‘I Bought This House Based on Listing Photos Alone’: Was It Worth the Risk?

Angela Caban

The coronavirus has galvanized many die-hard city dwellers to pack up and flee for the suburbs or beyond. But how easy is it to pull off such a drastic move during a pandemic?

Just ask Angela Caban, a former Broadway dancer and decorative painter who, after 28 years of living in New York City, reached her breaking point in April. Quarantined in a cramped apartment in Queens, hearing sirens wailing all night, she decided to buy a house in Charleston, SC, an area she’d grown to love during her frequent work trips there over the years.

Yet since Caban was on lockdown in New York, she had to shop for homes remotely and make offers without seeing places in person. Here’s what it was like to buy a house sight unseen, and the lessons she learned that might inspire other longtime urbanites and first-time home buyers to make the leap themselves.

Angela Caban bought this South Carolina home online just from this listing photo.

Southern Bell Living

Location: Hanahan, SC
House specs: 1,804 square feet, 4 bedrooms, 2 baths, separate barn
List price: $234,000
Price paid: $232,000

How did the pandemic play into your decision to leave NYC?

You give up a lot to live in New York because it has a lot to offer, but when those things go away, you start to question why you’re giving up so much.

Once COVID-19 hit in March, April, and May, I was stuck in my apartment for three months straight with no work. I wasn’t getting unemployment because that hadn’t kicked in. I had no outdoor space to speak of. I just wanted to have some room to roam, be in nature, and not feel desperate. That’s what put me over the edge.

Caban’s old apartment building in Astoria, Queens (She lived on the ground floor to the right of the red awning.)

Google Maps

I felt like no matter how difficult New York had been in the past, this was a whole new ball of wax. I was there for 9/11 and Hurricane Sandy. When other tragedies had hit New York City, people were saying, “We’re in this together.”

When COVID-19 hit, all of a sudden there was suspicion. Everybody was frightened of everyone else.

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Watch: Listing Agents Answer Our Burning Questions About the ‘Silence of the Lambs’ House

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The ambulance sirens were nonstop. Plus, my small apartment was directly on the street, with the garbage cans right outside my window. So when I tried to open the windows during the pandemic, there were roaches coming in. I was like, “I can’t do this anymore.”

first time home buyer
Caban’s new living room is almost the size of her old apartment.

Angela Caban

What made you choose Charleston as your new home?

I’d have work meetings down here, and I had fallen in love with the area. I liked the sense of history, the weather. And financially it was doable. My mortgage now is less than half my rent for my tiny apartment in New York City.

Caban’s new spacious kitchen makes her want to cook again.

Angela Caban

How did your house hunt go?

I started looking near the end of April. I put an initial offer in on a house that fell through after the home inspector I’d sent to look at it said it would fall down in two years. Then I was in a panic because I’d already given notice on my New York apartment. So basically I had six weeks total to find another house and close on it. 

Caban loves spending time on her new front and back porches.

Angela Caban

What were your biggest challenges?

There was no inventory. Every house I looked at and said, “Oh, that’s a possibility,” would be gone by the time I called. An hour after being listed, the house would no longer be accepting offers!

How did you find the house you eventually bought?

Lucky for me, this house had been on the market for 60 days. I don’t know if it was because the photos were crappy, or the fact that the neighborhood was considered a little dicey. But I’m from New York, so the neighborhood seemed comfortable to me. I put an offer in within 48 hours of losing the other house. 

Wasn’t it scary to buy a house you hadn’t seen in person?

I was emboldened because I could always back out—you have two weeks to do so when bidding on a house. So I got in the car and drove down to look at it two days after my offer was accepted. I literally did it all in one day; it took me 12 hours to drive down. I saw the house and drove around for about two hours, and then I drove back because I had to start packing! I literally didn’t sleep for 26 hours. It’s probably why I have more gray hair now than I should.

first time home buyer
Caban is happy to have a fireplace to decorate for the holidays.

Angela Caban

How did the house look once you saw it, compared with the photos online?

It was much better than I thought. There is a lot of detailing, dental molding, wainscoting, and paneling in the living room, along with 16 windows that let in a lot of light. Plus, there’s the barn in the back that is another 600 square feet or so. My eventual plan is to make a workshop and a place to make art and teach.

Caban’s Charleston, SC, home has a 600-square-foot barn.

Angela Caban

How was the mortgage process?

It was a nightmare. Nobody wants to give mortgages to a single, female, sole proprietor who does not have pay stubs—especially during COVID-19, when they’re afraid people may default on their loan. They had also enacted new COVID-19 regulations that meant I had a boatload more paperwork. I had to submit letters from clients, proposals for work that was going to happen, invoices for work that I was still waiting to be paid for. … It was insane. I joked with them that I had to give them everything except a bone scan.

Caban’s new bedroom—one of four in her Charleston home

Angela Caban

How did you finally secure the loan?

Thanks to the help of my real estate agent, John Bell of Southern Bell Living, and his mortgage broker, Ethan Lane at Mortgage Network. They were amazing, and I was an absolute basket case: “What else do you want from me? I have no place to go. I’m going to be homeless!”

I look forward to giving them both a hug someday after COVID-19 is under control.

How did you close on the house during the pandemic?

That is a whole additional saga. I was finishing up a painting job in New York when all of a sudden on Friday they said, “You’re closing on Monday,” so I had to get an attorney to attend the closing for me. To get that, I had to get a statement notarized. In the middle of COVID-19! I met the notary on the street, but then I had to have two witnesses! It took me asking 18 strangers to find two people who said they’d help.

Caban painted her new door red and added the bumblebee knocker.

Angela Caban

How did you pull off a move during the pandemic?

I couldn’t get a truck in New York. So I packed my car and drove down to Charleston, where I dropped off my cats in the new house. Then I rented a U-Haul and drove it back to New York, hired two guys who then met me at my old apartment, packed the truck. Drove it back down to South Carolina, where I hired two more guys to help me unload the truck, and voilà.

Caban’s cats adjusting to their new home

Angela Caban

Was leaving New York hard after living there for 28 years?

Leaving was difficult because you almost feel like it’s a badge of honor that you’re a survivor in New York City. But down here, I finally feel like I can actually live my life instead of just trying to make it from one month to the next. I can think big thoughts and make big things happen, for which I simply didn’t have the energy in New York.

A formal dining room is a luxury that few New Yorkers can afford.

Angela Caban

Now that you’ve lived in Charleston for a few months, how are you feeling?

It’s like I can finally breathe, and I absolutely love it. I sit every morning out on my back patio and watch woodpeckers, blue jays, and cardinals. I have roses that are blooming that I planted.

Caban now loves starting her days watching birds on her back patio instead of exterminating roaches in her New York apartment.

Angela Caban

What advice would you give first-time home buyers and others looking to move now?

When you’re looking at homes online, don’t immediately discount a property just by how it looks in its photos. It’s like online dating that way. You need to see how it feels once you’re face to face and interacting with the space. Luckily, though, the minute I saw it in person, I knew I would be very happy here.

first time home buyer
Caban says she can finally breathe since leaving New York.

Angela Caban

The post ‘I Bought This House Based on Listing Photos Alone’: Was It Worth the Risk? appeared first on Real Estate News & Insights | realtor.com®.

Source: realtor.com

Homie’s Greater Phoenix, AZ Housing Market Update November 2020

The local Arizona housing market has been hot nearly all year long. As we get closer and closer to the year’s end, will the trends continue? We checked out all the stats for Arizona’s market during November. Check out what we found out!

Monthly Sales

According to data from the ARMLS ® from November 1, 2020 to November 30, 2020, monthly sales in the Phoenix metro area rose significantly from where they were at this same time last year. With a +27.4% year-over-year increase, sales landed at 8,886 for the month.

While this number is a slight drop from the previous month of October, the -8.3% month-to-month decrease in sales is in line with the typical slow down in the market as the year starts wrapping up.

Monthly sales graph

Data retrieved from ARMLS®.

List Price

At $453.9K, November saw a +6.4% year-over-year increase in average list price. Median prices also rose. With a +10.0% increase from November 2019, the median list price in November was $330K.

List Price Graph

Data retrieved from ARMLS®.

Sale Price

Average sale prices increased by +18.0% between November 2019 and November 2020, landing at $418.7K. With a slightly smaller jump, median sale prices still rose significantly with +16.8% year-over-year increase. The November median sale price was $331.0K.

As forecasts predicted, these numbers are slightly lower than sale prices in October of this year. The average sale price was -1.5% lower than that of October and the median sale price was -1% lower. For next month, the average sale price is projected to increase, while the median sale price is expected to have another small decrease. Check back next month to see how these forecasts turn out.

Sales Price Graph

Data retrieved from ARMLS®.

Days on Market (DOM)

While many metrics in the market slowed down this November compared to the previous month, the Average Cumulative Days on Market did not. This number continues to steadily drop, showing homes are being sold more and more quickly. Landing at 41, the Average DOM saw a 2-day decrease from October of this year and a 17-day decrease from November of last year.

Graph of Average Days on Market

Data retrieved from ARMLS®.

Want to Know Your Home’s Value?

If you’re thinking of selling soon, you’re probably wondering how much your home is worth. Click here to request your free home value report from a Homie pro!

A Message From Sales and Operations Manager, Wayne Graham

Going into December, inventory is 28.2% lower than it was a year ago. In fact, some areas are experiencing record low levels of inventory. However, In contrast to the record low levels of inventory, we’re seeing record-high levels of sales. Demand increased by 27.4% between November 2019 and November 2020. Low supply and high demand are one of the surest guarantees of rising sales prices.

But even though prices are rising, according to the National Association of Realtors Housing Affordability Index it is still very affordable to buy a home in Phoenix compared to historical market trends. This is still possible because of extremely low-interest rates. So overall, home affordability is still in a good historical place in the Phoenix area.

Turn to a Homie

With our dedicated team of professionals, we can help you navigate the real estate market easier than ever. Click to start selling or buying with a dedicated and experienced Homie agent.

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The post Homie’s Greater Phoenix, AZ Housing Market Update November 2020 appeared first on Homie Blog.

Source: homie.com

5 Myths About Transitioning From Renter to Homeowner

Cavan Images/Getty Images

Making the leap from being a renter to becoming a homeowner is a process that includes taking stock of your financial situation and determining whether you’re ready for such a massive responsibility. For most people, the primary question is affordability. Do you have enough cash in the bank to fund a down payment, or do you have a credit score high enough to qualify you for a home loan? But there are other considerations, too—and plenty of misconceptions and myths that could keep you from making that first step.

Below, our experts weigh in on why some situations that may seem like roadblocks are actually not as daunting as they appear.

1. Buying a home means heavy debt

Some may argue that continuing to rent can spare you from taking on heavy debt. But owning a house offers advantages.

“Buying a home and using a typical loan would be spread out over 20 to 30 years. But if you can make one extra payment a year or make bimonthly payments instead, you can shed up to seven years from that long-term loan,” says Jesse McManus, a real estate agent for Big Block Realty in San Diego, CA.

Plus, as you pay your mortgage, you gain equity in the home and create an asset that can be used when needed, such as paying off debt or even buying a second home.

“Currently, mortgage interests rates are at their lowest point in history, so … it’s a great time to borrow money,” McManus says.

2. At least a 20% down payment is needed to buy a home

“Contrary to popular belief, a 20% down payment is not required to purchase a home,” says Natalie Klinefelter, broker/owner of the Legacy Real Estate Co. in San Diego, CA. “There are several low down payment options available to all types of buyers.”

These are as low as 0% down for Veterans Affairs loans to 5% for conventional loans.

One of the main reasons buyers assume they must put down 20% is that without a 20% down payment, buyers typically face private mortgage insurance payments that add to the monthly loan payment.

“The good news is once 20% equity is reached in a home, the buyer can eliminate PMI. This is usually accomplished by refinancing their loan, ultimately lowering their original payment that included PMI,” says Klinefelter. “Selecting the right loan type for a buyer’s needs and the property condition is essential before purchasing a home.”

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Watch: 5 Things First-Time Home Buyers Must Know

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3. Your credit score needs to be perfect

Having a credit score at or above 660 looks great to mortgage lenders, but if yours is lagging, there’s still hope.

“Credit score and history play a significant role in a buyer’s ability to obtain a home loan, but it doesn’t mean a buyer needs squeaky-clean credit. There are many loan solutions for buyers who have a lower than the ideal credit score,” says Klinefelter.

She says government-backed loans insured by the Federal Housing Administration have lower credit and income requirements than most conventional loans.

“A lower down payment is also a benefit of FHA loans. Lenders often work with home buyers upfront to discuss how to improve their credit to obtain a loan most suitable for their needs and financial situation,” says Klinefelter.

McManus says buyers building credit can also use a home loan to bolster their scores and create a foundation for future borrowing and creditworthiness.

4. Now is a bad time to buy

Buying a home at the right time—during a buyer’s market or when interest rates are low—is considered a smart money move. But don’t let the fear of buying at the “wrong time” stop you from moving forward. If you feel like you’ve found a good deal, experts say there is truly no bad time to buy a home.

“The famous saying in real estate is ‘I don’t have a crystal ball,’ meaning no one can predict exactly where the market will be at a given time. If a buyer stays within their means and has a financial contingency plan in place if the market adjusts over time, it is the right time to buy,” says Klinefelter.

5. You’ll be stuck and can’t relocate

Some people may be hesitant to buy because it means staying put in the same location.

“I always advise my clients that they should plan to stay in a newly purchased home for a minimum of three years,” says McManus. “You can ride out most market swings if they happen, and it also gives you a sense of connection to your new space.”

In a healthy market, McManus says homeowners will likely be able to sell the home within a year or two if they need to move, or they can consider renting out the property.

“There is always a way out of a real estate asset; knowing how and when to exit is the key,” says Klinefelter.

The post 5 Myths About Transitioning From Renter to Homeowner appeared first on Real Estate News & Insights | realtor.com®.

Source: realtor.com

Your Retirement Savings Goal for 2021

I’m trying something new this week. I built a calculator just for you. It’s meant to help with your retirement planning and look at the next baby step on your retirement path. The calculator asks you some basic information—your age, future retirement details, whether you’re conservative or optimistic about investments—and then calculates a suggested retirement savings goal for 2021.

I know New Years is more than a month away. But it can’t hurt to start thinking about 2021’s resolutions today. Saving money can be one of those resolutions, and retirement is a great thing the save for.

But a retirement savings goal is a difficult number to quantify. What if you retire at 60? At 55? At 50? What if your investments do well? Do poorly? What if they’re somewhere in between? You certainly don’t want to run out of money, so how should you account for that? This calculator answers all these questions.

There are lots of moving pieces in retirement planning. This calculator isn’t a cure-all, but it does simplify some complex math. It boils all the inputs down into one simple output: how much should you save next year to keep you on your retirement path?

And don’t worry—I explain all of my assumptions towards the end of the post.

Go ahead—give it a shot!



Drumroll, Please!

There it is! The field above shows your calculated retirement savings goal for 2021. This is the amount of cash the Best Interest recommends you should put into long-term investments. If you follow this advice year after year, you’re likely to achieve your retirement goals.

Below you’ll find a few different ideas: a FAQ, some Things to Try, and a list of Assumptions.

As always, let me know if you have any questions.

Retirement Savings Goal FAQ

As you ask more questions, I’ll update the FAQ below.

“What Should I Do With the Money I Save?”

I’m happy to tell you how I invest. That’s what I’ll be doing with my retirement savings in 2021.

“I Think the Calculator is Broken…”

I did not test this calculator like a software company would, so I admit that some inputs might “break” the calculator or lead to strange results.

My first recommendation: make sure you use “realistic” inputs. I tested a bunch of realistic scenarios, and they all ended up working as expected. But I didn’t try every possible combination. If you say you’re 50 years old and want to retire at 40, then you need a time machine, not a blog calculator.

That said, if you’re being realistic and you still think it’s broken, let me know.

“My Retirement Savings Goal Seems Really High…”

First, I recommend you read the next section. Most of us will have supplemental income in retirement (e.g. social security), and the next section describes how you should incorporate that into the calculator. It’ll lower next year’s retirement savings goal.

After that, there’s a stark realization here. Retirement is expensive! If you hope to retire soon, live a rich retirement, and/or have a long retirement, then you’ve got to save a lot of money.

There’s a reason why your younger years are so important for investing.

“How Should I Consider Supplemental Income in Retirement?”

There are dozens of ways you might supplement your income in retirement. Common examples include Social Security and pensions. The lotto doesn’t count.

If you fall into one of these camps, I recommend re-running the analysis after reducing your “Annual Spending in Retirement.” Let’s work through an example.

The calculator is pre-set to assume $36,000 in annual spending. The average Social Security pay-out in 2020 is about $1500 per month, or $18,000 per year. Therefore, I’d recommend adjusting the calculator’s “Annual Spending in Retirement” to $18,000 ($36k – $18k = $18k).

“Why Is My Retirement Savings Goal NEGATIVE?!

There are a few simple explanations why your savings goal might be negative.

The first and most common: you already have enough money saved for retirement! This is really good. This especially applies if you’ve been diligently saving for years and plan a low-cost retirement.

If you doubt you already have enough saved, go back and check your calculator inputs.

If you’ve checked your inputs and something still seems wrong, let me know.

“I Have NO IDEA What My Spending in Retirement Will Be. Help!”

Fair enough. It’s hard to predict what you’ll spend in retirement.

My recommendation: start with what you spend right now. And if you don’t know what you spend right now, that’s your sign that you should start budgeting.

Once you know how much you spend right now, take your largest expenses and scale them for retirement. Here’s my personal example of simple scaling:

  • Housing – I expect this to decrease, since I’ll have my mortgage paid off when I retire. (-$900) per month.
  • Kids – I don’t have any now, and I also plan that I won’t have any who I’m actively supporting when I’m retired. No change in this category.
  • Automotive – about the same.
  • Food, consumer good, etc. – about the same.
  • Medical – to be safe, I’m going to increase this number. Based on some quick research, +$500 per month.
  • Fun stuff – I think I’ll do a bit more fun stuff in retirement. For now, I’ll allocated +$200 per month to fun.

That’s it. This brief, simple scaling suggests I’ll spend about $200 less in retirement than I’m spending now.

But Jesse—by the time you retire, won’t the Best Interest be pulling in millions of dollars due to its amazing ability combine financial education with entertainment?!

Maybe, but I’m playing it safe for now.

“Should I Include Taxes?”

Most likely! Let me give you my personal example. About 75% of my current retirement savings lie in accounts that will get taxed upon withdrawal in retirement.

So if I need $40K for my actual spending, I’ll probably need to withdraw between $45K and $50K—the extra goes to income tax and capital gains tax. As such, I should input that $45 – $50K value into the Annual Spending on the calculator.

“Is My ‘Current Long-Term Investments’ Just My Net Worth?”

Not quite. Net worth includes many assets and liabilities that should not be considered long-term investments.

Your emergency fund is part of net worth, but it’s not growing like an investment. Your house might be a long-term asset, but you likely won’t be selling it in order to retire. And you debts count against your net worth, yet don’t count against your long-term assets. You can simultaneously save for retirement and pay down your debt.

Things to Try in the Retirement Savings Goal Calculator

Here are some cool ideas I recommend you try with the calculator. Keep two things in mind as you play around. The first is to investigate how changes in your life today can affect your long-term goals. The second is to realize that certain things—like market performance—are out of your hands, yet can still affect you.

1) Play With the Optimism/Pessimism Slider

Market performance plays a huge role in the retirement savings goal calculator. It controls both how your nest egg with grow leading up to retirement and how your nest egg will shrink as you withdraw in retirement.

If you’re too optimistic, you might not save enough. If you’re too pessimistic, you might end up saving more than you’ll ever need—and thus work longer than you need to.

I recommend you play around with the slider to understand the range of recommended savings goals. If you can, set the bar high and aim for a conservatively large savings goal in 2021. As the years go by, you can always reevaluate.

Remember—saving more money in your younger years is vital.

2) Give Yourself Some Extra Years

We don’t often get to play God, so take this chance to tack on extra years at the end of your life. Running out of money in retirement is not ideal, so this exercise will give you some buffer years at the end of your life—and will increase your 2021 retirement savings goal accordingly.

3) Go Fat, Go Lean

Take your 2021 savings goal—let’s say it’s $10,000.

Now we’re going to try to re-create that $10,000 result in two separate ways.

First, try to decrease your Annual Spending by 50% while also decreasing your retirement age. Tweak your retirement age until your recommended 2021 retirement savings goal ends up around $10K again. This gives you a rough idea of how quickly you could achieve a “lean” retirement. You’d be leading a spartan lifestyle, but retirement could be closer than you think.

Second, try to increase your Annual Spending by 50% while also increasing your retirement age. Again, tweak your retirement age until the calculator recommends saving $10,000 in 2021. This gives you an idea of how much more time you’d need to work in order to eventually live a “fatter” retirement. You could afford a lot more—-but at what cost? It’ll likely lead to many more years of work.

When I try this exercise, I get the following:

  • My normal input –> retire at 55
  • Lean = 50% less retirement income –> retire at 43
  • Fat = 50% more retirement income –> retire at 63

I’m not sure when I want to retire. But the spectrum of potential retirement lifestyles necessitate a spectrum of career lengths and savings.

The entire “FIRE” movement is based on these spectra of retirement lifestyles and career lengths.

Assumptions in the Calculator

An analysis is only as good as its assumptions. If I assume that I can run at 60mph, then my path to become a world-record holder is paved with gold. Usain Bolt, I’m coming. Bad assumptions = bad answers.

So here are some of the most important assumptions from today’s retirement savings goal calculator.

Inflation

I assumed 2.5% inflation per year. That applies to every year in the calculator. It affects how your current 2020 spending gets multiplied to reach a future nest egg goal. This is as good an assumption as one can make based on historical inflation rates.

Portfolio Makeup and Performance

Like the original Trinity Study, I assumed that your portfolio would comprise a 50/50 mix of stocks and bonds. Important note! Many portfolios—especially if you’re young—will leaning much heavier into stocks than bonds. This makes your portfolio riskier, but also is more likely to lead to better long-term returns. This is why I recommend you toggle to Optimism/Pessimism slider.

But let’s go back to the 50/50 portfolio. The Optimism/Pessimism slider affects the stocks’ simulated performance, varying between 1.9% growth per year and 11.1% growth per year. These numbers represent the worst 30-year annual return and best 30-year annual return in S&P 500 history, respectively. The bonds were assumed to return a steady 5% per year.

If you’re interested in the market’s past (and potential future) performance, this decade-by-decade comparison is a good starting place.

So when the slider is set at 0, the stock portion returns 1.9% and the bond portion returns 5%. The net result is a 3.45% return. When the slider is set at 10, the stock portion returns 11.1% and the bond portion still returns 5%, leading to a net 8.05% return.

Each increase of 1 on the slider will increase your annual portfolio return by about 0.5%.

This is way too coarse for some people. For a future iteration, I’d like to add functionality where you can choose your own stock/bond allocation. If you’d be interested in something more, let me know.

“The 4% Rule”

The 4% Rule is a brief nickname for the outcome of the famous Trinity Study. The rule states that…

  • if you’re planning a 30-year retirement
  • and if your portfolio is 50/50 stocks and bonds
  • and you want to be 95% confident in your retirement planning

Then you can withdraw 4% of your nest egg in Year 1 of your retirement, and then increase that withdrawal in each subsequent year to account for inflation. This makes your nest egg target easy to calculate—it’s your annual spending divided by 4%, which is equivalent to your annual spending multiplied by 25.

If you want more conservativism or if your retirement will last longer than 30 years, then you’ll want a “lower” rule (e.g. 3.5%). This increases what your target nest egg would

If you want to be more optimistic about your investments, or if your planned retirement is shorter than 30 years, then you’ll want a “higher” rule (e.g. 5%).

For this calculator, I used your input of “optimism or pessimism” to scale this “rule” between 3.5% (pessimistic) and 4.5% (optimistic). Then I scaled that number using your planned retirement length. Longer retirements scale the number down, shorter retirements scale the number up.

Clear the Memory

Thanks for giving the calculator a try. It’s my first attempt. If you didn’t get the memo earlier, I’d love to get feedback.

I hope you find it helpful. A retirement savings goal is something to think about every year. So why not start in 2021?

If you enjoyed this article and want to read more, I’d suggest checking out my Archive or Subscribing to get future articles emailed to your inbox.

This article—just like every other—is supported by readers like you.

Source: bestinterest.blog

Will You Ever Be Able to Save Enough for Retirement?

retirement election year

With the stock market still in roller coaster mode and more and more companies reducing or eliminating retirement benefits, many people—from Boomers and Generation Xers to savvy Millennials—are facing the fact that they need to seize control of their retirement financial plan. And they need to do it sooner rather than later.

Boomers in particular are quickly realizing that the landscape for long-term savings has changed dramatically since they signed up for their 401(k)s in the 1970s, 1980s or 1990s.

Planning wasn’t as crucial back then, said David Krasnow, 44, President/CEO of Pension Advisors in Cleveland. ”Between pension plans, 401(k)s, and home equity, it was assumed that the continual growth of investments and home value together with Social Security would provide plenty of money when employees stopped working,” he said. With a formula that basic, professional planners didn’t need deep investment expertise to deliver solid results.

“There were few certifications or fee disclosure requirements,” Krasnow pointed out. “The same person who sold you health insurance might sell you an investment program.”

That laissez-faire approach might have worked for people who worked, uninterrupted, until 65 (not facing protracted periods of unemployment) and not as contractors and/or part-timers or small-business owners.  It worked when the stock market produced steady 8% gains per year, not tumultuous volatility. It worked when companies offered generous 401(k) matches—and stayed out of bankruptcy to actually fund pensions. And it worked when home property values were growing—or at least stable.

But it doesn’t work now, and this is why:

  • We can’t assume continual growth of investments or home equity. Nor can we count on Social Security to be solvent 30-40 years from now.  That’s the new economic normal.
  • We’re anticipating living longer, staying active longer (which influences spending and other financial considerations), and with advancing age, facing the likelihood of considerable medical-related expenses.
  • Our parents are living longer.  Boomers looking to retire may want to help fund their parents’ later years as well as their own. And, of course, there’s the question of children and grandchildren, and whether (and how much) to spend on them when you don’t have a full income.
  • Traditional pensions or other employee-sponsored retirement plans may not be sufficient sources of retirement funds.
  • Investment products are more plentiful and more complex (read: confusing) than ever.
  • Retirees often continue working long past their 60s, which affects traditional assumptions about how much savings is needed when they do stop working.

So what does all of this mean for anyone intent on building a solid retirement financial plan?

1. Recognize the Need for a Professional Adviser

“In a constantly improving market I used to be able to manage my mutual fund investments on my own,” said Peter Doris, 66, a career and nonprofit expert from Philadelphia.  “Now I need a professional’s help. It isn’t just a question of putting money aside.  It’s a question of being really smart and current about each investment, and I simply don’t have the time or the background.”

2. Do Your Homework

“There is a minimum set of skills and knowledge base you must have, even if you use a professional,” said Jim McGrath, an Executive Vice President of Law and Administration, 67, in Orland Park, Ill. “Take seminars, do online research and read up so that you have solid financial literacy,” he suggests.  “You can’t make informed decisions without fully understanding your choices, their projected outcomes and their potential risks.”

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3. Be on the Same Page With Your Significant Other

If you’re married or in a relationship, make sure both spouses/partners are in agreement about life planning, investment objectives, reasonable returns and levels of acceptable risk. “My wife and I built our business together,” said Ted Vlamis, 78, an active CEO in Wichita. “She knows the numbers, so there are no surprises. We know that the chances are good that one partner will outlive the other, and any survivor shouldn’t be blindsided by financial problems they knew nothing about … or have to face, unprepared and grieving, the host of decisions that have to be made about a business or an investment portfolio.”

4. Own It

Dr. Deborah Ewing-Wilson, 58, a neurologist in a large Ohio medical system, advises people to “give the same due diligence to their personal and financial lives that they give to their work and businesses.”  It’s time-consuming and sometimes tedious, she admits, but then again so is taking care of one’s health.  “I’m here to help educate, recommend, and advise, but I can’t take responsibility for anyone else’s behavior or decisions,” she says. “It’s the same with a financial plan.”  In other words, it’s your money, your plan, your life.

5. Start Now

“Find a professional you trust, start saving as soon as you can, and stay on top of your plan, ready to make decisions as markets–and your life—evolve,” says Rich Iafellice, 57, vice president of an engineering services firm near Akron. He suggests working with an adviser who works on a fee basis, not on a percentage of growth of your portfolio.  “That way they’re focused solely on your needs and risk tolerance, not the potential for them to make big profits off of a portfolio that might be too ambitious for your comfort.”

Two last caveats: When shopping for an investment adviser, look for the designations CFP (certified financial planner), PFS (personal financial specialist) and CFA (chartered financial analyst). Anyone with these credentials has to have completed training from an accredited body, and passed rigorous exams demonstrating their competence. Certification is only one indicator of ability, however. The real test is whether an adviser has been successful for an extended period of time and is recommended by people you trust and respect.

More Money-Saving Reads:

  • What’s a Good Credit Score?
  • How to Get Your Free Annual Credit Report
  • What’s a Bad Credit Score?
  • How Credit Impacts Your Day-to-Day Life

Image: RomoloTavani

The post Will You Ever Be Able to Save Enough for Retirement? appeared first on Credit.com.

Source: credit.com

Homie’s Utah Housing Market Update November 2020

Utah’s real estate market has been hot nearly the whole year. How did it perform in November? Homie has your update!

Data from Utah MLS from November 1, 2020 to November 30, 2020.

Monthly Sales

According to data from the Utah MLS, Utah had 4,335 sales from November 1, 2020 to November 30, 2020. Of those sales, 75.6% were single-family homes, while 24.4% were multi-family residences.

The sales this month are slightly lower than the 5,602 sales in October of this year, but it’s a +18% increase from November 2019, which is an even larger percentage increase than the year-over-year comparison we saw in October. This means the market is following the usual end-of-year slowdown, but the market is still quite strong compared to a year ago.

Data retrieved from Utah Real Estate .

Sale Price

Even though monthly sales saw the usual end-of-year slow-down, sale prices continued to rise. At $379K, Utah’s median sale price rose +2.4% from October of this year and 16.8% from November 2019.

Monthly Sale Price Graph

Data retrieved from Utah Real Estate .

List Price (Per Square Foot)

List prices in Utah rose during November along with sales prices. November’s median list price per square foot was $175.92, which is up from the previous months’ median of $170.25 per square foot.

November List Price Per Sq. Foot

Data retrieved from Utah Real Estate .

Days on Market (DOM)

Homes in Utah continue to sell quickly. The Average Cumulative Days on Market (DOM) during November was 9. This is a 72% decrease from November of last year. Prospective Utah homeowners will need to act quickly to get the homes they’re interested in.

Average Days on Market Graph

Data retrieved from Utah Real Estate .

Number of Homes Listed With Homie

A total of 182 homies listed their homes with Homie during the month of November. This number is up from 154 during the same time period last year.

182 homes listed with homie

Data retrieved from Utah Real Estate .

Turn to a Homie

Homie’s local real estate agents can help you navigate Utah’s hot housing market and find your ideal home. Work with a Homie to get an amazing deal whether you’re buying or selling. Click the links to get in touch with your dedicated agent.

The post Homie’s Utah Housing Market Update November 2020 appeared first on Homie Blog.

Source: homie.com