Uncategorized • December 3, 2019

December Calendar of Events

by Kara Brem

So much holiday fun to be had!

Enjoy all our area has to offer and happy holidays to you and yours.

Uncategorized • December 2, 2019

Four Holiday Décor Trends to Inspire You This Season

by Kara Brem

by Meaghan McGlynn

The holiday season is here and for many of us, that means it’s time to deck the halls. If you’re looking for some inspiration and a place to start, here are some ideas that are certain to get everyone in the spirit.

A Tree of a Different Color

Photo Credit: Left – Lushome, Center – HGTV, Right – Christmas365

For many, there’s nothing more quintessential during the holidays than a Christmas tree decked out in ornaments. But acquiring a tree can be challenging and expensive. Moreover, housing a tree consumes time and space. That’s why we love the idea of an alternative tree. There are plenty of options you can buy online or create yourself using things you probably already have around the house. And if you miss the smell of a real tree, try a scented candle or essential oils.

The Season of Lights

Photo Credit: Amara

There’s something perpetually charming about twinkling lights. Whether you’re wrapping them around your front porch or adorning your fireplace mantle, extra lights deliver a warm glow during the holiday season. Getting creative and adding light to otherwise unexpected places, including bookcases, around headboards, or even in glassware, is a great way to keep everything looking merry and bright.

Act Natural

Photo Credit: Better Homes & Gardens

Not all holiday climates are built alike. If you’re expecting a white Christmas, you’re probably used to pine trees and winter brush, but for those of you located in regions where the mercury doesn’t drop, sprinkling in natural elements can transform your home into a wintery oasis. Holly and pine needles add a traditional touch, or consider a wreath of olive branches with some sleigh bells interspersed.

Bring it All Home at Dinner

Photo Credit: Amara

When decorating for the holidays, don’t forget the table! A sprig of holly adds a festive touch to your place settings. And instead of the traditional centerpiece, try placing candles in glass vases or mason jars to give your tablescape that added touch of holiday pizzazz.

Uncategorized • October 10, 2019

Homeownership is the Top Contributor to Your Net Worth

by Kara Brem

Many people plan to build their net worth by buying CDs or stocks, or just having a savings account. Recently, however, Economist Jonathan Eggleston and Survey Statistician Donald Hays, both of the U.S. Census Bureau, shared the biggest determinants of wealth,

“The biggest determinants of household wealth [are] owning a home and having a retirement account.” (Shown in the graph below):

This does not come as a surprise, as we often mention that homeownership can help you to increase your family’s wealth. This study reinforces that idea,

“Net worth is an important indicator of economic well-being and provides insights into a household’s economic health.”

Having equity in your home can help your family move in that direction, building toward substantial financial growth. According to the report noted above, people are not only creating net worth in the homes they live in, but many are also earning equity in rental property investments too. (See below):John Paulson said it well,

“If you don’t own a home, buy one. If you own one home, buy another one, and if you own two homes buy a third and lend your relatives the money to buy a home.”

Bottom Line

There are financial and non-financial benefits to owning a home. If you would like to increase your net worth, let’s get together so you can learn all the benefits of becoming a homeowner.

Uncategorized • July 30, 2019

5 Tips for Styling Your Bedroom for Better Sleep

by Kara Brem

Image by pexels

For many of us, the bedroom serves numerous purposes – it’s an office, a reading nook, a dressing room, and a place to unwind after a long day. However, aside from all these extra functions that the bedroom performs, its most basic and vital function is to act as your sleep sanctuary. It is the one room designed specifically to sleep in, which means that it is a room essential to our happiness and wellbeing. Without a healthy night’s sleep, we can suffer from a cloudy mind, memory loss, mood swings, and weight gain; and, continued sleep deprivation results in chronic health issues like heart disease, diabetes, and depression.

With the important role that sleep plays in our physical and mental wellness, it is vital that we do everything in our power to get the best sleep possible – including optimizing our bedroom for quality sleep. Here are five tips to style your bedroom to promote a good night’s sleep.

Clutter in the bedroom causes anxiety and a lack of sleep.

Too much clutter in your room can cause subconscious stressors and feelings of uneasiness that keep you up at night. Take a minimalist approach in your bedroom and use a decluttering technique to turn your bedroom into a calm and serene place of sanctuary. If you use your bedroom as an office space, make a clear division between your place of sleep and your workspace. Your mind should be in a state of complete relaxation when you go to bed, so any reminders of work should be out of sight.

Your air temperature and quality affect your sleep, so maintain optimal levels of both.

If you find yourself waking up throughout the night, it is very likely that your room’s temperature is either too hot or too cold. While it is estimated that the optimal temperature for a healthy night’s sleep is between 62 and 75 degrees Fahrenheit, experts believe that one person’s optimal temperature will vary from the next. Aside from air temperature, the quality of your air may also be causing you to lose sleep. Indoor air pollution, caused by chemical off-gassing from household products as well as cigarette smoke, air-borne allergens and viruses can cause you to experience deteriorating help along with a lack of sleep. To clean up your air quality, incorporate these plants into your bedroom along with an air purifier.

A good mattress is essential to quality sleep and your health.

While it may sound obvious that you need a good mattress to get a good night’s sleep, many people don’t connect their health issues to the state of their mattress. A mattress that is too hard, too soft, lumpy, or unstable will cause damage to your back and joints, and keep you up all night, tossing and turning, and trying to get comfortable. In addition, without the proper support of a good mattress, sinking causes an obstruction to your airflow and results in snoring.

Darkness is required for a good night’s sleep.

Our body’s circadian rhythm follows a dark-light cycle, so when it is time to sleep, it is vital that your bedroom is as dark as possible. Unfortunately, the light from devices like TVs, computers, alarm clocks, and cellphones, interrupt REM sleep and cause sleep loss. We recommend turning off all electrical devices at least 30 minutes before bedtime, hiding any device that emits light in a drawer or armoire, and wearing a quality sleep mask to bed.

The colors and noises in your bedroom matter.

To fall asleep, your brain needs a calm environment. Although you may love vibrant colors, when your bedroom walls are painted in these colors, it will be difficult to fall asleep. For a relaxing aesthetic, use paint colors that are calming and toned down. In addition, even the smallest noises can affect your sleep. To get a good night’s rest, eliminate noisy fans, turn off the TV, and play soothing nature sounds while you drift off to sleep.

While some don’t realize it, sleep is far more than just a time of rest – instead, it is a process of restoration that’s critical for the proper functioning of the mind and body. Without a healthy night’s sleep, we can suffer from a cloudy mind, mood swings, and weight gain; and, a continued lack of sleep results in chronic health issues like heart disease, diabetes, and depression.

Contribution by Elise Morgan

Uncategorized • July 30, 2019

Southern California Real Estate Market Update

by Kara Brem

The following analysis of the Southern California real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact your Windermere agent.

ECONOMIC OVERVIEW

Unexpectantly, the counties covered by this report — Los Angeles, San Diego, San Bernardino, Orange, and Riverside — saw total employment drop by 10,700 jobs (-0.1%) year-over-year. However, while Los Angeles and Orange counties reported declines, the smaller Riverside, San Bernardino, and San Diego counties saw employment rise. This is a significant reversal from the growth rates that have been in place for quite some time and may be due to re-benchmarking, which is when the government compares its sample to broader, historic data. I suspect that this is an anomaly and will reverse course, but I will continue to follow employment data closely as we move through the balance of the summer to see if this is a trend.

Over the past year, the unemployment rate in Southern California dropped from 3.6% to 3.4%, which further points to a data issue rather than a new trend that we need to be concerned about. I’ll know more when we publish the third quarter Gardner Report.

HOME SALES

There were 49,996 home sales in the second quarter of 2019. This was a drop of 3.6% from the same period in 2018 but 46.4% higher than the first quarter of this year.
Pending home sales (an indicator of future closings) rose by 3.7% compared to a year ago, suggesting that total sales in the third quarter are likely to be an improvement over current levels.
Following a trend that started last fall, home sales fell across the board. The most noticeable decline was again in San Bernardino County, which fell by 6.7%. The smallest drop was in the relatively affordable Riverside County.
There was an average of 40,174 active listings in the second quarter — up 13.1% from a year ago and 6.7% higher than in the first quarter of the year.

HOME PRICES

Year-over-year, average prices in the region were flat but were 5.3% higher than in the first quarter of 2019.
As stated above, affordability issues continue in most Southern California markets and this will likely lead price growth to taper.
Price growth in second quarter was mixed. Riverside County continues to have the greatest annual appreciation (+4.1%). Price gains were also seen in San Bernardino and San Diego counties. There were modest drops in average sale prices in Los Angeles and Orange counties, but this is not of great concern at the present time. That said, it is clear that affordability issues are present in these markets.
On a year-over-year basis, I still expect to see home prices continue to rise, but this likely only due to the very competitive mortgage rates. If rates move higher, this will have an impact on price growth.

DAYS ON MARKET

The average time it took to sell a home in the region was 44 days. This is an 8-day increase over the second quarter of 2018 but is down 9 days compared to the first quarter of 2019.
All markets saw the time it took to sell a house increase compared to the second quarter of 2018.
Homes in San Diego County continue to sell at a faster rate than other markets in the region. In the second quarter it took an average of just 29 days to sell a home. I would note that this is 5 more days than it took a year ago.
Market time is increasing, which may concern some, but it is simply a move back to historic averages.

CONCLUSIONS

The speedometer reflects the state of the region’s real estate market using housing inventory, price gains, home sales, interest rates, and larger economic factors.

Rising inventory levels, and affordability concerns in many markets will likely lead to slower price growth as we move through 2019. That said, mortgage rates are still very attractive, and this can offset affordability issues to some degree.

Given rising inventories and slower price growth, I have moved the needle just a little more toward buyers, though it still remains a sellers market.

As Chief Economist for Windermere Real Estate, Matthew Gardner is responsible for analyzing and interpreting economic data and its impact on the real estate market on both a local and national level. Matthew has over 30 years of professional experience both in the U.S. and U.K.

In addition to his day-to-day responsibilities, Matthew sits on the Washington State Governors Council of Economic Advisors; chairs the Board of Trustees at the Washington Center for Real Estate Research at the University of Washington; and is an Advisory Board Member at the Runstad Center for Real Estate Studies at the University of Washington where he also lectures in real estate economics.

Real Estate • July 13, 2019

5 Powerful Reasons Owning a Home is Better Than Renting

by Kara Brem

5 Powerful Reasons to Own Instead of Rent | MyKCM

Owning a home has great financial benefits.

In a recent research paper, Homeownership and the American Dream, Laurie S. Goodman and Christopher Mayer of the Urban Land Institute explained:

“Homeownership appears to help borrowers accumulate housing and non-housing wealth in a variety of ways, with tax advantages, greater financial flexibility due to secured borrowing, built-in ‘default’ savings with mortgage amortization and nominally fixed payments, and the potential to lower home maintenance costs through sweat equity.”

Let’s breakdown 5 major financial benefits of homeownership:

1. Housing is typically the one leveraged investment available

Homeownership allows households to amplify any appreciation on the value of their homes by a leverage factor. A 20% down payment results in a leverage factor of five, meaning every percentage point rise in the value of your home is a 5% return on your equity. If you put down 10%, your leverage factor is 10.

Example: Let’s assume you purchased a $300,000 home and put down $60,000 (20%). If the house appreciates by $30,000, that is only a 10% increase in value but a 50% increase in equity.

2. You’re paying for housing whether you own or rent

Some argue that renting eliminates the cost of property taxes and home repairs. Every potential renter must realize that all the expenses the landlord incurs (property taxes, repairs, insurance, etc.) are baked into the rent payment already – along with a profit margin!!

3. Owning is usually a form of “forced savings”

Studies have shown that homeowners have a net worth that is 44X greater than that of a renter. As a matter of fact, it was recently estimated that a family buying an average priced home this past January could build more than $42,000 in family wealth over the next five years.

4. Owning is a hedge against inflation

House values and rents tend to go up at or higher than the rate of inflation. When you own, your home’s value will protect you from that inflation.

5. There are still substantial tax benefits to owning

We know that the new tax reform bill puts limits on some deductions on certain homes. However, in the research paper referenced above, the authors explain:

“…the mortgage interest deduction is not the main source of these gains; even if it were removed, homeowners would continue to benefit from a lack of taxation of imputed rent and capital gains.”

Bottom Line

From a financial standpoint, owning a home has always been and will always be better than renting.

Uncategorized • July 2, 2019

Are You Better Off Paying Your Mortgage Earlier or Investing Your Money?

by Kara Brem

Photo Credit: Rawpixel via Unsplash

Few topics cause more division among economists than the age-old debate of whether you’re better off paying off your mortgage earlier, or investing that money instead. And there’s a good reason why that debate continues; both sides make compelling arguments.

For many people, their mortgage is the largest expense they will ever incur in their lives. So if given the chance, it only makes logical sense you would want to pay it off as quickly as possible. On the other hand, a mortgage is also the cheapest money you will ever borrow, and it’s generally considered good debt. Any extra money you obtain could be definitely be put to good use elsewhere.

The reality is, however, a little less cut and clear. For some homeowners, paying off their mortgage earlier is the right answer. While for others, it would be far more advantageous to invest their money.

Advantages of paying off your mortgage earlier

You’ll pay less interest: Each time you make a mortgage payment, a portion is dedicated towards interest, and another towards principal (we’ll ignore other costs for now). Interest is calculated monthly by taking your remaining balance, the length of your amortization period, and the interest rate agreed upon with your lending institution.

If you have a $300,000 mortgage, at a 4% fixed rate over 30 years, your monthly payment would be around $1,432.25. By the time you finish paying off your mortgage, you would have paid a total of $515,609, of which $215,609 were interest.

If you wanted to lower the total amount you pay on interest, you don’t need to make a large lump sum to make a difference. If you were to increase your monthly mortgage payment to $1,632.25 (a $200 a month increase), you would be saving $50,298 in interest, and you’ll pay off your mortgage 6 years and 3 months earlier.

Though this is an oversimplified example, it shows how even a small increase in monthly payments makes a big difference in the long run.

Every additional dollar towards your principal has a guaranteed return on investment: Every additional payment you make towards your mortgage has a direct effect in lowering the amount you pay in interest. In fact, each additional payment is, in fact, an investment. And unlike stocks, bonds, and other investment vehicles, you are guaranteed to have a return on your investment.
Enforced discipline: It takes real commitment to invest your money wisely each month instead of spending it elsewhere.

Your monthly mortgage payments are a form of enforced discipline since you know you can’t afford to miss them. It’s far easier to set a higher monthly payment towards your mortgage and stick to it than making regular investments on your own.

Besides, once your home is completely paid off, you can dedicate a larger portion of your income towards investments, your children or grandchildren’s education, or simply cut down on your working hours.

Advantages of investing your money

A greater return on your investment: The biggest reason why you should invest your money instead comes down to a simple, green truth: there’s more money to be made in investments.

Suppose that instead of dedicating an additional $200 towards your monthly mortgage payment, you decide to invest it in a conservative index fund which tracks S&P 500’s index. You start your investment today with $200 and add an additional $200 each month for the next 30 years. By the end of the term, if the index fund had a modest yield of 5% per year, you will have earned $91,739 in interest, and the total value of your investment would be $163,939.

If you think that 5% per year is a little too optimistic, all we have to do is see the S&P 500 performance between December 2002 and December 2012, which averaged an annual yield of 7.10%.

A greater level of diversification: Real estate has historically been one of the safest vehicles of investment available, but it’s still subject to market forces and changes in government policies. The forces that affect the stock and bonds markets are not always the same that affect real estate, because the former are subject to their issuer’s economic performance, while property values could change due to local events.

By putting your extra money towards investments, you are diversifying your investment portfolio and spreading out your risk. If you are relying exclusively on the value of your home, you are in essence putting all your eggs in one basket.

Greater liquidity: Homes are a great investment, but it takes time to sell a home even in the best of circumstances. So if you need emergency funds now, it’s a lot easier to sell stocks and bonds than a home.

Posted July 1 2019, 11:00 AM PDT by Kenady Swan

Uncategorized • June 16, 2019

Top 4 Renovations for the Greatest Return on Investment

by Kara Brem

Some Highlights:

If you are planning on listing your house for sale this year, these four home improvement projects will net you the most Return on Investment (ROI).
Minor renovations can go a long way toward improving the quality of your everyday life and/or impressing potential buyers.
Whether you plan to stay in your house for a long time or just a few years, it’s smart to know which home renovations add the most value.

Uncategorized • June 6, 2019

Minimize and simplify your living space

by Kara Brem

Have you considered what it would feel like to let go of the “stuff” in your life and downsize? To remove all the excess items you’ve acquired over the years and really minimize?

I recently did just that and I will tell you…it feels better than I ever imagined. Everything I own now fits in my recently purchased 800 sq ft one bedroom La Costa condo and 1 car garage…including my car!

Living a minimalist lifestyle is not for everyone. It’s certainly a case-by-case scenario and if you still have little ones in the house there are other versions of minimalism or simplifying that can also be rewarding, without limiting your living space to an extreme degree.

In my situation, my independent daughter is 25 and has been out of the house for years. She’s not coming home to live with mom anytime soon. When she does come for a visit, I splurge and get her an airbnb right down the street. She has her space and I have mine. It’s perfect!

When I bought my little condo, people thought I was a tad off my rocker. Some thought I must be experiencing financial difficulties. WHY would I ever want to do such a thing and why live in a small space?

Well here you have it. These are the benefits I’ve experienced thus far in my minimizing adventure:

I know exactly where EVERYTHING I own is. No more searching through boxes or cabinets looking for that one item.
I’m organized beyond belief. You have to be in a small space!
Instead of buying a home that was MORE than I needed, I now have money to travel, explore, and enjoy life when I have the time off work. I’m not a slave to my mortgage.
My manageable mortgage payment allows me to start on my next life goal…purchasing investment properties to create future financial comfort and stability for my “later years”.
I don’t waste my money on anything I don’t need because it just doesn’t fit! If I want to purchase something, something else has to go first.

Letting go and giving away my excess “stuff” allowed me to share things I did not need with those that did. Smiles for days. This activity was enough to make me want to give away more and so I did! People are so appreciative and many needed these things much more than I did.

So, if this sounds like a way of life you’d like to explore and if you’re ready to downsize, let’s get started looking for your new home. It’s a great time to start a new, simple lifestyle and it starts with your home base. I’m happy to help and I’m so excited about this new way of life I just want everyone to experience it.

Uncategorized • May 21, 2019

Renting vs. buying. What’s best for you?

by Kara Brem

The debate about whether it makes more financial sense to rent or buy has been raging for decades. Advocates of buying argue that when you pay rent you’re paying for someone else’s mortgage. When you buy, you are making an investment, which can significantly increase in value every year you live in the home.

Supporters of renting say that the extra costs associated with owning a home, such as interest payments, taxes, maintenance, can add up. They add that there’s no guarantee that those expenses will be recouped when the house is sold. Instead of investing in a home, you may be better off investing your savings in stocks, bonds, and other financial securities that hold less risk.

Matthew Gardner, our Chief Economist, forecasts, that we will not break 5% for 30-year fixed Mortgage rates for 2019, and likely won’t break it next year.

This means that getting a mortgage is relatively cheap, raising the question, ‘Is it really worth it to keep renting?’

Even if interest rates stay low, whether to rent or buy has a lot to do with each person’s specific situation. Here are a few considerations to make as you decide.

What’s the real estate situation in your city?

Industry groups put out reports every quarter stating the average national sales price for a home, and the average monthly payment for a U.S. rental. These reports are typically based on an average of all the cities in the U.S. But what really matters is what the numbers show when you dig into them on a local level.

Investigate the local sales and rental markets, and you’ll see there are some cities that fall well below that average, and some that rise far above it. When comparing housing costs, be sure to base your evaluation on what’s happening in your city and neighborhood, not the nationwide averages.

How long do you expect to live there?

If you don’t plan to be living in the same place for at least five years, renting is probably your best bet financially. But if you think you’re ready to settle down for as long as 7 to 10 years, chances are very good that any home you purchase will appreciate during that time even if the economy runs into some bumps along the way.

What’s the mortgage rate?

One of the other key factors to consider is the cost of your loan (the interest you’ll pay the lender). Fortunately, our Chief Economist, Matthew Gardner, does not expect interest rates to hit or break 5 percent, meaning money is relatively cheap.

Your mortgage rate will depend on how much money you have saved, your credit score, and other factors, so make sure to talk to a loan officer before you start looking for a home. Being pre-approved for a mortgage narrows down your price range and helps strengthen your offer when it comes time to compete for your new home.

Can you pay a bit more?

It can be advantageous to work a lower monthly payment to the bank so that you can pay a little more than the payment.

For example, if you can afford to pay a little extra towards your mortgage bill each month, say $300 more per month, on a 30-year, $300,000 loan, can knock eight years off the life of the loan and reduce your final bill by more than $63,000. That’s savings you would never see if you rented.

Will you need to make repairs or improvements?

Buying a fixer-upper may seem like a great way to get a deal on a house, but if the money you spend on the repairs is too great, your profit could be diminished when it comes time to sell. The same is true for remodeling and improvement projects.

Additionally, you can work with your Mortgage lender for a repair loan. This can help you get that lot you want, and help you pay for the repairs.

But ultimately, if you can only afford a home that demands major improvements, and you don’t have the skills to do much of the work yourself, it’s probably better to rent.

Do you have other ways to invest?

Many see a home purchase as an easy way to invest—a place where they can generate savings through home equity. But others say you can make more money renting an apartment and investing your savings in stocks, bonds, and other financial securities.

This is where a financial advisor might come in. They’ll be able to break down what you need to do in order to get the best return on your investments. They’ll also be able to see the big picture when it comes to your money.

Can you rent part of the house?

Speaking of a diverse portfolio, let your investment work for you. If you buy a house that includes a rental (extra bedroom, mother-in-law unit, etc.), you could be the landlord instead of paying the landlord. With that rental income, you could pay off the mortgage faster and contribute more to your savings. But, of course, you need to be willing to share your home with a tenant and take on the responsibilities of being a landlord or working with a professional property manager to help you with those duties.

Making your decision

To make your decision about whether to rent or buy easier, input the key financial facts regarding your situation into this Realtor.com Rent vs. Buy Calculator: For help making sense of the results and analyzing other factors, contact me to discuss your options.