Downsizing Options

We are thinking of downsizing, but can’t find a place to go.  Any ideas on how to approach this transition?

If you’ve been sitting on the sidelines this spring waiting for your downsizer to come on the market, you may be feeling disappointed right now.  We continue to have an extreme lack of inventory, and have for years in this particular category.  Here are some options for those of you who want to downsize to consider:

If you are looking for patio homes, we have a limited inventory in Sewickley, with Elmhurst (one available) and Sewickley Ridge (nothing available).  However, we do have nearby communities that have wonderful patio homes including options off Nicholson Road in Franklin Park and Ohio Twp, all still in “15143” including Diamond Run, The Fields of Nicholson and Traditions Sewickley Ridge.  We also have townhomes in Sewickley Village (one currently available), some with elevators, townhomes in Sewickley Heights manor, townhomes in Moon overlooking Sewickley and townhomes in Ohio township (still “15143”).  If you are looking for that illusive Village ranch, you may be waiting a while and looking at a large project to bring it up to modern standards, or paying a high dollar amount, as some of our smallest but well done homes are selling in the 700,000s.  We often have ranch opportunities outside the Village however.  We also have a nice selection of condos.  If you are hoping to spend a lot of your time traveling, while a condo may seem on the small side at first, it may be all you need if you won’t be in Sewickley all year.  For those with larger budgets, the new condos on Centennial are a very nice option. 316 Beaver Street and the Linden have undergone a smart remodels and offers stylish in-town condos.  The Brittany and Normandy provide additional options.

Perhaps you would consider a new adventure for your downsize?  We have had many local families move into the city, with some cool options to choose from.  If you are really looking to shake up your life, and don’t have a need for our school district, moving into the city might be a fun avenue to explore.

Early fall can be a very strong market.  We are encouraging homeowners who are considering a move to list this fall!  If your buyer is out there and we can’t find your ideal downsizer, there are the options of a delayed closing to give you more time, as well as an interim rental.  Give me a call if you would like to explore this further!

QUICK SEARCH

    I’m ready to answer any questions you have regarding your real estate needs.
     
     
    Kathe Barge, CRS, ABR, CNE, SRES
    Associate Broker
    HOWARD HANNA
    REAL ESTATE SERVICES
    401 Broad Street
    Sewickley, PA 15143
    Cell: 412-779-6060
    Office: 412-741-2200 x238
    kbarge@howardhanna.com

    Using an Appraisal Contingency

    With all of the bidding wars happening in this hot market, should we put an appraisal contingency in our offers?  

    Appraisal contingencies are added to agreements when buyers are concerned that their offer may be over market value.  If you are getting a mortgage, they really aren’t necessary if you are putting 20% or less down on your home.  Your bank will need your new home to appraise so that your debt percentage is not greater than 80%.  If it doesn’t appraise, you will either have to throw in more cash or reduce the sales price of the home, or the bank will refuse to fund the loan.

    If you are paying cash for your home, or have a small planned mortgage, your only protection from over-paying is to insert an appraisal contingency into your offer. If the home fails to appraise, you will have the option of terminating the agreement if you choose, or possibly re-negotiating the price.  While this may sound like a fool-proof option, when we are in a hot market, with limited inventory and limited options for buyers, the goal is to reduce the number of contingencies to make your offer more appealing, not to add more! When evaluating whether they want to take their home off the active market to work with your offer, a seller will weigh all of the components, and an appraisal contingency weakens your offer as it is one more hurdle the seller must overcome before they can proceed to closing.

    There is a definite risk that in a hot market you could overpay for a home.  Homes are in some circumstances selling for tens of thousands of dollars in excess of the list price. Unfortunately, this may be what it takes to get a home.  Inserting an appraisal contingency will only weaken your offer and could cause you to lose a bidding war. The best course of action if you want to win is to ask your agent to prepare an analysis of comparable sales and use that to determine your best offer, leaving out the appraisal contingency and hopefully succeeding in your bid to buy a new home.

    QUICK SEARCH

      I’m ready to answer any questions you have regarding your real estate needs.
       
       
      Kathe Barge, CRS, ABR, CNE, SRES
      Associate Broker
      HOWARD HANNA
      REAL ESTATE SERVICES
      401 Broad Street
      Sewickley, PA 15143
      Cell: 412-779-6060
      Office: 412-741-2200 x238
      kbarge@howardhanna.com

      Understanding the High-End Market

      It seems that high end home sales continue to lag as compared to the rest of the market.  Thoughts? 

      Our high-end market in the Quaker Valley School District is moving more slowly than the rest of the market, and this is particularly apparent when homes under $1 million are selling fast and at premium prices.  Speculation abounds as to why that is the case.  Many attribute that to the fact that our tax system was restructured several years ago to allow for a larger standard deduction and lower marginal rates but at the cost of limiting the deduction for property and income taxes to a combined total of $10,000.  Our property taxes are high in Western PA as compared to many parts of the country and that will impact expensive homes, with the possibility of the highest taxes, the most.

      Buyers may need a general mindset adjustment. As a whole, our income taxes in PA are lower than the majority of states.  Our earned income tax here in Sewickley is only 1%, compared to 3% in the city of Pittsburgh. We do not have sales tax on clothes or food as many states do.  So while our property taxes may be on the high side, we are in a far better position overall than many residents of metropolitan areas with similar advantages to Pittsburgh.  Property taxes are just a cost of living, and if your bucket list includes the amenities of a higher-end home, the taxes are what they are.  The sooner our marketplace accepts this reality, the sooner our higher end homes will start selling again!

      However, other high-end Pittsburgh markets are selling more readily than ours and while this article is not a political commentary, the reason most often cited by high-end buyers choosing against Quaker Valley is the school situation.  No one likes controversy – why move into it if you don’t have to?  If we can make unified forward progress, that may buoy our high-end market.

      In the meantime, our middle and lower end market segments are moving fast and often with many offers.  Homes in these segments that are priced appropriately for condition and amenities are often selling with multiple offers, and in a very short amount of time.  These market segments are accelerating quickly in their pricing.  Waiting for the home to show up on your Zillow search is likely going to be too late.  If a move is something you’ve been considering, give me a call and we can strategize on how you can best meet your needs in this complex market we find ourselves in! 412.779.6060

      QUICK SEARCH

        I’m ready to answer any questions you have regarding your real estate needs.
         
         
        Kathe Barge, CRS, ABR, CNE, SRES
        Associate Broker
        HOWARD HANNA
        REAL ESTATE SERVICES
        401 Broad Street
        Sewickley, PA 15143
        Cell: 412-779-6060
        Office: 412-741-2200 x238
        kbarge@howardhanna.com

        Protecting Against Overpaying

        How do you guard against overpaying in this competitive market? 

        You have a good reason to worry about prices in the market that we are in.  Currently it seems that prices have risen at least 10% in some price brackets since the new year.  That’s an incredible amount for the Pittsburgh market which typically appreciates at the rate of 1 to 2% per year. That increase is not being seen a crossed all price brackets – the million dollar plus market has as a general rule seen less. However, the majority of our homes are still seeing multiple offers and the prices are still coming in over the asking price.

        Given the current state of the market, there is a high likelihood that those participating in some of the more intense bidding wars going on right now are going to end up overpaying for their homes. If they remain in their homes for 5 to 7 years, however, that should not be an issue. We should see enough market appreciation in a 5 to 7 year period to make up for any premium that might be paid in the current market. 

        If you are getting a mortgage, the appraisal required by the mortgage company provide some level of protection. However, most appraisers are trying to make their appraisals come in where the market is presently, so that doesn’t exactly protect you from the “bubble” we may be experiencing. Additionally, if you are involved in a multiple offer situation, to be the winning bidder you will probably have to offer some level of “appraisal gap coverage” meaning that you agree to accept the appraisal at a lower number than the purchase price, should that occur.   So, you will not benefit from the typical protections afforded by an appraisal.

        In the end, the answer to your question is that if you are buying in this market, you are just going to have to come to peace with the fact that you may need to do what appears to be overpaying in order to get a home for you and your family. However, in the end, even if the market does settle down a bit, as long as you are not planning to move in the near future, the market will eventually catch up with any premium you might have to pay.

        QUICK SEARCH

          I’m ready to answer any questions you have regarding your real estate needs.
           
           
          Kathe Barge, CRS, ABR, CNE, SRES
          Associate Broker
          HOWARD HANNA
          REAL ESTATE SERVICES
          401 Broad Street
          Sewickley, PA 15143
          Cell: 412-779-6060
          Office: 412-741-2200 x238
          kbarge@howardhanna.com

          Impact of Interest Rates

          How are rising interest rates impacting home sales? 

          Rising interest rates are definitely impacting buyers.  Many buyers are having to step down their affordability levels and focus on homes that are less expensive homes than those they might have considered three months ago.  If you are a buyer and have been looking for more than a month, it’s a good idea to check in with your lender and request a new pre-approval and cost estimate so that you can be comfortable with what your payments will look like at the higher rates. 

          For most sellers, however, the rising interest rates are not impacting home prices. We continue to sell homes astonishingly quickly and at record prices.  The pool of buyers considering a home may be different, but their number is not less.  At the present time, it does not appear that the notable increase in interest rates has impacted our market in the “affordable” ranges at all. 

          However, the high-end market (over $1.5M) has always been much more susceptible to broader market factors such as interest rate increases.  There has been a notable (and hopefully temporary) decrease in high-end activity in recent months and rising interest rates may be playing a key role in that decline (along with the volatile stock market and other concerning world events). If your home falls into our high-end market, you may need to exercise patience with our market as your time on the market will likely be more in line with historic norms as compared to the current “flash sale” market we are experiencing in the $1.3M market and below.

          QUICK SEARCH

            I’m ready to answer any questions you have regarding your real estate needs.
             
             
            Kathe Barge, CRS, ABR, CNE, SRES
            Associate Broker
            HOWARD HANNA
            REAL ESTATE SERVICES
            401 Broad Street
            Sewickley, PA 15143
            Cell: 412-779-6060
            Office: 412-741-2200 x238
            kbarge@howardhanna.com