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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3 Ways to Avoid High-Interest Rates When Buying a Home in Spokane, WA

  In today's competitive real estate market, many potential homebuyers are concerned about the high-interest rates that seem to be on the horizon. Some are even putting their home search on hold, hoping for interest rates to drop. However, waiting indefinitely for lower rates might not be the best strategy. In this blog, we'll explore three strategies to help you lock in a lower interest rate today, so you can move forward with your home purchase confidently.   1. Seller Financing: A Creative Approach to Lower Interest Rates One unconventional yet effective strategy is to explore seller financing opportunities. Seller financing involves working directly with the property owner, bypassing the need for a traditional bank loan. This approach is particularly suitable for properties owned free and clear, meaning they have no existing mortgage. Finding Properties with Seller Financing Opportunities: Collaborate with a real estate agent who specializes in creative financing. Search for properties owned free and clear on the market or off-market. Reach out to homeowners who may be open to selling through direct marketing efforts. Negotiating Seller Financing Terms: Offer a reasonable down payment and potentially a lower interest rate. Be flexible with payment schedules and other terms. Educate sellers about the benefits of seller financing if necessary. Example of a Successful Seller Financing Deal: A 10-acre land deal with a seller offering a 5% interest rate, significantly below the market rate. The buyer puts down a 30% down payment. The loan is amortized over 30 years with a 5-year balloon payment. The seller earns an extra $25,000 compared to their initial asking price.   2. Assumption of Existing Loans: Leveraging FHA and VA Loans Another strategy is to assume existing loans, especially FHA and VA loans, which can be assumed by another borrower with the lender's approval. This allows you to benefit from the original borrower's lower interest rate. Finding Properties with Assumable Loans: Target homeowners who purchased their homes with FHA or VA loans within the past few years. Ensure that the lender allows loan assumptions and check for any potential complications regarding VA loan entitlements. Advantages of Assuming Existing Loans: Access to lower interest rates from the original loan. Reduced closing costs compared to obtaining a new loan.   2.5. Rate Buy Downs: Temporarily Reducing Interest Rates Rate buy downs involve negotiating with the seller to contribute to a rate buy-down program, temporarily reducing your interest rate for the initial years of your mortgage. Types of Rate Buy Downs: 2-1 Buy Down: The first-year interest rate is 2% less than the market rate, gradually increasing over the next two years. 3-2-1 Buy Down: Similar to the 2-1 buy down, with three years of reduced rates. Considerations with Rate Buy Downs: Understand that this is a temporary solution. Ensure you are comfortable with the eventual higher interest rate.   3. Exploring New Construction Deals Many builders, such as Hayden Homes, DR Horton, and Lennar, offer attractive interest rates, often below the market average, to incentivize buyers to purchase new construction homes. Benefits of New Construction Deals: Access to competitive interest rates. Potential cost savings on your monthly mortgage payment.   While it's tempting to wait for interest rates to drop, there are several strategies you can employ today to secure a lower interest rate for your home purchase. Whether you explore seller financing, assume existing loans, utilize rate buy downs, or consider new construction deals, taking proactive steps can make homeownership more affordable and attainable in today's real estate market. Don't hesitate to reach out to a knowledgeable real estate agent for guidance on implementing these strategies and finding the best option for your situation. Locking in a lower interest rate now could save you thousands of dollars over the life of your mortgage. So, take action and make your dream of homeownership a reality.

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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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