What Does A Federal Reserve Rate Hike Mean For Mortgages?

The Federal Reserve, or “The Fed” for short, is the central bank of the United States. One of the Fed’s purposes is to moderate interest rates, which is why it meets every six weeks to set the Fed Funds Rate (the short-term interest rate that banks charge each other.) This number does influence other short-term rates, including home equity loans. So… should you be worried if those rates go up?

The key to note is that the only mortgages directly affected by a rate hike are adjustable rate mortgages (ARM). These mortgages are tied to short-term indexes, so a change to the Fed Funds Rate can impact the interest rate on ARMs. A fixed-rate mortgage, on the other hand, is tied to bonds, so you don’t have to worry about changes to the interest rate.

Regardless, if the Fed Funds Rate rises consistently, all mortgage rates will eventually follow suit. That means you shouldn’t panic about a rate hike — but you also shouldn’t drag your feet if you can help it.

Have any pressing mortgage questions? Reply to this email or call any time. We want to make sure you have the information you need to land your dream home.

This information was provided by one of our preferred vendors, Supreme Lending. Thank you, Cale Iorg, Senior Loan Officer NMLS# 1121662, for this information.

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WHAT’S THE DEAL WITH THOSE “WE BUY HOUSES FOR CASH” COMPANIES?

In today’s real estate market, homes stay on the market for about 25 days on average before going under contract. That’s better than back in 2010, when homes were averaging 140 days to sell, but it’s still not fast, and there’s no guarantee that your home will sell in 25 days. Location, season, and many other factors affect how quickly you can sell a home.

If you need to sell your home quickly, those “We Buy Houses for Cash” billboards may have caught your eye. Can you really sell your home as-is in just a few days?

Who are they?

“We buy houses for cash” buyers are not your typical buyer looking for a home to live in or rent out. They are real estate investors looking to make a quick profit. For them to make a profit in the market, you as the seller must take a loss in the same market.

As such, they are looking to purchase a home for the lowest price possible, fix it up as needed, and sell it on the open market a short time later. These types of investors can make a huge profit on a home in just a few months.

Who do they target?

These cash buyers are looking for motivated or desperate sellers. For example, let’s say you listed your home, but the listing eventually expired without resulting in a sale. At this point, you would probably be contacted by a cash buyer. They’re hoping you’ll be discouraged by your failure on the open market and will be willing to sell your house for cash at a reduced price.

In the same vein, cash buyers go after people in situations that require a fast sale such as divorce, bankruptcy, foreclosure, and probate sales.

Are there benefits?

For many people in situations such as these, selling a home quickly might be the number one priority, despite the potential to maximize return. And selling to a cash buyer certainly is fast.

The typical financed purchase takes about 30 days to close. Contracts, inspections, appraisals, and other procedures take time. They must be done before funds are released.

Cash buyers don’t have to deal with that. They’ll typically come to your home within a day or two of you contacting them and make an offer on the spot or soon after. They often process the sale in-house and have a title company at the ready to clear the title.

Cash buyers also eliminate the inspection and objection process by simply buying a home “as-is”. In only a few days, your house will be sold and you’ll be turning over the keys.

Sounds easy enough. What’s the catch?

Say goodbye to any profits and probably the equity that you’ve built up in your home. The offer that cash buyers make is often suspiciously just enough to pay off your mortgage. You will likely only receive 50-80% of market value.

80% of market value might seem like it’s worth it to avoid the hassle of going the conventional route, but the average is more like 65% of market value.

Another reason to be extremely careful with these types of companies: scams. Phony investors have all sorts of tactics and tricks to extort money from desperate sellers. You don’t want to lose money, or worse, your home, just in an effort to save time.

In short, if you are considering selling your house to a cash buyer, do your research first. Selling a home to get out from under it isn’t the only alternative you have. There are other, more profitable options.

If you would like to discuss any of those options, please reach out to the team at The Meridian Real Estate Group! We would be happy to assist you with your real estate needs.

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Atlanta Market Update & Forecast – 21Q3

Click Here For Full Report: Atlanta Market Update & Forecast – 21Q3

Provided by Charlie Lockwood, the Managing Director and Associate Broker for KW Commercial Atlanta Perimeter Office.

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Home Classrooms Became a Necessity During Covid. Now They’re a Selling Point

Emily Porche swears by one holdover from her family’s life under lockdown: her children’s learning space.

Ms. Porche initially designed the room as a virtual classroom for her young daughters, but now it is a favorite hangout. With both girls back in school, the hanging chair is a spot for reading and the hand-built desks are used for cursive-writing practice. Having a kid-approved study area has made school assignments less of a chore for Avery, 8, and Hadley, 5, she says.

“Looking past Covid, this is now a space for homework and projects,” says Ms. Porche, owner of an online interior-design company who purchased and renovated a Marietta, Ga., five-bedroom home four years ago for $680,000, according to public records. The classroom-turned-homework space fits the home’s overall modern-classic farmhouse vibe, she adds. It cost her about $3,000.

Even as school districts have proclaimed an end to virtual classes, parents have come away with their own lessons from the experience: the need for organized, stand-alone learning areas far from chaotic kitchen counters or distraction-filled bedrooms. In addition to repurposing rooms in existing homes, developers and real-estate agents also are marketing and staging these spaces to would-be buyers.

“The family’s priorities have changed,” says Fredrik Eklund, an agent with Douglas Elliman in New York. “People want these learning centers.”

Listings over $1 million in 2021 that mentioned a learning space had a median time on the market of 45 days, 12 days less than homes that didn’t mention a learning space, according to data from Realtor.com. In May of this year, 1,178 homes mentioned terms related to learning spaces, a 58% increase from the same period last year, according to the data. (News Corp, the owner of The Wall Street Journal, also operates Realtor.com under license from the National Association of Realtors.)

In New York, Lauren Steinberg used space near an open staircase to create workstations for her three middle-school children.During breaks, Ms. Steinberg’s children use the home’s ninja-warrior room and climbing wall that are around the corner from their workstations.
In her New York condo, Lauren Steinberg added three built-in computer monitors, chairs and desks near an open staircase at a cost of about $35,000 to help her middle-school-age children stay focused on doing their work. “I can always walk by and see them from upstairs; they aren’t locked away in their room,” says Ms. Steinberg, whose 5,108-square-foot Tribeca home is situated across three floors. It is on the market for $12 million.
When her children—a 14-year-old girl and 12-year-old twins, a boy and a girl—started back at school in the spring, Ms. Steinberg, an interior designer, found that the homework area created boundaries for using electronics. The desktop computers can’t be easily moved from room to room and so screen time is kept mostly to one area.

Doing homework in their bedrooms is now out of the question, she says. “I know they’d be slouching and laying down.”

The kid-approved office is around the corner from the ninja-warrior room and climbing wall, which makes it easier for the children to take breaks, she adds.

Real-estate agent Jim St. André says he is staging more lower-level floors to combine play and work areas for children. For older children, buyers are asking for spaces that are sealed off from the main living areas, for online work or even for musical-instrument practice, he adds.

“People now look at those spaces as being less recreational,” says Mr. St. André, who works with Compass in New York.

He is selling a 7,058-square-foot, renovated $25 million Greek Revival townhouse complete with a kids’ floor that includes bedrooms, a lounge area with a couch and a learning space. “Buyers want a usefulness to some of these spaces that we are repurposing,” he adds.

In Los Angeles, a newly constructed 19,000-square-foot home on sale for $70 million includes a second-floor children’s wing complete with a study portal with a central library-style desk, built-in lighting and shelving. A kids’ television lounge borders the space, with the children’s bedrooms directly behind the recreation areas, says real-estate agent Blair Chang from The Agency.

Mr. Eklund, the Douglas Elliman agent, worked with a staging company to create a learning center complete with Zoom art backgrounds, custom shelving and educational games for a five-bedroom, eight-bathroom Los Angeles home that recently sold for $13.8 million.

“It’s kind of like a library but for kids,” he says. The rooms are on lower floors in areas that used to be reserved for family entertainment or exercise.

In other luxury listings, clients are forgoing traditional libraries, man caves and multiple offices in favor of dedicated areas for young students, he adds.

Developers are anticipating an uptick in demand for the organized learning areas. In Sudbury, Mass., three newly developed homes will have learning areas off the kitchen when completed later this year, in an effort to appeal to young families.

Rather than create the typical oversize kitchen, developer David Howe planned the space as a separate area, with built-in desks and shelving, that is geared toward learning but that isn’t isolated from the main entertaining areas. “I feel that the new norm is a hybrid way of learning,” says Mr. Howe, who got the idea to design the space because of his two young children.

Another learning space on the second floor is aimed at older children or adults who need a more secluded work area, with built-in seating and an outdoor area. “The design and inspiration was Covid,” he says.

The homes are on sale for about $3.5 million.

In New York’s Chelsea area, Maverick, a building that offers a mix of condo and apartment units, offers a Children’s Imagination Learning Center, with learning workshops and interactive play-based areas, says developer Eran Polack. Condo units in the building, minus the penthouses, range from $1.4 million to $6 million. It is set to be completed this fall.

For parents designing study rooms on their own, Naomi Coe, an interior designer of children’s spaces in Irvine, Calif., says it is important to create spaces that adjust to the changing needs of the students.

For example, she recommends opting for good-quality desks and chairs while adding small décor pieces that are easy to swap out as the kids grow and their tastes change. Separate areas for lounging with bean bags or hanging chairs can add a fun factor.

“Flexibility is always going to be the most important,” she says.

Repurposing virtual classrooms can take some unexpected adjustments, says Shahla Sandoval, who, with her husband, Rob Sandoval, turned the playroom at the front of her four-bedroom, 2,800-square-foot home in Danville, Calif., into a learning area last summer. The couple bought the home for $825,000 in 2011.

With desks at a premium, Ms. Sandoval, who runs a lifestyle blog, built her own against one wall, hung up a white board and put school supplies in a shared utility cart. She tasked her 9-year-old daughter and 6-year-old son with adding their own plants and creating a gallery wall with their artwork. She spent $2,000 on the setup.

Having the children share space for study sessions tends to lead to arguments. Ms. Sandoval prefers a staggered approach to who uses the space and when. “My kids couldn’t last side-by-side,” she says.

Thank you www.wsj.com for this article. For the whole article, Click Here.

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7 Tips To Help Your Gardens Survive (and Thrive) While You’re On Vacation

For most people, vacation stress revolves around packing and traveling. For gardeners, you’ll likely find us digging last-minute holes in the ground, deadheading flowers, or even panic-watering one hour before a flight (true story).

We’re guessing not that many gardeners are posting blissed-out photos on the beach every summer—because leaving our hard-earned gardens for a week or more is out of the question.

But listen up, fellow gardeners: You, too, deserve a vacation. Which is why we came up with this list of everything you can do to keep your garden happy while you sip tropical cocktails many miles away.

Here are seven tips to help your garden survive (and thrive) while you’re traveling this summer.

1. Throw down some extra mulch
Whether you have an irrigation system or not, it’s always a good idea to do everything you can to prevent your garden from drying out during your absence. One way to do that is by adding some extra mulch before you go.

“Prep your garden for reduced water,” says gardener Jessica Zhao, chief marketing officer of Spacewhite. “Add mulch to your garden beds to keep the moisture in the soil during hot summer days, and water more frequently leading up to your departure date. The morning of your departure, do a heavy water and wet down all the mulch in your garden.”

2. Consider adding fencing
If you live in an area rife with squirrels, giant squirrels (aka deer), rabbits, or any other garden-munching critters, now’s the time to install that fencing you’ve been talking about all summer.

“Fencing can help to make your garden more secure while you’re away,” says gardener Thomas O’Rourke, of Horticulture Magazine. “It can also offer a shaded area for plants that are likely to dry out in the heat of summer.”

If dropping the big bucks on fencing isn’t in the cards for you, consider at least leaving some pest repellent out and accessible for whoever will be tending your garden.

Which brings us to the next point…

3. Pick the right person to look after your garden
If you’re leaving for more than a week, you’ll want to have someone tending your garden—and you shouldn’t just assume your neighbors can do it. Choose someone who’s actually a gardener or someone you’re paying to do the job well.

“Don’t rely on neighbors, unless you’re envious of their garden,” says gardener Rick Hoskins, founder of Filter King. “If your neighbors don’t take care of their own garden, they won’t take care of yours. Ask someone with the skills and interest to do the job right.”

4. Create a cheat sheet for your stand-in gardener
You also shouldn’t assume that whoever you hire will remember every little nuance of your garden—because they probably won’t. Instead, create a cheat sheet to help your stand-in gardener, and consider labeling your plants or doing a walk-through together to help them understand what your plants need.

“A garden checklist is something that every organized gardener should consider,” says O’Rourke. “This is particularly useful if you’re growing annuals, vegetables, or new plants that you haven’t grown before. With the right instructions, it can be easily passed to someone who can help look after your garden while you’re away.”

5. Stow away any products you don’t want used
Keep things simple for your garden sitter by putting into storage any products you don’t want used during your absence (e.g., fertilizers, compost, pest sprays), and leaving out only the ones you do want the sitter to use. This is especially relevant for gardeners going on long trips, where more than watering might be required.

“Alongside your checklist, it helps to prepare the maintenance products you’d like your gardener to use while you’re away,” says O’Rourke. “Reference these in the corresponding task on your checklist to ensure the right fertilizers, composts, etc. are used on the correct plants.”

6. Cut back and deadhead
This might sound like a superficial exercise, but there’s actually good reason to deadhead and cut back your flowers before you head out for summer vacation.

“Deadheading cuts down on the amount of water needed, and allows your plant to use the basic amount for survival rather than flower and seed-head production,” says Clive Harris, creator of DIY Garden.

So go ahead and pick a few bouquets for your friends, and for your garden sitter as a preemptive thank you!

7. Give your garden a hearty watering
Set your plants up for success by giving them one last, long drink as close to your departure time as you can. Water each individual plant, soak your new mulch, and double check any irrigation lines or hose timers.

Then, lay down your shovel, wash the dirt off your face, and catch that plane. Vacation awaits.

Thank you www.realtor.com for this article. For the whole article, Click Here.

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7 Things All First-Time Homeowners Get Wrong—and How To Avoid Those Big Mistakes

Like most major milestones in life, becoming a first-time homeowner comes with quite a few learning curves. Even after you close on the house and it becomes officially yours, there’s still a lot to learn when it comes to taking care of the place—and setting yourself up for long-term success.

Having recently purchased my first home, I’ve had a front-row seat to all the trials and tribulations that come with learning how to be a homeowner. Here are seven of the biggest mistakes first-time homeowners make (myself included), plus some helpful tips from the experts on how to avoid them.

1. Calling a repair person with the wrong specialty
This might not sound like a big deal, but it can actually end up costing you quite a bit of time and money—especially if there are significant household repairs on the line.

“This is the most common mistake committed by first-time homebuyers,” says Joshua Haley, founder of Moving Astute.

“When you hire a repair guy who doesn’t specialize in fixing what’s broken in your home, the cost of repairs could skyrocket,” says Haley. “Homeowners have been known to spend upward of $135 an hour on a contractor who they thought was coming out for a couple hours at most.”

One way to avoid this is by doing some research beforehand. Try to gain a rudimentary understanding of what’s wrong, so you can explain the problem over the phone. This will help you avoid any confusion about the extent of work that needs to be done, and it will also help ensure you’re hiring the right person for the job.

2. Blindly hiring contractors
Speaking of hiring the right person: There are a million ways for home upgrades and repair projects to go wrong, and one of the best ways to avoid this is by making sure whichever contractor you hire has a long list of glowing reviews.

No matter what kind of work you’re having done—construction, repairs, or even just some landscaping—always make sure the people you hire come highly recommended by someone you trust.

“Always ask for recommendations,” says Michael Branson, CEO of All Reverse Mortgage Inc. “Your neighbor may know a good contractor or handyman who could help fix up your home. Remember, the biggest compliment a business can receive is word of mouth.”

3. Not budgeting for new expenses
While you might have your mortgage and utility bills under control, there are a lot of other expenses that come with homeownership that you’ll want to plan for as well. This includes any homeowners association fees, homeowners insurance, regular maintenance fees, and even property tax.

“Consult a real estate professional who will inform you of the neighborhood’s usual property taxes and insurance costs,” suggests real estate investor Richard Mews. “Another idea is to request the seller’s utility bills for the last year or so.”

Though the latter might seem weird, most sellers will understand: Whatever information you can get will help you feel more prepared for all those new expenses.

4. Ignoring routine maintenance
One thing a lot of first-time homeowners overlook is the simple fact that they’ll have to do routine maintenance—like, usually something every month.

These are things you’ll want to learn about relatively quickly, since putting them off can end up costing you a lot in repairs.

“Keep a recurring list of preventive maintenance tasks,” says John Bodrozic, CEO of HomeZada. “Your home is essentially a collection of assets—like equipment, appliances, building materials, fixtures, finishes, and landscaping. All of these things need preventive maintenance to make sure the home is operating efficiently, which saves you money on your monthly energy bills and avoids expensive fix-it and repair costs.”

5. Making home improvements too soon
When you get into a new home, it can be tempting to start filling it with all of your dream furnishings—or even to embark on some expensive remodeling project.

My best advice to new homeowners? Hold off.

What you envision for your house will likely change, especially the longer you live in it. Start by using the furniture you have, and making small upgrades by shopping for used items.

Once you’ve lived in the home for a few months, and understand how you actually use each space and what you ultimately want from it, you’ll be in a much better position to start spending the big bucks on remodeling and those fancy new furnishings.

6. Not winterizing your home
Unless you live in Florida, chances are you’ll have some light winterizing to do around your new home before cold weather hits.

“Whether it’s because they don’t know where to start or they’re not sure if it’s necessary, (not winterizing your home) is a big mistake,” Haley says.

Whether that means draining pipes of water to avoid freezing temperatures or adding insulation to save on heating, these are some of the most important seasonal chores you’ll ever do as a homeowner.

7. Assuming you and your partner are on the same page
Becoming a first-time homeowner with someone puts a whole new twist on the relationship, which is why it’s so important to keep good communication throughout the process, and especially in those first few months.

“Don’t make decisions without discussion,” says Phillip Ash of Pro Paint Corner.

“If you’re buying your home with your partner, chances are that you’ve lived together before and know each other’s decor taste and habits. But once you own a home, it becomes even more imperative that any decisions that affect the other person are talked about. This is important—whether it’s paint color, home decor, or bigger things like renovations and taking on additional monthly expenses.”

Bottom line: Homeownership will be much more rewarding when both of you are involved in the process.

Thank you www.realtor.com for this article. For the whole article, Click Here.

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How The Pandemic Changed How We Underwrite Commercial Properties

For the better part of the last 18 months, commercial real estate has been on ice, frozen in place to weather a storm the world is still struggling to understand. The wait-and-see approach can only last so long. As the U.S. economy begins to unfreeze, dealmakers are looking to understand the damage from the thaw. Before transactions can begin again in earnest, underwriters must account for the fallout. New methods of valuation and assessment will be needed to keep pace with the accelerating speed of information.

“COVID accelerated a decade-long process down to a year and a half,” Professor Tim Savage said. Savage teaches at the NYU Schack Institute of Real Estate. Before life in academia, Savage worked with CBRE to build out the brokerage’s powerful econometric tools. “COVID accelerated the recession, the challenges of brick and mortar retailers and the outsized performance of industrial.”

Accounting for that rapid pace is now the biggest challenge to accommodating a growing investor appetite for deals. Accelerated trends are hitting new top speeds and show no sign of slowing down. In the second quarter of 2021, U.S. GDP jumped 6.5 percent, making it one of the strongest quarters in nearly 20 years. Strong GDP reflects broader growth across the economy, a sign that things may be getting back on track. Retail sales are up nearly 16 percent, hourly wages are up, homes sales are up, air travel and lodging are back to pre-pandemic levels. All of these key macroeconomic indicators are boosting macroeconomic optimism, luring investors back into the game. Microeconomic indicators tell a much different story. Office owners know their buildings are still mostly empty. Brick and mortar retailers are still in retreat. Industrial rents and development numbers continue to break records.

The conflicting narratives have created two different versions of reality. On paper, Midtown Manhattan is full of office workers. Tenants are still paying rent, so when assessing the value of a property, that space is considered occupied. But it isn’t. On paper these buildings are one thing, in reality, they are another. The problem is investors value the asset based on the income the assets are producing, not occupancy. Sticky forms of cash flows are distorting reality in asset valuation and underwriting. During most of the pandemic, offices have been useless. E-commerce warehouses have been essential. On paper, the essential industrial facility is worth a fraction of the useless office. That’s a potentially cataphoric problem. When valuations are untethered from market realities, disaster often soon follows. The new reality of the market after COVID is still taking shape. Remote work and commerce are fundamentally shifting daily American habits, the places they visit, and the spaces they need. Underwriters and appraisers will need better tools to reflect the shifting value of real estate in this new paradigm.

“It’s important to begin to think about real-time pricing of space in commercial real estate,” Savage said. “We have an example, they’re called hotels. Appraisals will need to happen more frequently, even large holders won’t have the luxury of doing it every six months. The commercial real estate industry will have to behave more like other industries that do mark to market valuations every day.”

Mark to market (MTM) accounting is a method of valuation that accounts for fluctuations over time based on market conditions. Value is based on what the owners would get for the asset if it was sold today. MTM is common in the financial industry, where lenders must account for borrowers defaulting, marking down the assets as bad debt to its fair value through the use of a contra asset account. The process creates a marketplace that reflects real-time data. Real-time data powers the modern economy. Anyone with a Bloomberg terminal can see real-time prices and valuations of trillions in assets, securities, commodities, and goods with just a few clicks. Commercial real estate operates more like a bond, Savage explained.

Long considered the safest investment, office rents from highly rated tenants are thought of as guaranteed. The landlord signs a 10 year deal with a tenant, collects checks for nine and a half years, then shows back up to ask the tenant if they want to sign another lease. Those deals could soon be a relic. Leases are shrinking, tenants are demanding more flexibility and competitively priced coworking spaces are taking big bites out of the traditional office market. Locking in tenants and rent payments may have saved the commercial real estate industry from pain during the pandemic, but it hasn’t served tenants. How much longer tenants who may not need an office are willing to put up with the office landlords’ tough tactics is a question no one has the answer to yet. Still dealing with the coronavirus pandemic and the deadly Delta variant, the industry is still at a standstill, hoping to stay fresh on ice.

“If the current thinking is we work from home one or two days a week, that reduces foot traffic by at least 20 percent,” Savage said. “That has a major impact on office and retail underwriting. In the office sector, we have to get beyond the WeWork debacle and start to think about valuing the optionality of space. We also have to recognize impairment in retail. Lenders are going to have to recognize that real assets simply are worth less today than they were 18 months ago.”

No one likes being told what to do, but the commercial real estate world especially hates being told what their assets are worth. Dealmakers play everything close to the chest, using their own methods to value assets depending on who wants to know. That’s caused the world of commercial real estate to look fundamentally different than residential. Desktop underwriting is common in residential real estate, where practically anyone can input data into an algorithm to understand the value. Rapid underwriting in residential real estate creates transparency and better reflects real-time pricing, creating the basis for the multiple listing services that facilitate the bulk of transactions. Decentralized valuation and underwriting in residential real estate that reflects real-time pricing more accurately reflects the risk of an investment.

Unlike residential, where information is in the hands of the many, in commercial real estate, information is far more centralized, creating major barriers to transparency that hold the industry back. In residential real estate, deal makers make deals. In commercial, the best deal makers spend most of their time overcoming information asymmetry. The most successful commercial brokers are often the ones with the most information, executing deals most brokers dont even know are on the table. With so much information behind high walls, calculating risk for accurate underwriting and valuation is even more difficult. Now more than ever it is critical to see the new risk landscape for what it really is, continuing to rely on dated methods of underwriting is building a house of cards.

“Transparency is not a hallmark of commercial real estate,” Savage explained. “Transactions are private and they tend not to be aggregated. There are institutional features in the industry that challenge the creation of something like an open-sourced CoStar. I challenge the industry. We have the technology today that we didn’t when CoStar launched. We can have an open MLS that can help us measure risk better, allowing high-quality brokers to do what they do best: bring useful insight about the current state of the market and where it’s moving.”

What little information is reported is highly selective, always after the fact. Information brokers like Real Capital Analytics and CoStar are limited by what data they’re given or what data is willing to be shared. None of them are open-sourced, they all traffic in proprietary technology for paying customers. In commercial real estate, there are no independent third parties that store data and valuation models to base deals and underwriting on. In this respect, residential real estate does a much better job. Closed deals are the best indicators of value, but when no one is closing a deal, no one can understand the value. Price discovery isn’t happening because no one’s buying. Without deal flow, valuing the largest asset class in the country is next to impossible. That’s where most of the industry is at now because the technology to build a different system doesn’t have any buy-in from stakeholders with information.

Despite being adept swimmers living much of their life in the water, penguins can be apprehensive about diving in. They inch forward slowly, standing at the precipice, waiting for someone to fall or be pushed. When one finally makes the plunge, the others look to see how they fare. If no leopard seals or killer whales make their move, the rest of the penguins eagerly join them. The odd behavior is how penguins assess risk. It’s oddly similar to how commercial real estate deal-makers assess their own risk. Everyone is waiting for someone to dive in and make a deal to see if it’s safe. Someone is going to pay for price discovery that helps everyone but could hurt them. It doesn’t have to be that way. Instead of acting like penguins on a cliff diving into the dark water, the commercial real estate industry could leverage technology to see what dangers lurk beneath the surface.

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Commercial Real Estate: Buying Versus Building

Few opportunities in life are as fun and challenging as being the owner of a growing small business. As your sales grow you will find your business in a state of transition, quickly adding staff and equipment until at some point the need for a larger commercial space becomes apparent. At that point one decision will affect the future success of your business more than any other: Do you need to buy an existing commercial building so that your current operations can expand, or do you need to build something specific to the needs of your business? This article takes a quick look at the factors affecting that decision.

Building a new facility and buying an existing building both have pros and cons. In weighing the pros and cons and how they fit within the larger business goals of the company, the savvy business owner considers all of their options and chooses the right path. Several factors must be diligently considered during the decision process including both the short and long-term goals of the business and the state of the local commercial real market. The amount of cash on hand is also a major consideration in choosing between buying and building. Making the wrong decision can seriously handicap a small business and limit its long-term success.

If your new commercial space needs are urgent then buying an existing building is the way to go. While the transaction to purchase an existing space does take some time, it is nothing compared to the timeline needed to purchase and build a new structure, especially if rezoning is needed.

It is also important to understand the local commercial real estate market before making the decision to buy or build. If you are in a buyer’s market there may be plenty of options available on the market where the existing building will fully meet your business needs. However, in a seller’s market the options may be very limited, and even the best options available may need additional buildout to make them work for your business.

The building inspection provides information about the existing structure that you will need to consider before buying an existing building. If the inspection report is a long list of issues and code violations then you will definitely need to factor in the cost of repairs and maintenance to the bottom line of your final decision to purchase. A quality building inspection can save you from being stuck with a “lemon” property with costly recurring issues.

Building a space to the exact specifications your business needs can be a huge plus for a company struggling to find an existing property that is adequate. The added control and flexibility can in some cases greatly offset the additional time and cost of developing your own property.

When building you must hire a team of experts to help you in making the right decisions. A surveyor, architect, zoning attorney, real estate agent, and other professionals all do their part in ensuring that you pick the right site and design and build a space that will accommodate all of your growing business’s needs.
In conclusion, buying an existing building is best when you need to move quickly and the needs of your business are easily met by a number of properties on the market. However, if you have the time and money to build a custom solution for your business and there are limited properties on the market that meet your business needs then building is definitely the way to go.


We Can Help

Whether you’re looking to lease, buy, or sell commercial property, now is still the time to do it in Atlanta. The Meridian Real Estate Group has been assisting commercial clients for well over a decade and would love the privilege of earning your business. Our goal is not just to help our clients with a transaction, but to support the building of financial legacies through real estate. Call us today at 678-631-1723 or visit us online at www.themeridianway.com. We look forward to serving you.

By John Rose, Realtor

The Meridian Real Estate Group

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Exactly How Many Properties Will Be Freed Up Now That The Federal Eviction And Foreclosure Moratoriums Have Expired?

Exactly how many properties will be freed up now that the federal eviction and foreclosure moratoriums have expired? Lillian Dickerson with Inman News begins to answer that question in the article she wrote and was published on Aug. 02, 2021. Below are excerpts of that article. 

“…After a series of yo-yoing between expirations and extensions, the federal eviction moratorium and the foreclosure moratorium on all federally-backed mortgages established by the CARES Act and the Centers for Disease Control and Prevention (CDC) ended July 31. With this most recent one-month extension, the CDC explicitly said “this is intended to be the final extension of the moratorium.”

At that point in time, it’s unclear exactly what will happen with homeowners and properties across the country, but things will likely be dependent on geographical location and loan provider.

How many new properties may come to market is unclear

Wells Fargo, for instance, has said that it will not begin foreclosures again until 2022, and has also put a pause on evictions through the end of the year.

Bank of America and Chase, however, will only continue their foreclosure suspension through the end of June, in line with federal government guidance. During a Senate hearing on the Annual Oversight of Wall Street Firms at the end of May, Chase CEO Jamie Dimon added that about 90 percent of the bank’s customers had already exited forbearance programs.

On the evictions side, several state governments have continued to keep eviction moratoriums that extend beyond the federal deadlines over the last nearly year and a half of the pandemic. But at this point, most are either in line with the CDC’s expiration date or through the end of that specific state’s state of emergency, which is variable and may change frequently.

States with stronger protections currently in place include Washington, D.C., which has suspended all evictions filings and hearings through the end of federal orders, and Minnesota, which has also suspended hearings and sealed eviction records while the state remains in a public health emergency. Other states like Georgia and Ohio have no statewide orders in place at all, and have allowed filings and hearings to continue.

What is known, however, is that over 2 million homeowners are currently behind on their mortgages, and a higher proportion of those homeowners are households of color, according to a housing report released by Harvard University. Because many of those homeowners are still struggling with the fallout of job and income losses, they may not be able to resume payments come August.

“Because these borrowers are especially likely to have suffered sustained income losses, it may be difficult for them to make up for their missed mortgage payments as well as property taxes and homeowner insurance premiums,” Harvard’s report reads. “Lenders often resolve delinquencies by adding the accumulated debt to the mortgage and extending the loan term to cover the costs, but this solution presumes that borrowers can again make full monthly payments.”

Likewise, at least 6 million renter households are behind on rent and at risk of eviction, according to the U.S. Census Bureau, which the National Low Income Housing Coalition warned has the potential to bring a historic wave of evictions this summer and fall.

“These tenants or occupants have been running behind on their payment obligations, which may be deferred for a time being, but it’s still going to accrue,” Saurabh Shah, co-founder of residential real estate crowdfunding platform InstaLend, told Inman.

“There is going to be a time when the maturity clock sets in on the accrued obligation that they have to pay, and it’s highly likely that they won’t be able to catch up with that. So any restructuring of the loan is still not going to be helpful when you consider all the payments that are still outstanding.”

All that is to say, it’s hard to predict just how many homes may be vacated as a result of the moratoriums expiring. Some experts predict there likely won’t be a huge flood of properties that come onto the market, but the market will get a modest boost of inventory — and real estate agents who have been desperate for inventory will want to be ready when that time comes…”

Thank you www.Inman.com for this article. For more articles like this, Click Here.

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Home Maintenance Skills Every Homeowner Should Master

There are some basic home maintenance tasks that every homeowner should know how to do. Don’t waste money on a handy man – these maintenance skills can be learned and mastered by just about anyone. Read these seven home maintenance tasks to see if you’re a top-notch homeowner.

1. Cleaning The Gutters

Every homeowner should know how to clean their gutters. Failure to do so at least twice a year can result in foundation damage, roof leaks, rotted wood, and more. Not only that, but properly maintaining your gutters can help them last up to 20 years, and depending on the material your gutters are made with, up to 50 years. It’s best to get this task done in the spring and fall to avoid the extreme weather that comes in the summer and winter. In order to clean your gutters, you’ll need to get up on a ladder. Be sure to update yourself on proper ladder safety before cleaning your gutters, and if you don’t think you’re up for the job, call a professional for help.

2. Resetting Circuit Breaker

Some common reasons why your circuit breaker may have tripped are from an overloaded circuit, short circuit, or ground fault. A circuit overload is the most common culprit; you can prevent a circuit overload by running fewer appliances at the same time on that particular circuit. To reset your circuit breaker, first locate your circuit breaker and find the breaker that is near the “off” position or not fully in the “on” position. Then, you must turn the breaker completely to the off position before turning it on again. When the switch moves back to the on position, your power should be restored. If power is not restored, try flipping it off and on again. If the problem persists, you may have a short or some other issue that needs to be fixed before you attempt to switch it on again.

3. Drying Out a Flooded Basement

Depending on your area, your basement flooding from heavy rain is just a matter of time. It’s best to be prepared and know what to do before it happens. Check out our article on What to Do if Your Home Floods to learn more about what to do initially when you find your home has been flooded. After the standing water has been removed, it’s time to bring out the towels, fans, and dehumidifiers to soak up the lingering moisture. It’s important to tackle this as quickly as possible because your basement will be in danger of developing mold that can be dangerous.

4. Changing HVAC Air Filters

Your HVAC systems use filters to trap dust, pollen, and other debris to prevent your system from spreading those irritants throughout the home. Every system has a different filtration system, but most will require cleaning or replacing filters on a monthly or quarterly basis. Maintaining your HVAC filters will help improve air quality, reduce the chance of breakdowns, and give you peak performance during the summer months. You can check your HVAC owner’s manual to confirm which kind of filter you need to buy.

5. Checking Smoke Alarms and Carbon Monoxide Detectors

According to the U.S. Fire Administration, three out of five home fire deaths result from the fires in properties without working smoke alarms. This may be one of the most important maintenance tasks you should know how to do, if nothing else on this list. Your smoke alarms and carbon monoxide detectors should be tested monthly to ensure they are working properly. While you are checking if your alarms are working properly, also make it a habit to wipe off any dust, dirt and grime from your detectors. Dust, dirt and grime can build up over time and make it hard for your detectors to sense smoke or carbon dioxide when an emergency situation arises. You can wipe them down with a damp cloth or vacuuming the surface with a soft brush attachment.

6. Finding Wall Studs

Locating the studs in your wall comes in handy when hanging artwork, TV wall mounts, mirrors, shelves, and much more. Studs are the vertical 2 by 4 inch beams that support the frame of your home. Besides purchasing an electronic stud finder to easily find the studs in your walls, there are other ways to locate the studs. Studs are generally spaced 16-24 inches apart on center; meaning from the center of one stud to the next, they are 16 inches apart. With no tools whatsoever you can use the tapping method. Alternatively, if you have a magnet on hand, you can slide the magnet against the wall and the magnet will be attracted to the steel drywall screws. Keep in mind with the magnet method that all nails and screws will not always be perfectly in the center of the stud, and also the fact that some studs have metal protector plates.

7. Turning Off the Gas

Typically, there is no reason to shut off your gas at the meter, even after a natural disaster. Unless you smell, see, hear or suspect that gas is escaping into your home, do not attempt to turn off your gas service at the meter. Once your gas is turned off though, you will need to contact your gas provider to come turn it back on as turning the gas back on should only be handled by a knowledgeable professional. In an emergency, your gas can be turned off at the main gas shutoff valve that’s normally located near your gas meter. Be sure you are prepared in an emergency by knowing where your gas valve is and having a wrench in an easily accessible spot to be able to turn it off.

By our Preferred Vendor, Choice Home Warranty.

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Why the U.S. Housing Market is So Tight and Predictions for Future Trends

Why Is the Housing Market So Tight?

It may come as no surprise if you have been in the market for a new home that housing supply is currently at its lowest level since the 1970s.

“In my time studying housing markets, I’ve seen bubbles and I’ve seen busts,” says Bill McBride, an economist who predicted the 2007 housing crash. “But I’ve never seen anything quite like this. It’s a perfect storm.”

The questions on a lot of people’s minds are what caused this housing shortage, and when will it end? Perhaps more importantly, how will it end? Will it look like 2007 which led to one of the largest economic meltdowns our country has ever seen?

According to an article in The Atlantic, years of insufficient building and a construction pause during the pandemic led to low inventory. Seniors, who in previous decades sold their homes to downsize, are now more likely to “age in place,” which is keeping millions of homes off the market. The emergence of the Millennial generation made strong housing demand in the early 2020s entirely predictable. And The Great Recession’s clobbering of the construction industry made today’s housing shortage equally foreseeable.

And according to Freddie Mac, the U.S. housing market is 3.8 million single-family homes short of what is needed to meet the country’s demand.

Can Homebuilders Normalize the Housing Market?

If there aren’t enough resale homes to meet the demand shortage, can homebuilders save the day? The short answer is they are trying to, but they have been dealt their own spectrum of challenges. A decreased labor shortage, Covid backlog of building permits, dramatically rising land and building supply costs have all resulted in a slower pace of building which is not as robust as the market demands. Although there are positive signs with increased housing starts, the U.S. housing supply has been underbuilt for well over a decade and it will take years of accelerated new home construction to close the gap.

And a potentially painful new twist has been added, about 47% of contractors added escalation clauses to home contracts last month, according to an April survey by the National Association of Realtors. The clauses let firms raise selling prices as building costs rise. Buyer’s fears of being gouged or not being able to qualify for a mortgage once the home is actually finished could majorly slow down this sector again.

What About Foreclosures That Are Sure to Flood the Market?

This seems like an obvious question to ask, especially after the Covid related downturn in our economy where scores of Americans lost their jobs and/or income. Fortunately or unfortunately depending on your perspective, foreclosures won’t have a meaningful impact on overall supply. According to Goldman Sachs, pandemic related forbearance provisions later this year should put some additional homes on the market, but not dramatically. Of the roughly 45 million mortgages in the US, 4.5% are currently in forbearance, but the majority of those aren’t likely to enter foreclosure, Goldman said, “because the substantial improvement in the labor market we expect in coming months should increase households’ ability to resume mortgage payments.”

What Are the Future Trends Looking Like?

Unfortunately there is no crystal real estate ball, but there seems to be some general consensus among economists and other experts. 1) Interest rates may rise slightly, but are expected to remain historically low. 2) Home inventory will increase, but will stay a seller’s market due to the slow rate in comparison to need. 3) Home prices are still growing at the fastest rate on record.

All that being said, it is a GREAT time to sell your home! Buying can be more of a challenge than in the past due to tight inventory, but NOT impossible with the right strategies and negotiating tools in place which a good Realtor will provide you with. If you are interested in buying or selling your home or land, please call us, it will truly be our honor to serve you!

By Holly A. Morris, Realtor

The Meridian Real Estate Group

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Commercial Real Estate: Buying Versus Leasing

Most growing businesses will at some point need to either lease or purchase commercial real estate. The decision to buy or lease a commercial property is a critical one and can impact the bottom line of a growing business for years. For companies that need either retail, office, or industrial commercial space; finding the right space and making the right decision to buy or lease is a choice that a business owner needs to get right.

The Pros and Cons of Leasing

Pros

More liquidity  – Leasing typically ties up less capital due to the fact that a downpayment on a loan is not required to move into the space.

Fixed monthly cost – A company leasing a space generally will not have to pay for significant repairs and maintenance for the property. Paying for minor repairs and common area maintenance is typical for a commercial lease, but large unexpected expenses are mostly covered by the landlord.

Tax breaks – A business is allowed deductions for lease payments, property, insurance, property taxes, utilities and maintenance.

Flexibility – A company can simply relocate when the lease is up without having to sell the property.

Cons

No equity – When a business leases a commercial space they give up the opportunity to accumulate equity in the property.  

No passive income – If a business owns a property there is always potential income by way of leasing out any unused space to another business. When you lease you give 

up this income opportunity.

Rent expenses – Rent payments usually exceed the typical monthly payments you would incur to pay off a loan if you had purchased a similar property. 

Less control of the space – When renting the landlord has final say on what you can and cannot do with the space.

The Pros and Cons of Buying

Pros

Equity – If you buy with cash you have instant equity. If you take out a loan you are building equity over time as you pay off the loan.

Asset value appreciation – Your equity also increases if the value of the property goes up over time.

Potential for rental income – If you have unused space you can lease it out for additional income.

Tax breaks – If you buy the property you get tax breaks for interest, depreciation and non-mortgage expenses.

Control of the property – Other than local zoning ordinances and use restrictions listed in the title,  you have total control of the property and what you want to do with it. 

Cons

Upfront down payment required – A purchase whether cash or financed will inherently tie up more capital than leasing a similar space.

Difficulty qualifying for financing – It can be difficult to qualify for a commercial real estate loan. Hard money lenders typically have higher interest rates.

Liability insurance required – You will need liability insurance to protect yourself from lawsuits if someone is injured on your property.

Potential for loss of liquidity or capital – If the property’s value declines over time your are stuck with the loss of capital that could have been used elsewhere.

The Final Analysis

It makes sense to buy if your company has enough cash flow for the capital expenditure. Buying is generally a good option if you are looking to build equity, plan on staying for several years, and want total control of the property.

Leasing on the other hand is an excellent option for many companies that are looking to avoid tying up cash with a downpayment and want flexibility to find a new location at the end of the lease. 

Hopefully, this article has shed some light on the factors to consider when deciding if buying or leasing commercial property is right for your business. If you are looking to buy or lease a commercial property don’t hesitate to call the Meridian Real Estate Group today.


We Can Help

Whether you’re looking to lease, buy, or sell commercial property, now is still the time to do it in Atlanta. The Meridian Real Estate Group has been assisting commercial clients for well over a decade and would love the privilege of earning your business. Our goal is not just to help our clients with a transaction, but to support the building of financial legacies through real estate. Call us today at 678-631-1723 or visit us online at www.themeridianway.com. We look forward to serving you.

By John Rose, Realtor

The Meridian Real Estate Group

For Additional Blog Content, Click Here! 


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