It does seem to be time for an in depth forecast about our area’s housing outlook for 2015. The prediction game is going strong everywhere else this week, with print and online journalists and TV talking heads interviewing experts and each other about what to expect in the coming year. Some make noteworthy predictions—but more seem to be doing their best to sound authoritative while remaining vague enough to avoid provably wrong calls.

I have to sympathize. Last year, after delving into the Frankford housing outlook to come up with predictions, the one I put at the top of my list was a forecast that mortgage interest rates would soon be climbing. That was safe—rates had been so low for so long, history told us they had to rise, didn’t it? Besides, all the experts agreed.

What then happened in 2014 explains why financial prospectuses tend to footnote projections with sentences like "past performance is no guarantee of future results." Rates did rise; but then sank again. So this year, it’s probably a better idea to shelve the crystal ball in favor of laying out some of the factors we do and don’t know—factors that should influence the direction of Frankford housing trends for the coming year.

First, what we do know for sure. Since Baby Boomers make up the largest demographic in the country...

Uh-oh! No they don’t. The Census Bureau now says that the cohort of 23-year-old Americans has just become the largest in the country. Followed by 24- and 22-year olds, respectively. Probably why the chief economist at the NAR® projects that this generation will "drive two-thirds of household formations over the next five years." He says 2015 will become the point at which the millennial generation’s presence in the housing market will be truly felt for the first time. So what we do know is that younger buyers have begun to join the ranks of homeowners in substantial numbers. That’s different; it has the look of a major trend.

And mortgage rates will rise (because they have to, right?) Again, this one only seems to be a reliable projection. At this point, a 30-year mortgage is actually lower than it was a year ago. It is thought that foreign influences (uncertainty in Europe; economic weakness in the Far East) are what have held down U.S. housing financing rates. If that’s true—and since no one can say with any certainty what to expect from events overseas—mortgage rates and their influence on Frankford housing activity should more accurately be placed in the don’t know column. 

So will Frankford housing prices and sales activity rise in the coming year? We do know that the public opinion polling data supports that likelihood. Consumer confidence is building, possibly because of a brightening employment picture. In fact, real estate mega site Trulia reports that their samples tell them "consumers expect 2015 to be better, especially for selling a home." 

Economists agree. Fortune.com says that economists are "nearly unanimous in predicting that home values would continue to rise" and that "surveys of homeowner sentiment suggest that more of them will look to sell their homes" in the coming year. If you are leaning in that direction yourself, there’s one factor we know for sure: I’ll be standing by in 2015, ready to put all of my resources and experience to work for your Frankford home sale!

 

There is a seven-year window for some past Sussex County homeowners—and it’s one that’s opening, not closing. The ‘window’ in question is the one that could activate Frankford "Boomerang Buyers"—which would come as good news for the local home sales.

Some background about Boomerang Buyers. It’s a term coined in the wake of the subprime mortgage fiasco, describing those burned by the housing crisis. They were, on the whole, Baby Boomers and GenXers who were caught up in the Great Recession. For many who became enmeshed in the effects of the nasty confluence of the cliff-dive of the subprime mortgage bond market and collapse of residential valuations that swept the nation, foreclosures or short sales became, literally, offers they couldn’t refuse. Not only did the bitter aftertaste leave many with a spoiled appetite for homeownership, but the damage done to the credit ratings of millions made that a moot point: they had fallen off the scale when it came to qualifying for a new mortgage.

But that was then; this is now. It’s a now that, in RealtyTrac Newsroom’s breathless phraseology, "the first wave of…homeowners who lost their home to foreclosure or short sale during the foreclosure crisis are now past the seven year window they conservatively need to repair their credit and qualify to buy a new home."

Soon, more and more Boomerang Buyers in Frankford will be in the clear, if they choose to be; and they are only the first wave. "Nearly 7.3 million potential boomerang buyers nationwide will be in a position to buy again from a credit repair perspective over the next eight years," says Newsroom. Bankrate, the mortgage and financial advice website, sees the group as particularly well-qualified. They quote a broker in North Carolina to that effect: "If you’ve been through a foreclosure, you’ve already been a homeowner…you know the process. You’ve been through hell sometime in the last seven years…"

That word ‘sometime’ is apt, because the seven year period has been anything but uniform. Guidelines for that "waiting period" have sometimes been three years for FHA qualifiers, or even shorter for portfolio loans that lenders keep on their own books. But whether it’s three or seven years, the clock usually starts ticking only when a foreclosure has been completed. But according to FICO, although a foreclosure remains on a credit report for seven years, "the negative impact will fade as time passes."

For potential Sussex County Boomerang Buyers still waiting for a foreclosure to disappear altogether from their credit reports, there are other routes that can lead to a homeownership reboot. For more on buying or selling, I’m always pleased to sit down and discuss some of the great opportunities in our current market!

When we buy or sell a home, the rest of our day-to-day activities tend to get less attention. When an offer comes in (or doesn’t) — or when we have to wait on pins and needles to hear if the home of our dreams will be ours — the rest of what’s going on takes a back seat. That is because buying and selling real estate involves not only significant sums of money, but also crucial and emotional decisions about the center of our family’s activities.

At such a life-changing crossroad, most Frankford people decide that it’s a good idea to work with a Frankford professional real estate agent. But since not all real estate agents are equally well equipped to provide the same quality of support, the questions is, how to choose?

I agree with the consensus that the following are potential red flags:

1. Non-communicative

Your Frankford real estate agent is working for you: you should be their priority. A real estate agent who is not communicative is either not invested in working hard for you, or is not organizing his or her real estate processes effectively. Everyone is slow to return a phone call once. Twice is a red flag!

2. Too Much Pressure

A real estate professional’s job is to offer guidance and provide resources that would be hard to get on your own — not to boss you around. The selling and buying process is ultimately about you and what you want and need, not about your agent making a fast sale. If something about a potential transaction makes you uncomfortable with, your Frankford real estate agent should respect that.

3. Former Disciplinary Problems

Every real estate agents in Frankford must be licensed. State agencies record complaints and disciplinary actions. Before you start working with an agent, check that no disciplinary actions have been filed against her or him.

With so much on the line, the importance of working with a top-tier Frankford real estate agent is unquestionable. If you are ready to start interviewing agents, I welcome the opportunity to put my resources to work for you!

That housing needs change as people get older goes without saying. For Frankford Baby Boomers, the "getting older" concept has gradually morphed from the distant abstraction it seemed in the 60’s and 70’s to a more immediate concern. And of all the decisions that will have the most impact on those nearing their golden years, buying the right Frankford home—one that makes the most sense for the future—tops the list.

Boomers have heard and read much advice about buying a home; advice having to do with downsizing, mobility issues and the like. Most of it is cautionary…and not very cheerful. But suddenly weighing into seniors’ "buying a home" deliberations is a contrary point of view: one that many of them have apparently begun to suspect on their own. It’s news that could be of considerable importance, not only for their own age group, but for younger adults as well:

Growing older doesn’t seem to be nearly as dire as everyone has been led to believe.

Last Monday, "Why Everything You Know about Aging is Probably Wrong" led The Wall Street Journal’s special insert on planning and living "in the new retirement." Its lead article dissected the most common preconceptions Americans have about aging, including the expected declines in mind, body, productivity, and stereotypes of growing loneliness and depression. "Everyone knows that as we age…life becomes less satisfying and enjoyable," the Journal reported…followed by what a wide range of research shows: "Everyone, it seems, is wrong."

Among the scientists quoted was the former director of a Baltimore study that has been underway for three decades. Of the widespread notion of the aged as being depressed, cranky, and irritable, etc., he says they constitute no more than 10% of the older population. The remaining 90% are "not like that at all." Another Stanford study showed that as participants aged, their moods improved!

This may or may not change how we approach buying a home for our latter years, but to the extent that it’s a 180-degree reversal from what most of us have always believed about what to expect next, it should warrant at least a thoughtful examination of how we choose.

Common wisdom

: Downsizing. Baby boomers who stay in large houses are probably spending more money than necessary; cleaning unused rooms may be too physically taxing, etc.

Second thought

: "Extra" rooms may be needed to accommodate new hobbies, visiting children and grandkids.

Common wisdom

: Mobility. Must be a single-level home; mobility issues are paramount.

Second thought

: Stairs provide regular mild exercise; greatest threats to physical well-being are inactivity (and over-exercise).

Common wisdom

: Budgeting. A budget showing exactly how much can be afforded when renting or buying a home is critical. It should include taxes, insurance, maintenance, and other expenses.

Second thought

: No research changes this one: buying a house in retirement should always be based on solid budget realities.

Whether you’re retirement-bound, buying your next Frankford home sets the table for the coming years in so many ways it’s vital to base your selection on reality rather than myth. Once you’ve set your course, I’m standing by to help find your dream house in all the many ways that I can put at your disposal.