Aug 3, 2021

More Affordable Housing

There is a housing crisis in the United States and I am not just talking about the homeless living in tents in many cities.  We are short 5 million housing units to meet demand.  In other words, supply is not keeping up with demand, which is the reason that home prices are going through the roof.  The only way to get there is higher density housing in the suburbs.  It is not uncommon to see high rise apartment and condo buildings in some major cities where land is scarce.  And, while we don't need 20 story buildings in the suburbs, it is likely that we do need to see 4 - 6 story buildings on available land. 

Further, excess commercial property needs to be torn down and redeveloped into housing.  This will mean rezoning to include multi use residential; but using the land differently is essential to filling our nation's housing needs.  Clearly, when apartments are built whether for all age groups or 55 or older some number of apartments must be set aside for government subsided housing to provide for more affordable living.  This approach would be far more preferable to building government projects that often turn into slums 10 or more years later.  

As a country, we have to rethink housing to create more affordable housing.  The key is land use.  Getting more units on less land with parks and other amenities nearby.  This also means getting rid of burdensome regulations that can add up to 30% to building cost.  We see the impact in places like California where home prices are extremely high thanks to land values and regulations that add to costs.  

We need 5 million more affordable housing units in the United States.  With some creative approaches we can get there; but business as usual is not working.  

Aug 2, 2021

Removing Private Mortgage Insurance On Your Loan (PMI)

Home buyers who purchased a home with less than 20% down likely were required by the lender to have Private Mortgage Insurance on your loan often referred to as PMI.  This will increase your monthly house payment sometimes by a few hundred dollars a month.  The good news is that there are ways to get rid of it.  First, it goes away automatically, once you are half way through the mortgage provided you are up to date on your payments, but that could take years.

More likely, one of two other ways are more probable.  If your home has appreciated in value in the last five years, which is likely given the escalating real estate markets, you can do one of two things.  You can refinance your loan perhaps today at a lower interest rate assuming you now have more equity in the home.  Or, you can go to the lender with an appraisal to prove the higher value and request that they remove the PMI from your loan. 

First, just Zillow your home to get an idea of its current value.  If there has been significant appreciation, which in many cases may have occurred, choose the best option for you.  Since it cost money to refinance your loan, unless current mortgage interest rates are 1% or more below what you are paying now and you plan on staying in your home for 5 years or more, the best option may just be to have your current lender remove the PMI if you qualify.  PMI can be eliminated.  Take the first opportunity to get rid of it to lower your monthly payments.    

Aug 1, 2021

Bacon Lovers - Time To Fight Back

Since there is nothing better than the smell of bacon cooking on a stove in the morning probably in most homes in the country, all should know that bacon is under attack.  A new law in California, surprise, surprise requires that Pig farmers house pigs in bigger pens, basically 4 square feet bigger to give Pigs more room to spread out.  Get the pun.  So instead of 20 square feet 24 square feet.  Supposedly, the extra 4 square feet is more humane.  Let's remember, these pigs are being raised for food not pets.  

Since Pig farmers based in California cannot supply the 250 million pounds of bacon consumed in California each year, most of the bacon needed will come from Iowa and other states.  I say the hell with California.  Don't take my bacon away. This means that Pig farmers would have to make a major investment to supply California with bacon.  Even if they choose to do so, which is questionable, they can't meet the time frame.  So, not only will bacon be 30% more expensive in California going forward, we could all end up paying more.  This is a national disaster.  The reality is we can't live without bacon.  

It is time for bacon lovers to fight back.  Contact your members of Congress to demand national bacon laws.  Since federal laws overrule state laws, if the Feds keep the same standards in place,  the California law, which makes little sense, will be null and void.   4 square feet is just 2 feet by 2 feet bigger.  I doubt the Pigs can tell the difference.  We just can't have a bacon shortage in our country.  It would be a national emergency.  

Jul 30, 2021

An Interest Only Mortgage Can Be A Great Option

Most people don't realize that during the first 30 years of a fully amortized mortgage, very little money is actually going to pay off the principal.  During the first 10 years, most of the payment is interest only, however, the payment is higher than would otherwise be the case if it was actually an interest only loan.  So for some people living in real estate markets where homes tend to appreciate, it might make more sense just to get an interest only loan to get the lowest payment possible to invest the money in the stock market, 401K's or other investments, or perhaps to pay for things like child care.  If the home appreciates at just 3% a year, the homeowner will be growing equity in the home anyway even though nothing is going to pay off the principal. 

Certainly for people who will only be in the home for 10 years or less, for whatever reason, an interest only loan could make perfect sense provided homes in the area tend to go up in value over time.   Yes, you will owe the original loan amount whenever you sell, but if the home goes up in value, you paid a much lower payment for the time period allowing you to grow savings elsewhere or to cover other family needed expenses. 

Consult a good accountant to see what might be best for you based on your personal circumstances.  In many instances an interest only mortgage loan could be cheaper than paying rent.  If that is the case, home ownership is always the best option.   


Jul 29, 2021

Slight Uptick in Home Inventory in June

The number of homes in the US on the market was still 37.5% less in June, 2021 than in June 2020, which has led to skyrocketing home prices in many markets.  Clearly, there is more demand than supply so that the national median sale price actually rose from $320,000 in April to $336,000 in June.  The good news however, is that inventory across the country rose by 1.9%, which means at least there was a few more homes for sale than months before.  

This is not much of an uptick unless it becomes a trend.  The fact is that the country is short 5 million housing units, which in particular is a killer for first time home buyers that tend to drive markets.  In fact, first time home buyers have been driven out of the market because they just could not compete with either all cash buyers, or buyers able to put 20% or more down to purchase a home.  And, of course, since many homes have been selling in bidding wars above list price, first time home buyers with low down payments just could not compete.  So, they have been forced to continue paying rising rents until the markets cool down. 

I suspect it will take two or three years for demand and supply to equalize.  It may not be a buyer's market for a while, which would take a downturn caused by much higher mortgage interest rates, but at least there may be more inventory to choose from, which should moderate prices.  The last year has been one of the most interesting in decades in the real estate market.  To say it has been a seller's market is an understatement.  

Jul 27, 2021

High Crime Rates Negatively Impact Property Values

Aside from the threat to life, high crime rates impact property values.  Clearly, given a choice people would not want to buy a home in a neighborhood, or city with a high crime rate.   Fewer buyers means lower prices.   As as a result of some calls to defund the police, which is irrational, we are seeing a crime wave across the country.  Robberies, assaults and murder rates are way up in some of the largest cities in the nation.  

Regardless of your politics, it is time to call on elected leaders of both political parties to take action.  We need more cops on the street and they must be empowered to do their jobs.  This does not mean police brutality or use of force that is unnecessary; but given the criticism cops have faced, they are standing back rather than making arrests.  

This can't be allowed to continue because the murder rate in the United States is sky rocketing in many urban areas.  Also, dumb laws need to be eliminated.  California does not prosecute theft under a $1,000 in goods.  So thieves are going into stores with large plastic bags to steal up to the dollar limit.  Some stores in various areas are closing because the theft is unstainable.  In addition, some jurisdictions release criminals with no bail.  So crooks and murderers are back on the street the next day after an arrest.  This has to stop.

All Neighborhoods should have Neighborhood Watch to assist the cops with preventing crime.  High crime should be everyone's concern.  Aside from the threats to personal safety, it is costing people money.  Theft results in higher prices.  And high crime rates absolutely impact property values.  

Jul 26, 2021

Trading Commuting Time For Bigger Homes At Lower Prices

Years ago, when I was first married, we bought our first home in California 40 miles away from our work.  We were able to buy a large home at half the cost it would have been just 20 miles closer to work.  The end result was a 90 minute commute in bumper to bumper traffic, which we did for 8 years.  It was miserable.  During the winter, I left my home in the dark and I came home in the dark.  I did not see our home during daylight hours except on weekends.  We did not know how miserable it really was until we no longer had to do it with a job transfer, when we bought our second home.  

This is a common story.  There are many people around the world who commute 60 - 90 minutes or more each way to go to work whether driving, or taking public transportation usually trains in those regions that have them.  At least on the train you can read or nap.  The question is whether the trade off of buying a bigger home at a lower price is really worth it.  Certainly, for people with families that need more space, it may be the only option.  However, there is no doubt that it impacts quality of life.  

That is why when Covid hit and many people were given the option of working from home, they jumped on it.  So much so that now that they have been able to work from home, many are fighting going back to the office.  A lot of this has to do with commuting time, which in many cities is 60 - 90 minutes each way.  Fighting bumper to bumper traffic is stressful.  Certainly, after we moved and my commute fell to 30 minutes each way, I knew I would never take a job again that required long commuting distances.  

So when considering a home purchase, factor in both the cost of commuting in terms of time and money.  Just maybe it makes more sense to buy a smaller home closer into work if you are still required to go into the office.  The best of all worlds is the ability to work from home because then you can live virtually anywhere in the country.  

Living And Working In Another Country

Some people decide to retire to another country as a way to get a lower cost of living and or for the "charm".  Of course others often take work assignments paid for by their employers.  In either case, there are some things to consider.  Clearly, there are cultural and many times language differences between countries.  And for Americans that are used to having everything at their finger tips and many services available to them when needed, living in another country can be very frustrating. 

While foods are available in every major country in the world, there may not be the selection that is typical in an American grocery store.  And, the prices for food could be higher in many countries in the world than is common in the US.  And, then there are services.  There is enough competition in the US that when we need to buy services, we can usually get things done pretty quickly.  That is not always true in other countries.  

However, the most important issue is medical services.  Medicare coverage does not apply outside the United States.  So retired people would have to come back to the United States to access non emergency medical care.  But if something happens in country and travel is impossible,  there could be a huge problem.  Certainly, living or working in a country with substandard medical care could be life threatening.  And, since you would not be a citizen of that country, it may be necessary to buy additional medical insurance to provide for coverage and or medical evacuation.  If on a global assignment companies usually provide benefits necessary to deal with medical issues.  Those just moving to another country would be on the own.  There are lots of things to consider before moving to another country and or taking a global assignment.  Make sure you check all the boxes.  

Jul 25, 2021

Quality of Life - Family And Friends

Quality of life could mean different things to different people.  For some, it is about shopping, entertainment and restaurants nearby.  For others, maybe it is all about sports, fishing, hiking and camping nearby.  For everybody, quality of life should involve good medical services nearby because as we get older, we will all need medical care of one sort or another.   

Aside from amenities that contribute to quality of life, we all need family and friends nearby to complete the picture.  Reports indicate that people with family and friends regularly in their lives live longer.  That could be because people are social animals.  Human beings need interaction with others to be happy.  I know, I know some people are loners.  They choose to live a solitary life.  The problem is, the day will come when someone needs help.  Crap happens and when it does, it is nice to have family or friends you can depend on.    

In addition to doing things outside the home with family and friends, ultimately our homes are a meeting place bringing people together for meals, life events, parties etc.  And whether we live in a small home or a mansion, making it people friendly is not that hard to do.  Get rid of clutter so there is space for people.  Buy comfortable furniture in and outside to accommodate at least 6 - 10 people at a time.  Cook together.  The old days of Mom being in the kitchen alone doing the cooking to bring it out to a dining room are long over.  Put your guests to work helping to prepare a meal.  It is both fun and makes doing it easier for the hosts.  

Heart is where the home is.  At Paragon we help people sell and buy homes designed for entertaining.  We know that family and friends are the key to a happy life.  Living in a comfortable home whether big or small is part of the story.  

Jul 24, 2021

Everybody Loves Italian Food - Home Cooking

It seems that everybody loves Italian Cooking.  But what most people in the United States think of as Italian cooking is mostly Southern Italian cooking because most of the immigrants that came to America were from Southern Italy.  So mostly foods prepared with red sauces, rather than white sauces.  Of course, things like pizza, which was invented in Naples, Italy, spaghetti and meat balls, sausage, ravioli and lasagna are most common.  And, it might be that the reason for so much use of tomato sauce is because the Spanish, who controlled much of Southern Italy for decades brought the tomato back from the new world and introduced it to Europe probably through the bottom of the Italian boot.  But Italian food is so much  more.  

As someone who grew with my Italian mother always in the kitchen, I came to realize the value of the kitchen in every home no matter what your ethnic origin.  Since I started cooking about 10 years ago, I know how important it is to have all the mixing bowls, platters, big pots, great knives, all sorts of utensils and of course olive oil, the food of the Gods, for good home cooking.  That is certainly true related to Italian Cooking.  

Veal is cooked by Southern and Northern Italians differently.  Northern Italians invented Veal Marsala with a brown gravy, Veal Piccata with a lemon sauce and Veal Milanese, which is breaded Veal cutlets.  And then there is Oso Bucco, cooked for hours which is a Veal Shank often served with polenta, a kind of the Italian version of grits.  Southern Italians created Veal Parmesan covered in cheese with a red tomato sauce usually served with Spaghetti.  

And then there all the fish dishes.  The stuffed calamari, which is incredible with or without red sauce.  Obviously, Italy is surrounding by the Mediterranean and Adriatic Seas, so every kind of fish is on every menu again often cooked differently from North to South.  Bacalao, which is served in all Mediterranean countries is dry salted cod.  Most of the Italian cold cuts that are very expensive like Prosciutto, Capicola and various hams come from Northern Italian.  Some of the salamis and peperoni's come from Southern Italy.  

But I get back to the importance of the kitchen in every home.  Foods cooked from scratch take a lot of time and effort.  The reward is mouth watering meals that will keep family and friends coming back for years.  Kitchen renovations provide the best return on investment.  So, if you are thinking of remodeling for sure put some of your money in creating a gourmet kitchen.  Then buy a good Italian cook book and start having some fun.  

Jul 23, 2021

Condos Are Selling At A Record Pace

While most people would prefer single family homes and they tend to appreciate more than condos, condos are now selling at a record price as the cheaper alternative to single family home ownership.  Even so, many condos are selling for more than the list price.  No doubt, a lot of first time home buyers are gravitating toward condos.  The fact is that any kind of home ownership is better than paying rent unless someone is only going to be the area for a short time.  Certainly, if your horizon is three years or longer, buying a  home, if you can afford to do so is better than renting.  

Condo living comes with some trade off's.  Clearly, it is higher density living so your neighbors are essentially your house mates.  If they are good neighbors no problem.  If they are bad neighbors, could be a nightmare.  The home owner's association is there to help deal with bad neighbors because they must comply with the rules; but it can take weeks, or months to get compliance from stubborn people.  And don't forget, you must comply with the rules too.  If you are a non conformist, condo living might not be for you.  

If buying a condo, do your homework.  Before signing on the dotted line read the HOA documents so you fully understand the rules you must live by.  Make sure the HOA is financially sound because if not, you could get hit with a big assessment.  Some people think condo living is maintenance free.  While technically true, you will be paying monthly HOA dues to have them deal with the maintenance.  So one way or another you will be paying for the things that must be repaired or replaced.   

Condo living is not for everyone; but it is a good alternative to renting.  At Paragon, we help people sell and buy homes for the best price possible.  If there is a condo in your future, we can help make it happen.  

Jul 22, 2021

Home Ownership Should Be Part Of Your Investment Strategy

While home prices can go up or down, over the long run, home ownership should be part of your investment strategy.  And, the good news at least for now is that home appreciation is not taxed.  So as the value of your home goes up, you are increasing the equity you have in your home.  Currently, if you sell your home and it is your principal residence, couples can keep up to $500,000 in gain tax free.  Singles can keep up to $250,000 in gain tax free.  Amounts above these dollars would be taxed as capital gains, which at the moment is still lower than most income tax rates.  

If you earn interest or dividends on stock or other investments unless in IRA's or 401K's, you will pay federal and state income taxes on those earnings in most states each year.  So in essence appreciation on the value of your home works a lot like an IRA in at least deferring any taxes that could apply if and when you sell.  And, for now anyway since much of the gain on sale would be tax free for most people, home ownership is given preferential tax treatment.  

Usually, though not always over many years homes will increase in value.  This is especially attractive since mortgages today are at such low interest rates.  It could be that your house payment is about the same or less than what it would cost to rent like square footage, which makes home ownership even more attractive.  Yes, you will have things like maintenance and other expenses related to home ownership; but those things are factored into rents too.  

If you don't own a home do what you can to become a first time buyer.  If you do own a home, look at it as the investment that it has become.  You can Zillow your home to get an idea of current value.  At Paragon Home Resources, we work with families to sell and buy homes at the best price.  We know that a home is an investment and counsel our clients on the benefits of home ownership.  

Jul 21, 2021

Your Credit Score Is Very Important

Most people think that their Credit Score is all about getting a mortgage to buy home.   And, while that is true, your credit score is used related all purchases that involve credit of any kind along with the rental of a house or apartment.  It does not take much to impact your credit score negatively.  If you miss payments or are consistently late on payments, it will negatively impact your credit score.  If you default on a loan or file bankruptcy, your credit score will go down dramatically.  

The agencies that monitor credit scores usually use the following ratings:

800 - 850 Exceptional

740 - 799 Very Good

670 - 739 Good

580 - 669 Fair

300 - 579 Poor

In order to get preferential interest rates on loans, your credit score would have to be Good or Above.  It is possible to get a loan at a Fair rating; but interest rates will be higher because you would be consider a credit risk.  Obviously people in the Poor category are probably not getting loans and or if they do get loans, the interest rates would be outrageous.  

It is important to recognize that when renting a home or apartment as part of the application process, the owner or landlord will run a credit report.  In choosing who to rent to, the owner will choose the tenant with the highest credit score.  It is possible that unless the rental is in a bad area or in a less desirable location, an owner will not rent to anyone with Poor credit.  So, it is really important to maintain as high a credit rating as possible by paying your bills on time.  

Jul 19, 2021

Estate Planning Before It Is Too Late

Surprisingly, some couples with considerable assets do not have their affairs in order meaning they do not have good estate plans in place.  It is important to sit down with family members, sons or daughters and have the What If discussion.  What if Mom dies.  What if Dad dies.  Things can change very suddenly if someone falls ill especially if that someone is the spouse that handles all the couple's finances and the other spouse is clueless.  

Ideally, most if not all payments should be on automatic debit from a checking account so that at least necessary payments will continue without late penalties.  If one spouse dies, the other will get the higher of the two Social Security payments; but it still means a sudden loss of income.   The time to deal with housing issues is while both spouses are healthy.  If living in a multi story home, maybe its time to downsize to a one story house that would be suitable for the surviving spouse.  

Fortunately, we moved my parents into a 55 or older gated community long before my Dad passed away.  Since my Mother handled their financial affairs, she experienced no real disruption in her life when my father died.  Had my Mother died first, my father would have needed assistance, but at least the housing situation would have been fine.  

Once someone turns 70 every year is like a dog year meaning the equivalent of 7 years.  Health circumstances can change suddenly, which requires a quick reaction from family members to deal with the medical issues at hand.  Most important, every couple of any means should have a good estate plan in place to deal with the What If's.  And, families need to be involved to best understand what could happen when the first parent suddenly passes away.  

Jul 17, 2021

Older High Rise Condos - More Inspections

It is safe to say that after the collapse of a 40 year old high rise condo building in Florida and the deaths that followed, values for similar properties have probably plummeted.    No one would buy a condo in a like building without significant inspections, structural analysis etc.  Home owner associations would be wise to get engineering reports and quickly first to make sure buildings are safe and any remedial work needed is done fast,  but also to make any sales that might otherwise occur even possible.

There is a pretty good chance that lenders will stop lending on purchases in many of these buildings and insurance may be impossible to get without significant assurances that these structures are safe.  To be clear, aside from the tragic deaths that occurred from the collapse of the building in Florida, from a real estate perspective,  it has created one big mess. 

Buildings in Florida built after Hurricane Andrew have been built with standards to withstand a category 5 hurricane.  That means a whole lot more cement block construction, more cement in general and more steel for strength.  These older buildings are just not built to these standards.  My guess is that upon further inspection, many of these buildings will have to be torn down because the remedial expense will just be too great.  That probably leaves lenders holding the bag because people will just walk away and default on their mortgages if condos are uninhabitable.  If that happens, lenders may refuse to do new mortgages on buildings with similar construction.  That will make these condos worthless.  It is clearly a disaster for all concerned.   

Bidding Wars To Purchase A Home Slowing Down

For the past six months since there has been so little inventory in many real estate markets, homes have been selling above list price as a result of bidding wars taking place.  There is now buyer fatigue and a little more inventory hitting the market so though still happening bidding wars are slowing down.  This is good news for first time home buyers in particular, who just can't compete with all cash offers and or high down payment offers.  Those making offers trying to buy a home with nothing down, or just 3% down were not even considered by sellers.   They have been out of luck. 

Money talks so all cash offers with no contingencies and a quick closing date are always at the head of line related to offers.  After those, people who can put 20% or more down would be given preference.  And, of course the deal always goes to the highest bidder all other things being equal.  This is what happens in a seller's market. 

But the tide will eventually turn.  If mortgage interest rates do back up, it will cool the real estate market.  When that happens we will see more inventory and prices will go down some; though since the country is short 5 million homes, this could take a few years.  In real estate, timing is everything.  It is always best to sell when there is a seller's market and buy when it is a buyer's market.  Unfortunately, things don't always work out that way for everybody.  

Jul 16, 2021

Inflation Is Coming - What It May Mean To You

Many economist are predicting that we will see major inflation in the United States because of all the money the federal government is pumping into the economy.  Home prices have been going through the roof because there is not enough supply to meet demand and the price of materials has sky rocketed related to the building of new homes.  We need 5 million more homes presumably built in the US to keep up with demand.  It could take 3 - 5 years for that to happen so home prices should continue to remain high unless and until mortgage rates go up dramatically, which would cool the market down.  

However, inflation related to the purchase of goods and services is a threat to all Americans.  We see the cost of gasoline going up dramatically, which eventually ties to the cost of everything because most goods are eventually shipped by truck to your neighborhood.  If you commute long distances, it will cost you more to go to work, as well.  Most important, if your income is not going up to pay for higher prices, it means you will ultimately have a lower standard of living.  

The good news is that if you locked in a low fixed interest rate mortgage, at least your house payments will not be going up.  The same could be true for a car payment.  But, if your home appreciates dramatically, in many cities, your property taxes could go up.  You can also expect to see higher premiums for home insurance, since replacement value cost would go up with the higher cost of materials to rebuild your home in the event of a disaster.  All of us will have to adjust to higher prices.  It could mean eliminating various unnecessary discretionary expenses just to pay for day to day goods and services.  

Jul 15, 2021

Home Insurance - Time For A Review

It is time to call your insurance man to review your home insurance.  With property values sky rocketing and more importantly the cost of materials going through the roof, you need to make sure you have enough insurance to cover the full replacement value of your home in the event it burns to the ground.  The odds are pretty good that you may be underinsured if you have not done a review in a very long time.   The last thing you need is arguing with your insurance company in the event of a disaster.  

Full replacement value will vary by area.  If you live in high cost California or other states with high values and high cost of living, the likelihood is that the cost per square foot to rebuild your home will be higher than if you live in a second or third tier city and or lower cost of living state.  The amount of insurance you purchase will determine the premium you pay.  If you need to increase your premium to buy more coverage, there is a pretty good chance that the premium will go up 10 - 20% per year; but that is better than not having enough insurance if disaster strikes.

The more equity you have in your home, the more important that you have the right coverage.  The reality is that if you have little equity in a worse case scenario, you could just walk away and hand the keys to the bank.  However, if your home is paid off and or you have a lot of equity, you will not want to walk away in the event of a disaster.  You will want your home rebuilt with the same quality materials and standards it has now.    

Jul 13, 2021

Aging Baby Boomers - 74 million by 2030

Baby Boomers are turning 65 at the rate of 10,000 a day for the next 15 - 20 years.  By 2030, there will be 74 million Baby Boomers age 65 or older.   This huge demographic will have a tremendous impact on our country.  The real question is where are all these people going to live.  Half of them have little in savings and so their Social Security income, assuming it still exists in its present form, will be most of their monthly earnings.  

Even today, 65% of those who need home care and or assisted living is being paid for by Medicaid.  That basically means that they have no means to pay for their own care so the government must step in to provide financial assistance.  This entitlement actually happened with the passage of ObamaCare.  However, when 30 or 40 million Baby Boomers can't care for themselves in the next 20 years, the government will face an impossible situation.  With Social Security and Medicare headed toward insolvency if something is not done pretty quick adding this Medicaid entitlement to the mix is going to lead to huge government deficits.  

From a housing perspective families may start to recognize that they may have to care for their aging parents.  We could see more situations where Mom or Dad moves in with one of their children.  This could have an implication related to housing design.  Many news homes are now being built to accommodate multi generational living with mother in law suites.  I suspect we will see housing additions and or renovations to allow for Mom or Dad moving in with one of their children because they will not be able to afford any other solution.  This could be a back to the future moment as occurred decades ago when parents lived with their children. 

The next 20 years will present many challenges related to caring for this Baby Boom generation.  There will have to be solutions for many that combine family and government assistance.  The day is coming fast.  

Jul 12, 2021

Cash Back Rewards Now Come With Many Purchases

Everybody is used to getting points or Cash Back Rewards with many purchases.  And, buying and selling homes is no exception.  When you work with Paragon Home Resources to sell or buy a home, you will get a cash back reward of up to $12,000 for each sale depending on the sale price.  What this really amounts to is a commission reduction so there is no need to go to a discount real estate broker to achieve the same thing with less service. 

And, working with Paragon Home Resources actually comes with more service in the person of a Home Resources Coordinator who acts as your advocate working with a local assigned real estate agent throughout the sale process.   Assistance is provided with negotiations and closing the sale.  In addition, if you need help with a mortgage, or moving your household goods, Paragon is a one stop shop.  Your Home Resources Coordinator will do just that, coordinate the entire moving process for you.  

Paragon Home Resources assists with life decisions.  Whether you are a first time home buyer, someone right sizing, a senior moving to retire, or a senior moving into assisted living,  Paragon knows how to make moving easy and stress free for you.  Best of all, you will receive a Cash Back Reward when the sale is complete.  

Jul 11, 2021

Buying A New Construction Home

 If you are thinking about buying a new construction home, here are some things to think about.  First, there is little or no standing inventory, so very rare to find a brand new home just sitting there for you to purchases unless it fell out of sale at the last minute.  Second, you will pay 30% or more for new construction than for the same square footage on an existing home.  Lots are likely to be smaller for new construction homes unless you pay a huge amount for a lot premium.  

And, you can count on 10 - 12 months to complete a new tract home in most parts of the country.  Custom homes could take 18 - 24 months from beginning to end.  The advantages of course is that you can choose your own flooring, paint, cabinets, finishes etc. but all of these things come at additional prices and they can be very costly.  When ever you see a base price, you should assume you will spend about 30% more for upgrades.  The basic selection the builder provides is just that basic.  But, what you will get is new energy efficient appliances, windows, insulation that will save you money over the long run; but again at a cost upfront.  

In many parts of the country, new homes come with no landscaping so another big cost.  Depending on the size of the lot, basic landscaping could cost $50,000 or more and that does not assume anything fancy.  If you start with the outdoor kitchens, pools etc., it will be over $200,000.  

New construction homes are great; but this option can be very expensive.  You must factor in all the cost before deciding on a new home, rather than an existing home.  

Jul 9, 2021

Build To Rent Options

As home prices become less affordable for many, builders are actually building homes for purchase by investors with the intent of turning them into rentals.  These must be all cash buyers because mortgage lenders usually lend to the actual homeowners planning to live in the home.  This option is apparently most attractive to young people, who normally might have been first time home buyers that are now priced out of the market and retired people who perhaps are actually living off the equity from the sale of their homes.

Our country needs 5 million homes to catch up with demand.  The only way to get there as land becomes more scare in many areas is higher density condos; perhaps going up four or more stories.  Land that is currently zoned commercial must be repurposed to allow for multi use residential development.  This is the only way to bring the cost of housing down.  We need more supply than demand to get lower prices.  We are not anywhere near that happening just yet.   

What is happening is that some people are rethinking the notion of affordable housing.  It could be that homeownership in the US will go the way of other countries where renting is more common than ownership.  One thing is sure, the notion of a fully amortized 30 year mortgage may turn into interest only loans to get much lower affordable payments.  Things are changing. 

Jul 8, 2021

Top 10 Best States To Retire

Bankrate, a consumer financial services company, has published its list of the Top 10 States to retire.  Their findings are based on affordability, wellness, culture, weather and crime rates.  Some on the list may surprise you.   The states are in order:

1. Georgia

2. Florida

3. Tennessee

4. Missouri

5. Massachusetts

6. Wyoming

7. Arizona

8. Ohio

9. Indiana

10. Kentucky

It is important to recognize that these states come out on top based on scoring of the factors indicated.  Obviously, some of these states are in cold places, which would be a disqualifier for many older people.  And then there is the personal family factor that is not a consideration.  Very often people want to live close to their grandchildren. In any case, retired people are moving to some of these states by the thousands every year and for all the reasons indicated.  

Jul 7, 2021

Living In A High Rise Building

There are various cities with 20 or more story residential high rise buildings, whether condos or rentals.   There are a few things to consider if choosing high rise living.  Naturally, people want higher floors for the views.  If there are outside terraces that are part of the dwelling being 20 or more stories up is a little scary or at least it would be to me.  Next, fire truck ladders can only go up 8 stories in the event rescue is ever needed.  Finally, if the power goes down for whatever reason elevators may stop functioning, which means taking the stairs.   Older people especially who may have mobility issues should consider what would happen if they had to take the stairs to escape the building.

High rise living is not for everybody.   HOA fees can be very expensive.  You will pay dearly for all the services that the building may offer.   So the cost is not just about the price of the condo or the rents.  All the add on fees could be substantial.  

Still, there is something to be said for walk in and walk out living.  People who use high rise living as a second home may find it very advantageous.  

Jul 5, 2021

Home Values - All About A Point In Time & Other Factors

Depending on the area, there is a pretty good chance that anyone who sold a home six to twelve months ago, probably would have gotten more for that very same home today.  Values in many places have sky rocketed because demand is much greater than supply.  There is just no inventory in many places, which when combined with low mortgage interest rates has caused prices to go up dramatically.  There is no doubt that home values are about a point in time and other factors.  

People attempting to sell older high rise condos in Florida after the recent tragic building collapse may see their values go down even if there is nothing wrong with their building.  In that case, it is other factors driving values.  We often hear people say, I could have gotten more for my home than I got.  That reality is probably not.  Market forces are incredibly accurate.   A home generally sells for exactly what it is worth given the point in time and other factors that impact value.  

We are in dangerous times.  People are paying crazy prices for homes today.  Unfortunately, many have short memories and do not remember the crashes we have experienced in the last 20 years when values fell by 20 - 50% in some areas with condos suffering the greatest losses.  A real estate down turn at some point is inevitable.  None of it matters if you can ride it out; but unfortunately life events sometimes intervene requiring a sale.  At some point in the future we could see short sales meaning that the home is worth less than the mortgage owed on the home.  When that occurs, people usually walk away losing all their equity and turn the keys over the bank.   Just remember, what goes up eventually will come down.  Let's just hope you can rid out the cycle.  

Jul 4, 2021

Owning Two Homes - Reasons For And Against

There are many people that have the means who own two homes.  In some cases, they may own a home as their principal residence in a tax advantageous state.  The savings in state income taxes alone if they live in a no income tax state could very well pay for the second home.  It could be a good investment strategy.  But, there will be property taxes, insurance, HOA dues, maintenance and in some cases a mortgage payment so owning a second home is not free.  

One way to look at it is if the second home is appreciating at at amount equal to or greater than the carrying cost to own the second home,  it could be like owning the home for free.  And, it is also somewhat of a savings account.  The day could come when the equity from the sale of a second home could be used to pay for home care or assisted living.  However, owning a second home is one more thing to take care of in terms of maintenance.  Be assured, if something can break it will break.

And, then there is the car situation.  If you own a second home unless it is within reasonable driving distance, it means flying there whenever you choose to visit your second home.  That could mean at least one car based at your second home, which is another expense.  If your retirement income is significant, none of this may matters; but if owning a second home is preventing you from otherwise enjoying life, you should consider the cost.  Decide where you really want to live and focus on it as your principal residence.  And, don't worry about grandchildren.  With Face Time you can see them everyday and or visit several times a year with you going to them, or them coming to you.  Quality time together is all that matters wherever it occurs.  

Living In A Safe Community

With crime sky rocketing in many areas, it is more important than ever to buy a home in a safe community preferably with highly rated schools.  Crime rates are published for most cities so it is easy to see how a particular area compares to the national average.  And, you can always check out a school district on the Great Schools rating or more importantly the schools that would be in the neighborhood where the home is located.  Even if you don't have kids, or plan to put you kids in private schools, don't buy a home in an area that is below a 7 out of 10 on the Great Schools rating because it will tie directly to property values in the event you ever want to sell. 

More and more people are moving into gated communities to get that little extra means of security.  The best ones and the most expensive from an HOA perspective will be those with manned guard houses.  Generally, the homes in gated communities with manned guard houses will also be more expensive.  Second best choice and less expensive will be those areas that are gated; but usually just involve clicker or tag on your car window to open the gate.  The problem with this scenario is that people just wait for an owner to come by and then they just follow you into the community; but it is still better than nothing.  

The good news is that whole house security systems are now pretty cheap to buy and install.  The monthly charge may be $30 - $40 a month.  If you live in a community without gates, having a security system is a good idea.  But just know, if you don't remember to disarm it when you leave your home and the security company calls the police believing somebody is breaking into your home, you will eventually be charged for false alarms and that can be as much as $250 each time.   Sadly, we have to worry about security particularly in those cities focused on defunding the police.  It is what it is.   

Jul 3, 2021

Fire Season Is Here - Time To Act

If you live in an area prone to forest fires, which is many Western States, it is time to act to protect your home.  Any flammable vegetation near your home must be cleared.  And, if you have vegetation that is most combustible, it should be removed and replaced with more fire resistant plants.  Since we have had to evacuate our home more than once given proximity to major fires, we have seen the devastation that can come from fires.

Years ago when we lived in California, a fire began about 20 miles away as the crow flies.  8 hours later it was across the street from our home.  It actually burned another 20 miles all the way to the beach.  People died in that fire.  I sent my wife and son away to lower ground.  I was on my neighbor's roof, since their home was right next to the mountain, hose in hand to water down their roof.  Some friends were on my roof doing the same thing.  I watched as the fire burned down the mountain from two directions with 100 miles an hour winds.  It was pretty terrifying.  

Since our home had a heavy shake wood roof that is now illegal, the fire marshal told us that if one home had caught fire all 700 homes in the tract would have burned because the winds were so strong that it would have been impossible to stop the inferno.  We have actually had to evacuate more than once.  This is serious business.  

If buying or building a home try to buy one with cement eves.  Any exposed wood is a danger because the sparks from a fire that lands on dry wood immediately can cause it to go up in flames.  Years ago, there was a fire in Laguna Beach, California.  The only home on a ridge that survived was one with cement eves. 

And, then there is the need to evacuate when told to do so.  Always be prepared to grab critical documents and valuables with you include photo albums with pictures that cannot be replaced.  If you live in any area prone to fires, it is not a bad idea to have a fire safe file cabinet.  It just might survive a fire.  Most important, be prepared.  Get rid of vegetation that will quickly go up in flames.  When told to evacuate, leave immediately.  Fires are unpredictable and can be at your home within minutes.  

Jul 2, 2021

Condo Association Assessments

 All condo associations are required to maintain reserves to cover repairs and improvements of common area assets.  So a portion of monthly dues goes into reserves to cover the actuarial life of things like roofs, private streets, club houses etc.  Theoretically, the money is supposed to be there when repairs are needed.  However, what we recently saw with the tragic collapse of a condo building in Florida is that the structure itself needed $15 million in major repairs that were not covered by reserves.  The condo board knew about this problem as early as 2018 and no doubt tried to convince homeowners to vote for a major special assessment. 

Here is where the problem lies.  Generally,  a condo association is limited in the amount it can raise dues each year without a vote of the members.  When these major special assessments come up very often older retired owners will vote NO because they just don't have the money to pay a special assessment.  My guess is that the condo board tried repeatedly to get the votes they needed to get the $15 million to make the repairs.  They apparently eventually must have been successful because the work was supposed to begin in a few months. 

Sadly, is was too late.  The structural issues were so bad that the building collapsed before the repairs could be made.  A 100 plus people are buried in the rubble.  This problem exists all over the country when the need for these major Special Assessments come up.  There probably needs to be some kind of state legislation to deal with this because when significant work must be done to prevent a tragedy, condo boards must have more authority to act.  It is time for action.  

  

Jun 30, 2021

The Problem With Condo Associations - Repairs and Improvements

All condo associations are required to maintain reserves to cover repairs and improvements of common area assets.  So a portion of monthly dues goes into reserves to cover the actuarial life of things like roofs, private streets, club houses etc.  Theoretically, the money is supposed to be there when repairs are needed.  However, what we recently saw with the tragic collapse of a condo building in Florida is that the structure itself needed $15 million in major repairs that were not covered by reserves.  The condo board knew about this problem as early as 2018 and no doubt tried to convince homeowners to vote for a major special assessment. 

Here is where the problem lies.  Generally,  a condo association is limited in the amount it can raise dues each year without a vote of the members.  When these major special assessments come up very often older retired owners will vote NO because they just don't have the money to pay a special assessment.  My guess is that the condo board tried repeatedly to get the votes they needed to get the $15 million to make the repairs.  They apparently eventually must have been successful because the work was supposed to begin in a few months. 

Sadly, is was too late.  The structural issues were so bad that the building collapsed before the repairs could be made.  A 100 plus people are buried in the rubble.  This problem exists all over the country when the need for these major Special Assessments come up.  There probably needs to be some kind of state legislation to deal with this because when significant work must be done to prevent a tragedy, condo boards must have more authority to act.  It is time for action.  

  

Jun 28, 2021

The Ten Most Affordable Beach Towns

For those of you who always wanted to live near the ocean, but thought you could never afford it, there are the 10 most affordable beach town in the country, some of which you have never heard of.  Of course, none of them are in California or Hawaii, but they are on the water.  They include:

Atlantic City, New Jersey

Myrtle Beach, South Carolina

Daytona Beach, Florida

Rockland, Maine

Swansboro, North Carolina

Chincoteague Island, Virginia

Long Beach, Washington

Matagorda, Texas

Grand Island, Louisiana

Dennis Port, Massachusetts

Some of these places are in winter climates so a very short summer season to actually go in the water if that is your goal.  However, the ocean is always beautiful to look at during sunrises and sunsets.  Naturally, homes right on the water will be more expensive than homes a block to two away with views of the water.  But before you take the leap, know what your are buying.  Homes near water require more maintenance because salt water air is rough on homes.  And, there is the damp season.  Home near water in winter will be damper and colder unless you are in a Southern climate and then far more humidity.  And of course, some of these locations are subject to hurricanes so buy a newer home that is rated for a category 5 hurricane, which means it is probably cement block construction.  In any case, if you have always wanted to live at the beach, it could be possible in some parts of the country at reasonable prices.   

At Paragon Home Resources, we can assist you in finding your dream beach house anywhere in the country.  We help people sell and buy homes at the best price possible.  Just call Paragon to make it happen. 

Jun 25, 2021

Outfitting Your Home Office

Many people who live in small homes or apartments may just have a small desk someplace in a corner of a room that they are calling their home office.   For others that have the luxury of designating a whole room as a home office, it is important to actually set it it up to be effective.  Even if you use a lap top computer when you travel, there is no reason you can't hook it up to a regular key board and big screen monitor to make using it easier.  Next comes the desk, which really needs a pull out for the key board to allow for fastest typing.  

I like book shelves nearby or above the desk or work station to allow for storage of important business items.  In my case, I have two printers, the old reliable one I have had for years that only prints in black and white that is much cheaper to use and the super duper color printer that allows me to print in color and scan documents.  Faxing documents is pretty much gone with the wind.  Instead today, it is all about scanning capability and attaching documents to emails. 

A good speaker phone is a must since conference calls are sometimes necessary; though now with Zoom or other video connectivity, using the computer audio often replaces the phone.  I am big on head phones to get greater audio capability; but they are not altogether necessary since computers now have audio built right into them. 

A storage closet is a nice to have in order to keep materials that may be necessary to work.  I have a big book case in mine with shelves that I use for paper and other items to make my home office fully functional.  If you are going to work at home, it is important to be fully functional.  With a little money, you can make it happen.  

Jun 24, 2021

Big Investment Companies Buying Rental Homes

Wall Street discovered the residential real estate market after the 2008-09 Fiscal Crisis.  As real estate markets in many cities collapsed and values went down by as much as 50%, big Wall Street Investment companies put real estate investment trusts in place to buy thousands of rental homes for cash.  The trend even continues today with home prices going through the roof.  Matter of fact, Wall Street money is helping drive prices up and making it tough for first time home buyers to buy a home.  They just can't compete with all cash offers.  

This trend is good and bad.  These big companies will be able to weather a storm if real estate markets suddenly start to slide as mortgage interest rates go back up.  Since homes are typically paid for in cash, they are not subject to the mortgage market.  And as long as they are collecting rents, which they continue to raise, they can hold on to homes longer until markets recover so no short selling.  On the other hand, all cash buyers distort the real estate market, since most buyers will need a mortgage to buy a home.  All cash buyers tend to result in higher home prices, which makes it difficult for low or middle income people to buy homes at higher prices.

It is what it is.  Now that Wall Street has discovered this investment vehicle as an opportunity for them to makes lots of money, they are not going away anytime soon.  Expect some government regulations to come into play as average people start to complain that they are being pushed out of home ownership.  

Jun 23, 2021

Refinancing Your Mortgage To Consolidate Debt

In some instances since mortgage interest rates are so low, it may makes sense to refinance your mortgage to consolidate credit card debt.  Car loans have been at historically low rates so there may be no advantage to add the car loan to your mortgage.  It is credit card debt that is the real problem, since interest rates are probably 12% or more.  If you owe $10,000 or more in credit card debt maybe it makes sense to refinance your loan; but there are things to consider.  You will probably pay $4,000 or more to refinance your loan.  

And, if you will be moving soon, refinancing may not make much sense.  If you plan to be in your home for 5 years or more, locking in a low interest rate could be a good idea.  But, you have to cut up the credit cards because if you go back to your old buying habits charging monthly expenses on your credit cards, you could end up right where you started from in a year or two.  This is about self discipline.  If you can't change your buying habits, just adding on to your home loan is not the best idea.  

If you are refinancing to renovate your home adding value in the process that could be a good thing.  Remember, kitchen and bathroom renovations have the most return on investment.  Using your home as a cash machine can be positive or negative.  But like any credit facility, it must be done wisely.  

Jun 22, 2021

Pets In The Home & Other Smells

Many people love dogs and cats and some actually have them as substitutes for children, or even spouses once gone.   The only problem is that animals create lingering smells in the home.  Animal lovers don't smell those smells anymore because they get used to them; but anybody else walking into a home will observe the smell immediately.  This is one of the reasons landlords often do not allow pets.  They know that the smell permeates carpets, drapes etc.  

If someone is planning on selling a home best to put pets someplace else and do a deep clean while the sale is in progress including the yard.  There are buyers that will walk right in and walk right out if they smell pets.  

Next, there are certain spices that are very strong.  Cooking with those spices on a regular basis will be in the air, carpets and drapes.  Cigarette smoke is a problem too.  The fact is that any offensive smells are a real negative when trying to sell a home.  Even with a deep clean, it is sometimes difficult to get rid of certain offensive smells.  People have actually had to paint, re-carpet their home and buy all new drapes to end the odors.  Just FYI, listing your home for sale is about dealing with any objections that buyers may have.  Right now, it is a sellers market; but it will not always be that way.  Dealing with offensive smells should be right at the top of the list when getting your home ready for sale.  

Jun 21, 2021

Rental Rates Are Going Through The Roof

Following the trend in housing prices, now rental rates in many markets are also going through the roof.  Landlords who may not have been able to raise rents during the Pandemic are doing it now.  And, the fact that our country is short 5 million or more homes is not helping matters.  Clearly, there is more demand than there is supply, which is driving up both home prices and rents.  Many people that want to buy homes have been priced out of the market and or are waiting until prices come back down, or there is more to choose from in housing market.  

Landlords are taking advantage of these trends as an opportunity to raise rents, which have been fairly stable for quite some time.  This also reflects the inflation that is hitting our country as a result of all the government money sloshing around.  There is a pretty good chance that rents will go up 10 - 20% in many markets in the country in the next year.

This may very well cause renters to rent smaller dwellings, whether homes or apartments than they otherwise might to contain cost.  Real estate is actually pretty predictable in terms of how prices drive behaviors.  Rental rates going up was pretty predictable given the demand for housing.   First time home buyers have been priced out of many markets.  They can't compete with buyers bidding up prices often paying more than list price.  So, these otherwise buyers are forced to rent until the housing market cools down, which could be several years because demand is still outpacing supply.  

Jun 19, 2021

US Housing Market Is Short 5.5 Million Homes

Home prices are going though the roof because supply has not kept up with demand.  In many markets, homes are selling within days of listing and often above list price in bidding wars.  Clearly,  we need more houses of all types across the country.  In places where land is scarce that means more high rise living.  Certainly, 4 or 5 story apartments and condos would be a good solution.  1,000 - 2,000 square foot dwellings would meet the needs of most couples and even young families.  The notion of a single family home on an 8,000 - 10,000 square foot lot may end up being a luxury.  Cities should rezone older areas to allow for higher density housing as a solution to add housing units in desirable locations.  

Obsolete commercial properties should be torn down and replaced by housing of all types.  This will involve rezoning to multi use residential with mixed use commercial so stores and other amenities within walking distance could be the wave of the future.  We have to create more affordable housing for singles, couples and young families.  Government has a role to play too.  Adding so many regulations adds to the cost of building.  We do need common sense regulations; but is time to eliminate unnecessary burdensome regulations, the cost of which just gets passed along in higher home prices.  California is a case in point.  It is estimated that city, county and state laws add $50,000 - $100,000 to the price of a home.  This just is not workable in a state with very high prices anyway. 

We may also see some situations where families actually go back to shared living.  Grandpa and Grandma could end up living with children.  Years ago, extended families always lived together.  It is  not the end of the world if it is needed.  We are going to have to get creative to build the 5.5 million housing units that are needed today.   

Jun 18, 2021

China Impacts Everything In The Housing Market

Aside from all the political interactions that go on with China, it is the one country in the world that has a tremendous impact on daily life.  So many things are made there that any slow down in trade can bring a building project to a halt.  And, if costs go up related to things coming from China, we will see higher building cost in the United States and on most household items.  We needed a new microwave convention oven.  Come to find out that there are only three companies in the world that make all microwave ovens for all the different brands.  And guess what. they are all made in China.  

When there was a blockage in the Suez Canal a few months ago, it made delivery of goods slow down.  So we waited three months for our microwave to come in.    We have friends that are similarly waiting for their new dishwasher to arrive.  Appliances available from a Lowes or Home Depot may very well be in stock so shorter delivery times are available; but higher end appliances are usually not maintained in a company's stock.  They are ordered through a distributor and many things have been on back order for months.  

Things like door hinges, door nobs and a million other things are made in China.  This is the reason 5 million jobs in the US and 70,000 factories have closed in the last 30 years in the United States.  Companies have moved production to China and other countries because of cheap labor and lower environmental standards.  It all works just fine, except the job losses in the US, until there is a bottleneck.  Covid has caused a bottle neck.   So, if you are waiting for some critical things to complete your home improvement project, odds are pretty good China is somewhere in the story.  

Jun 17, 2021

Highest Home Value Increases In The US

Home values are going through the roof all over the country.  It is clearly a seller's market almost everywhere.  It is happening because mortgage interest rates are very low and we are short 4 million housing units in the nation.  So this is clearly a supply and demand issue.  The demand is high.  The supply is low, which is driving up prices.  According to Red Fin, the markets with the highest appreciation this year have been Phoenix, Las Vegas, Sacramento, Austin and Miami.  In all case, homes have appreciated by double digits in these markets.    

So, what is a buyer to do.  In places like Reno, where I live homes are selling in a week or two with multiple offers bidding up the price often above list price.  First time home buyers with little to put down are out of luck because sellers will only accept offers with high down payments and often with no contingencies.  Buyers should get a home inspection anyway just to know what you are buying even if the seller refuses to make repairs. 

Many buyers should perhaps sit it out and wait for sanity to come back into the markets.  The only problem is that eventually mortgage interest rates will go up.  So though the home values may come down a bit, if rates go up the payment could end up being more.  So, this is a damned if you do and damned if you don't situation.  At least once the market cools, there may be more homes to choose from than there are now.  

Jun 16, 2021

Growing Older - Making Your Home & Life Retirement Friendly

During the last three years, we have watched many of our friends deal with serious illnesses requiring hospital stays and or even die.  We too have had minor surgeries that were not as serious.  What we have learned is that people over 65 really need to be prepared for what may come their way.  My grandfather used to say in Italian that growing older was like the bull poking you with his horns everyday.  In many ways, it is true.  So, thinking that life will go on business as usual is not realistic once we turn 65 or older.  

It is time to look around at your home to make it retirement friendly.  It may even be time to move to a one story house preferably in a warm climate if you live in a place that gets a lot of snow.  Falling is the biggest risk for older people that often leads to major health issues and surgeries.  So at all costs everything must be done to avoid falling.  If you live in a two story home, as much as possible, you should try to convert it to one story living.  So bringing the washer and dryer upstairs is a good idea if it is currently in a basement. Not hard to do with stackable units.  

If you can create a master bedroom suite on the first floor that would be good too.  Some people install the stair elevators to allow for going up stairs easier.  That can be done quickly so no real need to do it sooner than necessary.  However, bathtubs should be converted to showers with grab bars and a bench.  You are probably saying, I don't need any of these things right now.  Sadly, we have learned that everything can change in a day.  

Next, simplify your finances.  Make sure that both husband and wife can deal with your finances if the one managing them today is suddenly gone.  There are so many situations where a remaining spouse is clueless about their finances.  And, once the spouse managing their money is gone, it can become very stressful.  It should not be that way and with a little planning it does not need to be chaotic.  The time to deal with growing older is NOW.  So, make a check list of To Do's and get them all done.  

Jun 15, 2021

Quality of Life - Different For Everyone

Quality of Life can mean very different things to different people.  After working very hard their whole lives, we moved my parents to a very nice 55 or older gated community.   They were able to pay cash to buy a new 1,600 square foot patio home, which was actually much nicer than the older 1,200 square foot home they left behind in North Hollywood, California.  This community had an 18 hole putting course and and a great club house and pool for activities.  For my parents, who never traveled except to go to funerals back in Ohio where they were from, quality of life meant paying their bills without worry, having plenty of food, golfing on the putting course for my Dad who never golfed in his life and activities for my mother with new found friends at the club.  My mother used to attend the garden club luncheons even though she never gardened in her whole life.  Oh Yes and they discovered baseball on TV.  That was it.  They were comfortable and content.  They did not need anything else.  My Mom was still cooking until she was 87 years old.  

Most important, no matter where people live, I believe that family and friends are critical to quality of life.  Interaction with people seems to be what makes people happiest.  It is not about money; but rather the ability to share life experiences.  And, this becomes really important when people need moral support to deal with life's challenges; mostly health issues as we grow older.  While family may be there when these life events occur, friends often provide the most support.  

We often hear people say, "when I retire I am going to travel".   Unfortunately, travel often requires mobility.  As we grow older, it could be that many trips that require a lot of walking may not be possible.  So as someone who has traveled all over the world, I would suggest that if traveling is on your bucket list, if you have the means to do it sooner than retirement, go for it.  You can always go on cruises later in life, which require less mobility.  

Everyone needs to define Quality of Life for themselves.  To many, it may be a very simple life.  For others, they maintain a busier calendar in retirement than when they worked.  Not so sure that is the best idea; but if it works for them; then fine until it does not work for them.   

Jun 14, 2021

Buying A Tiny House

We are starting to see a trend especially among younger people to buy  "tiny" homes.  These are usually custom built homes on wheels that can be transported anywhere.   They are a cross between a manufactured home and a mobile home.  These tiny homes are usually between 500 and 700 square feet including second floor space.  The cost can be somewhere between $60,000 and $100,000 depending on amenities.  Sometimes, they will have a pull out deck once parked. 

There is only one problem and that is where to park a tiny home to connect it to electricity, gas and sewer.  Tiny home parks are springing up all over the country and or it is possible to park a tiny home in a mobile home park.  Either way, unless somebody owns a lot to park it on, there will be monthly payments to rent a space.  Those spaces could cost $500 or more a month depending on location.  The good news is that since a tiny home is on wheels, it can be moved.  However, it would usually require a large truck to haul it to a new location and that can cost $3,000 or more depending on distance.  

Even so, this could be a great alternative for a young person, or couple seeking a starter home especially now with home prices going through the roof.  A tiny home is probably not a good alternative for a family with children.  There just is not enough room to accommodate more than 1 or 2 people. It is not "real property" in the sense that it is real estate because it is not attached to the land.  Instead, it would be considerer personal property just like owning a car or truck so that probably means some kind of license fee each year depending on the state.   Tiny homes could be the wave of the future for retired people, as well, just seeking a little space to call home.    

Jun 12, 2021

Fixing Up Your Home

Years ago, when I was a school teacher and had more time than money, I hired some kids and together we landscaped our new home entire yard.  I hired a landscape architect to complete the design, which we followed.  I did have cement poured for the patios in front and back; but otherwise, we installed sprinklers, a railroad tie retaining wall, about 40 trees,  hundreds of plants and sod.  It was a huge job that took two summers to complete.   I was young then and had lots of energy and took the time to learn how to do the job right.  It was a tremendous amount of work; but our yard looked great once done.  Though we don't live there anymore, the home is still there and the yard still looks great; though a little over grown.  We probably could have planted half the number of trees and it would have been enough.  Remember, plants grow.  

I never attempted a major renovation within the home.  And today, I have a guy for everything; electrician, plumber, handy man, gardener etc.  I am just not that handy with tools and I don't have the time or the energy to take on big jobs.  That ship sailed long ago.  However, younger people can save a lot of money by attempting small jobs around the house.  Of course, the trade off is time.   Time you spend doing a renovation is time you don't have to spend with your family.  Years ago, when our sons were young, I hired a gardener to avoid spending my Saturdays dealing with the yard so I could spend more time with my family.  

But be advised, projects always take longer than you anticipate and usually cost more because you will need to factor in screw-up's.  If you don't get it right, most likely it will either need to be done again, or you will call in a professional to get the job done right.  If you are handy with tools, you could find doing a renovation enjoyable.  There is a lot of information on the Internet to provide instructions and or stores like Home Depot and Lowes some times offer classes.  So if you have plenty of time and energy, go for it.    

Jun 11, 2021

Costco & Trader Joe's - Got To Have Them

Far be it for me to do a commercial on this blog for Costco and Trader Joe's, but I love both stores and find them necessary to daily life.  Costco is wonderful for big families because most things they sell come in bulk sizes. If nothing else everybody can take advantage of their paper products, can goods, drugs and many other items that have a long shelf life.  Trader Joe's is just perfect for young couples and Seniors who don't need bulk products. 

We probably would not buy a home in a community that did not have a Costco and Trader Joe's nearby.  Trader Joe's is really good for couples, young or old because the foods they sell are ideal for quick meals with proportions that make perfect sense for two people.  I get lost in a Costco going and down every aisle.  And, since I am an impulse buyer, I end up buying things just to try them. 

There are so many convenience foods, which are great for both seniors and working couples.  Today, it is all about making a meal in 30 minutes or less.  When a single mom or husband and wife come home from work and the kids are waiting to be fed, making dinner happen quickly is critical. However, some of this shopping means having sufficient freezer and storage space to keep purchases.  We have lots of cabinets for our Costco storage and plenty of freezer space for cold items.  The days of cooking things from scratch are pretty much over thanks to Costco and Trader Joe's.  


Flipping A Home - Beware

HDTV has many shows with personalities focused on flipping homes as investment income.  I would tell anyone thinking about doing it, Don't.  Unless you have the skills and plan to do a lot of the remodeling yourself, by the time you hire contractors and deal with all the unexpected expenses that will come up, the odds of making a lot of money are minimal.  Plus in this market, homes are selling for top dollar.  The chances of finding a bargain fixer upper that can be renovated for a profit just got harder.  

Let the professionals with deep pockets work on flipping homes for a living.  They better understand what they are getting themselves into.  And, we are only seeing the ones on TV that worked out for them.  My guess is that they lose money on some number of homes.   So, mind your own business.  

If you want to invest in a nice home in a good location that needs minimal work to make it a rental, that makes better sense.  At Paragon Home Resources, we work with people all over the country to sell and buy homes.  If you need help buying an investment property, just call Paragon.  

Jun 10, 2021

Rooting In A New City - Do It Fast

Many people are moving from areas they may have lived in for years to new areas across the country.  Sometimes these are people retiring moving from cold places to warm places.  In other cases, younger people who can work from home are choosing to move from high cost, high tax states to lower cost, lower tax states.  The reason for the move does not matter.  What does matter is that once moved, people need to root fast in order adjust to the new area.  

Some things are obvious.  If you are on Medicare Medigap or Advantage Plans, your current health insurance may not be applicable in the new state.  You may need to change medical insurance companies.  Once done, you will need to find a doctor, dentist etc. to deal with medical issues.  If you have chronic illnesses, you may also need to identify specialists covered under your health care plan.  But beyond the basic stuff, unless lots of relatives are nearby and even if they are close, you will need new friends to replace the people you left behind in the old location to begin a great life in the new location. 

Friends matter so join clubs, or maybe a church or temple.  If you can, buy in an area with HOA or other Club facilities.  Most important, jump right in and get involved.  As soon as you get your home settled, knock on your neighbor's doors to introduce your family.  There will be neighbors that are not good options; but there will be others that will welcome you with open arms.  Life is what we make it.  Choose to makes yours a great life.  Don't be shy.  Other people are always looking for new friends too.  

Jun 8, 2021

Dealing With Bad Neighbors and Pets

For the most part, people usually have nice neighbors who take care of their homes.   But once in a while, a neighbor and or his pets can be devils from hell.  The first thing to do is not confront someone who is irrational.  Hopefully, you live in a tract with a Home Owners Association.  Odds are pretty good that a bad neighbor is violating some HOA rules.  If so, call the HOA and let them handle it.  They have the ability to fine a resident who is not following the rules.  They can make someone pretty miserable if they don't comply with the rules.  

Next, if you don't live in a tract with an HOA, there could be city or county ordinances that apply to what the neighbor is doing.  Call your city or county if you live in an unincorporated area and demand that they deal with the problem.  You can also call the police or sheriff if you think the neighbor is doing something illegal.  No one is allowed to come on your property and destroy any plants, trees etc.  They are allowed to trim trees that may be growing over the property line; but only up to the property line.  

Hopefully, your HOA or city/county law enforcement can deal with any neighbor that is violating rules or laws.  You certainly don't want to create a situation that could turn violent.  There are many people addicted to drugs or alcohol that could be very irrational.  Do not engage them under any circumstances. At some point, if the problem is not solved, you may need to move.  There is nothing worse than dealing with a crazy neighbor.  You could try chocolate chip cookies and see if that works.    

Reverse Mortgages - Could Make Sense For Some People

Generally people who are retired; but have little money in savings and not enough to live on with Social Security or other pensions, may be able to tap their home equity by getting a Reverse Mortgage.  Initial fees are pretty high; but the outcome could be a monthly check to supplement income to live on.  This option should be a last resort.  What will happen when the owner(s) die is that presumably the home will need to be sold unless the heirs can pay off the debt. 

While most people would like to stay in their homes until the end of life, the real question should be is it a smart thing to do.  Homes require regular maintenance.  Things break and will have to be repaired or replaced, which can be costly.  Just maybe it would be smarter to sell the home and use the equity to live on.  Depending on the persons age, renting in a 55 or older apartment complex, or moving into a senior assisted living community may be the best option.  As people get older they just don't need as much space.  A one or two bedroom apartment may be enough.  And, depending on income, it is possible to get a low income benefit offered in many rental buildings, which will result in lower monthly rents.  And, people with little income may be able to take advantage of Medicaid to pay for assisted living.  

Ultimately, it is about quality of life.  Spending a lot of money to maintain a home may not make much sense for someone over 75 years old.  At Paragon Home Resources, we work with Seniors and their families to assist with life decisions.  If you have a home to sell anywhere in the country, we can help you get top dollar for your home to give you the money you need to live a great life.  

Jun 6, 2021

Are You A Hoarder - Warning Signs

If you have things all over your home sitting on tables, the floor, furniture etc., it could be a warning sign that you are a hoarder.  It has to be one of three things.  First, maybe you don't have enough storage for the things you own.  So, you have a choice, build more storage in the garage or where ever you can put it.  Or, if that is not possible, it is time to get rid of a lot of stuff.  Second, your home is just too small for your family.  If you have more things that can possibly fit in the closets, or cabinets, maybe you need a bigger home to accommodate your family.  Third, you are a hoarder and that will not change if you build more storage or you buy a bigger home because you will just fill the new space.  If that is the case, you may need help dealing with your obsession to keep adding to your things.  

Let's first start with the financial impact of having more things than you need.  If you are still buying things you don't need, you are trading dollars for things that eventually will end up at a garage sale, or donated to charity.  Why do it.  Save the money.  Put more in your 401K or other investments.  Most things don't appreciate in value.  They depreciate.  Whatever you pay for something, it is worth less the minute you turn over the dollars.  Why waste your money.  

Next is the health impact of hoarding.  Clutter attracts mold, dust and dust mites.  Your family is breathing the air in your home.  You could be living in a hazardous waste zone that can impact allergies and infections.   You can't fix this unless you get rid of the piles of things.  The rule needs to be if it does not fit in a closet or cabinet, you have too much stuff that could be impacting your health.  This is also applicable to all the toys kids tend to have these days.  For every new toy that comes in, two should go out.  So, look around.  If I am describing your home, maybe you need to take action.  

At Paragon Home Resources, we can recommend companies that will help you get rid of stuff.  Many things can be donated for a tax write off.  Other things that are just junk have to go.  Trust me, you will feel better if the clutter is gone from your home.     

National Electric Power Grid Is At Risk - The Two Week Rule

Given the cyber attacks we have recently seen,  the odds are pretty good that cyber terrorists will attack our electric grid sometime soon.  All people in our country should count on it.  So, the question is are you ready to do without electricity for days or weeks.   Everything we take for granted will stop if we lose power.  That includes everything in your home, heating, air conditioning, lights, refrigerators, stoves without a match to light the gas assuming the gas is still happening, TV's, computers etc.  Outside our homes, stores, gas stations, banks etc. will all be closed unless they have huge generators allowing them to operate, which is doubtful.  

So, you can only control what you can control.  Maybe it makes sense to buy a generator that will at least power your refrigerator, heating and some lighting.  Short of that have plenty of batteries on hand to power lighting if nothing else.  Canned food, which can include things like Chicken, Tuna etc can provide food for a while.  If you have pets, pet food is pretty easy to have on hand.  Assume at least two weeks of inability to go to a grocery store to buy food.  

And, you should also have two weeks of bottled water on hand.  It is possible that water will be gone too because it could be based on pumps that are not working.   Think through everything you would need to last two weeks in your home without power.  Don't think this can't happen because it already has happened many times related to natural disasters.  Assume the two week rule.  We may be on own for two weeks.     

Jun 5, 2021

Living In A Cold Climate - Not So Good

We moved to California from Ohio when I was 8 years old.  When we lived in Ohio, I remember my father and grandmother arguing over whether to use hot or warm water on my frozen little hands one winter after coming in from outside.  Now that my wife and I live in Reno, Nevada while the weather is pretty moderate, we do experience some cold months usually in January or February, when we can get several feet of snow at our 6,000 foot elevation.  I hate it, so we try not to be there in those months.  If we are there, I usually have to get the guys to come and clear my driveway at least enough so we can get a car out of the garage.  

I don't know how people live in cold climates with months of snow and bleak weather.  At least in Reno, we get 300 days of sunshine a year and blue skies even if it is chilly outside.  I guess this is the reason many people facing retirement move from cold places to warm places.  People in the Mid West seem to like Arizona or Nevada.  People in the Northeast usually head to Florida.   The snow is especially hard and dangerous for older people because of the possibility of slipping on the ice often causing a fall, which is the single biggest source of accidents for older people. 

Getting out of the cold into a warmer place in retirement makes perfect sense.  Millions of people do it every year, which is why states like Florida, the Carolinas, Nevada, Texas and Arizona continue to grow and many cold states continue to shrink.  At Paragon Home Resources we work with people to sell and buy homes.  We are helping many implement this migration with one point of contact assistance, which includes dealing with all the services needed to accomplish a move.  Just go to paragonhomeresources.com to see what we can do for you.  

Jun 3, 2021

The Most Popular Home Styles

A recent study identified the most popular architectural homes styles in the country, which is highly dependent on region as follows:

1. Ranch; 2. Craftsman; 3. Contemporary; 4. Modern; 5. Cape Cod; 6. Colonial; 7. Tudor;  8. Cottage;  9. Mediterranean; 10. Farm House.

In my 40 years of real estate experience, younger people often gravitate toward more modern styles, while older buyers usually want homes with "charm" or more traditional styles.  Most important, buying a home that is out of character for the area may result in White Elephant syndrome.  That is the home might appeal to 1 in 10 buyers if you ever have to sell.  The goal is to buy a home in a great location that would appeal to 9 out of 10 buyers in case the need arises that you must sell the home.  

Like everything else architectural styles can be trendy.  The ones that are more trendy tend to look dated sooner.  You can never go wrong with more traditional styles.  And, the roof pitch matters particularly in climates with a lot of rain or snow.  Never buy a home with a flat roof in an area with lots of rain or snow.  You will eventually have leaks guaranteed.  And, roof pitch adds to the curb appeal of the home.  It does not need to be too steep; but visually having a roof with a nice pitch adds value to the home.  

So, choose architectural style wisely.  One day you may need to sell the home.  You should buy a home that will be attractive to most people.  Curb appeal matters.  

Jun 2, 2021

Homes Selling The Fastest In 10 Markets

Real Estate Markets are crazy all over the country; but homes are selling the fastest in 10 key markets as follows:

Ogden, Utah; Manchester, New Hampshire; Colorado Springs, Colorado: Reno, Nevada; Vallejo, California; Columbus, Ohio; Elkhart, Indiana; Austin, Texas; Topeka, Kansas and Rochester, New York. 

In these markets homes are sold within a week or two and often above list price in bidding wars.  No doubt, there is little inventory in these markets so supply and demand is driving quick sales at high prices.  These location are probably hot for different reasons.  States like Utah, New Hampshire, Colorado, Nevada, Texas and Indiana are attracting buyers usually moving from high cost high tax states.  These particular inbound states have thriving businesses so they are growing.  

Columbus, Ohio is a great university town with a good quality of life.  Not sure why markets are hot in Topeka or Rochester.  Vallejo, California is less expensive than closer in Bay Area cities.  But here we are.  Could be people downsizing, or maybe first time home buyers since homes in Topeka or Rochester would be relatively inexpensive.  

Many believe we have about 14 more months of crazy real estate markets.  However,  we need 4 million more homes to fill demand, which could takes several years to achieve.  In any case, right now it is a great Seller's Market.  Not so good if you are a buyer.  Be prepared to pay above list price to win a bidding war.  It is happening all over the country.  


Jun 1, 2021

Working From Home - People Can Live Anywhere

The trend of people working from home was happening before Covid; but after Covid when many people began working from home that had not done so before, the trend just further accelerated.  Since the technology is there to allow people to work from anywhere, more and more of them are choosing the life style they want and moving at their own cost.  In many cases, they are moving from high cost cities and states to lower cost cities and states where home ownership is more affordable.  

They are also escaping the high taxes and cost of living in states like California, New York and Illinois, which often provides an automatic salary increase by just crossing a state line.   It just makes sense.   The availability of Zoom meetings making working from anywhere easy.  This blogger recently did a Zoom meeting with client contacts and our employees based in Sweden, France, Singapore, Texas and Nevada.  We also did a Best and Final Presentation by Zoom that went very well.  In the old days, we would have all jumped on airplanes at considerable cost and time resources for an hour or two meeting.  Today, with all of us working from home, we had successful meetings for an hour that achieved our objectives.  Business life will never be the same again.  

If considering a move, it is really important to do your homework.  Make sure the city and state you are choosing has all the amenities that are important to you and your family.  At Paragon Home Resources, we work with families to sell and buy homes all over the country.  We can assist with your life decisions by providing information and an unbiased sounding board to help you choose just the right location and home.  

   

May 31, 2021

Pocket or Whisper Listings Are On The Rise

Real Estate markets are so hot in many areas of the country, that some number of homes are not even making it on to the multiple list to sell the home.  Instead, the real estate agents are working to just match sellers with buyers at a price the seller is willing to take.  This often insures the real estate agent the full negotiated commission if a second agent is not involved in the sale.  This process is not in the best interests of the seller since many homes today are selling above list price in a week or two once exposed to the market.

Sellers do it because they don't want to be bothered with potential buyers walking through their homes.  But since homes are selling so quickly sometimes as result of multiple offers that bid up the price, doing a pocket or whisper listing is short sighted.  Instead, take the buyer with the most money down, mortgage pre-qualification completed an no contingencies.  Sell the home in "as is" condition no matter what home inspections may show up.  Get a healthy deposit so that if the buyer walks for any reason, the seller can keep the deposit.  

We are facing the craziest real estate market we have seen in years.  Eventually, things will cool down and go back to normal.  Prognosticators are predicting 14 more months of crazy.  Nobody knows for sure; but if we see higher taxes or higher interest rates, things will cool down.   Real estate like all investments runs in cycles.  Buyers that can wait for a bit of down cycle should wait.  On the other hand, though the price may be lower, the mortgage interest rate is likely to be higher so the payments could end up being about the same.  The only real benefit of a down market could be more inventory so more houses to choose from at a better price.