Lori Jean's
Real Estate Quick Takes
July, 2022
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Welcome to the July edition of Lori Jean's Real Estate Quick Takes, produced right from my own desk!
The purpose of my newsletter is to provide my friends and clients with relevant real estate information in a fun, easy, quick read. Whether you're buying, selling, or just keeping up on your investment, I hope this information is helpful to you.
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Analysis: Days On Market is holding steady at 15 days, Median sales price is up over last year but held steady from May, and the average sold price went down from May to June. This is all good news for buyers concerned about the increased interest rate.
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$229,000: Building Your Wealth Over the Long Run, Despite Higher Interest Rates
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According to the National Association of REALTORS® (NAR):
“Homeownership is the largest source of wealth among families, with the median value of a primary residence worth about 10 times the median value of the families’ financial assets. Over the past decade, a homeowner who purchased a single-family existing home would have gained more than $229,000 in home equity if the home were sold at the median sales price in the fourth quarter of 2021.”
So what does this mean to you? In the DMV, the increase in home values was actually closer to $250,000 or a little higher than the national average used in the NAR quote. If your home increased in equity by $250,000 over 10 years that is equivalent to a tax-free pay raise of $25,000 per year just for having a roof over your head. Put another way, people who rent would have had a loss of income opportunity of about $250,000 over 10 years or $25,000 per year. Additionally, renters paying an average Maryland rent of $1384 per month for a 2-bedroom apartment at an annual cost of $16,680 lost $166,080 in rent payments over that same 10-year period. Altogether the renter lost rent payments and suffered an equity gain opportunity cost of roughly $416,080 in just 10 years. Now rent for 30 years, and you see why homeownership has historically been the best vehicle for wealth building.
If the increased interest rate has scared you away from home buying, put it in perspective. The increase in equity and not paying rent overcomes the higher interest rate by a huge margin. Even if you end up paying a higher interest rate than you might have a year ago, you are way ahead of the wealth-building process by owning a home. The average interest rate over the past 20 years was 8-9%, so at 5-6%, the rate is still below average. If the rate goes down after your purchase, you can refinance for a small cost relative to the gain. If the rate goes up, as expected, you will be doing the happy dance to have an interest rate of less than 6-7%.
Contact me anytime if you have questions–I'm always here to help.
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Thinking about purchasing a new home or curious about what homes are on the market? I've got you covered. Contact me today!
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"Run when you can, walk when you have to, crawl if you must, just never give up."
—Dean Karnazes, Ultramarathon runner
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Thinking of selling but have a question? Reach out to me anytime–I'm always here for you.
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If you didn't know, I LOVE TO READ. Here's this month's book recommendation:
Getting Things Done by David Allen
If your profession is like mine, being super busy is great. Of course, the downside is a personal sacrifice in time for yourself or family. I have a system I call “mind blocking”. Yes, it’s a take-off on Time Blocking but deals with your emotional focus rather than what you are doing physically. Mind Blocking allows you to work when you are at work, and be with your family or friends when you are with family or friends. Sounds simple but we all know it is not that easy.
I found the key to emotional and mental freedom in “Getting Things Done” by David Allen. The key to giving yourself the freedom to stop thinking about work when you are socializing is to organize yourself BEFORE you settle in for family time. We’ve all been there, you’re trying to enjoy your children, grandchildren or a run in the woods and all you can think about is stuff you need to get done. You know it's crazy but you can’t stop. David Allen refers to ‘to-dos’ that are not logged into a reliable, retrievable format as open loops in your brain. If you have something to do and you do not record it on a list of things to do your brain can’t let it go. This causes a level of stress and distraction which prevents you from enjoying non-work events. So take the time before your social event to review your TO-DO list and completely empty your brain onto the list. This is a simple hack, but it does require a good TO-DO system. For more on that I recommend taking the time to read David Allen’s book, it has sold millions of copies for a good reason.
Sound interesting? Here's a direct link to his book on Amazon.
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I am very skeptical of REALTORS®, as I have encountered a number of shady ones. Working with Lori Buongiovanni was a pleasant surprise. Here's why:
- She is honest
- She actually works in YOUR best interest (not her own)
- She knows the real estate business
- She will work her tail off for you
- She'll get you the maximum $$$ for your house at a fair fee
I almost listed my 5+ acre farm with a REALTOR® who was going to put up a sign, write up a listing, and sit and wait. Then, Lori came along and in a whirlwind, changed all that. She quickly conducted thorough comps of the area and listed my house for $80,000 MORE than the first REALTOR®. Recognizing my house needed some work to get the maximum for it, she brought in a team to clean out the junk in my barn and house and make repairs. All at a very fair price for me. She spent 4 FULL DAYS at my house, helping haul stuff, sort through stuff, repair stuff, mulch, etc. She gave me spot-on guidance throughout the entire process and was always available when I needed her. She tackled several obstacles that came up along the way in my favor - to include an error the appraiser made that could have cost me $25,000. I can't recommend Lori highly enough!!!!!
–Sue
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If you know of anyone that would find these tips, updates, and headlines interesting, feel free to share!
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