Smart Moves

Before the pandemic, walkability was the key feature homebuyers of all ages sought when choosing an ideal neighborhood. Proximity to restaurants, coffee shops, grocery stores and public transit topped the list. But these features have been outstripped by the quest for maximum square footage and lot size.

“It’s all about trade-offs, and these days the trade-offs favor indoor space and outdoor amenities. Buyers still love sidewalks and city attractions. But only if the advantages of traditional suburbia are addressed,” says Fred Meyer, a longtime real estate broker and appraiser.

The pandemic shifted priorities for the long term, according to Meyer, noting that the overall rise in home prices has made it impossible for buyers to obtain all the features on their wish lists.

The shift has been documented in a recent research report published by Zillow, a national real estate firm based in Seattle. The report says sellers with desirable backyard features, such as an outdoor shower, pizza oven and bluestone patio, can command higher prices from buyers.

Take the case of a San Diego couple in their early 30s who are selling the condo they bought enthusiastically in early 2020, just before COVID-19 hit the United States -- and before their baby boy was born the next year.

They still love living in the vibrant Little Italy section of downtown San Diego, with its popular restaurants and pastry shops as well as easy access to street festivals and waterfront vistas. But the area can suffer from noise pollution, including aircraft flying overhead, and the couple’s condo feels too small for their young son.

At this point, the couple are charting a new lifestyle in a close-in suburb of San Diego, where they’re hoping to find a neighborhood with highly rated public schools, as well as a property with a sizable backyard patio. But first they must sell their downtown condo.

Here are a few pointers for the sellers of urban condos:

-- Highlight the value of road access.

Granted, most buyers wouldn’t relish living near the noisy entrance to a major highway. But a location just a mile from that ramp could be a plus for those who work in suburban areas but want to live downtown, says James W. Hughes, a housing expert at Rutgers University’s school of planning and public policy.

“So long as they don’t hear thundering noise from that freeway, some people would prefer your city location to one tucked deep in a suburban neighborhood, which often means more time for their travel to work,” Hughes says.

If your city location leads directly to an important thoroughfare -- without being too close -- he says this point should be emphasized in your marketing materials. Also, if the home is a short walk to mass transit, stress this point as well.

Hughes says many young professionals still enjoy the benefits of in-town living. Yet numerous hold jobs with firms based in suburban office parks. Post-pandemic, many are no longer able to work remotely and must commute. That’s why highway access can be a selling point.

-- Don’t rule out a price cut if your home won’t sell otherwise.

Suppose you’re attempting to sell a home on the noisier side of a city community. But while comparable homes in more tranquil parts of your urban area are selling swiftly, your place continues to languish unsold.

In this case, Meyer says one of your few remaining options is to take a slight price cut below what’s being asked for comparable properties on calmer streets nearby.

It may not be necessary for sellers in popular city neighborhoods like San Diego’s Little Italy to resort to a price cut. But if your home is in an up-and-coming city community, especially one with high volume of construction noise, you might need a discount to attract buyers.

-- Stress access to improving city schools.

Is the community where you live served by quality schools, whether public, charter or private? And are many would-be purchasers people with young children?

If so, Meyer says, it would be a smart idea to promote the purchase of your home as a way to gain easy access to good schools for your kids.

“Assuming your price is realistic and your schools are well regarded, this could be a genuine plus for your sale. Remember that many young families with a preference for city living are working diligently to improve the quality of the urban schools their kids attend,” Meyer says.

-- Look into the cost of fencing your urban yard.

Some urban roads seem particularly risky for children and pets. These include avenues traveled by many commercial vehicles. If you own a detached house along this sort of roadway, Meyer says you might wish to fence your yard in hopes of lessening the fears of potential buyers.

“Fences aren’t cheap -- there’s a lot of labor involved in their installation. But the expense could be justified if it helps unload a hard-to-sell property,” he says.

Your listing agent should be able to advise you on whether the fencing of your yard would constitute a justifiable pre-sale expenditure. As one money-saving option, the agent might recommend that you fence your backyard only, creating a protected area where small children and pets could play.

If you decide to invest in a fence, the choices may seem daunting.

“When selecting your fencing, choose something in wood or vinyl. Stay away from one of those chain-link fences that looks like a military installation,” Meyer says.

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

At age 37, an auto mechanic has modest aspirations for a house he hopes to buy in suburban Maryland. His job will likely only allow him to finance a place below the median price in the area where his family -- his homemaker wife and two toddlers -- now rent.

But the mechanic’s quest to buy is unflagging. This is despite the fact that his savings accounts have declined due to recent stock market fluctuations. Still, he notices that many more homes are now on the market in the area where he lives. That’s due to layoffs at federal agencies in his vicinity.

“This spring seems like a time when sellers are more open to negotiation than last year, when we started home shopping for real. I see lots more price cuts by owners. They’re not as haughty as before. So we’re hopeful,” the mechanic says.

With its concentration of federal employees, Maryland is among several states where federal cutbacks are increasing unemployment. Also affected by federal job loss are parts of Virginia and California.

“There are no giveaways for houses in our area. But at least sellers are more motivated. Plus, there’s no urgency for us to move,” the mechanic says.

Chen Zhao, the head of economic research at Redfin, a national real estate brokerage, doesn’t know the mechanic in this true story. But she shares the expectation that home prices should moderate in much of Maryland. She also foresees lower mortgage rates going forward.

Still, Zhao says an increase in home shoppers hasn’t yet translated to more sales “because prospective buyers are still figuring out whether lower payments are enough to justify a home purchase in today’s uncertain economy.”

Here are a few pointers for buyers:

-- Limit yourself to your financial comfort zone.

Michael Crowley, a real estate broker and former president of the National Association of Exclusive Buyer Agents (naeba.org), cautions buyers against taking any mortgage that feels uncomfortably large.

“These days, there’s no easy way to qualify for a mortgage. Lenders aren’t easing up on their requirement for full documentation of your income, assets and credit history. Yet it’s still possible to encounter a loan officer who will let you borrow more than is prudent. You’re the one who must draw the line,” Crowley says.

However, he notes that today’s young adults are typically quite conservative about their borrowing habits. They have vivid memories of older relatives who lost their homes due to foreclosures during the Great Recession.

-- Look for a place where you could house a roommate or two.

Unlike older homebuyers -- including those who’ve formed families -- many young purchasers are comfortable with the notion of sharing their property with roommates. After all, that’s what they did in a college dorm or a rented group house.

“For homeowners of all ages, it can be advantageous to have at least one rent-paying housemate,” Crowley says.

What kind of property is most attractive to renters?

Crowley recommends you seek a home with a bedroom suite that includes a private bath so a roommate could live more autonomously. A separate, outside entrance to the suite would be ideal. Also, a place near a college campus could be an especially good bet.

-- Seek an energy-efficient home.

After becoming owners for the first time, many buyers are stunned by the size of their upkeep expenses. They find themselves making frequent trips to Home Depot to buy everything from garden supplies to light bulbs. Also, they didn’t budget for high plumbers bills or energy costs.

Of course, many costs associated with homeownership -- such as taxes and insurance -- are unavoidable. But sharp home shoppers can more easily contain their utility costs by selecting an energy-efficient property that’s well insulated and has double-pane windows.

“Despite advances in energy production, inflation is more or less a given for utility bills,” Crowley says.

Financial advisers suggest that before agreeing to buy a particular property, you review at least six months’ worth of utility bills from the current owner. Also, make sure the home inspector you hire gives you a sound estimate of your utility costs going forward.

Ask your inspector to tell you about the quality of insulation for any property you’re considering, including energy ratings for your windows. Double-pane windows can save you as much as 15% to 20% on your utility bills compared with single-pane windows.

-- Don’t forget to factor lifestyle into your home selection.

Whether you’re single or part of a growing family, your social life is doubtless important to you. Even if you outpace many of your friends in the quest for homeownership, you don’t want your move to result in social isolation.

You needn’t live in the immediate vicinity of friends to stay close. But you could find life in a faraway suburb very lonely if the neighborhood where you move to is a long drive from close friends.

“Location is terribly important when it comes to lifestyle. Choosing the right property isn’t just about lots of square footage and fancy features. It’s also about a lifestyle that’s fulfilling on multiple levels,” Crowley says.

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

A registered nurse of 37, who has long aspired to homeownership, never expected to still be renting in 2025. But that’s the reality for her and an estimated 35 million other members of the millennial generation who feel stuck in their rental units.

“As an intensive-care specialist, I make a good salary. I’ve worked long hours since college. It doesn’t seem fair that I’ve fallen short on homeownership,” the nurse says.

Those who track housing trends aren’t surprised that the nurse -- like nearly half of those in her large population cohort -- is still struggling to buy. Compared to the baby boomers, millennials, born between 1981 and 1996, have faced a succession of financial challenges.

Many carry large amounts of student debt, which inhibits their buying power. High inflation in housing costs and a shortage of available properties in popular metro areas also hinder their search.

Economists point to multiple factors holding back wannabe owners from the millennial age group. They came of age during the financial crisis of 2008, and many had their plans again disrupted by the pandemic that hit in 2020. During COVID-19, rising home prices combined with bidding wars, and higher mortgage rates made it harder than ever to buy.

Still, millennial wannabe homeowners aren’t giving up. Though wary, many are trying again this year, despite ongoing economic uncertainties.

“Of late, it feels increasingly difficult to discern what may lie ahead,” says Keith Gumbinger, a vice president at HSH Associates, which tracks mortgage markets across the country.

One step that wannabe owners are taking involves intensifying their savings in any way possible, says Ashley Richardson, who’s affiliated with the Council of Residential Specialists.

Contrary to widespread belief, these days, first-time buyers don’t need a 15% to 20% down to finance a home. Though mortgage lending standards remain stringent, low down payment options are widely available. Still, nearly all purchasers need cash -- if only for closing costs and moving expenses.

“As always, cash talks. People with more cash can get better deals,” Richardson says.

Here are a few pointers for buyers:

-- Reflect on your attitudes about spending.

What stops people from reducing their spending? Financial planners say emotional impediments are often to blame.

Shawn Koch, a certified financial planner who counts many millennials among her clients, says that numerous people attempting a crash savings program first need to deal with the reasons for their poor money habits. To help conquer these impediments, she recommends a book called “Money Harmony: A Roadmap for Individuals and Couples,” by Olivia Mellan.

“To get in hunker-down mode, you may need an attitude adjustment,” Koch says.

-- Start with an inventory of your current spending.

A major obstacle to saving for a home is uncontrolled day-to-day spending. But before you can decide how to reallocate your funds, Koch says you need to review where your money has gone for a period of several months. This can be done either with pen and paper or a personal finance tool such as Quicken.

Such a review can bring surprises. Koch says many of her clients are shocked to learn how much they’re spending on restaurant meals, carryout food, delivery orders and coffee breaks.

Doing a spending inventory can be time-consuming because you must sift through credit card and checking account statements. Indeed, for those who don’t routinely track their spending, this process could take the better part of a weekend. But Koch says it’s essential to determine where cuts are possible.

-- Set up a budget that allows room for your savings goal.

Given the ever-rising cost of living, Koch says it’s hard to trim expenses enough to allow for a serious savings program. Still, she urges savers to examine their largest outlays, including regular supermarket spending.

“People know restaurants are costly. But grocery store food can also add up fast,” says Koch, who recommends that clients buy fewer processed foods, do more home cooking, monitor food waste closely and consider taking bag lunches to work.

Transportation costs can also put a big dent in most household budgets. Koch advises savers to challenge long-held assumptions about car ownership. Would public transit or carpooling be a realistic alternative for commuting that could lead to hefty savings, including for car insurance?

“To save for a house, you may need to cut a car,” Koch says.

Koch also recommends you examine your cellphone outlays.

“Do you really need the latest iPhone, or will the phone you’ve owned for a couple of years still meet your needs? You can always upgrade to a better phone after you’ve met your other money goals,” Koch says.

Creating a working budget that saves expenses isn’t a tough thing to do. But for those who need guidance, Koch recommends “The Budget Kit: The Common Cents Money Management Workbook,” by Judy Lawrence.

-- Establish an automatic savings plan.

Many people living paycheck-to-paycheck find it hard to summon the discipline to save significant amounts of money. And they fear automatic withdrawals from their pay.

But financial planners say automatic withdrawals can be the answer for people who aren’t methodical savers. And they say those who have direct debits taken from their pay rarely miss the money. Meanwhile, their savings accounts add up quickly.

With an automatic debit plan, you just set it and forget it. That’s a big plus for anyone trying to save money for a house,” Koch says.

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