Real Estate: The State of the American Dream

By Tia Morrell, Realtor® at Landing Real Estate

I often wonder who created the foundations of the American Dream. The dream that is often associated with having a successful career, getting married and having children, and buying a home with a white picket fence to grow old in. This mindset has been engrained from generation after generation as the status quo.

However, in a changing world, this dream has become a difficult and far- fetched ideology for many. Whether it’s dating online in a post-pandemic world, the cost and accessibility of education, or the affordability of real estate, I can speak from first-hand experience how overwhelming it may seem.

Across the US, the overall median rental price is at a staggering $1,930 per month/$23,160 per year. For someone who works for $20 per hour, 40 hours a week, the expected take home pay after taxes is around $36,000. Subtract the rent from that total and you’ll find that $12,500 goes fast when inflation has you spending $240 a year buying milk and eggs at $5 a carton.

As a Realtor® it’s my job to know the market, and while it’s important for me to understand median home values and interest rates. I spend a great deal of time analyzing the economy and how it may affect people in varying demographics. This scenario is not uncommon for many Maine residents, with non-family households making a median average of $34,126.

According to a study taken from the Pew Research Center , 49% of hopeful homebuyers have felt as though homeownership is not in their realm of possibilities. This sentiment has had a stronghold on many prospective buyers who feel it is more worth it for them to use 50 to 75 percent of their income to pay rent instead. If you feel you can’t attain the “American Dream,” it is because there are systemic governmental sanctions that were once in place that are still in the process of being eradicated.

Illegal practices such as blockbusting and steering were practices only frowned upon, until the

government passed multiple enactments in the 1970’s to try to diminish unfair treatment. Redlining for example, is a now illegal practice that has roots in our own state. The Maine island, Malaga, was once home to a racially diverse fishing community in the 1800’s before the State of Maine chose to forcibly remove all of its citizens in 1912, and razed their homes to prevent them from returning.

The reasons for the removal related to post civil war hysteria, race, and the potential rise of education. While this is now unethical, it’s important for buyers to understand that this type of conduct was regularly used in the nation’s past. The housing market cycles every 10 to 18 years, meaning that only three cycles have passed from the 1970’s when tighter regulation began. However, in the grand scheme that still leaves individuals who were subject to this practice with less opportunity.

I’ve found that it is worth it for me as a Realtor® to take the time to educate my clients about the history of real estate, the current economy, and the process of how purchasing a home is valuable.

If you feel like the economy is dimming your chances of purchasing a home, I urge you to reach out to an experienced Real Estate professional who will take time to get to know you and your situation and put you in touch with trusted lenders and loan officers. I often tell people that the first step to take is to get pre-approved!

Applications for financing take only a few minutes of your time and most lenders will have it completed within 48 hours. There are tons of great programs that help home buyers in these situations that could put you in a better position to purchase. If you don’t qualify for a mortgage right now, work with your lender to know exactly what areas need more work.

Most of all, make sure the professionals you are working with are thoughtful to your situation, and always treat you fairly. <

Tia Morrell is a Realtor for Landing Real Estate in Windham. Call her at 207-518-8298. 

Real Estate through the years

By Richie Vraux

The face of Real Estate has certainly evolved over the years. The Real Estate Industry really started in the 19th century in Chicago, 1908 to be exact. It was called the National Association of Realtors with 120 founding members. Today, there are over 5,600 realtors just in the state of Maine and growing every day.

Years back they would publish all the listings in a Real Estate Book. Here all the “For Sale” properties were listed in a weekly or monthly publication that was put out by the local Realtors. Most Real Estate Agents listed their new home listings in the local newspapers and local publications where those potential buyers could ask their Real Estate agent to see certain homes for sale.

Just think, all your communication was done over the phone and then, of course, in person. You had to get in your vehicle, drive to meet your sellers, go over all the forms that were available to you at the time and then obtain signatures. Then pay the publication company to enter the listing in the local listings book and repeat several times until the property was sold.

Then Faxs were invented, Yippee! Now you could send your documentation by phone into a Fax Machine. That was a major breakthough at the time. If you were rich enough at the time, you would own a Fax Machine. If not, you would have to drive to your local office and send it from there, but it was not interactive. You always had to follow-up to make sure it was received by the recipient.

So, as the years went by the internet was discovered! Wow! Now this is progress! But it was only in DOS mode, so it still was a one-way delivery system, and finally Windows and the Microsoft platforms were introduced.

Now, most all Real Estate is done quickly and more efficiently. Now we can actually sign and send documents online and they are acceptable to most companies. There are however times that still require a wet signature, which mostly are: deeds, notary public, wills, trusts, adoptions, divorce proceedings, court orders and evictions and insurance benefits.

Wow, life has certainly progressed in the Real Estate Industry. It is certainly a benefit to me because I personally got into the real estate world later when everything was at my fingertips.

I got into this business because I love real estate. I do what I love and love what I do. It can certainly be an abundant amount of work, but to me, it is very rewarding.

First-time buyers are what I like best. They are new to the home-buying process and need to be guided every step of the way. From the initial house hunting to negotiations, inspections, title, to closing.

If I can offer advice with your home, be it down-sizing, expanding because you need more space due to a new baby or mom or dad moving in with you, or relocating, I can help you. <

Richie Vraux is a Broker with Better Homes and Gardens- The Masiello Group located at 776 Tandberg Trail in Windham. He can be reached at: richardjvraux@gmail.com or by calling 207-317-1299.

Real Estate: Fun Facts about Stats

By Lisa DiBiase

According to the National Association of Realtors® recent release of Home Buyers and Sellers Generational Trends Report, there are some interesting and fun facts about our real estate transactions.

Whether you are looking to purchase or sell a property, there are many facets to the transaction that need the knowledge and experience from a Realtor® to guide you through the process.

Definitions of different types of generations:

Silent Generation - born between 1928-1945

Baby Boomers - born between 1946 and 1964

Generation X (aka GenX) - born between 1965 and 1980

Millennials (aka GenY) - born between 1981 and 1996

Generation Z (aka GenZ) - born between 1997 and 2012

Generation Alpha (aka GenA) - born between 2013 and mid 2020’s

● Millennials made up the largest share of home buyers at 43 percent; Boomers made up the largest share of home sellers at 42 percent; Gen Z made up 2 percent of each. It is now more likely for an older Millennial to be a first-time seller than a first-time buyer.

● Gen X had the highest incomes (it also had the highest share of married couples, thus more dual income), and bought the most expensive and second-largest homes; they were also the most likely to purchase multi-generational homes.

● Gen X were the most racially/ethnically diverse group: 23 percent identify as a race other than White; younger Millennials least likely to identify as heterosexual: 9 percent identified with another orientation.

● Millennials were the most educated: 90 percent of younger Millennials had at least an associate degree.

● Boomers moved furthest distances, primarily to be closer to family and friends, and were more likely to downsize.

● Young millennials use tech but are the most likely to use an agent in the purchase process and most likely to use an agent to sell their home.

● The silent generation were the most likely to move to be closer to family and purchased the smallest homes; they also had the highest percentage of military veterans.

● Gen X and younger Boomers delayed their home purchase the longest (5 years) due to debt.

According to Lawrence Yun, Chief Economist for NAR on Jan. 6, 2023, there are more Americans working today than at any other time in history due to 223,000 net new jobs in the past month, 4.5 million in the past year, 11.2 million in the past two years, and 23.2 million since the low point during the economic lockdown in April 2020. The unemployment rate is at a historic low of 3.5 percent. Wage growth over the past 12 months was 4.6 percent.

Job additions will be critical in generating fresh housing demand as mortgage rates show signs of stabilization. Housing affordability remains a challenge for those renters considering buying a home. More homes, therefore, need to be built to ensure more supply and lessen the upward pressure on home prices and apartment rents. This will also help tame the overall consumer price inflation, permitting the Federal Reserve to stop raising interest rates and possibly lower its short-term fed funds rate before the year ends.

Here are the nuts and bolts for 2023. We will continue to experience a slight decrease in sales and a slight increase in price. If you are a buyer on the fence, you should buy. Get into a property before the prices continue to rise. You can refinance to a lower interest rate, when they come down. Build your equity now. As a seller, you are poised to continue to see an increase of buyers while we are in a slower winter market. We will start to see an increase of inventory during the spring market which will create competition with other homes on the market.

As I have said before, please call a local REALTOR for all your real estate needs no matter how big or small. We are trained professionals here to make your life easier. It's best to surround yourself with the right team of professionals that can continuously give you the right advice for all your circumstances. <

Lisa DiBiase is the Broker/Owner for Landing Real Estate. She and her company represent buyers and sellers in the Greater Portland area. For all your real estate needs contact lisa@landinghomesmaine.com

Real Estate: It’s a New Year, time for a review of your coverage?

By Jonathan Priest

A surge in home construction prices has been an ongoing story in 2022. A pandemic-induced supply chain disruption, inflation and labor shortages have contributed to a 15-year high for home construction backlog. While housing construction activity is expected to be bogged down in the short-term, there is some optimism for a return to normalcy in 2023.

As a homeowner, it’s worth reflecting on what a spike in construction costs could mean for you. If a problem like a natural disaster or fire destroys all or part of your home, your bank account could also take a serious wallop without the right level of coverage.

Here are the top home insurance tips for 2023 to help you navigate the challenges of a new year.

Buy Coverage That Absorbs a Spike in Home Repair Costs

The dwelling coverage within a home insurance policy pays to repair or rebuild your home if it’s damaged by a problem covered by the policy, like a house fire.

Your dwelling coverage amount should be based on what it would cost to rebuild your home based on the local construction and labor costs. But certain situations, like a tornado that flattens entire neighborhoods, can cause a spike in rebuilding costs. Suddenly your dwelling coverage amount could be insufficient.

Fortunately, some insurers offer extended, guaranteed or even UNCAPPED replacement cost. These optional coverage types absorb a spike in construction costs by adding extra coverage to your dwelling insurance limits when needed.

Keep Home Insurance Afloat

If you want home insurance for all types of water damage, you’re going to need to plug some major holes. Here are a few things to consider:

Don’t Underestimate Your Flood Risk

It’s estimated that only 15 percent of homeowners have flood insurance. But many homes are at risk for flooding, possibly even your home. Floods are the most common natural disasters in the U.S. and 99 percent of counties were impacted by floods between 1996 and 2019, according to the Federal Emergency Management Agency (FEMA).

Going without flood insurance can be very costly and potentially devastating. Most folks get flood insurance through the National Flood Insurance Program (NFIP), but you can also get a policy through the private market.

And if you already have a policy through the NFIP, you may be pleasantly surprised. FEMA’s flood insurance rates have recently undergone a new pricing system, and some homeowners can take advantage of reduced rates.

Small Drops Make Up an Ocean

Floods aren’t the only water problem to threaten your home and savings. Homeowners Insurance covers certain types of leaks and water damage, but not all types of water damage.

Don’t Assume You’re Covered for Natural Disasters

Floods are not the only disaster commonly excluded from a standard home insurance policy. If you live in a disaster-prone area, you might need to bolster your home insurance with endorsements or additional policies to ensure you’re fully covered.

For example, you may need to augment your hurricane insurance plan with a separate windstorm policy in some coastal areas. If you live in an area with seismic activity, you may want to consider adding earthquake or earth movement coverage.

Know How Much Stuff You Have

The personal property coverage in a home insurance policy pays to repair or replace belongings—your clothes, jewelry, furniture, pots and pans, musical instruments, electronics, books, art, and even the decorations and knick-knacks you keep on your shelves.

But how much personal property coverage do you need? One good way to find out is by creating a home inventory. A good inventory can both speed up an insurance claim and help maximize your claim payment. If you forget what you owned, you won’t make a claim for it. Taking a video of your home and belongings doesn’t take long, and it’s one of the smartest and easiest things you can do to prepare for unexpected home insurance claims.

Bump Up Your Liability Coverage

With so much focus on your house and belongings, it’s easy to overlook liability coverage within a home insurance policy.

Liability insurance pays for a legal defense, judgments, and settlements if someone sues you over injuries or property damage and you’re legally responsible. For example, if someone takes a bad fall at your house, a lawsuit would fall under your homeowners liability coverage.

A good rule of thumb is to buy enough liability coverage to cover your assets, or what you could lose in a lawsuit. Another option to ensure you have adequate liability coverage is to purchase an excess liability (sometimes referred to as an umbrella) policy. <

This article was brought to you courtesy of Farmers Insurance agent, Jonathan Priest, with an office at 57 Tandberg Trail, Suite 7, Windham. Call him at 207-893-8184 or send him an email at jpriest1@farmersagent.com