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Michael Ardolino

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Real Estate Graph

By Michael Ardolino

Michael Ardolino

According to Long Island housing statistics, the number of listings taken increased nearly 6% since April 2022. Total homes available is also approaching 10%.

As the number of homes on the market increases, it’s important for those thinking of selling to keep their eyes on the real estate market. Fortunately for sellers, things are still in their favor, and forecasters predict it will remain that way this summer and into the fall.

For buyers, this means more to choose from. If you are selling and haven’t purchased your new home yet, you’ll also benefit from inventory starting to inch up.

While other potential sellers may be contemplating the perfect time to put their home up for sale based on their personal plans, if you base your decision on when it’s right in the market, you’ll come out with a better return on your investment.

Heading toward possible stabilization?

A recent article in The Washington Post states, “while mortgage rates and home prices are not expected to drop, they are anticipated to somewhat stabilize.”

Some may wonder if the market stabilizes, how it will remain a seller’s market this summer. According to Shivani Peters, a mortgage advisor and expert, “We have no reason to believe that home prices will stop appreciating … When you own, it’s a gift.” After two record-breaking years, the slight climbs in mortgage rates and home prices aren’t bad news. Prices will still continue to appreciate through the stabilization.

A reminder

Interest rates continue to inch up to slow inflation — we’re seeing nearly 6% for some 30-year fixed rate mortgages — and savvy buyers want to stay ahead of rising interest rates. For example, a person who bought a home in 2019 valued at $370,000, who put 5% down with an interest rate of 2.87%, would have a mortgage payment of $1,457. Someone who bought a home valued the same in 2022 with interest rates at 5.25%, would now pay $1,940. If they wanted the same type of house that sold for $370,000 in 2019, they would now pay around $500,000 for that home, with 5% down and current interest rates, their mortgage payment is $2,623. Timing is everything!

Real estate and financial experts are keeping a careful eye on The Federal Reserve as the central bank announced a .75% percentage point rate hike on June 15. Jerome Powell, chair of The Federal Reserve, said the Feds may announce a similar rate hike again next month. As I discussed in a past article, just because the rates are going up doesn’t mean they are the highest they have been.

Takeaway

As mortgage rates rise, buyers are less likely to purchase a home at the same price they would have six months ago; mortgage rates are predicted to only continue increasing over the next six. While rates will still be historically low, the best time to sell or buy is now. So … let’s talk.

Michael Ardolino is the Founder/Owner-Broker of Realty Connect USA.

Source: CoreLogic/The Balance

By Michael Ardolino

Michael Ardolino

The beginning of this year has proved to look at more than one factor when predicting the future of real estate. Sellers and buyers have been on the edge of their seats.

National headlines, including “foreclosures” and “recession,” haven’t helped matters. To avoid misconceptions, those wanting to sell or buy a home need to read past headlines for context.

Let’s discuss foreclosures

Earlier in the pandemic, people were eligible for a forbearance program for coronavirus-related financial hardships. The federal program allowed property owners going through a difficult time to request a pause or reduction of their mortgage payments from their lenders. It provided an opportunity for many to get back on their feet.

Experts are finding that many who took advantage of this plan could catch up on their payments or restructure their loans, making it easier for them to make payments again.

Mortgage Bankers Association findings show that 36% of loans upon exiting the forbearance program were paid in full, 44.6% were repayment plans and 18.4% of mortgage holders still had problems.

For the homeowners who had enough equity to sell their homes, the real estate market has quickly absorbed the new listings because inventory is low and demand still remains high.

Recession doesn’t equal housing crisis

When some people hear “recession,” they think if there’s a housing bubble it will be ready to pop. Looking back at 2008, I can understand the concerns. Interestingly, there have been half a dozen recessions since 1980, and homes have appreciated four times and only twice depreciated. (See the chart in my ad in Arts & Lifestyles)

The data proves that a slow economy doesn’t necessarily mean home values fall.

I mentioned in past columns that this time around, as homes appreciated and the trend continued, we were in better condition than 2008 when a high percentage of borrowers were defaulting on their subprime mortgages.

Those mortgages were easier to get than they are today, and the banking industry learned from its mistake. Banks are looking for buyers with credit scores on the high side who can afford a solid down payment. Also, homeowners who refinance must maintain 20% equity, which wasn’t the case in 2008 and led to property values falling to a point where the owner had a higher principal than what their house was worth.

Takeaway

Timing is everything. There’s no need to panic even if the economy isn’t ideal. With a little research, you can find the best time for you to sell or buy a home. 

So … let’s talk.

Michael Ardolino is the Founder/Owner-Broker of Realty Connect USA.

Stock photo

By Michael Ardolino

Michael Ardolino

The experts were right. U.S. Federal Reserve System Chair Jerome Powell recently said that raising interest rates 50-basis-points, which converts to .5%, is on the table for the central bank’s May meeting.

The May rate increase will follow the Fed’s decision to raise rates in March. It would be the first time since 2006 that rates were raised in back-to-back meetings. And, the half-point increase would be the first in 22 years.

Mortgage rates

Since January, mortgage rates for a 30-year fixed mortgage have climbed from an average of 3.11% to a current 5.35%. It’s the first time that the rate has gone above 5% in a decade. We’ve mentioned in several past articles that experts have always projected rising interest rates spread across 2022, even though they are still on the low side.

Mortgage rates on the rise and inflation fluctuating may prompt people to question where the housing market is leading. People may also wonder how home prices and home unit sales will be affected.

According to Sam Khater, Freddie Mac’s chief economist, mortgage rates increased for seven consecutive weeks. “While springtime is typically the busiest homebuying season, the upswing in rates has caused some volatility in demand,” Khater said. “It continues to be a seller’s market, but buyers who remain interested in purchasing a home may find that competition has moderately softened.”

This softening makes sense as many potential buyers may start looking for houses in a lower price range or take a break from looking at homes.

Debunking some myths

Some buyers may want to wait until home prices and mortgage rates decrease, which isn’t a financially-savvy move. It’s imperative to keep in mind that rates and prices will continue to rise, so the longer you wait, the more it will cost you.

Homeowners, don’t think you can set the asking price at whatever amount you want because of a seller’s market. Your house still needs to be priced appropriately. Real estate professionals have seen homes that have remained on the market for months, even though most properties have sold in days around them. It’s all about pricing.

Despite memories from the early 2000s, the housing market is not in a bubble ready to pop. The 2006-08 bust happened because of the foreclosures that flooded the market due to purchasers who weren’t qualified for the mortgage they had and homeowners using the equity in their homes as if it was an ATM.

What has happened in the real estate market the last few years has happened naturally and hasn’t been generated by financial institutions easing lending requirements. Today’s market is continuing as a seller’s market with homes continuing to appreciate due supply and demand, because the pandemic increased the number of people who realized the importance of having their own home, especially in the suburbs.

Takeaway

A recent article in The New York Times, “The Sky-High Pandemic Housing Market Finds Gravity Does Exist,” summed up the current real estate market best.

“By any standard that prevailed before 2020, this would be a hot real estate market.” While demand is subsiding slightly, home prices remain high, with economists predicting a continued rise in the near future.

So … let’s talk.

Michael Ardolino is the Founder/Owner-Broker of Realty Connect USA.

On March 30, 500 students and family members attended the Multi-Industry Career Exploration Fair at Ward Melville High School.

The event was organized by the Three Village Industry Advisory Board with tremendous ongoing support of Alan Baum, Three Village school district executive director for Human Resources and Secondary Curriculum, who along with 3V-IAB oversees the development and implementation of our programs.

As chair of 3V-IAB, I was thrilled to see a terrific turnout.

After the event, Ilene Littman, 3V-IAB co-chair and Ward Melville High School business teacher, and I were pleased to receive positive feedback from many who participated.

The advisory board has hosted the event for students in grades 7 through 12 for four consecutive years. After being held virtually last year, it was satisfying to see the career fair continue and take place in person, providing plenty of opportunities for students to interact with more than 80 businesses and organizations from various industries.

Superintendent Cheryl Pedisich called it a “valuable partnership” for students and community members.

“It was evident that this was a tremendous undertaking involving hours of time and effort,” she said. “However, what was most clear was the enthusiasm and passion that the two of you and your student leaders exemplified in executing the program.” 

The number of students who helped organize the event this year was impressive. The committee members and I appreciate the volunteers from Student Government, DECA and the Robotics Department, as well as members of the Business, Family and Consumer Science, and Guidance departments. They played a big part in the career fair’s success.

Kevin Scanlon, assistant superintendent for educational services, said it best after the fair: “The students’ organizational abilities rivaled any Fortune 500 company.”

One of the young people involved was 3V-IAB student liaison Savanna Pineros who said she felt this year’s career fair was a success.

“Many students were able to meet with a diverse array of businesses, representing a wide variety of fields,” she said. “Students were able to ask many questions and explore several career opportunities in a unique way.”

Grace Smrek, 3V-IAB student president for 2021-22, said, “Walking around this event, I could see our community coming together to support the students in discovering potential career paths. As the student president of this board, I am honored to have been a part of the most successful career fair yet.” 

Incoming 3V-IAB student president Justin Moore noted that this year’s career exploration fair “doubled any other career fair in the past, making it the largest one yet.” 

Since its inception, the 3V-IAB mission is to prepare teenagers for the careers of the future. Career exploration fairs have featured businesses from fields such as technology, finance, engineering, health care, hospitality, government and more. The advisory board feels it’s essential to educate students on all the opportunities available to them to prepare for their futures.

“By bringing together a wide spectrum of industries, we showed the innovators of tomorrow all of the varied opportunities that are possible for them,” said Suffolk County Legislator Kara Hahn.

Town of Brookhaven Councilmember Jonathan Kornreich said, “I appreciate so many local professionals taking the time to help demonstrate the wide variety of options available to our students.”

One of those professionals, Vinny Menten, manager of Gabrielli Truck Sales and 3V-IAB board member, said the career exploration fair is “a huge value to students who are trying to make their way through life and gain the information necessary to make a good personal decision.”

Stan Abrahamsen, Chick-fil-A franchisee, said, “My two GMs really enjoyed all the interaction with the students as well as parents.”

I’m looking forward to the next 3V-IAB event, Money Talks, to be held May 25 during the school day. Colette Frey-Bitzas, director of financial planning for PPS Advisors, and Nicole Sarno, Webster Bank business managing director, will be heading up the presentation and interactive conversation with the students.

Frey-Bitzas describes Money Talks as the “secrets of success.” It’s not so much what you make but what you save.

“‘Save’ means so much more than what is put in the bank,” she said. “It’s understanding taxes and best places to put your money, so it works for you.”

There will be more to come next school year, and the board is looking forward to these events and planning them with the students. 

Michael Ardolino is the founder/owner-broker of Realty Connect USA.

By Michael Ardolino

Michael Ardolino

As I mentioned in last month’s column, it’s essential to pay attention to current events. For those watching the news, you’ve probably noticed the various factors affecting today’s real estate market.

Federal Reserve

The U.S. Federal Reserve System met this month and raised interest rates for the first time since 2018. At a recent conference Jerome Powell, chair of the Federal Reserve, said, “There is an obvious need to move expeditiously to a more neutral level and more restrictive levels if needed to restore price stability.”

Due to anticipation of the meeting, the average 30-year fixed mortgage rate climbed to 4.16%, according to Freddie Mac. After the meeting, the rate climbed up slightly to 4.52%. Keep in mind at the end of 2021, rates were at 3.11%. Powell has hinted at a 50-basis-point rate hike, which converts to .5%, by the Federal Reserve’s meeting in May or even before; some experts believe the rate could possibly jump even higher.

Current trends

Mortgage rates are slightly up during a period when there are more buyers than sellers in the real estate market. That’s good for sellers as it keeps the market competitive.

According to the National Association of Realtors, pending home sales were down 5.4% in February compared to 2021 across the nation, however, in the Northeast, homes going into contract are up!

“Buyer demand is still intense, but it’s as simple as ‘one cannot buy what is not for sale,’” said Lawrence Yun, NAR’s chief economist.

Also, due to inventory not meeting demand, we’re still seeing homes appreciate. Keeping Current Matters, a real estate resource, reported home values appreciated an average of 15% across the country last year. Experts predict that home prices will remain steady.

World events are indeed causing supply chain issues. We have been hit hardest in our pockets when paying for oil deliveries or gasoline, which will continue to affect us. When consumers spend more to drive their car or heat a home, they may have less money to save for a new house. Going back to low home inventory, this slight dip in homebuyers hasn’t affected real estate yet.

Takeaway

The beginning of this year has proved to look at more than one factor when predicting the future of real estate. Mortgage rates may be slowly rising, and then low inventory also comes into play to balance things out. Remember, rates are still historically low, as the graph above shows. 

For potential sellers, it’s still a favorable time to put your house on the market while prices are on the high side. A home sale now could mean getting a bigger home or downsizing. Or, if you’re moving out of state, you’ll have the competitive edge with more money in your pocket because house prices are rising all over the country, even in areas once known as more affordable. So … let’s talk

Michael Ardolino is the Founder/Owner-Broker of Realty Connect USA.

 

By Michael Ardolino

Michael Ardolino

When homeowners think of selling their house, many forget about essential factors, such as paying attention to the news and the trends that follow, because what’s going on in the world affects real estate and the prices of homes.

A nose for news

We have seen the same trends that I’ve talked about in past columns, a sellers’ market and homes selling quickly, all over the country. The bottom line is simple: what’s going on economically in our country and worldwide affects us.

I always advise people thinking of selling or buying a home to pay attention to the news. It’s vital because the real estate market always has the potential to change.

Financial experts are keeping an eye on what the Federal Reserve, which will meet in March, will do. It’s possible the short-term federal funds rate will be raised four to six times in 2022. The goal is to combat inflation. Raising the rates hasn’t been done since 2018.

The anticipation of rate hikes has already pushed rates up slightly, which is starting to affect the housing market. Last week rates started inching up over 4% for a 30-year fixed mortgage.

However, Russia’s invasion of Ukraine is creating uncertainty in the economic arena. If there is a financial fallout, possibly due to an oil price increase, it could lead to mortgage rates increasing. The flip side of the coin is that the Federal Reserve may take a less drastic approach than initially believed.

At the beginning of the week, the U.S. already saw stocks dipping and oil prices jumping. Trends such as these can make some aspiring buyers a bit hesitant to make a move. Only the future will tell if rates will go up or stay steady, even though they will still be on the historically low side.

The current trend

The National Association of Realtors (NAR) reported that “pending home sales slumped in January, continuing what is now a three-month drop in transactions.” (See graph above)

Lawrence Yun, NAR’s chief economist, stated, “With inventory at an all-time low, buyers are still having a difficult time finding a home … Given the situation in the market — mortgages, home costs and inventory — it would not be surprising to see a retreat in housing demand.” 

Yun also mentioned “house hunters are contending with a number of additional market issues, including escalating home prices and rising interest rates. Rates jumped nearly a percentage point in January from December, further adding to monthly mortgage costs.” 

Takeaway

Everything connects to one another and creates a domino effect. Whether you’re looking to sell or buy, it’s vital to pay attention to current events as well as the present economy. You’ll want not only to research your area, but also the area you’re looking to move to in the future. Real estate professionals can help explain everything involved in buying and selling homes in today’s market. So … let’s talk.

Michael Ardolino is the Founder/Owner-Broker of Realty Connect USA.

Real Estate Graph

By Michael Ardolino

Michael Ardolino

Great news is trending for 2022. The real estate market is still favoring sellers, and buyers can take advantage of mortgage rates that remain historically low.

Timing is everything. The best tip anyone can give a homebuyer is: Take advantage of rates on the low side now.

Let’s look at the data. According to Keeping Current Matters, mortgage rates are still below the average for each of the last five decades. Back in the 1980s, some people were paying rates as high as 12.7%! (See graph above)

For each single percentage point a mortgage rate is raised, it may only translate into a small increase in your monthly payment; however, over a few decades that will add up to a significant amount. Even half a point can make a difference.

The first few weeks of 2022 have been a prime example of how quickly mortgage rates can change. Freddie Mac reported 3.55% for a 30-year fixed-rate mortgage on Jan. 27. Just three weeks before the company was reporting the same rate at 3.22%. Fortunately, the week before the 27th stayed flat despite the month-long rise, but these numbers are the highest in nearly two years.

Experts, such as Freddie Mac’s Chief Economist Sam Khater, expect the increase to be gradual, with rates possibly reaching 3.7% by the fourth quarter. We’ll stay on top of this closely.

Lock it in. People starting the home buying process will benefit from visiting various banks to find the best rate and locking it in. Rates fluctuate daily, sometimes even hourly.

How does a rate lock work? The lock will protect you against rate increases while in the home buying process. Of course, there is always a chance rates can go down, and that’s when it’s wise to ask your lending institution if they offer a “float down” option. Considering how things are trending, it’s most likely not needed now.

Make sure to ask about fees before locking in a mortgage rate. Depending on the lender, locks tend to last 30 to 60 days. Also, ask about extension costs past 60 days.

Make the move. The housing demand will continue to be high due to more buyers than sellers. Fannie Mae and Freddie Mac predict trends that will see a strong increase in home prices in 2022.

Many homeowners wait until later in the year to put their homes on the market as many people in the past searched for homes in the warmer weather to prepare to move after the school year ended. Buyers will look earlier now that they see mortgage rates increasing. Get their attention by putting your house on market earlier than the rest.

Takeaway. Be the first to secure the best price for your home, and if you need to take out a mortgage on your new place, enjoy 16-year low rates. So … let’s talk.

Michael Ardolino is the Founder/Owner-Broker of Realty Connect USA.

METRO photo

By Michael Ardolino

Michael Ardolino

The new year is around the corner. Many homeowners yearning for a fresh look may think about renovating their homes or making small changes to their house. Here’s a piece of advice — always keep in mind that you will sell your home one day. With the market staying steady for sellers, it may be sooner than later.

Stay relevant

Even if you’re not thinking of selling your home currently, when painting, buying new fixtures, working on the outside, or making any change, stay up to date with the latest trends.

There are plenty of ways to find looks that are pleasing to you while you’re living in the house and still trendy. One day when you are ready to sell your home, you’ll be glad you did. It will mean less time and money to get it ready for market.

The first step is to check out popular social media apps such as Pinterest and some home decor websites or magazines. Some beautiful colors are trending for 2022. 

For those who like a bright pop of color, purple will be a hot one. It works best in pillows or select pieces and the color pairs well with neutrals or a jewel tone such as red. Green is becoming another popular choice. The color is an earthy tone that is ideal for walls, and just like taupe, warm browns and off-whites, it works well with various decors.

Be bold with furniture and home decor items and mix materials such as metal, stone, wood and different fabrics to add an inviting look to a room. 

Homes with kitchens that open into a living or family room are very popular. At the same time, today’s buyers like to see some definition between areas so consider a kitchen island or area rug in the dining room.

As you walk around your house, remember with more work-from-home options and many people still exercising at home, setting up a room or area that can be identified as office space, a study room or yoga studio is still big. Remember your ceilings when updating your home, too. Textured ceilings are dated so work on replacing popcorn, textured or stucco to freshen up your home.

Breath of fresh air

One of the biggest trends over the last couple of years has been the growing appreciation for the outdoors and fresh air. No matter what time of year it is, you can think about creating a yard that is an oasis for you and future occupants with luscious gardens, or fun additions such as fire pits and porch swings.

Takeaway

Many sellers who real estate professionals have staged or painted for often comment, “Why didn’t I do this sooner so I could have enjoyed it! Now I don’t want to move!”

You don’t have to be selling your house in the next few months to keep your home market-ready while still enjoying it yourself. You also never know when the opportunity to sell will arrive. Over the last couple of years, many people who weren’t even thinking of selling decided to do so to take advantage of the seller’s market or because a person or real estate professional reached out to them and asked them to consider selling.

Next year is going to be an exciting one in real estate, and I look forward to sharing with you more tips plus market news in this column during 2022. So, let’s talk.

Michael Ardolino is the Founder/Owner-Broker of Realty Connect USA.

METRO photo

By Michael Ardolino

Michael Ardolino

Want to sell your home? Now is as good of a time as any to get started.

Why now?

Recently, National Association of Realtors Chief Economist Lawrence Yun said at a conference and expo that the residential real estate market continues to be promising.

“All markets are seeing strong conditions and home sales are the best they have been in 15 years,” Yun said. “The housing sector’s success will continue, but I don’t expect next year’s performance to exceed this year’s.”

First steps

Before a for sale sign goes up, there’s some prepping to be done.

A real estate professional will provide some tips on preparing your house to make it more attractive to potential buyers. I’ve mentioned some of that advice in past columns.

Sellers usually know to put away anything they don’t need right now and donate what they no longer want. This tip applies during the holiday season, too. A festive seasonal look can be inviting, just not too much. This means if you’re ready to sell before 2021 ends, keep this in mind to show off your space to its fullest potential.

The most important step is to sit down with a professional. They’ll go over with you how much similar houses near you sold at and help you decide the best marketing strategy and pricing for your home.

Timing is important

For the last few months, we’ve been keeping an eye on real estate news and trends together. As many recent Long Island sellers know, prices have been high and houses have sold quickly. While winter historically tends to be slower in real estate, experts predict things will be different this season.

“[This] winter is likely to be a better time to sell than winter typically is,” says Kelly Mangold, principal at RCLCO Real Estate Consulting. “Many sellers should not feel the need to wait until spring, especially in high-demand areas.”

This is no surprise. Interest rates are still historically low. For buyers, it’s still wise to get a mortgage now as some experts see interest rates inching up in 2022. A few experts, including forecasters at the Mortgage Bankers Association, predict that by the end of 2022 30-year fixed mortgage rates will average 4%. Fannie Mae economists are more conservative, thinking the rates will average more around 3.4% during the fourth quarter of next year.

Sellers can still get more money now than they would have just two winters ago. Inventory is still not meeting demand, with more buyers than sellers. Add to the equation that many buyers have met stiff competition finding their dream home. Many are still looking or starting their search again after taking a short break.

Takeaway

Real estate trends depend on what’s going on economy-wise and can be confusing sometimes. A real estate professional would be more than happy to help you with the steps and timing. So … let’s talk..

Michael Ardolino is the Founder/Owner-Broker of Realty Connect USA.

Stock photo

By Michael Ardolino

Michael Ardolino

In last month’s column, we talked about the importance of keeping an eye on the news regarding real estate trends. I mentioned Federal Reserve Chairman Jerome Powell and Treasury Secretary Janet Yellen appeared before a Senate panel on Sept. 28 to testify in a hearing about economic recovery.

Fortunately, the Senate passed a temporary extension of the debt ceiling, which allows the government enough funding until December.

Aftereffects

Decisions like this affect the housing market. When the debt ceiling isn’t raised, interest rates and mortgage rates rise, which influences mortgage rates and in turn new homebuyers and sellers.

There has been a slight increase in mortgage rates. According to Freddie Mac, early in October rates passed 3%. What experts do is watch the U.S Treasury yield when they predict mortgage rates because there is a strong correlation between the yield and the 30-year mortgage rate.

Sam Khater, chief economist at Freddie Mac, said, “We expect mortgage rates to continue to rise modestly which will likely have an impact on home prices, causing them to moderate slightly after increasing over the last year.”

Trends

Homeowners for months have enjoyed an attractive year-to-year home price appreciation due to not enough homes on the market. Findings from sources such as FHFA, CoreLogic and S&P/Case Shiller back this up.

Bill McBride, who writes the blog Calculated Risk, said recently that his “sense is the Case Shiller National Annual Growth Rate of 19.7 percent is probably close to a peak. And year-over-year price increases will slow later this year.”

When mortgage rates rise, we usually see changes such as house prices and the length of time it takes a home to sell. Trends are showing the market will slow down slightly in the final quarter of the year.

Analyst expert Ivy Zelman has said that “closings are set to decline roughly 10 percent year over year in the second half of 2021 and home price appreciation is on the cusp of flipping to a decelerating trend.”

What we as real estate experts are talking about is not depreciation. Decelerating at this time means increased home price appreciation at a slower or more moderate rate. This moderate rate, experts believe, will continue into the next year. 

Takeaway

We’re seeing this trend around the country. If you’re planning on moving or downsizing to an area that was once considered in demand, make sure to talk to a real estate agent in the town you’re planning to move to, and they can tell you what the current trends are in their market.

The time is now while the housing market is still up. While things are trending slightly to higher interest rates, prices are really good, and the housing market is changing at a moderate pace. Now is the time to get the most for your investment or lock in a fantastic mortgage rate. So … let’s talk.

Michael Ardolino is the Founder/Owner-Broker of Realty Connect USA.