Palm Trees and Ice Storms …

I spent the week of January 19-26 at an all-inclusive resort in Punta Cana, Dominican Republic, and returned to Nashville on January 27.
 
A week at a luxe resort: warm breezes, gorgeous views, immaculate landscaping, excellent service, lots of food, lots of cocktails, lots of lounging. Like being on another planet. 
 
Returning to: freezing cold, power outages, downed trees, impassable roads, and many of my fellow citizens living in cold and darkness. Not to mention a couple of clients seriously worried about the condition of their property which, because of the ice, is inaccessible at the moment. 
 
Whiplash! Disorienting, to say the least!

This reminds me, however, that certain things remain constant. On average, Americans are richer than Dominicans, but we all want the same things – food, shelter, community, recreation, a sense of purpose. We have disasters – they have hurricanes and earthquakes; we have tornados and ice storms. We all recover.

It’s life. In the Caribbean. In Middle Tennessee. Which brings me to real estate.
 
As I’ve said a number of times in this space, a house (or condo, or whatever) is a place to “do” your life. It’s a big investment for sure, but it’s so much more than that – a canvas on which to paint your personal story. Everyone everywhere wants and deserves a good place to live.
 
So, how does that play out on this freezing, ice-bound mid-winter day in Tennessee? May be hard to believe it, but this is the perfect time to buy.

At plus/minus 6%, interest rates are a whole 1% lower than they were a year ago. While they may drift somewhat lower in the year ahead, they aren’t going back to the record lows of a few years ago, and if you look at history, 6% is a pretty solid deal. Inventory was up by 13% in December – so, you have plenty of properties to look at. 
 
Shop now. Don’t wait until spring. The conventional thinking is that there will be more inventory in the spring because sellers often wait to list until spring. And sellers do that because they assume there will be more buyers in the spring. It’s a circular argument. 

Right now, there are fewer buyers to compete with, and inventory is more than adequate. Aside from slogging through sidewalk slush and soggy yards, this is the perfect time to gear up for the search and beat the rush. 

Gifts Received, Gifts Wished For

In this festive season of sipping and chatting, shopping and wrapping, giving and getting, I am always well-advised to slow it down a bit and look at all the good things life has brought me. Life itself is a gift, and when I stop and look, life is full of other gifts. 
 
That said, there’s always something more to wish for.

Gifts received …
 
My Peeps The relationships in your life are the substance that makes the rest of it make sense. I love my family and friends who support me, feed me, buy me drinks, and make me laugh. I love my clients – so many of whom appreciate my services, say please and thank you, become my friends, and earn me a good living in the process. And I love my crew at Onward Real Estate. I simply could not have landed in a better spot – great friendships, great professional support, and laughs a plenty.
 
An Arrival On March 21st, Cordell Harding Paine arrived here on the planet – son of William and Kristin, my son and daughter-in-law, and baby brother to Ruthie. Happy parents, grandparents, great aunts, and a host of cousins and friends. Joy all round!
 
Boom Town I’ve said it before, and I will say it again, we live in exciting times here in Nashville! I came here 49 years ago, to a sleepy, backward, medium-sized city without much going for it. But in recent years, we have stepped into the spotlight as a city of consequence (bachelorettes aside) and I love it! Growth and opportunity abound all around us! Another gift! 

Interest Rate Relief While 7%+ is, historically speaking, a decent mortgage rate, there has been a lot of angst among buyers (and sellers) who long for the never-to-return days of 3%. Angst also, among those priced out of the market by real estate price inflation. Down to the low 6% range, and perhaps to dip into the high 5s, mortgage rates these days are friendlier, and that’s a gift for everybody.

A few gifts I’m still waiting for …
 
A little sanity in Washington I’ll go ahead and say it: we need a break from the looney tunes stuff! Tariffs, no tariffs, maybe tariffs. Conspiracy theory of the week. Masked men in unmarked cars yanking people off the streets. Giving the finger to our closest allies. Epstein all day, every day. Enough! Let’s give ourselves a break!
 
Less hate, more love! Seriously! We, as a nation and as individuals, need to simmer down! The current level of angry rhetoric and divisiveness in this country is unsustainable. People abusing waiters and flight attendants. Politicians demonizing and name-calling anyone they disagree with. Book banning and burning. It’s at a level I’ve never seen before. We must embrace our common humanity and work together despite disagreements. Or we will lose everything. The effort begins with me. And you. So, I ask you to give it a try. I’m with you on this.

Is it time to refinance?

In this season of thanksgiving, there may be something to be grateful for that you hadn’t thought of: refinancing. 
 
Refi is something we haven’t heard much about over the past couple of years. But this year, mortgage rates have been slowly, steadily dropping, and the conversation has begun. 
 
Since January, rates have been drifting downward from a high of 7%+, and are now coming very close to 6%. That doesn’t help at all if you have a mortgage from the pandemic 3% days. But if you are locked in at an upper-6% to 7% rate, it could make a difference.
 
So, is it time to refi? As usual in this business, the answer starts with “It all depends.” 

First some background. The traditional rule of thumb has been that for a refi to make economic sense, your new rate had to be at least 1% point lower than your old rate. Refi costs money. There are charges attached to obtaining a mortgage, and your new payment had to be enough smaller than your old payment to pay you back for the up-front cost. 
 
But that calculation has shifted. The proper calculation depends on two things: your monthly savings with the new rate, and how long you plan to stay in the house. 
 
Total amounts borrowed to buy a house have grown considerably in recent years due to significant inflation of real estate values. But there has not been similar inflation of loan origination and other closing expenses. The result: a relatively smaller percentage of reduction in your big monthly payment can have the potential to pay you back for your loan origination costs within a reasonable time frame.

An example: It cost $3,500 to obtain your refi mortgage, and your payment is $290 a month less than before. Dividing the $3,500 by $290 means you will pay yourself back for the loan origination cost in 12 months. If you plan to keep the house longer than a year, you are dollars ahead. 
 
Of course, you need to look before you leap, and for once in this space, I’m not going to recommend you talk first to your full-service realtor. Talk first to your mortgage lender to help you with the calculations. And if you don’t have a lender you trust, talk to your realtor. I can help with that.
 
If you’re paying on a high-rate mortgage from even a few months ago, have a look at a refi. You might be thankful you did!

Spooky Season

Like most realtors, I’m often asked, “How’s the real estate market?” There’s never been a one-sentence answer to this question, but these days it’s harder than usual to be succinct. 
 
I usually say something like, “Interesting,” or “A little weird right now,” before launching into a longer explanation if they seem like they want more. 
 
But what is this “weirdness?” What’s causing it? Properties are still selling – but everything seems to be happening in dream-like slow motion. And the horizon is distinctly murky. I blame uncertainty. Buyers and sellers both are feeling uncertain about the future, and that’s not good for business.
 
A statistic: Beginning this January, mortgage applications have been rising month after month all year. Yet, the number of bound contracts and closings has remained static. There are lots of buyers out there, waking around with pre-approval letters in hand, who aren’t buying. It’s not an inventory problem – inventory well above last year. Apparently, people aren’t making offers. 
 
Uncertainly breeds fear, and fear breeds paralysis.
 
So, really, what do we have to fear? Actually, there are a couple of things …

Overpricing
A lot of sellers and potential sellers are still enjoying mortgage interest in the 3% - 4% range, with vivid memories of the snatch and grab market of 4+ years ago. They tend to have a “make me move” mindset, and price their properties that way. That is not going to work. The properties that sell these days are … priced to sell. The ones that sit for months without an offer are not. If the idea of waiting months for an offer – an offer that’s almost always going to be well under asking price – doesn’t scare you, go ahead and price it like it’s 2021. Otherwise, run away screaming from that temptation.

Underbidding
Conversely, there are sellers who are serious about moving things along, and price their property accordingly. Buyers, if you see something you like, and you can afford it, and the comps support the price – make a strong offer and get the deal! Someone else will get it if you don’t. So, if the temptation to lowball on a reasonably priced house strikes, treat it like that intriguing door in the haunted house. Don’t open it! 

Fear Itself
Channeling Franklin D. Roosevelt here … We have nothing to fear but fear itself. We are indeed living in unsettled times. Tariffs, no tariffs, some tariffs? Inflation, maybe? Fed rate cut, maybe … or not ... who knows … ? But curling into the fetal position and doing nothing is rarely the best approach. If you need or want to do a real estate deal, now is almost always the best time. Waiting and trying to game the market can blow up in your face – another thing to be scared of!

Buyers, make your move!

When I am asked by clients and potential clients contemplating a buy or a sale, “Is this the right time?” my answer is usually an unqualified, “Yes.” If you need or want to buy or sell a house, now is always the right time. 
 
Interest rates change. Inventory, and other market conditions change. The general economic outlook changes. But trying to game that out waiting for THE ideal moment almost never works. The only thing we can always expect is the unexpected.
 
All that notwithstanding, there may be a bit of nuance here …
 
Best Week to Buy a House? A recent realtor.com article points to localized market trends that indicate there is, on average, a prime week in the fall when inventory peaks and demand remains steady, making it the best time for buyers to make a move. According to the article, the week varies from one metro area to another, and here in Nashville it seems to be October 12-18.
 
So, buyers, let’s jump on it!

Are you ready to buy?
 
Get pre-approved
Several years ago, during the snatch and grab era, beginning with this step was absolutely essential. No one would even look at an offer that didn’t come with a pre-approval letter. But, it’s still a good idea to start here. Sending a pre-approval along with an offer gives the offer instant credibility, and it may allow you to beat out a rival buyer. Furthermore, it tells you how much house you can afford – a vital piece of the puzzle! 
 
Scan the market – know what you want
I’ve never worked with a buyer – including myself! – who didn’t learn things, shift opinions, and modify desires somewhat during a search. On-line tools are wonderful, but nothing will ever replace an in-person visit to the property to see and feel it for yourself. That said, narrowing things down as much as you can before trekking all over Middle Tennessee looking at all sorts of properties, will make things easier, clearer, and successful sooner.
 
And go!
Grab a wonderful, hard-working realtor (I know one I can recommend) and hit the trail. The right one is out there, and according to the stats, your chances of landing it are good this October!