Expert Tips for Navigating the Home Buying Process

If you're considering buying a home, you've likely already gathered advice from family and friends who have gone through the process. While their insights can be helpful, it's crucial to also consult with experts—your real estate agents and lenders—to make informed decisions. We've gathered top home-buying tips from four experienced agents on our Agent Advisory Board to guide you in finding a home that meets your needs and fits your budget.

Here are 20 expert tips to help you on your journey to homeownership, whether you're navigating a buyer's or seller's market.

1. Focus on Homes Within Your Financial Comfort Zone Shelly Salas, a broker with Your Home Sold Guaranteed Realty, advises buyers to get pre-qualified by a lender to understand their purchasing power. She emphasizes the importance of staying within a budget that allows you to maintain your lifestyle comfortably. "Just because you qualify for a $500,000 loan doesn't mean you should stretch your finances to the limit," she says.
2. Explore Government Programs for Down Payment Assistance Government programs can help first-time buyers and others with down payments and low-interest loans. Even if one partner has owned a home before, programs may still be available if the other partner hasn't.
3. Take Over Low-Interest Mortgages from Sellers In some cases, buyers can assume low-interest Veterans Administration (VA) loans from sellers, even if they aren't in the military. This can result in significant savings compared to current higher interest rates.
4. Negotiate Seller Concessions Don't hesitate to negotiate with sellers, especially in a buyer's market. Salas notes that sellers may be willing to cover costs like solar panels, saving buyers thousands of dollars.
5. Choose an Experienced Agent with Strong Reviews It's vital to work with an agent who understands the local market and has a track record of success. Salas recommends vetting agents by reviewing their experience and client feedback.
6. Secure Financing Early to Prepare for Interest Rate Changes Winston Murray, founder of Works Real Estate Company, advises buyers to speak with a lender early to understand their financial options and create a plan for different interest rate scenarios.
7. Consider a Fixer-Upper for More Value Purchasing a fixer-upper can be a cost-effective way to get the location or layout you want. However, Murray cautions that buyers should be aware of the home's current condition and have a clear vision for renovations.
8. Explore New Construction Options New construction homes often come with builder incentives that can lower your monthly payments and closing costs. However, Murray advises buyers to research the builder's reputation and warranty offerings.
9. Know When to Compromise on Features It's rare to find a home that checks every box on your list. Murray suggests prioritizing the most important features and being flexible with others, especially if you're not finding what you want in your desired location.
10. Consider "House Hacking" Buying a multi-family property and living in one unit while renting out the others can help offset mortgage costs, making it a smart investment for first-time buyers.
11. Keep an Eye on Homes that Have Lingered on the Market Murray recommends looking at homes that have been on the market for a while, as they may offer good value due to overpricing or poor presentation.
12. Be Aware of Hidden Costs Marcus Larrea, founder of Palm Paradise Realty, advises buyers to consider hidden costs such as insurance, condo fees, and special assessments, especially when moving to a new area.
13. Bring a Contractor to the Home Inspection If you're considering a home that needs work, Larrea suggests bringing a contractor to the inspection to estimate repair costs, helping you budget accordingly.
14. Leverage Your Agent's Connections for Discounts A good agent can connect you with tradespeople and suppliers who offer discounts on home repairs and improvements, potentially saving you money.
15. Explore Different Loan Types Larrea emphasizes the importance of understanding all financing options, including conventional loans, FHA loans, and others, as market conditions can affect what's available.
16. Consider Buying Now and Refinancing Later Even if interest rates are high, Larrea advises buyers to find a home within their budget and refinance when rates drop, rather than waiting for perfect conditions.
17. Prioritize Unchangeable Features Jason Farris, founder of FresYes Realty Group, advises focusing on features like lot size and location, which can't be changed, rather than cosmetic details that can be updated later.
18. Pay Attention to Lot Size With growing interest in Accessory Dwelling Units (ADUs), Farris notes that lot size is becoming increasingly important for buyers looking to add extra living space in the future.
19. Cast a Wide Net in Your Search Farris recommends looking beyond the Multiple Listing Service (MLS) and exploring other sources like Zillow, as not all homes are listed on the MLS.
20. Weigh the Costs of Waiting to Buy Farris advises buyers not to wait too long, as home prices may continue to rise faster than their savings. He suggests finding creative ways to enter the market sooner rather than later.

These expert tips offer valuable guidance as you navigate the home-buying process, helping you make informed decisions that align with your financial and personal goals.

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Jefferson Parish School Board Unveils Plans for Two New $48 Million Schools, Set to Open by 2026

The Jefferson Parish School Board is nearing the final stages of planning for two new schools, each with a budget of $48 million, aiming to open them by the 2026-27 school year. At a recent school board committee meeting, architects presented renderings of the new St. Ville and Washington campuses. Both schools are designed to accommodate 1,000 students, ranging from pre-K to eighth grade. These new facilities are part of a districtwide reorganization plan approved by the board last year, which included closing six schools and relocating two others.

The new St. Ville campus will be constructed on the site of the soon-to-be-demolished Helen Cox High School, located at 2200 Lapalco Blvd. in Harvey. This site was chosen after the board determined that the previous St. Ville location was too small. During the construction period, St. Ville students have been temporarily relocated to Woodmere Elementary.

Similarly, the new Washington campus will be built on the current site of Bunche Elementary. To make way for the new construction, part of the Bunche campus will be demolished starting in October. Students will continue attending classes at Bunche during this phase. Once the new Washington campus is completed, the remaining buildings at Bunche will be demolished to create parking spaces.

Both new campuses feature a "pod" design, where four or more classrooms are arranged around a central common area with its own entrance. This common area will include a science lab and flexible seating that can be configured for small-group instruction. The "pod" design also enhances safety; in the event of an emergency, such as a school shooting, the entrances to each pod can be closed off, keeping classrooms out of view.

The construction contracts for both projects are expected to be put out for bid later this year. The St. Ville campus is being designed by Lachin Architects, while the Washington campus is being designed by Grace Hebert Curtis.

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Understanding the Discrepancy in All-Cash Home Sales

In 2024, the median percentage of homes sold to buyers who paid entirely in cash—without taking out a mortgage—reached 22%, according to a recent survey conducted by the National Association of Home Builders (NAHB). This figure was gathered from a special question added to the NAHB/Wells Fargo Housing Market Index survey in May 2024.

The percentage of all-cash sales is a significant indicator, as it may reflect the availability of mortgage credit in the market. Notably, this percentage has shown a direct correlation with interest rates, particularly the Federal Reserve's target federal funds rate. For instance, data from the Census Bureau's quarterly "New Houses Sold by Price and Financing" release revealed that the share of all-cash sales surged after the Federal Reserve began tightening monetary policy in 2022, peaking at 10.7% in the fourth quarter of 2023 before falling to 6.6% in early 2024.

At first glance, the 22% all-cash sales figure from the NAHB survey appears to contradict the lower percentages reported by the Census Bureau. However, it's essential to explore the reasons behind this apparent discrepancy.

The Census Bureau's quarterly report is based on a sample of new homes, while the NAHB survey focuses on a sample of builders, many of whom are smaller companies. Larger builders, who construct a higher proportion of new homes, might have lower shares of all-cash sales, which could explain the difference between the Census and NAHB figures. However, the NAHB survey data suggests otherwise, indicating that smaller builders actually have the lowest share of all-cash sales.

Another factor to consider is the Census Bureau's definitions. The quarterly Census report tracks new homes sold, meaning a potential buyer has either signed a sales contract or made a down payment. However, this does not include all new single-family homes. Some homes are classified as contractor-built or owner-built, where the ultimate homeowner hires a general contractor to build a home on their own lot. These homes, which often involve a contract to build rather than a traditional sales contract, are more likely to be financed with all cash.

Additionally, the Census Bureau compiles an annual file from the same data that includes all types of new single-family homes. A recent tabulation by NAHB of the 2023 data revealed that contractor-built and owner-built homes are much more likely to be all-cash transactions than those built for sale.

NAHB's latest census of its members found that 54% of single-family builders primarily engage in custom building, which corresponds to contractor-built homes in the Census Bureau's classification. This concentration of custom builders in the NAHB survey likely contributes to the higher reported share of all-cash sales.

In summary, the NAHB's May 2024 survey indicates a median of 22% all-cash sales, significantly higher than the peak of 10.7% reported by the Census Bureau in their quarterly release on new houses sold. The discrepancy seems to stem not from differences in survey methodologies but from the inclusion of custom builders in the NAHB survey. These builders specialize in contractor-built homes, which are more likely to be financed entirely with cash but are not captured in the Census Bureau's reports on new houses sold.

Therefore, the NAHB survey provides valuable, timely insights into new home financing, particularly within the custom home-building sector.

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How to Navigate Real Estate Investments with Market Insights

Investing in real estate can be a highly rewarding endeavor, with data indicating that it is one of the most effective ways to secure your financial future. According to the Federal Housing Finance Agency (FHFA), the compound annual growth rate for homes across the United States has consistently shown positive growth since 2012. Even in the aftermath of the 2008 recession, the U.S. housing market has averaged over 4 percent growth from January 1991 to today. Specifically, North Carolina has experienced remarkable growth, with housing prices appreciating by 74.78 percent in the last five years and 324.41 percent since 1991.

Homeownership offers a significant return on investment, often surpassing other types of investments. However, timing your purchase or sale is crucial for maximizing returns. By analyzing market trends and gaining a deep understanding of the market, you can make more informed decisions about when it's best to buy or sell a property. Here's how you can better understand and evaluate these market trends:

1. Understand Key Real Estate Metrics

First, it's essential to familiarize yourself with the critical metrics used in real estate to understand what's happening in a specific area. In regions like the Triangle, these metrics can vary widely depending on the county and city, as the area has expanded significantly to accommodate growth. Key metrics to grasp include:

• Median Home Prices: This figure gives you an idea of the typical value of homes in a particular area. For instance, as of May 2024, the Triangle MLS reported a median home price of $419,200 across 17 counties, including Wake, Durham, Orange, and Chatham.
• Months' Supply of Inventory: This indicates the number of homes available for sale. A balanced market typically has a four- to six-month supply of homes. High inventory suggests a buyer's market, while low inventory points to a seller's market.
• Days on Market (DOM): This metric shows the average number of days a property remains on the market before being sold. A shorter DOM signals high demand. In the Triangle, the median DOM was just 12 days at the end of May 2024.
• Sales Volume: This represents the number of homes sold within a certain period. An increasing sales volume indicates a healthy market.
• Price per Square Foot: This helps compare home values across different neighborhoods or regions. In the Triangle, the current price is $219 per square foot.

Regularly understanding and comparing these metrics can help you get a clearer picture of the market's health.

2. Analyze Historical Data

Historical data shows that home prices have increased significantly over the years, providing valuable context and helping identify trends. When analyzing historical data, consider the following:

• Home Price Trends: Examine how home prices have changed over the past 5-10 years. Are they steadily increasing, or do they fluctuate with economic cycles? The FHFA House Price Calculator can help evaluate a specific home's price growth.
• Interest Rate Trends: Understanding how interest rates have affected the housing market over time is crucial. For example, while mortgage rates have hovered around 7 percent post-COVID-19, this is still lower than the historical average for 30-year mortgages.
• Seasonal Patterns: Real estate markets often have seasonal fluctuations, with spring and summer typically being busier, affecting prices and inventory levels.
• Economic Indicators: Broader economic trends, such as employment rates, GDP growth, and interest rates, can also influence real estate markets.

3. Evaluate Current Market Conditions

With an understanding of historical trends, it's important to assess current market conditions to make informed decisions. In the Triangle, the presence of major companies like Apple, Google, and Fujifilm Diosynth Biotechnologies has driven demand as new residents move into the area. Key considerations include:

• Supply and Demand: High demand combined with low supply generally pushes prices up, favoring sellers. Conversely, high supply and low demand benefit buyers. The Triangle is currently experiencing growth in new construction, but inventory remains tight.
• Local Market Conditions: Real estate is highly localized, so focus on analyzing the Triangle and North Carolina markets rather than relying solely on national trends.
• Interest Rates: Lower interest rates reduce borrowing costs, increasing buyer affordability and demand, which can drive up prices. Staying informed about Federal Reserve actions can help you understand how interest rates might affect the housing market.

4. Consult with Trusted Real Estate Professionals

Engaging with local real estate agents, brokers, and analysts can provide deeper insights into the market:

• Agents and Brokers: They offer hands-on experience and can provide valuable insights into current market dynamics and future expectations.
• Appraisers: These professionals can help you understand the current market values by evaluating property valuations.
• Real Estate Analysts: Analysts who manage real estate investments for organizations can provide detailed market analysis and forecasts based on comprehensive data.

5. Practical Steps for Buyers and Sellers

Whether you're buying or selling in the Triangle, here are some practical steps to consider:

• For Buyers: Research the market extensively, consult multiple data sources, and include real estate professionals in your decision-making process. Ensure your finances are in order, and get pre-approved by a local mortgage lender. Finally, consider buying during slower market periods, such as fall or winter, when competition is lower.
• For Sellers: Conduct thorough research and make your property appealing through staging and minor updates. Work with a trusted real estate agent to price your home competitively, based on current market conditions and local comparables. Also, consider selling in spring or summer when demand is higher, and homes tend to sell faster.

Understanding real estate market trends is vital for making informed decisions about buying or selling a home at the right time. By staying informed and patient, you'll be in a better position to maximize your real estate investments.

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