Smart Moves

In the midst of the pandemic, those with strong and sustainable incomes are smashing records for home-buying in appealing areas outside metro cores.

“Professionals able to work from anywhere basically view this entire economic disruption as an opportunity to live wherever they want,” says Glenn Kelman, the CEO of Redfin, the national real estate brokerage.

To get a bigger house for the money, these buyers, many of them the parents of young children, are willing to uproot and even change states to obtain a plush domain with loads of square footage. In some cases, they’re even considering resort communities.

“People are buying vacation homes and then taking a permanent vacation, where they’re working from those houses,” Kelman says.

Obviously, those working in fields suffering layoffs -- such as hospitality, travel and retail sales -- are in no position to buy a home these days. But some in sustainable white-collar industries are highly motivated to purchase a larger place.

“This level of demand is just insane,” Kelman says.

Adding to the sense of urgency for many buyers is the ascent of home prices, coupled with beguilingly low mortgage rates. They’re undaunted by the fact that desirable properties are in extremely short supply.

“Affordability is at the heart of this year’s noticeable migration from high-cost downtowns toward suburbs, small and midsized towns, and even vacation destinations,” says George Ratiu, a senior economist for Realtor.com, the national home listing service.

It’s true your money will typically buy more house if you choose a place many miles from a city. Yet real estate specialists urge home shoppers to thoroughly investigate any outlying area far from where they currently live before they commit.

“No house is an island. You could buy a splendid house in an area that looks appealing on the surface. But if you land in a community where neighbors rarely socialize, that could be an unhappy outcome,” says Mark Nash, a real estate analyst and author of “1001 Tips for Buying and Selling a Home.”

He says some buyers mistakenly assume that picking a community with expensive houses will yield them a warm, welcoming neighborhood. But that’s not always the case. “You could move to a tiny condo and find wonderfully interactive neighbors. Or you could buy your way into a super-fancy neighborhood and encounter snobby people who refuse to interact,” Nash says.

Here are few pointers for buyers:

-- Don’t rule out a brand-new subdivision or condo complex.

Are you weighing a move to a new development, but fear it would be unfriendly? If so, Nash suggests you learn more about the community before automatically rejecting it.

Granted, many condo buildings are populated by young professionals or two-income families who have extremely demanding daily schedules, even during a pandemic, that keep them busy for long hours. Still, many who move to new developments are motivated to build lasting friendships with neighbors.

“They’re open to making new friends because they have few established relationships,” Nash says.

-- Look into the social dynamics of any neighborhood you’re considering.

Buyers who want a friendly, interactive community are advised to spend time there in search of clues about how people relate.

“Even coveted neighborhoods can have real issues. It only takes a couple of unpleasant, busybody residents to spoil the mood in the whole neighborhood. That’s particularly likely if they’re always on social media undercutting other people,” Nash says.

During the pandemic, you might be reluctant to go door-to-door. But even adhering to social distancing guidelines, you could still walk through a community on a weekend to chat with neighbors who are out in their yards.

-- Go visit a community you’re considering more than once.

Nash recommends that those with a strong interest in a target community visit at varied hours to look for patterns of human behavior.

“Drive through the neighborhood four times in a day -- during the morning, at midafternoon, at dinnertime and again at 11 p.m. Notice whether people are relating to each other or staying inside their homes nearly all of the time,” he says.

In some neighborhoods, residents are superficially friendly yet don’t build in-depth relationships with each other.

“Perhaps you’ll see people out walking their dogs who smile and wave to each other. But they seem too busy to stop and communicate,” Nash says.

-- Always remember that friendships are reciprocal.

Those with a support structure within the immediate radius of their home have many advantages. Not only can they borrow the cup of sugar they need to finish a batch of cookies, but they can also count on help in an emergency.

Still, as Nash says, moving to a friendly neighborhood won’t guarantee you develop a strong support structure -- unless you invest time and energy in creating positive relationships that are genuinely give-and-take. You need to interact during times of celebration as well as need.

“All good relationships, and that includes relationships with fellow residents, must be reciprocal if they are to be strong and enduring,” he says.

(To contact Ellen James Martin, email her at ellenjamesmartin@gmail.com.)

The United States could be heading toward one of the biggest generational transfers of housing in decades, say those who track the country’s real estate markets.

Many more aging baby boomers -- the eldest of whom are now in their 70s -- are expected to soon begin letting go of their big suburban houses.

Meanwhile, young families with growing offspring are eager to take over large and well-located suburban houses, which are currently in very short supply.

“Until now, lots of older folks have been clinging to their family homes. Who wants to move during a pandemic? But all that will likely change profoundly in the near future,” says Mark Nash, a longtime real estate broker and analyst.

Nash predicts that as early as 2021, many more boomers will be compelled to sell their spacious properties, due in large measure to health worries, but also financial concerns.

“Right now, because of forbearance programs, the mortgage payments of many seniors (like adults of all ages) have been temporarily suspended under federal rules. But after COVID-19, that will change, and all these deferred payments will come due. Owners who can’t pay up may have to sell to avoid foreclosure,” Nash says.

He says seniors who must liquidate their equity to fund their retirement years will eventually release many of the sort of properties that families so desperately wish to acquire.

In many neighborhoods, the present zeal for home-buying among young families is unusually strong.

“The buying season we’re seeing this fall more closely resembles peak market activity we’d see in the spring of a typical year,” says Chris Glynn, a senior economist for Zillow, the national real estate company.

Until now, one factor slowing the generational transfer of housing has been that many older people have deferred spending on the sorts of improvements that would make their properties more show-worthy.

“A lot of people falsely believe it costs a fortune to get a house ready for sale. That’s only the case if the place has severe problems, such as foundation issues, a leaky roof or major plumbing problems,” says Nash, the author of “1001 Tips for Buying and Selling a Home.”

In reality, most properties don’t require extensive expenditures to prep them for a positive sale.

“A ho-hum house can become a whole lot more appealing with a small investment in paint and cleaning supplies,” according to Nash.

Here are a few pointers for sellers:

-- Undertake a “power cleaning” for major impact.

Doing an in-depth cleaning can be one of the most cost-effective steps sellers can take to distinguish their property from rival homes for sale in the same neighborhood.

“The simple fact is that clean sells. Like it or not, people do judge a book by its cover. And any house that looks the least bit dirty will nearly always be passed over,” Nash says.

However, remember that the kind of cleaning your place needs is not the sort of superficial work you’ve typically done in the past before guests came over for dinner.

“You need to do a power cleaning -- the deepest cleaning you’ve ever done. For example, you need to clean every window, inside and out, no matter how high,” Nash says.

Are you unwilling to tackle such an in-depth chore? Then Nash recommends you spend the few hundred dollars it costs to hire a well-recommended cleaning crew.

“For sellers, an investment in cleaning services gives a tremendous bang for the buck,” he says.

-- Find a listing agent skilled in staging.

These days, many sellers see the wisdom of engaging a professional home stager. This is a design-minded person who removes excess furnishings from a property and then rearranges the remaining items to make the place seem larger and more attractive.

Hiring a professional stager can cost $500 to $1,500 or more, depending on the size of the space. But you can obtain high-quality staging services for no extra charge by selecting a listing agent trained in the art, says Kendall Bergstrom, a veteran agent who specializes in luxury home sales.

“Many real estate people have added staging to their skill sets,” she says.

-- Arrange for a pre-listing home inspection.

In the current seller's market, it’s not uncommon for buyers to waive the right to a home inspection to make their offer more competitive. But even after a contract is signed, deals can still fall through if the buyers discover a significant problem with a place.

As Nash says, many savvy sellers won’t risk a failed deal -- one that could delay their moving or retirement plans. To avoid this outcome, he urges sellers to hire their own inspector before their place goes on the market.

Granted, it can cost $200 to $600 or more to hire an inspector. And there will be more bills if the inspector locates problems that require repair. But that could be money well spent if it preserves your chance to sell on your timetable.

“The reality is buyers are now much more willing to walk away from a deal if scary-sounding problems are identified at any point in the process. The best way to avoid this crisis is to identify and resolve all the issues before any buyers arrive to tour your place,” Nash says. (To contact Ellen James Martin, email her at ellenjamesmartin@gmail.com.)

America’s millennial generation -- born between 1981 and 1996 -- are highly motivated to buy their first house. They spend countless hours on the web searching properties. But many are scared to go beyond the internet phase.

“A lot of people get stuck window shopping online. It takes them a long time to get their ground game going,” says Devin Ratoosh, a 32-year-old real estate broker who counts many millennials among his home-buying clients.

To illustrate, he tells the true story of a longtime buddy, a computer engineer also in his 30s, who spent more than a year in the internet-search phase before finally touring properties with Ratoosh a couple of weeks ago.

“This guy took forever to get his ducks in a row. But he and his wife, both working from home due to COVID-19, were extremely unhappy living in their small city apartment. They really needed two home offices and a yard for exercise. The pandemic got them into the serious phase,” Ratoosh says.

Just this week, the couple is closing on a three-bedroom bungalow with an ample yard in a comfortable, middle-income suburb.

Ratoosh cites several reasons for homebuying hesitancy among millennials who are wannabe owners. One is that they came of age during the housing downturn of 2008, when foreclosures were everywhere.

Another limiting factor is that many cash-tight millennials believe they must amass a 20% down payment before they can seriously consider buying.

“That’s a false concern. There are many programs for people with much less than 20% down,” says Ratoosh, who’s in business with his boomer-age father.

Here are a few pointers for millennial renters seeking a well-priced house:

-- Move forward once you’re certain of your decision to buy.

True real estate pros never urge prospective buyers to rush into a home purchase prematurely. Even so, for those who are genuinely ready to proceed, they say one reason for people to move forward soon is that low-cost financing is currently available.

“Mortgage rates are now breathtakingly low,” Ratoosh says.

-- Remember that rents can always change.

It’s hardly surprising that those who sell real estate for a living encourage tenants to favor a home purchase over rental. But they do make one point that resonates with first-timers, including millennials. In most areas, your monthly housing payments should remain more stable over time if you’re paying on a mortgage rather than a rental lease.

“You’ll have fewer sleepless nights with one of those delightfully low fixed-rate mortgages,” says Tom Early, a broker and past president of the National Association of Exclusive Buyer Agents (naeba.org).

Buying also gives you the potential to build equity --especially when home values are ascendant, as they’ve been for multiple years.

-- Seek mortgage preapproval before hunting for a house.

It’s important to gain mortgage clearance before attempting to bid on a property. That involves getting your credit standing assessed and verifying your income and assets.

“In popular neighborhoods, the supply of available entry-level homes is very limited these days. So don’t even think about trying to compete with other bidders prior to gaining the credibility you need through mortgage pre-approval,” Early says.

-- Carefully time your pitch for a “stale” listing.

During the current pandemic period -- when buyers outnumber sellers in many desirable markets -- there are relatively few workable ways to compete for an affordable house. But one approach that could help involves pursuing a listing that’s been languishing unsold for a lengthy period.

“Those who way overprice their home when it first goes up for sale usually earn the ire and disrespect of many buyers,” Early says.

When finally these owners face reality and get into a “must sell” situation with their stale property, they might even let the place go slightly below market.

How do you know which sellers have a strong need to sell soon? Early says that the listing agents for many stale properties can be remarkably frank about why the owners need to move.

-- Look into buying a “spec home” from a builder.

Early, who’s worked in real estate since 1982, says he’s helped a number of purchasers score a good deal on a brand-new house the builders constructed without specific buyers in mind. This is known as a “spec” property.

Though many such homes have already been snatched up by eager buyers, there are always a few available for those who hunt them down.

“Seek out builders who still have several spec houses in their developments. They need to sell these homes to pay off the bank for their construction loans. Their urgency could result in a fair deal for you,” Early says.

-- Accept the current limitations for bargain shopping.

Early says there’s no shame in offering list price or slightly more in a hot area, assuming you’ve done your homework and are convinced you’re not paying more than a few thousand dollars over true market value.

“You can’t let emotion cloud your judgment. But if you’ve found a house you dearly love, years from now you won’t regret that you ran that extra mile to make it your own,” Early says.

(To contact Ellen James Martin, email her at ellenjamesmartin@gmail.com.)