A Wave of Smaller, Affordable Homes on the Horizon

Are you in the market for a new home but finding yourself thwarted by the seemingly relentless surge in mortgage rates and home prices? Well, there's a silver lining on the horizon. According to Ali Wolf, the Chief Economist at Zonda, smaller, more affordable homes are poised to make a comeback: “Buyers should expect that over the next 12 to 24 months there will be a notable increase in the number of entry-level homes available.” In fact, smaller homes are already making their presence felt. When the pandemic struck, the very concept of 'home' underwent a profound transformation. Homes weren't just places to live; they became offices, schools, gyms, and more. Those who had room to adapt to these new demands tended to hold onto their homes. Meanwhile, those with limited space found themselves looking to upgrade to larger residences. Consequently, during the pandemic, smaller homes became the norm in the housing market, and this trend continues to shape the market today (as illustrated in the graph below): This graph also underscores the seasonality of the housing market, with larger homes often appearing during the summer months when families with school-age children are more likely to move. With fall approaching and historical patterns in mind, we can anticipate an influx of smaller, more affordable homes hitting the market for the remainder of the year. This is excellent news, particularly for those struggling to afford a home. Robert Dietz, the Chief Economist at the National Association of Home Builders (NAHB), notes the recent shift in demand for smaller homes: “. . . as interest rates increased in 2022, and housing affordability worsened, the demand for home size has trended lower.”   What Does This Mean for You? The seasonal trend of smaller homes appearing in the market later in the year, combined with builders currently introducing smaller, budget-friendly newly constructed homes, bodes well for prospective homebuyers. Mikaela Arroyo, the Director of the New Home Trends Institute at John Burns Real Estate Consulting, offers her insight on this potential increase in smaller homes: “It’s not solving the affordability crisis, but it is creating opportunities for people to be able to afford an entry-level home in an area.”   If the idea of a smaller, more affordable home appeals to you, you're in luck – they're on their way. To stay updated on what's available in your locality, reach out to a local real estate agent. The path to your dream home may be shorter than you think.

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New Construction Home in Spokane, WA Sold for $410,000

At Halsted Hometeam, we take immense pride in assisting clients from various corners of the country in finding their dream homes. Recently, we had the privilege of helping a buyer from North Dakota secure a stunning new construction home in Spokane, Washington. This successful transaction was secured for almost $15,000 less than its original list price.   The Home The property that instantly captivated our buyer was a brand-new construction by Hayden Homes, showcasing the elegant 1574 square foot Hudson model. This thoughtfully designed, mid-sized single-level home offers a harmonious blend of space and comfort. The heart of the home, the open kitchen, is a haven for culinary enthusiasts, featuring generous counter space, ample cupboard storage, and a convenient breakfast bar—an ideal setting for culinary creativity to flourish. The spacious living room seamlessly connects to the adjacent dining area, creating an inviting space that is perfect for relaxation and entertainment. But the charm doesn't stop there. The main suite is a luxurious and private retreat, boasting a dual vanity bathroom, the option for a separate shower, and an expansive closet that ensures ample storage. In addition to the main suite, the home includes two other generously sized bedrooms, one of which can effortlessly transform into a den or home office, offering versatility to cater to diverse lifestyle needs. The second bathroom serves these bedrooms, completing the well-thought-out layout of this new construction gem.   Closing Success Finally, on August 30, the keys to this awesome new construction home were handed over to our thrilled client. Despite the property's initial listing price of $424,566, our client displayed remarkable negotiation skills by securing it for the fantastic price of $410,000. We are truly honored to have been part of this journey, assisting our buyer in finding their perfect new construction home in the heart of Spokane, Washington.   Hayden Homes Hayden Homes is renowned for offering affordable yet high-quality and aesthetically pleasing new construction homes in Spokane. It represents an ideal choice for those seeking a blend of value and style in their new home.

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Increased Employment Opportunities and Higher Incomes Fuel Surge in Buyer Demand

Amid prolonged discussions about an impending recession, the economy has displayed remarkable resilience, a phenomenon partly attributed to robust employment rates and steadily climbing wages. Examining the most recent data on both fronts reveals promising trends for those contemplating the sale of their homes.   Expanding Job Market In contrast to the anticipated job losses during periods of economic downturn, our current economy is experiencing growth and job creation. According to the Bureau of Labor Statistics (BLS), July saw the addition of 187,000 jobs—an increase from the 185,000 generated in June. This ongoing job growth is indicative of an expanding workforce. Notably, the unemployment rate remains significantly lower than the historical average of 5.7%, as illustrated in the graph below: A lower unemployment rate signifies that a majority of job seekers are successfully securing employment. Gainful employment provides individuals with stable incomes, thereby fostering an environment conducive to exploring homeownership.   Elevated Earnings Furthermore, data demonstrates a consistent upward trajectory in hourly wages over the past several years, as depicted in the graph below: As wages continue to rise, individuals have access to greater disposable income, which can be allocated towards savings or directed into the home purchasing process. This augmented income helps mitigate some of the affordability challenges posed by current housing market conditions. Affordability hinges on three primary factors: wages, home prices, and mortgage rates. Amidst the current backdrop of elevated home prices and mortgage rates, Builder Online aptly highlights the contribution of escalating wages: “The housing market has been a beneficiary of the strong economy and labor market. Many of those employed have saved money over the past few years and used those funds toward a down payment on a home.”   For homeowners contemplating a property sale, the synergy of a buoyant job market, increasing wages, and the resultant surge in buyer demand is indeed cause for celebration. The expanding pool of potential buyers is now better positioned to embark on their homeownership aspirations.   The confluence of burgeoning employment prospects and rising incomes has given rise to an enthusiastic buyer base, significantly favoring property sellers. To make the most of this propitious environment, consider enlisting the expertise of a local real estate agent. Their guidance will prove invaluable in navigating the intricacies of the home selling process, from appropriately pricing your home to ensuring it is ready for prospective buyers' scrutiny.

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