Category Archives: Real Estate

Maryland Eviction Process and Laws

Whether you’re a landlord or a tenant in Maryland, it’s important to understand the eviction process and laws in the state. In most states, landlords are legally allowed to evict tenants for non-payment of rent or other lease violations. But doing so must be done in an appropriate manner, which includes following the proper steps outlined by local law. Let us understand the Maryland eviction process and laws in detail.

Elderly tenants, tenants with children or those who have a disability may have additional protections against being evicted unnecessarily. Landlords must also be aware that certain circumstances may make an otherwise lawful eviction process illegal, such as when there is a federal investment clause that prohibits renting property to long-term tenants at market rates.

Maryland Eviction Process and Laws: Key Things To Know

What is the Maryland Eviction Process?

In Maryland, landlords can evict tenants for a number of reasons, including non-payment of rent or violating the lease or rental agreement. Landlords can also evict tenants if the person is no longer able to meet the essential obligations of the lease, such as by becoming disabled or elderly.

When a landlord decides to evict a tenant, the process involves the landlord serving the tenant with a notice to vacate the rental property. The notice must specify the date on which the tenant must vacate the rental property. If the tenant does not move out by the date specified in the notice, the landlord can file an eviction lawsuit in court. In some cases, the landlord can also file an eviction lawsuit without first giving the tenant a notice to vacate the rental premises.

If the landlord does this, the eviction procedure is the same as if the landlord had served the tenant with a notice to vacate.

Notice Requirements for Evicting a Tenant in Maryland

eviction notice

 

A landlord in Maryland must provide written notice to a tenant of at least 14 days’ duration before filing an eviction lawsuit or attempting to physically remove the tenant from the rental property. This written notice is considered to be the “notice to vacate.” If a landlord attempts to evict a tenant without providing proper written notice, the eviction is considered to be “illegal” and the landlord may be subject to fines and penalties. The landlord’s notice to vacate must include all of the following information:

The date, time, and place of the eviction meeting; a clear statement of the reason for the eviction; the signature of the person who delivered the notice; and the signature of another person who will be at the eviction meeting.

The Court hearing for eviction in Maryland

After the landlord gives the tenant notice to vacate the rental property, the judge will set a court date for the eviction hearing. At the hearing, both the landlord and the tenant will have the opportunity to speak about their rights and responsibilities under the lease or rental agreement.

At this hearing, the judge will determine if there is enough evidence for the landlord to evict the tenant. If there is enough evidence, the judge will order the tenant to move out of the rental property by a certain date. The tenant should not move back into the rental property until they have a court order permitting them to do so. The judge will issue a final order during the eviction hearing. If the tenant fails to comply with the order, the landlord can file an eviction lawsuit in court.

The procedure for physically removing a tenant from rental property

If the tenant does not move out of the rental property by the date specified in the eviction notice or if the tenant remains in the rental property but fails to pay rent, the landlord can file an eviction lawsuit in court. At this stage of the eviction process, the landlord must present evidence of non-payment of rent to the court clerk. If the landlord wins the case and the tenant does not pay the unpaid rent, the court will allow the landlord to file a writ of execution against the tenant that allows the sheriff to physically remove the tenant from the rental property.

Federal Protection Against Illegal Evictions in Maryland

Maryland Eviction Laws - Reasons for Eviction

 

Verbal or written notice can be given to a tenant as long as it meets the requirements described above. Some jurisdictions require that the eviction notice include a specific time period for moving out, such as 14 days. If a landlord attempts to evict a tenant without providing proper written notice, the eviction is considered to be “illegal” and the landlord may be subject to fines and penalties.

If the eviction process is conducted “illegal” or “improperly,” the landlord may be able to reduce or dismiss the eviction lawsuit if they can show that they attempted to follow the proper steps but were not allowed to proceed because the other person was doing the eviction in “illegal” manner.

Summing up

In Maryland, a landlord can evict a tenant for a number of reasons, including non-payment of rent or violating the lease or rental agreement. When a landlord decides to evict a tenant, the process involves the landlord serving the tenant with a notice to vacate the rental property. If the tenant does not move out by the date specified in the notice, the landlord can file an eviction lawsuit in court.

At this hearing, both the landlord and the tenant will have the opportunity to speak about their rights and responsibilities under the lease or rental agreement. If the tenant does not pay the rent or vacate by the date specified in the eviction notice, the landlord can file an eviction lawsuit in court. After filing the lawsuit, the landlord must go to court again to get a judgment and order of possession. If the tenant does not move out of the rental property by the date specified in the eviction notice, the court will issue a final order.

How Is The Housing Market Affected By Rising Federal Interest Rates?

The cost of borrowing money and using a bank to store your funds is determined by the interest rate. The amount you borrow or save over the year is used to determine interest rates. As a result, if you deposited $1,000 and earned 1% interest, you would have $1,010 a year later. And interest rates are one of the most important factors when you buy a property or a house. So how are the housing market and rising federal interest rates correlated?

What Factors Determine Interest Rates?

The amount that a lender charges a borrower for the use of assets on top of the principal is known as the interest rate. The status of the economy is one of several variables that affect the interest rate that banks charge. The interest rate is determined by the central bank of a nation, and each bank utilizes that rate to establish the range of annual percentage rates (APRs) that they provide.

When inflation is strong, central banks often increase interest rates since doing so increases the cost of lending, which deters borrowing and decreases consumer demand. Thus inflation is one of the major factors that affect the housing market and rising federal interest rates.

What Motivated the Fed to Raise Interest Rates?

The Federal Reserve’s two primary goals are to stabilize prices and work to maintain moderate long-term interest rates. If you’ve been keeping up with the news, you know how contentious inflation is. The economy is currently undergoing a rapid pace of price increases for several reasons, but the Fed can only influence the federal funds rate. Let’s just review how we got here.

Three factors have come together to create the global situation we are in: supply chain disruption due to pandemic-related economic shutdowns, increased economic activity brought on by COVID-19-related stimulus measures, and sanctions and blockades on Russian oil as a result of the conflict in Ukraine.

To stop inflation, the U.S. central bank raises the federal funds rate. However, because every other rate a lender sets swings with it, the federal funds rate affects all interest rates because it is the rate at which banks borrow from each other overnight. Particularly for larger loan amounts, increases of less than a percentage point might have a significant impact on borrowing.

Rate increases can occur more than once and frequently do. The federal funds rate has risen by 1.5% so far in 2022 after three increases. This positions it, as of this time, in the region of 1.5% to 1.75%.

A decade bond rate with the federal funds rate

The Federal Reserve of the United States sets the benchmark interest rate known as the federal funds rate. This interest rate is what banks charge one another for overnight loans. Thus any change in the interest rate by the Federal Reserve leads to a strong impact on the housing market and rising federal interest rates

Because it frequently acts as a baseline for other interest rates, this rate is known as a benchmark rate. Interest rates on everything, from savings accounts to credit cards, are partially determined by fluctuations in the federal funds rate.

The federal funds rate also affects the interest rates of bonds, such as the 10-year US government bond.

In the past, changes in the price of 10-year Treasury bonds have mirrored movements in the interest rate on 30-year mortgages. Mortgage rates grow in tandem with increases in the 10-year bond rate. For rate reductions, the same holds.

A lot of people may find it more difficult to purchase a home because increased interest rates entail greater mortgage payments each month.

Housing and price growth

Housing and price growth

 

The process by which money loses its purchasing value is called inflation. For instance, if inflation was 8.5 percent in the previous year, something that cost $100 then would cost $108.50 now.

Several mechanisms exist for inflation to affect the home market.

For starters, inflation raises the price of homes in the same way that it raises the price of all other things.

The Fed’s attempt to keep inflation under control and at a low pace is one of its objectives, nevertheless. To decrease the money supply and lower the inflation rate if inflation spikes sufficiently, the Fed may raise the federal funds rate.

Correlation Between the Housing Market And Rising Federal Interest Rates

In the next five years, the cost of a variable mortgage for real estate investors, such as landlords, is anticipated to rise dramatically. As a result, cash flow for property investors will probably be lower. In addition, section 24 was implemented in 2017, which meant that if you owned a property in your name, had a mortgage on it, and were a higher-rate taxpayer, you would have to pay a lot more tax on the property.

If interest rates continue to rise, many rental properties will probably stop producing as much money because the increased cost of borrowing has eaten into their cash flow. Although landlords may not be generating a profit, on paper they still are because of how profits are determined. As a result, to pay the tax each year, landlords will have to dig deeper into their pockets. The rising taxes and higher interest rates on real estate are expected to cause some property owners to sell their properties, according to experts.

Reduced Housing Market Activity

The major impact on the housing market and rising federal interest rates is the reduced housing marketing activity. At the moment, low-interest rates have made obtaining a mortgage more affordable, which has inflated the housing market. As a result, many renters in several parts of the world now find it more difficult to become homeowners.

The impact on the whole economy will be substantial because the income-to-house price ratio is at record highs.

Bottom line

Reduced Housing Market Activity

The Federal rates are continuously on the rise to cool down the economy from the rebounding of the recession after the pandemic. Due to this, the housing market is seeing extensive high prices and low levels of inventory. The strong correlation between the housing market and rising federal interest rates is evident from the factors mentioned above. Experts are of the view that the market will stabilize in the coming months and there will also be an increase in the housing inventory.

 

 

 

Should I Rent an Apartment or a House? 4 Best Reasons

When looking for a new place to live, there are other issues besides “rent or buy?” Because after deciding to rent, you have to quickly make another choice: Should I rent an apartment or a house?

Every tenant should have the freedom to pick and choose when it comes to their next rental property. One of the most important choices for renters who have this choice is whether to rent a house or an apartment.

Let’s take a closer look at the advantages and disadvantages and decide to rent an apartment or a house. You should be able to choose which is better for your situation after carefully weighing the two options.

So should I rent an apartment or a house?

Rent a house: pros and cons

Renting a typical home entails renting the complete structure. You’ll have plenty of space to work with, privacy, and access to outside features like a front or back yard.

It’s a fantastic choice for a tenant seeking additional room, family living, or a property with a yard for their pets.

Pros:

Safety: Renters have more privacy in a house than they would in a typical apartment with shared walls. Since residences are detached, you won’t have to worry as much about annoying your neighbors with your hobbies, exercise routine, irregular schedule, or much else.

More Space: A house provides all the extra room you need to realize your dream home, whether it be an art studio or a dedicated home office. You’ll have even more room to work with if your lease allows access to spaces like a basement, garage, or upper floor.

Interests and passions: You don’t have to worry as much about upsetting your neighbors when you live in a house. You can engage in your hobbies and leisure pursuits more effortlessly. It can be challenging to practice an instrument in an apartment without annoying your neighbors. Renting a home makes a lot more sense if you are sporty and want to play games in the backyard.

A Home For Pets: Renting a home increases the likelihood that there will be a yard and space for your pets to roam. Even though an apartment allows dogs, renting a home makes far more sense if you have a large dog. The room to run around will be much appreciated by your dog.

Cons:

Greater accountability: There will be more upkeep required as there is more area and space. If you have a yard, there can be grass to cut and things to tidy up. Most likely, if you are renting a home in a cold-weather region, you will be in charge of clearing the walkway and driveway.

Increasing Utility Bills: The cost of utilities in a home can be significantly more than it is in an apartment. Unless you just want to use one room, heating or cooling a whole house uses a lot more electricity. To avoid regions in your home with weak coverage, you might also need to spend money on WiFi extenders or a better WiFi package.

Location: The location will be a consideration while deciding whether to rent a home or an apartment. You have a lower chance of finding a home close to the city’s entertainment district. Instead, the majority of dwellings are situated in the outskirts, far from the majority of facilities like shops and restaurants.

Rent an apartment: pros and cons

Apartments can be found inside apartment buildings, multi-unit homes, converted warehouses, or connected units inside apartment communities, making renting one a little more challenging. But the foundations of apartment rental remain the same.

You will be sharing common areas and amenities with other apartment dwellers, renting a unit with a small portion of the square footage of a home, and having walls that are attached to those of your neighbors.

So should I rent an apartment or a house?

 

Pros:

Spending: Apartment living ought to be less expensive than home ownership. You not only pay for less space most of the time, but the rent is frequently more affordable. Less money will be required for utilities, which are typically already covered by your monthly rent. 

Walking distance: Apartment complexes are typically situated nearer to entertainment venues and grocery stores. You might discover that most of the places you need to go are only a short walk away.

Mobility: Living in an apartment gives you more freedom to move whenever you need to. You may find it simpler to move in and out of an apartment if your employment frequently requires you to shift from one place to another. Finding a fully furnished apartment increases your chances of saving money and time on moving.

Reduced Repair work: Of course, you must maintain a clean and orderly environment, but that’s about it. Someone will take care of any issues with your rental for you, usually rather quickly.

Cons:

Limitations: Any alterations you intend to make to the flat are more likely to be subject to limitations. Additionally, compared to renting a house, apartments may not allow you to keep pets. Always make it a point to look into any regulations and limits before signing a lease on an apartment.

Parking: Off-street parking may be scarce in many apartment buildings. If there is off-street parking, finding a spot may be difficult and expensive.

Privacy: It might be difficult to feel private when you share walls, floors, and ceilings with other tenants. Additionally, stress can be brought on by uncomplicated things like the loudness of your television or music and how early or late you wake up.

Rent an apartment: pros and cons

Bottomline

Deciding whether to rent an apartment or a house depends on what you need in a home to live the comfortable life you want. A house can give you more peace and privacy and good space both indoors and outdoors.

But if you are looking to live near a city center, need flexibility and cost is also a great concern, then it is better to choose an apartment for rent.

Whatever your choice for renting is, it is important to know that you will need the rent for the first month and the last month, a security deposit, and maybe a rental fee.

It is better to check and make a list of financial expenses beforehand. Failing to do so, you may not be able to rent an apartment or a house. 

Both, a house and an apartment have their pros and cons when it comes to renting them. With the above information, you can very well decide whether you should rent an apartment or a house for a better life and financial condition.

 

Is it Good to Buy A House Now? Or Wait Until 2023? – Expert View

If you are looking to buy a house, you should be aware of the latest trends in the housing market. On June 15, 2022, The Federal Reserve raised the interest rate by 75 basis points, the highest since 1994. The Federal Reserve’s activity does not directly dictate the mortgage rates, but it does affect the mortgage industry. So is it good to buy a house now? Or Wait?

Experts do not expect much relief in the coming months, so they do not think it is a favourable time to buy a house. They reason that the rates have increased much more than they initially expected.

On the other hand, looking at the chances of potential savings based on the best mortgage offers will give you a better return on investment.

Is It Good to Buy a House Now

Just a little browsing through the best mortgage offers can give you great returns. For a 30-year fixed mortgage, the average rate of interest is 5.80% which means that on every $100K you borrow, you have to pay $584.21 as part of principal and interest. Similarly, for a 15-year fixed mortgage with an average interest rate of 4.98%, you end up paying $532 for every $100K you borrow to buy a house.

For a 30-year mortgage, you can save thousands of dollars in interest if you can pay back larger monthly payments. But take this risk only if it can fit into your monthly budget. So don’t think much on is it good to buy a house now. Just plan properly and move ahead.

More reasons to buy a house

More reasons to buy a house

If the economy goes into recession, it will cause the interest rate to fall to around 4% or even lower. In that condition, it is better to postpone the decision to buy a house for some time. It is an excellent time for first-time buyers to save some more money.

Some industry experts predicted that the 30-year fixed mortgage rate would increase from 3.1% to 3.3%, whereas the Mortgage Bankers Association predicted it to be around 4% by the end of 2022.

But the 30-year fixed mortgage rate is now floating close to 6% from being close to stable at 3% in 2021. This steep rise proved the industry experts and Mortgage Bankers Association’s predictions wrong. The industry forecast says that interest rates are expected to vary between 5% and 7% by the end of 2022. Nadia Evangelou, Senior Economist & Director of Forecasting for the National Association of Realtors, says the interest rates will be more than 6% this year.

Whereas Rick Sharga, executive vice president of Market Intelligence for ATTOM Data Solutions, predicts that the average interest rate will be between 6% to 6.25% by the year-end. And so a question like is it good to buy a house now, doesn’t arise.

Why are interest rates increasing?

The Federal Reserve will have to raise the fund rates to curb inflation and reduce its position on mortgage-backed securities, which will cause the interest rates to rise further. It is not favourable for home buyers as with the higher interest rates, home loans become less affordable. It also increases the home prices, and buyers have to shell out more for their monthly payments.

With an increase in home prices, the demand for buying homes reduces. June 2022 figures show that the inventory of houses on sale is increasing, but the buyer demand is just moderate. The rates might finally come down and that answers your question – is it good to buy a house now?

Alongside, there has been a decline in mortgage credit availability, making it difficult for a home buyer to qualify for a mortgage loan. With a shortage of buyers and increasing home inventory, it seems to be a seller’s market for the time being. But comparing with the past, the home inventory is just two-thirds of what it was in 2020.

It is a seller’s market, and there are more buyers than available homes on sale. It is a difficult time for first-time buyers to buy a house. According to the data released by NAR, the national median price for existing homes sold in May 2022 was $407,000, which is approximately 14.8% more compared with May 2021.

Days on sale for houses are decreasing

Interestingly, more than 80% of homes sold were on the market for just 16 days in May 2022. This average was 17 days in April 2022. A nationwide housing study released by Fannie Mae states that only 83% of the respondents believed it was not a favourable time to buy a house.

Consumers expect their financial situation to worsen more as they are more worried about their job security, according to a statement by Doug Duncan, Fannie Mae’s senior vice president and chief economist.

In an April 2020 survey, consumers seemed more concerned about housing loan affordability and rising mortgage rates, while the HSPI remained constant after a decline of 0.3 points. Comparing the month of May in 2021 and 2022, the HSPI is down by 11.8 points this year. 79% of consumers do not find the current period suitable for buying a home.

In April 2022, about 76% of consumers did not find it the right time to buy a house. More and more respondents expect an increase in mortgage rates in the coming months.

Is it a good time for Home Buyers?

The percentage of consumers who did not find the current situation suitable to buy a home increased from 76% to 79%. Alternatively, customers who said the time was appropriate decreased from 19% to 17%. If we compare month over month, the net share of buyers who find the current time suitable to buy a house decreased by five percentage points.

Is it a Good Time for Home Sellers

On the sellers’ side, the percentage of people finding it suitable to sell a house increased from 72% to 76%. Those seeing the current time unsuitable for selling decreased from 21% to 19%. In a month-over-month comparison, the number of respondents who found it suitable to sell a house increased by six percentage points.

Expectations about Mortgage rates and Home Price

tenant greatThe survey revealed the percentage of people that expect home prices to rise further in the next 12 months increased from 44% to 47%. Alternatively, the rate of people who expect home prices to go down has decreased from 25% to 23%, while those thinking the home prices will remain stable reduced from 26% to 25%. In a month-over-month comparison, the respondents expecting an upsurge in home prices increased by five percentage points.

For the mortgage rates, the percentage of respondents who expect a downfall decreased from 5% to 4%. In contrast, those expecting an increase also reduced from 73% to 70%. The percentage of people expecting mortgage rates to remain the same increased from 18% to 20%. In a month-over-month comparison, the respondents expecting the mortgage rates to go down in the next 12 months increased by a meagre two percentage points.

Conclusion

So still wondering if is it good to buy a house now or wait further. If yes then you should read the article again. You will get the precise answer to your question.

Democrat's tax increase

How will Democrats’ Tax Increase Affect Real Estate Market? – Factual Research

Most people looking to buy or sell a house or connected with real estate were eager to know about the proposed tax policies and changes. Will the democrats’ tax increase affect real estate market in 2022 or beyond? Let us explore.

These new tax policies will mainly affect the wealthy, corporate houses, and real estate investors. Accounting Today quotes,

“The biggest tax increase in a generation took a major step forward with proposals of $2.1 trillion in potential tax levies.”

Before going into details, it is crucial to know that these are only the proposed changes and have not been signed into law yet. There are chances that many of these may still change and not even become law. It is advisable not to make decisions based on these changes before consulting some experts.

When the tax rates change, they affect real estate investors differently. It is not that if the tax rates increase, your tax burden will also increase. Even if the democrats’ tax increase affect the real estate market it should not be a burden on you if you plan correctly. It all depends on what your financial standing is. But if you think that, why discuss these tax changes before they become law? Then the simple answer is that if you want to take complete advantage of your tax savings, you need to make well-informed decisions with all the information at your disposal. When these changes become actual laws, you might have limited time to make crucial decisions.

Self-directed retirement account investments

democrats' tax increase affect real estate market

 

Sometimes real estate investors use retirement money to invest in real estate. This self-directed investment in different real estate deals helps them to be safe from penalties and current taxes. These investments can be of several types, like rental properties, notes, syndication, etc. The proposed changes

may restrict Individual Retirement Accounts (IRAs) from investing in debt securities, private equity, and other investments. Most of these investments need the IRA owner to satisfy educational, financial, and licensing prerequisites.

If you want to invest your self-directed IRA in some deal that requires the investor to be officially recognized or authorized, the new proposed changes can be a problem for you. If these proposed changes are enacted into law, you must dispose of the interest or move it to another account before December 31, 2023. Failing to do so on time may incur potential taxes and/or penalties of over 50%.

If this law forms, investments in any real estate syndication using self-directed IRS may not remain a favorable option anymore. The proposal further prevents the IRA from becoming an owner of more than 10% of the investment, and the IRA will not be able to invest in any entity where he is an officer.

These proposed changes prohibit IRA investments into standard procedures like blocker corporations, Checkbook IRA LLCs, Joint ventures, and trusts. So democrats’ tax increase doesn’t need to affect the real estate market in a direct sense.

Will Democrats’ tax increase affect real estate market?

We have been hearing about the potential increase in the tax rates by Democrats for some time now. The proposed changes may increase the highest federal income tax rate from 37% to 39.6%. It will apply to single taxpayers if their income is over $400K and for married couples if their joint taxable income is over $450K.

Changes in Tax Rates

The proposed changes aim to raise the tax rates and lower the income level at which higher tax rates become applicable. It means that now more people will come under the highest tax rate bracket paying a good part of their income in taxes. Now the question is, why should we consider ordinary tax rates here?

It is because with real estate, most incomes like flip income, rental income, property management income, etc., have ordinary tax applicable. Another significant change that is expected is related to C corporations. These changes plan to increase the highest C-corp tax rate from 21% to 26.5%. This change will only impact C-corps with an income of more than $5 million. Thus it is clear that those saying that democrats’ tax increase affect real estate market are not true.

If you are an average real estate investor using C-corps to earn property management income, the proposal aims to lower the tax rate to 18% on the first $400K of the taxable amount.

Capital Gains Taxes

Many investors are also interested to know what these proposed changes may bring to the capital gain taxes. The proposed changes may get some good news for higher-income taxpayers that the capital tax may increase from 20% to 25% and not 39.6%. It would be strange that higher capital gains tax rate would apply to the gains acknowledged on or after September 13, 2021. So if you have sold some of your assets before this date, they would incur the lower capital gains tax rate and vice-versa.

If you entered into a transaction in August 2021 but closed it only after September 13, 2021, a lower tax rate will still be applicable on the transaction. Some examples of capital gains are selling business assets, rental property, stocks, and primary homes.

Business Income Taxes

The proposed changes may also affect the higher-income taxpayers with their business come. Net Investment Income Tax will then apply to the ordinary business income. In the past, high-income taxpayers paid this tax only on their investment income. But if enacted as law, the proposed changes would also look to tax this on business income. It would be an additional load of about 3.8% in addition to the already applicable federal and state income tax.

An ordinary income from a business in real estate may include flip profits, income generated from commissions, property, asset management income, etc. Married couples with taxable income of more than $500K and Single taxpayers with taxable income over $400K will be affected by this change.

Are the proposed changes suitable for real estate investors?

Not everything is terrible in the new proposed changes for the real estate investors. Investors are not worried if the democrats’ tax increase affect real estate market. There are a few good things that we did not see in the proposed changes. These are related to the removal or limiting of the 1031 exchange benefit. It is a situation where the investor can defer the taxes by selling an appreciated rental property and replacing it with some other property.

The proposed changes do not mention the 1031 exchange benefit, so it can be considered good news for real estate investors. The proposed changes do not mention the bonus depreciation, general business write-offs, and tax benefits for real estate professional status. So we can believe that these also will still stay.

Bottomline

There have been changes in tax rates and regulations from time to time, and your strategies and investment decisions should also change based on them.

It is always a good idea to under how the proposed changes if enacted into laws, may affect you and plan your tax and investment decisions accordingly. It is also helpful to get in touch with the advisors and prepare for tax changes.

Will The Real Estate Market Get Affected By Fed Rate Hikes in 2022?- Expert Opinion

If you are looking to sell or buy a house soon, you will be interested to know more about the trends in the housing market. The predictions about the housing markets cannot be 100% accurate, just like the weather forecasts. But you can make some fair guesses about the future after looking at what the real estate experts are going by. And, one of the major factors is fed rate hikes in 2022. Will the real estate market get affected by fed rate hikes? Let us explore the possibility.

These forecasts are good if you need an idea of how the market will be in the future to buy or sell a house. But your decision to buy or sell a home should entirely be based on the finances you have or personal situations affecting you. Now let us see what the experts have predicted for 2022.

2022 – Housing Market Forecasts – Real Estate Market Get Affected by Fed Rate Hikes

2021 was a crazy time that saw insane house-selling behaviour. The sellers were getting offers of vast amounts over their asking price within a few hours, causing a lot of stress to the buyer and seller. But thankfully, we are out of such time with the market still strong. It is a good sign for the future.

Home prices in 2022

Like every market, the housing market also works on the factors of demand and supply. Even in 2022, there is still a shortage of homes for sale; therefore, the prices are still high. The median price was $360,000 in December 2021 and went up to $408,000 in May 2022.

A few months back, the prediction of home prices was 7.6% which now stands at around 10.8% for the year. It is a big jump, but these are just forecasts that can change daily. If the real estate market get affected by fed rate hikes then this can jump to unimaginable levels.

The home sales were very high in 2021, and the first few months of 2022 saw a sharp decline and behaved like the pre-pandemic time. The construction of new houses is significantly less and therefore the supply will be tight in future.

The effect of increasing interest rates

Interest rates are also an essential factor affecting the cost of homes. In 2021 the interest rates were the lowest ever, with just 3% for 30-year fixed-rate mortgages, which was predicted to increase to 3.6% in 2022.

As inflation increased, The Federal Reserve had to raise the benchmark interest rate to keep it in check. The Federal Reserve does not dictate the mortgage rates, but their corrective action does affect the interest rates. With rising inflation and increased Federal rates, the 30-year fixed-rate mortgage rate has increased to 5.7%. The overall rates are about 2% higher, meaning the new buyers have to pay extra interest to buy a house. These figures might change in the future, but according to experts, the second half of 2022 will see fewer homes for sale and a higher interest rate.

Housing demand in 2022 – The forecast

According to experts, the housing demand in 2022 will be more robust later. Even if the real estate market get affected by fed rate hikes the demand won’t be less. If we compare the number of buy offers the sellers received this year, they were fewer in May than in April, but still more than the pre-pandemic time. Though the demand is less because of the increased interest rates, the houses are still getting sold quickly.

The housing inventory forecast for 2022

The experts believe fewer houses will be on sale in the latter part of 2022. The estimated housing inventory in May was 1.15 million, which is about 4% less than last year. For the market to stabilize, this unsold inventory is expected to be around 2.3 million. Home buyers may have to wait a little longer to buy a home, but for sellers, without a doubt, it is a great time to sell a house.

The Sale of Houses – Will it Be slow?

The Sale of Houses - Will it Be slow?

The second half of 2022 will see housing getting sold at a faster rate although it is believed that if the real estate market get affected by fed rate hikes this can change. Last year the houses were getting sold in about 21 days, and time has gone down to just 16 days in 2022. It is indeed an excellent time for the sellers to sell homes fast. Since the market is challenging, the buyers should not wait longer if they find a house that fits their budget. So keep your bullet points ready for the home and grab your dream house that meets your requirement.

Is there a possibility of a market crash in 2022?

Looking at the current trends, experts are sure there are no chances of a market crash this year. With lending rules getting stricter, there are fewer chances of foreclosures too. As the supply of houses is less, which is expected to be the same in coming years, there is no possibility that the prices will drop sharply, resulting in a crash situation.

Read this before you buy a home in 2022.

Before buying a new home in 2022, you should go through this checklist. If you find that you have all the points checked, then it is the best time for you to buy a home rather than a rental home.

  1. You have the resources from which you can find the best property in the market to buy
  2. You can pay the down payment up to 20% of the total cost
  3. Mental preparedness
  4. Any debts to pay
  5. Enough emergency funds for up to 6 months available after buying the home

Financial stability is important

Do not let the market fluctuations hamper your decision to buy a home. But if you miss out on any of the above-mentioned conditions, you should not go forward with buying a house. Even if the market is down and property seems to be cheap. But if you are financially stable and assured about your career and income growth in the future, you should use the opportunity to buy cheaper homes in 2022.

So is 2022 a good time for home buyers?

So is 2022 a good time for home buyers?As the homes for sale are already in short supply, the competition to buy will be stiff, and the prices will continue to rise. Experts say that the inventory will be low for some time to come. While the homebuilders are convinced that 2022 will be a good year for business, buying a new house will not be easy. With the increasing government tariffs, high lumber prices, and shortage of supply chain, it would be difficult for the builder to build enough houses to meet the new demands.

The situation might worsen if the real estate market get affected by fed rate hikes. So if you are out to buy a home, there will be fewer options to choose from. You might even have to compromise on some of your wants.

Bottomline

The housing market fluctuations are very uncertain; it is hard to predict anything with certainty. If the real estate market get affected by fed rate hikes the fluctuation might be further prolonged to 2023. Having a real estate professional by your side is always helpful when buying or selling a house.

US Rental Property Market – Expert Positive Forecast for later part of 2022

The US rental property market has seen a lot of changes recently. There was a rapid growth for some time, but now the new construction of homes gradually seems to lessen.

It would be unfortunate if the economy saw a downturn, causing the housing market to go down. But in any condition, the rental property market will not see a downfall. Lesser new construction, low inventory, and fewer buyers able to buy houses will, in turn, make the rental property investment an attractive opportunity to invest.

If this phase continues, the second half of 2022 and 2023 will see new investment in US rental property market and growth opportunities. It will create a demand for new property management companies and property management software. Let us see further insights into the US Rental market with property experts’ forecasts, stats, and projections.

Forecast for Renters: Will the Rent Prices Drop?

If you are a home renter, you will be concerned to know if the rent prices will drop in the coming months. The US rental property market is fluctuating. Be relieved that the stats predict the opposite. The rent prices will show growth but at a slower rate. We can understand it better by looking at the demand drivers, forecasting different rentals like apartments and houses, and possible opportunities.

According to real estate investors and other investors, one of the growing investment opportunities is the rental market for single and multifamily homes. Homes built for rent are showing tremendous profit opportunities. NAHB data shows that in the 3rd quarter of 2021, there were around 16,000 starts on houses built for single families. Though it covers only 6% of the total housing market, the built-for-rent homes market also shows promising signs of increase.

Housing Forecast from National Association of REALTORS

According to NAR, the house rent will grow moderately in 2022, showing a growth of approximately 6.5%, keeping most houses on rent still out of reach of renters. Due to the increase in prices, the buyer’s interest is decreasing, and if the mortgage rates rise further, it will affect sales even more. People are worried that the economy may not fall soon. With Federal Reserve increasing the interest rates to curb inflation and rising taxes, the economy may hit a downturn. Also, with more housing regulations, land labor and materials shortages may further discourage new buildings.

Rising Rental Prices – Opportunities in the US rental property market

Rising Rental Prices - Opportunities in the US rental property market

 

The rental prices have been growing fast since 2021, which is a good sign for the US housing market. According to the NAR predictions, in 2022, rent prices will grow better than home prices. It, in turn, may facilitate the development of new apartments and houses. But the landlords see new challenges in managing rents, and the renters have more expectations and want more and more facilities. Landlords expect the prices to go up while the tenants want to see the prices going down.

With a bit of economic recovery, a shortage of labour and materials, and the termination of eviction laws, we can only say that the rent prices will further rise in the USA. Most tenants looking for a downfall in rent prices will surely be disappointed. After the pandemic, more people are returning to big cities and filling the apartments. The demand for renting houses is also increasing in cities badly affected by the pandemic. Thus, the overall US rental property market is back on track.

Till mid-2021, the rent prices increased swiftly and settled by November. Since then, the rental prices for one and two-bedroom houses and apartments have risen by 12 to 15%. Landlords can be happy with this after a tough time of the pandemic. According to a report by Zumper, the rental prices for a 2-bedroom house increased by 13%. One-bedroom house rent increased by 12% in 2021.

2022 – Increase in Long term Renters

In 2021 the rent prices that saw 5% to 6% growth are now rushing towards 15%. The economy is showing signs of improvement, and more spending on infrastructure can cause the demand for the US rental property market to rise. The badly hit California rental market should also recover in 2022.

There is a shortage of houses to rent, and with housing prices rising further, more and more Americans will turn towards renting. As there will be lesser new construction, the short-term tenants will be forced to tenancy for a longer time. With an increase in housing prices and interest rates coupled with the labor shortage, the growth for multifamily investors and landlords will be slow.

With the US rental property market already declining, landlords are facing a lot of financial stress. This time does not predict well for the American workers returning to work after the pandemic. The workers will have to pay higher rental prices per the market if their wages do not increase, as there will be a limited supply of rental properties. It can be challenging for the landlords as they will have to screen each tenant strongly to ensure that they get their rents continuously and on time.

Increasing Rental Demands and Prices in 2022

A recent report by Zumper shows a rapid increase in the rental prices in big and expensive cities compared to smaller ones. The growth in the economic activity after a stimulus and states opening for work will see a greater demand for rental houses and apartments. After the pandemic, the landlords are now at ease as they can see their properties again filling with tenants. But the rent increase can be a surprise to the renters. To their disappointment, the rent will rise much further.

The US rental market is seeing a supply shortage, increased demand, and rising property prices. It can be a good time for landlords with properties to rent. Even the investment in the new property is being made in the higher-price segment than the affordable price segment.

With increasing home prices, the population that cannot afford an apartment or a home has to rent a house. It was the birth of today fast growing housing rental market. As the pandemic subsides, we will be more explicit about why the rent is increasing and what drives the demand for the rental property. This can bring new opportunities in the US rental property market. At the same time, it can hurt many people struggling to meet their ends.

With newer business challenges in the housing market and increasing returns from rents and investments, it can be an excellent time for landlords and property investors.

Analysis of Delaware Real Estate Market in 2022

The economy is seeing many ups and downs, and a lot is happening worldwide. Is it the right time to invest in real estate, especially in Delaware? If an investor wants to make intelligent decisions to invest in the Delaware real estate market, they need to consider some factors. Let us discuss these in detail.

Delaware Real Estate Market in 2022

Before you plan to invest in the real estate market, there are factors that you need to consider about the Delaware real estate market in 2022 and beyond. Apart from the money, the other most crucial factor is the market condition you want to invest in. It is better to know beforehand if the market is healthy. Most markets offer many opportunities, but a wise investor will choose a market that provides the best returns and aligns with his investment plans. At the same time, you should go through our website to understand the Delaware housing market forecast 2022 before buying a home.

The same goes for the Delaware real estate market. If you are an investor who is thinking of investing in Delaware real estate by buying houses for sale there, you need to know the exact market conditions and future market predictions. Up-to-date data is always helpful to analyze the real estate market accurately.

The Delaware Real Estate Market in 2021

Before understanding the Delaware housing market trends in 2022, we must see last year’s market performance. The data collected in 2021 about the market performance is the basis of the present market conditions and predictions from the experts.

During the pandemic, we saw the house market in Delaware crashing, including real estate. We also saw how the industry quickly recovered as people started adopting a pandemic-induced lifestyle. The Delaware real estate market was seen as a seller’s market during the pandemic. Most counties saw a sharp increase in the number of houses on sale and the median property prices.

We can use the example of New Castle’s single-family homes to understand things better. Comparing the data of the past two years, the median price in 2020 was $295,360, which increased by 16.8% in November 2021. Similarly, the number of housing units sold in 2020 was 454, while the figure in 2021 was 477.

Delaware’s real estate market saw an increase in housing demand because of the COVID-19-induced lifestyle changes and shortage of housing supply. The NAR data on average per year construction shows that between 2001 and 2020, there were 276,000 lesser homes constructed in the US. Due to this slowdown, the US housing market in 2022 had a gap of almost 5.5 million homes on sale.

The housing demand is increasing in the US, and the real estate industry needs to construct more than 2 million homes per year for the next ten years to fulfil it. The task appears nearly impossible considering the global conditions affecting the supply chain and the shortage of material and labour. So in 2022 also, the real estate market will be governed by the laws of demand and supply.

Delaware Real Estate Market 2022: What can investors look forward to?

No two real estate markets can be the same as each comes with its unique nuances. If you are seriously looking to invest in real estate, it is essential to understand the Delaware real estate marketing in 2022 first. The industry experts have reviewed how the real estate market in Delaware will be in 2022 based on past data and trends.

Delaware – The hot market for the sellers

The experts believe that Delaware will continue to be a seller’s market, somewhat hot that the investors need to keep notice of. They predict the number of days a house remains on sale will reduce to 40 from a current of 60 in the coming months. The market will pick up fast, but investors should get influenced by this and still check diligently before investing. The buyers should contact a local real estate agent, research the property, and not make impulsive purchases. These two actions will help get a better deal in the Delaware real estate market.

Price Fluctuations to continue with an increase towards the end of 2022

The experts predict that the price fluctuations seen in 2021 will continue till the end of 2022. They are not sure about the level of changes, but the median property prices are expected to rise by the end of 2022 in most Delaware counties. Will the real estate prices fall in 2022 before December? There is no perfect answer to that question.

 Increasing mortgage rates will affect the Delaware real estate market.

By the end of 2021, the industry experts predicted that the mortgage rates would increase slightly but remain lower than 5% by 2022 end. If you go through real estate news Delaware on various reliable real estate websites you will see similar predictions.  Be it about the Delaware housing inventory or the real estate rates, you will see an almost similar forecast.  But the predictions were far from accurate. By the second quarter’s end, the rates had already touched 5%. This increase resulted from the conflicts in Eastern Europe that affected the economies globally. Experts believe that the mortgage rates will surpass the previous prediction of 5%, considering the current global situation and the pandemic not looking to subside. It impacts the dollar’s purchasing power significantly and will make getting affordable housing difficult for most Americans.

Millennials are also interested in the housing market.

Due to the pandemic, people had to make many abrupt lifestyle changes. It also made them rethink their priorities too. Today many individuals under 35 are also considering purchasing a house for themselves. Earlier, the people of this age bracket generally delayed investing in real estate and prioritized other things over a home. Most millennials want to secure their future by investing in real estate and buying a home to live and work from during these uncertain times.

Conclusion

Investing in real estate can be very profitable if done the right way. After analyzing the Delaware real estate market in 2022 you can decide your next step. This investment is way safer and more secure than investing in shares and stocks. Another significant advantage is that the real estate properties only appreciate with time until the market falls badly. There are risks involved in Delaware’s real estate market investments, but it also has many benefits. If you are thinking of investing in Delaware real estate, it would be good to take the help of professionals and online tools to help you make better decisions.

Watch Out For These 12 Signs That Point Towards A Bad Lease

You’re not the only one looking to rent an apartment or home at this stage in your life. Many people prefer to rent over buying. That’s why it is important to understand what your lease covers before signing it. Especially bad lease is something that a renter should always know. 

This article shares some warning signs renters often overlook when signing leases. These signs will help you avoid falling for bad leases.

12 Signs That Point Towards A Bad Lease

12 Signs That Point Towards A Bad Lease

  • The Landlord is Demanding Cash

Real experts state that it is a red flag if you are asked to wire money or pay cash. It is because the cash you give to a legitimate business would be checked for counterfeit currency. In addition, cash payments remove the paper trail, which is precisely what a fraudster would like.

  • Lease with a No Buy-Out Clause

In the event that plans change or the lease expires, ensure there is a reasonable and pre-determined buy-out clause. For example, it is reasonable to allow a lease termination upon 60 days’ notice and payment of two months’ rent.

  • Additional Form of Contact is Not Given

Real estate experts cautioned about the ease of searching for an apartment listing. The concierge can give you the key and pose as a realtor to show potential tenants the property.

You should verify that the person who shows you the apartment is a representative of the company that placed it on the market. It’s possible that a listing agent is operating on their own.

  • Clauses Present in the Lease That Give Leverage to Others

Do not assume that the lease agreement is “standard language.” You need to understand the terms and what happens if you fail to perform your duties. You never know what might happen and how it could impact you. You can’t let random lease clauses give the other party leverage over you.

  • Issues in the House Are Yet to be fixed

You should have a plan in place for when the air conditioner will be repaired if you arrive at an apartment with a broken one. If the landlord won’t give you time, state in your contract that you will receive a rent discount every month it is out of service. If you haven’t signed a contract, don’t assume it will be fixed when you move in.

  • No Remedies in Case of Landlord Defaults

Many leases have provisions that protect the landlord in case the tenant violates the terms of the lease. For example, tenants can default by not paying rent on time, storing prohibited items, or having pets. Tenant actions can lead to default. However, landlords may also default by failing to make repairs. As a tenant, you should have rights in the event of default by a landlord.

  • Unclear Requirements of Lease-Break

Unclear Requirements of Lease-Break

Renters will benefit greatly from taking the time to read and understand all terms. It is important to carefully review lease terms before signing any contract. Details can be complex and vary from one state to the next. The lease-break requirement is a major source of confusion. Renters who don’t know how to give the notice to vacate can face costly consequences. Communication is essential!

  • Visiting the Property is Not Allowed before Signing the Lease

It’s a red flag if a landlord refuses to allow you to see the rental before you sign the lease.

Most real estate experts state that an owner or manager who prevents tenants from seeing the property may be concealed damage that could be significant to you but not enough for you to end the lease. For example, unseen units could have a terrible paint job, stains all over, bad smells, or other unsightly nuisances.

You are obligated to follow the terms of the lease once you sign it unless the landlord gives you a different property or other issues.

You must inspect the property before you sign the lease. Send someone to represent you if you are moving from another state. Find another apartment if the landlord refuses to rent you one.

  • The Landlord Resides Overseas or Out of State

If the owner of the property is not a resident in your state, it could cause problems if there are legal issues.

You should verify that the lease is signed by a local property manager or company if the landlord is located out of state.

  • There’s No Damage Checklist Has Been Provided By the Landlord

There's No Damage Checklist Has Been Provided By the Landlord

It is crucial to do a walkthrough of the rental property before you sign a lease or move in. These issues could be blamed by the landlord later on, and they may require you to pay for them.

  • There’s an Investigation Going on for the Owner

If you give your information to a landlord, they will interview you to ensure that you are a responsible tenant. It’s fine to interview them back. You can always do an internet search to find out their name and verify it with the Better Business Bureau. They may have a long list of former clients with formal complaints. However, they might also have many former clients who have never filed a complaint. This one is for you if there’s even a footnote about the owner.

  • Vague Security Deposit Terms

If there is a scratch on the floor, will your landlord withhold your security deposits? Unfortunately, many other legitimate landlords aren’t interested in ever returning your security deposit. To protect yourself from this, take dated photos when you get your first place.

buying a new house

Buying a New House? Get a Great Deal with These 8 Never Heard Before Tips

Leave a reply

Homebuyers don’t want their money stolen. It doesn’t matter what the market is like; it’s vital to ensure you get a fair price. How can you be sure that you are getting a great deal, even if the market is tight? So you can make an informed investment decision of buying a new house, it is essential to understand how to assess the value of any property.

When the norm is to overpay for a house, it’s challenging to get a great deal. However, Q3’s survey of over 1,000 top real estate agents revealed that 87% of homebuyers are willing to pay more for homes with low inventory.

This guide will help you create a razor-sharp house-hunting strategy. It includes clever ways to save money and tips for finding hidden opportunities. You’ll be glad you played your cards right and won’t have to compromise your needs or settle for a substandard home.

Buying A New House – 8 Amazing Tips To Get Great Deals

Look Out For Recently Sold Houses

Comparable properties are similar in size and neighborhood to the one you are planning to buy. For example, a 1,000-square-foot, newly remodeled double-story home with a garage should be listed for roughly the same price as an identical 1,000-square-foot home in the same area.

You can gain valuable insights by comparing the price of the property to other properties. Is it significantly less expensive than bigger or more luxurious properties? Are smaller, less desirable houses more expensive?

buying a new house - Recently Sold Houses

Your agent can provide the most accurate and updated information about comparable properties to you. Also, you can look at similar properties that are in escrow. It means that the property is currently being sold but has not been closed.

Find out the Reason behind Seller’s Decision to Sell

You can make your offer more tailored if you have more information about the seller. Is the seller moving to a new location and needs a fast closing? Are there any divorce proceedings? Is the seller moving to a new location, and would he prefer a longer closing time or a rent-back arrangement?

Use Online Real Estate Listings and Public Records to do Research

You should focus on collecting information about the seller, property, and neighborhood. Find out if the house may be in foreclosure and if the seller is involved in a divorce proceeding. You can also see Google Street View determine if the house was on the market previously and what the price was.

buying a new house - Use Online Real Estate Listings

Make sure to look at the property as well as the surrounding area on each real estate listing site. The more information you have about a property, the more confident and competent you will be as a buyer.

Look Out For Comparable Properties

You can visit other homes to get a feel for their size, condition, and amenities. You can then compare prices to determine what is fair. If they are to remain competitive, reasonable sellers will similarly price their properties to comparable on the market.

Analyze Market Conditions

Are prices fluctuating lately? Properties in a seller’s marketplace will be more expensive than properties in a buyer’s. It depends on your current location on the boom-and-bust curve of real estate.

buying a new house - Analyze Market Conditions

If the real estate market is on an upswing, and the peak price is not yet reached, then properties might not be too expensive even in a seller’s marketplace. If rates have just started to fall, then properties may be too expensive even in a seller’s market. It can be hard to see the valleys and peaks until they are passed. Consider the effects of the mortgage interest rate on your economy.

Search for Short Sale Properties or Bank-Owned

You can also deal-hunt for homes by looking for properties that are in foreclosure or that are bank-owned. According to data from the National Association of Realtors, foreclosure homes were sold at an average discount of 20% below market value as of May 2020.

Short sales may be listed online under “subject to bank approval.” Public records can also help you find short deals. For bank-owned properties, your agent can search the MLS for REO listings or use an online foreclosure aggregator such as the one provided by Bank of America.

However, buying a short-sale or foreclosed house comes with its own set of challenges. First, you will need to be prepared to bid on a foreclosure home auction-style. Second, cash is likely to be required. Third, the foreclosure market is fierce when you have to compete with all-cash investors who are looking to rent or flip these bargain-priced homes.

Buy During Offseason

It’s an excellent idea to zigzag when other homebuyers are zagging. Experts say that the best time to begin your house hunt is in March. It is due to increased competition from other buyers and the real estate momentum that tends to pick up in spring.

Instead, start your home search in November before the rest of America falls into a turkey coma. Data shows that home buyers who close by February can save an average of 7.17% on their home purchase if they beat the spring rush. For seasonal trends in your market, enter your city and search for the “Worst Month” for sale.

Test & Compare

You can always offer a lower price than the seller’s list price in a seller’s market to get their reaction. Sellers list their properties at the lowest possible price because they are unwilling to negotiate. However, some sellers still list their properties for a higher price because they want to see if anyone is ready to buy their house at a higher price or not. You will know if the seller is willing to accept your counteroffer or price adjustment.

Some sellers might under-price their properties to generate interest and start a bidding war. However, unlike eBay, sellers don’t have an obligation to sell to the bidder who bids higher. Sellers have the right to reject any offer that doesn’t match their expectations.

You may be tempted to offer a lower price if you are serious about the property. However, sellers could find it offensive and refuse to deal with anyone who uses such tactics. You may also be at greater risk of being outbid if you offer less than the listed price.

The Bottom Line

It is essential to know how housing prices are set up before you start looking for a house. It will allow you to make an informed decision and negotiate a fair deal with the seller. These tips will help you make an informed and confident offer on any property in any market.