Blog :: 10-2015

How Do Homeowners Accumulate Wealth?

We found this very interesting! This is important for anyone considering renting or buying. Evaluation of financial investments can make or break your return on an achievement scale. Check out what Lawrence Yun had to say:

The differences between buying and renting are massive. According to the Federal Reserve, a typical homeowner's net worth was $195,400, while that of renter's was $5,400. The data reflects 2013 and the next survey of household finances, which is conducted every three years, will be out in 2016. Based on what has happened since 2013 and projecting a conservative assumption of what could happen next year to home prices if we see only 3% price growth, the wealth gap between homeowners and renters will widen even further. The Fed is likely to show a figure of $225,000 to $230,000 in median net worth for homeowners in 2016 and around $5,000 for renters. That is, a typical homeowner will be ahead of a typical renter by a multiple of 45 on a lifetime financial achievement scale.

Though there will always be discussion about whether to buy or rent, or whether the stock market offers a bigger return than real estate, the reality is that homeowners steadily build wealth. The simplest math shouldn't be overlooked. A vast majority of homebuyers take out a 30-year fixed rate mortgage to make a home purchase. After 30 years, there is no mortgage payment (nor rent payment). So the home price growth over that time period would be the equity that the homebuyer would have accumulated. For example, the median home price of a single-family dwelling in the U.S. thirty years ago in 1985 was $75,500. This year, it will be at least $220,000. That figure of $220,000 is the housing component of the person's wealth. Even had home prices not risen, the person would still have $75,500 in wealth today - on top of not paying any further monthly mortgage after 30 years.

This simple example does not play out nearly as neatly in the real world, since people do not stay in one residence over the 30 year period. Almost all homeowners trade up, change neighborhoods, or move to a better school district at some point. However, they are able to make those residential relocations due to the housing equity accumulated, even over a shorter period, and can immediately apply that equity to the next home as a downpayment. Therefore the conditions of steadily building housing wealth still hold.

We also know that not everyone can or should be homeowners. The memories of easily accessible subprime mortgages and subsequent harsh foreclosure pains are still fresh, and remind us of the devastating impact on the families involved, local communities, and to the broad economy. In addition most young adults have not developed the financial standing or have found a stable, desirable career and, therefore, choose not be homeowners until later. The homeownership rate among households under the age of 35 is 35% currently and rarely rises above 40% historically. For those under the age of 25, the current ownership rate is 23% and rarely rises above 25%. But the time will eventually come when people want to convert to ownership. By the time people are in their prime-earning years of 45-to-55, nearly three-fourths do eventually become homeowners. By retirement, nearly 80% are homeowners.

A recent survey of consumers commissioned by my organization revealed that 80% believe that purchasing a home is a good financial decision (2015 National Housing Pulse Survey). Most consumers appear to already understand the simple math and the benefits of homeownership. So don't overthink the matter of whether now is a good time to buy, or whether stock market returns will be better. The exact timing of a home purchase will have little financial impact in the big scheme of things. Just know that homeowners generally do come out ahead of renters in the long run.

View the original article here:

http://www.forbes.com/sites/lawrenceyun/2015/10/14/how-do-homeowners-accumulate-wealth/

 

The Entryway, Your Home's Smile

Your entryway sets the tone for the rest of your home - and when you've got potential buyers visiting, you want them to feel welcome and cozy from the moment they enter. Here are some ways to warm up your entryway according to Andrea Davis at Realty Times:

#1 De-clutter!

The first step to creating a welcoming entryway is an immaculate entrance. If your entry area is cluttered with stuff - bags, decor, shoes, coats, etc. - it makes it hard for buyers to picture themselves in your home. Get rid of everything but the essentials - and, if possible, store those in a closet or other room. If you want to add a touch of the season to the entryway without adding clutter, think about placing one tasteful vase or centerpiece on a table near the door. If you're unsure how to stage your entryway, a home stager can help you balance between clutter and just the right amount of staging pieces. Staging usually helps a house sell quicker, as evidenced by studies from places like Bankrate.

#2 Update the door.

Buyers have to walk up to your front door before they walk into the foyer. If they see a dingy front door, it can set the wrong tone for the rest of the house. If this sounds like your front door, consider some improvements:

  • Replace the hardware (door knob, pulls, lock)
  • Restain or paint the door
  • Repaint the trim around the door
  • Clean the windows in the door

If your door has lived past its prime, you might need to invest the necessary money to replace it. This way, the first thing buyers see will be shiny and new. If you feel so inspired, add a bit of seasonal flair such as pumpkins, seasonal wreaths, flowers, whatever feels right for the exterior of your home.

#3 Have plenty of storage.

Useful entryway storage is enticing to buyers, especially in the form of built-in benches, cubbies and artfully placed shelves. If you don't have that kind of storage to offer, adding something as simple as knobs or hooks for coats can help a lot. For that extra bit of seasonal fashion, you may want to add a candle or two atop the shelf -- but don't go too far. It's important to keep the clutter down at all costs.

#4 Light it up!

Buyers can't appreciate all of the work you've put into your entryway if they can't see it. Proper entryway lighting is important, whether it's a well-placed lamp or a hanging pendant or both. If you have a hanging fixture, make sure the bulb is bright enough for nighttime showings. 

Conclusion

These are some of the top improvements to address when staging your entryway for potential buyers. Whether or not you decide to add some seasonal flavor into the mix, make sure your entryway feels appealing and welcoming -- and that it sets the right tone for the rest of the walkthrough.

See the original blog here.

Tucked In For The Winter

The days are growing shorter and cooler and it's said that a snowy winter is on the way. Which makes right now an ideal time to put your garden to bed so it will be well rested and ready to thrive come springtime. If you are planning to sell your home in the coming months the winterization steps you take for your plants will also help you keep your yard healthy and attractive to potential buyers, even in the deepest of winter dormancy. This list of must do's were compiled by Helen Chong at Realty Times.

  1. Pruning helps remove dead or diseased branches from trees and shrub, and will allow for stronger growth within the branches that remain. Pruning is also done to help control the growth of a plant to a desired size or shape. The amount of pruning and how you prune as well as when will depend on what you are pruning. Fruit trees, for example, grow fruit at various times in their growing seasons. You will want to confirm when your trees bear fruit, it could be after a year of growth, during a current season's growth or on spurs that grow after pruning.
  2. Mulching will protect your plants from the cold. A good thick layer of fresh mulch along the base of your plants will help regulate the temperature, effectively giving your plants a blanket. Be sure to remove any old mulch first as it may harbor pest eggs which could be devastating come spring. Once the first frost or close to freezing temperatures arrive, it is time to lay down the new layer of mulch. This will help maintain a steady temperature, protecting from fluctuations of freezing and melting periods. It is these changes that can cause damage to roots. Roses are vulnerable to the cold in particular. You can wrap rose bushes in a burlap mulch container to help them make it through the colder months. 
  3. Planting new trees, shrubs, and of course bulb planting is now ideal. By planting now they will be set to lie dormant for the winter, and ready to focus new growth and energy in the spring. Most fruit trees need at least 6 hours of daylight during the growing season so be sure to plan accordingly where you will plant any new trees, being sure they will get enough direct light. You should also delay fertilizing any new plants at this time, as fertilizer will encourage continued growth and the energy needed to dormancy may be depleted too much for a plant to survive the winter.

Some other quick tips include checking for pests regularly and make any repairs to flower beds, clean up any dead flowers or stalks as well.

With just a little time and care, you can prepare your garden to survive the winter and burst forth with a bouquet of color come spring. If you are ready to sell your home the extra steps toward winterizing your garden will give you an extra edge in attracting potential buyers as well. 

Click here to read the original article, or click here for even more great winterizing tips from Better Homes and Gardens.

 

Autumn in Waterbury

Everyone knows that Vermont becomes a colorful paradise this time of year. Between the foliage, food, and attractions, there's not a whole lot to complain about when it comes to Fall in Vermont.

But where can you find the most authentic Vermont, Autumn experience?

Perhaps Waterbury!

If food, beer, and foliage sound good to you this season look no further. Waterbury is home to some of Vermont's most scenic views and renowned breweries. Take a beautiful drive on I-89 and stop through on your way to see what all the talk is about. 

There's a reason Waterbury is the beer capitol of the state. Lawson's Finest, The Alchemist, Trapp Lager, and Hill Farmstead are just a few the mouth-watering brews to be found alongside a broad collection of Vermont wine and spirits. Not to mention. Waterbury is the home to the world famous Heady Topper. All your beer, wine and food needs can be generously satisfied in one of many pubs and restaurants such as The Reservoir, Blackback, Cork, Blue Stone, Arvads, Stowe Street Cafe, and Prohibition Pig. Finish off with real Vermont flavor with a few scoops of Ben & Jerry's ice cream all made with local ingredients.

Also in town are a number of great shops and boutiques full of friendly faces. From books and antiques to cards, toys, gifts, flowers, and clothes of any style, it's easy to get lost in the Waterbury experience.  

Want to get out of town? It's probably a good idea, you don't want to miss the views this time of year. Take a trek, bike run, or stroll up Camel's Hump, Perry Hill, or Mount Mansfield with terrain and route options available for all skill levels. 

With so much to see and do, Waterbury is definitely a wonderful place to visit, or live, in Vermont. 

 

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Fall Home Maintenance Checklist

With autumn here it is time to get your house in shape for the cooler months ahead. Fall is a great time to take care of the little things that can make a difference for you and your home. Getting ready for colder weather means checking, repairing, and prepping your home to withstand the upcoming rain, wind, and snow.

We found this article from Realty Times full of helpful tips that every homeowner should do before hibernating this winter.

1. Stow Your Mower

With the cooler months ahead, it's time to start thinking about how you are going to stow your lawn mower. Before saying goodbye to your lawn mower for the winter season, there are a few things you should consider. First, it will be a good idea to sharpen the blade of your lawn mower to ensure that it is in tip-top shape for the spring. You'll also want to empty your gas tank before putting your lawn mower to rest. Taking simple steps like these before putting your lawn mower into storage will help increase the longevity of your equipment.

2. Perform an energy audit

Performing an energy audit is really important because it will tell you where heat is escaping, so you can correct the problem and save money on utilities. If you are doing an energy audit yourself, first make a list of all air leaks in your home by seeing where there are drafts. Seal the air leaks that you have identified by applying caulk or weatherstripping. Potential energy savings by detecting and fixing drafts can range from 5% to 30% and will make your home much more comfortable.

3. Replace Your Storm Windows

Before it gets too cold, replace your screen windows and doors with energy-efficient storm windows. Consider a proper storage space for your screen windows so they do not get damaged over the winter months. You'll want to give them a good cleaning, along with your storm windows, so that they are ready for the upcoming colder months!

4. Check your Furnace

Home heating systems that aren't properly maintained may be less than 50 percent efficient. A dirty filter will increase your heating costs and reduce the life of your equipment. For these reasons, it is important to check your filter once a month and replace or clean if necessary. Have a professional take a look and perform any adjustments to your furnace during this time if needed.

5. Install Gutter Guards

Homeowners often overlook the importance of gutters, but they protect your home by diverting rain water safely away from your home. Gutter cleaning is a temporary solution to a permanent problem, but it is important to keep your gutters clear and clean in order to prevent home issues like foundation and structural issues.

If neglected long enough, these types of concerns can be serious and costly. One way to combat clogged gutters and eliminate gutter cleaning is to have gutter guards professionally installed to your home. Installing a micromesh gutter protection system, will help save you the time and hassle of cleaning your gutters when the leaves begin to fall.

6. Maintain your Home's Exterior

Trim back trees and branches that are hanging too close to your home. Fall and winter are known for unexpected weather conditions, so it is important to prevent any type of debris from falling on your home and producing serious damage. Seal driveways, brick patios, and wood decks. For long term care of your home exterior, it is important to apply a layer of sealant to prevent weed growth, repel stains, and increase the longevity of these areas.

7. Chimney and Fireplace

You'll want to call in a professional to inspect and clean your chimney. Annual cleaning of your chimney is important to prevent dangerous chimney fires. Test your fireplace flue to ensure that it is tightly sealed when closed.

8. Test smoke/carbon dioxide detectors

This is a simple task for homeowners, but it is often forgotten about. Detectors should have a "test" button. If the alarm sounds -- you're good to go! If not, try replacing the batteries and test again. If the alarm still doesn't fire, you may need a new detector. Testing these systems is a quick, but very important quarterly test to perform.

Taking these steps will not only lower your utility costs, but they will protect your largest investment, your home, from the unexpected weather conditions ahead. Find the original article here.