trusted professional can be far easier to navigate.
Decision #5 – Trust your gut. When interviewing agents there are few things more important than a deep level of trust between you and the agent you choose to represent you. And trust comes in two crucial parts. The first is professional competency.
To trust someone with what is likely the single biggest financial transaction of your life, you need to have confidence that the agent you choose has the skills, technology and ability to fight hard and win what’s in your best interests. That’s why choosing someone just because they’re a “friend of the family” isn’t always the best choice.
The second layer of trust is personal. When you work with someone on something as important as the sale of your home, you need to know you can trust that person personally.
You need to feel a deep sense of confidence that your agent puts your needs in front of their own. It’s not about flash and glitter, or how many homes that agent sold. What’s important is, “Can I trust this person with my financial future?”
That’s where “listen to your gut” comes in. most of us can sense authenticity and integrity. It comes out in many ways and generally when you’re in the presence of it you know in your gut. Sometimes the person might be a little quirky, other times they’re not, but again it’s not about flash and charisma.
The bottom line, choose someone you trust on both a professional and personal level and “go with your gut.”
I hope you found these suggestions helpful. Selling your home is a life altering series of decisions. The better prepared you are to make those decisions effectively, the better the end result.
And as always, if there is anything at all I can do to help you, please feel free to call me at 1-401-580-9797. The conversation is always free and you’re under no obligation of any kind. My entire objective in our conversation is always to help you in any way that I can.
Also, if you would like to know approximately what your home is worth before meeting with an agent, feel free to check out my offer below. It’s a free over-the-phone market evaluation. Just call anytime 24 hours a day and if I don’t pick up leave a message with your email address and I’ll get that evaluation out to you ASAP!
Generally speaking, the consensus seems is that the residential real estate market in most parts of the country is on the upswing in the aggregate. As a licensed Realtor, I will run with that consensus as much as I can because so much of our economic health is psychological and relies on consumer perception. Anecdotal evidence indicates that there is an impressive correlation between the tone of the national headlines about the economy and the psyche of the average consumer. If the news anchors say the sky is falling everyone will soon be running for shelter, even if there is no empirical evidence to support the claim. Similarly, if national headlines are droning on about the lousy economy, high unemployment, and soon-to-be-rising interest rates, home-buying will grind to a virtual stand-still. What both of these occurrences have in common is that they frequently rely on inconclusive, or superficial, data that do not adequately represent the economic “status-quo”. For example, below is a graphical representation of actual data from Core Logic, an aggregator of real estate data (among other things).
The old saying goes: “The only difference between a recession and a depression is that in a recession your neighbor is out of work, in a depression YOU are out of work” So what does this mean? Selfishly speaking, I don’t know and as long as houses are selling in RI and MA (which they are) I am not sure if I should be concerned. However, when I read economic data that do not support the economic outlook; in the back of my mind I can hear the voice of one of my college economics professors emphatically stating that the real numbers do not lie…but those numbers can be manipulated by others for political gain. Case in point: http://tiny.cc/ifnutx an article in the NYT trumpeting the great employment outlook, and this sobering report by the CEO of Gallup http://tiny.cc/oknutx. What do you think???
This past week I came across two separate indications about what may happen to the residential real estate market in southern New England, and elsewhere, in 2015. The first was actual data that demonstrated that while sales were down in 2014 compared to 2013, the prices had risen close to 5%…and this is in Rhode Island, traditionally one of the “lagging indicators” of all states and historically one of the last to exit from economic downturns. See the below:
Rhode Island has been hit especially hard since the last downturn because the unemployment rate has been one of the highest in the nation, and it has been ranked last by CNBC on several occasions for business attractiveness. Next I read the predictions for interest rates from several different sources and they all indicated that rates are going up from .3% to 1.2% by the 2015 4Q.
So to extrapolate: In a “worst case scenario”, if the price of a house increases from $200,000 to $210,000 AND interest rates increase 1.2% (NAR) the monthly payment excluding taxes and insurance would increase from $948/mo today to $1,143/mo at the end of 2015. That is an extra $2,340/year, $35,100 over 15 years, and a whopping, uncompounded, $70,200 over 30 years. Wouldn’t it be better to have that money in your retirement account, or use it for a vacation home? Since we have been at historic lows for a few years, and prior to the downturn the “Fantastic Rates” were well over 5%, this is not that outlandish. It is also not outlandish to think that we will not be returning to rates this low for generations since prior to 2010 we had never had rates in the 4% range (BankRate.com.) So what do you think is now a good time to buy or sell a home??? If you have questions about buying or selling a home, email Joe@JoeLucaRealEstate.com or voice/text at 401-580-9797.
1. Deep Clean
Buyers want to see a fresh, clean home – a dirty home will turn buyers off.
- Kitchens sell homes. Give special attention to countertops, grout lines, appliances, and cabinets, inside and out. Clean the refrigerator and pantry, and hide any trash cans.
- Clean floors until they shine, and clear away pet areas. Dust all surfaces, including those above your line of sight. Don’t forget the ceiling fans!
- Make bathrooms look good and smell fresh. Scrub toilets, and clean shower doors. Invest in fresh bedding, linens, and towels. Odors will turn off buyers. Refresh the space with room deodorizers, but don’t use heavy scents.
- Clean corners, doorways, and window frames. Don’t forget the garage!
- Clear out closets, and store what you’re not using. A half-filled closet looks much larger than one that is stuffed.
2. Add Curb Appeal
- Invest in professional landscaping. Make sure the lawn is mown, re-seed where the grass looks thin, and trim hedges, trees, and anything that blocks the view to your home. Add colorful flowers along pathways and by the front entry.
- Power wash the outside of your home, including paths and driveways. Wash windows to make them sparkle and let in light, and clean gutters and walkways.
- Give your front porch a makeover. Add a bench or chair and a decorative touch. Don’t forget the mailbox! Give it a touch of paint, and be sure it’s standing up straight.
- Park cars in the garage–or even better, out of the way entirely.
3. Fix What’s Broken
You want buyers to focus on the best features of your home, and not on problems from deferred maintenance. This is the time to do those ‘fix-it’ projects that you’ve been putting off. It may cost a bit up front, but it will pay off in the long term.
- Walk through your home with a fresh eye to see if there are obvious maintenance issues. Fix the things you can yourself, and hire a handyman for larger projects. A fresh coat of paint in a neutral color will go a long way!
- Small details add up. Replace worn, dated hardware and knobs with new pieces that suit the style of the home. Replace worn switch plates and old heating and air conditioning registers with new ones that are clean and uncracked.
- Lighting makes all the difference. Replace old bulbs with higher wattage, full spectrum light bulbs. Open curtains to let in natural light.
- If the weather allows, open the windows for fresh air.
4. Stage It!
Home staging is one of the best steps you can take when preparing to list your home. Statistically, a staged home will sell 80% faster, and for 10% more than an un-staged home! The cost of staging is one of the best returns on investment a seller can make over any other improvements. If you can afford to, hire a professional stager. You will be surprised at the difference they can make for a small investment. A stager will:
- Showcase the best features in your home, placing furniture to define focal points and maximize the space.
- De-clutter to help create a feeling of spaciousness.
- De-personalize the home so that potential buyers can envision themselves in your home, rather than focusing on the things you own
- Highlight the best features of your home–a beautiful kitchen, a stunning view, a great fireplace, or whatever it is about your home that makes it special.
- Organize furniture placement so that it helps to create visual space and good flow, and define rooms, so that buyers can see how each room in your home can be used.
5. Invest in Professional Photos
Today’s buyers are more likely to see your home for the first time on the internet. Great professional photos will make your listing stand out over similar homes, and encourage potential buyers to come see your home. Once you get your home looking its best, be sure to keep it “show ready” for a quick sale. Put out some fresh flowers, and you’re ready to go! All photos courtesy of Graciela Rutkowski Interiors