Blog :: 03-2021

Welcome to our blog! Here you will find information regarding market, local and Lakes Region information and events! Along with DIY projects and more! Come back often to see what's new and leave us a comment if there's something you'd like to see.

Co-Working Spaces May Soon See a Surge in Activity

Co-working and flexible workspace providers saw business quickly dwindle as the COVID-19 pandemic struck last spring and the shift to remote work began. These businesses sublet space on short-term contracts, which allowed tenants to leave quickly as employees moved to working from home.

However, investors and analysts are turning bullish that co-working and flexible office providers such as WeWork and IWG could soon see a boom in business as workers return to offices.

Still, there’s a lot of catching up to do. WeWork’s occupancy rate globally plunged to 47% at the end of 2020. It lost $3.2 billion last year, The Wall Street Journal reports. Before the pandemic, co-working spaces were the fastest-growing type of office space in commercial real estate, according to JLL. But the pandemic struck the sector particularly hard.

On the other hand, traditional property service providers have been more protected in the pandemic since their tenants sign long-term leases. Even as offices have remained mostly empty, building owners could still collect rent.

But moving forward, property providers may be more drawn to shorter-term leases. As such, investors are seeing signs that co-working spaces could hold a special attraction to offices moving forward.

Flexible leases could grow from less than 5% of the market today to as much as 30% by 2030, the real estate firm JLL forecasts.

Co-working spaces could grow as an option as companies may be reluctant to sign a 10-year lease until they better understand what the future of work will look like and how employees will divide their time between home and office. “Some may turn to looser office arrangements longer term, accelerating a trend already building before the pandemic,” says reporter Carol Ryan for The Wall Street Journal.

Companies that press forward with a remote office likely will still find they need a space to meet in-person at times. Also, some offices may decide on a hybrid workweek approach—splitting time between the office and home—which could also cause companies to look at flexible office space as an option.

“Co-working spaces have the potential to provide vital business services to support the remote workforce closer to where they are, especially as residual anxieties linger over taking public transit,” Brent Capron, design director of interiors at architecture firm Perkins and Will’s New York studio, told CNBC in an article on co-working spaces.

 

Courtesy Realtor Magazine

Source: "Flexible Offices Will Be Crowded After COVID-19," The Wall Street Journal (March 23, 2021) and "How Co-Working Spaces Could Succeed in the Post-Pandemic World," CNBC (Jan 12, 2021)

Getting the Right Light

Choosing bulbs has gotten much more complicated as energy-saving technology becomes more common. Here’s how to make the smartest and most flattering choices for a home.

By Al DeGenova

Selecting a beautiful new light fixture for a home is a great way to visually update a home and add sparkle to a space. But putting the wrong lightbulb in that fixture can have disastrous effects. The wrong lighting makes a room feel too dark or too bright. Light also affects the appearance of upholstery, paint, or artwork.

Comparing lighting options available today can be like comparing a Model T with a Prius because of the vast options—both old-school and new—on the market. With energy consciousness steadily rising, the expansion of federal legislation mandating lightbulb efficiency is now being reconsidered by the Department of Energy, and some states, including California, Nevada, and Washington, already have strict laws in place. The 60-watt tungsten bulb is, indeed, becoming a Model T.

Just as you can still find gas-guzzling cars, however, you can still purchase incandescent bulbs. However, you need to understand the terminology surrounding new light sources.

Lightbulb Types

LED, CFL, and halogen and tungsten incandescent: LED is the most energy-efficient and long-lasting; it’s also the most expensive. Tungsten incandescent bulbs are the least efficient and cheapest; 90% of the energy consumed by an incandescent bulb is lost as heat. CFLs contain mercury and must be disposed of properly.

Bulbs come in any number of shapes and sizes. When shopping, the most common lightbulb shape and size is described as an “A19 Medium Base.”

Brightness: Light output is measured in lumens, not watts as we previously used for brightness. In context, a 60-watt incandescent bulb provides roughly 800 lumens: 40W, 450 lumens; 75W, 1100 lumens; 100W, 1600 lumens; 150W, 2600 lumens.

Energy Used: The amount of electricity that a lightbulb consumes is measured in watts. A 60W tungsten bulb consumes 60W. An 800-lumen LED bulb (equivalent to the 60-watt tungsten) uses approximately 14W of electricity, a 75% reduction in energy consumption. Efficiency is often expressed as lumens per watt; the higher the LPM ratio, the more energy-efficient the bulb.

Light Appearance: We understand lightbulbs described as “warm white” or “bright white,” but these are subjective terms, meaning different things to different manufacturers. Light appearance refers to the “color” of the white light. Light color is represented in Kelvin, a temperature measurement. 2700K is roughly the equivalent of a tungsten bulb; 3000K roughly the equivalent of a halogen bulb; 4500K considered equivalent to daylight, and appears blueish.

2700K lighting is warm and cozy, great for living rooms and bedrooms. 3000K lighting is crisper and best used where functional light is important, as in a kitchen or bathroom. 4000K is great for the garage or laundry room. Make sure that the lamps and ceiling lights in a room have matching Kelvin ratings. Nothing’s worse for a room’s appearance than mismatched light color. A bedroom with 2700K lighting at the ceiling and 4000K in the nightstand lamp looks awkward and will create an imbalance in paint and fabric colors.

Dimming: Ever say, “let’s dim the lights” to create a little romance or watch a movie? When incandescent bulbs are dimmed, their color warms, meaning that it changes to look more like candlelight.

Look for the word “dimmable” as a feature on the lightbulb package or integrated LED fixture. Unlike incandescent lighting, not all LED or CFL lights can be dimmed. This is not a huge consideration for bulbs used in table or floor lamps, but ceiling lights, especially chandeliers, are often controlled by wall dimmer switches. Nondimmable LEDs may not react and CFLs may turn a greenish-blue color. So much for atmosphere.

Further, LEDs and CFLs rated as dimmable will not warm to look like candlelight. They will simply get less bright while giving off the same color. LEDs offer a technology called “warm dim” that mimics the dimming of incandescent bulbs. Search for warm dim LEDs that offer a color range of 3000K to 2200K or wider.

Color Rendering: You probably won’t see the color rendering index of a lightbulb on its package. But this measurement is important when illuminating artwork or when highlighting decor, such as fabrics or paint colors. Low CRI ratings make the colors in a room seem flat, while high CRI makes color snap.

Sunlight, with a CRI of 100, has the most accurate color rendering; halogen matches sunlight with 100 CRI, which is why galleries often use halogen lighting. Most LED bulbs are rated above 85 CRI, which is considered acceptable; CFLs are somewhat lower. However, LEDs are available at higher CRI levels when color rendering is critical.

 

Al DeGenova is a freelance writer and former marketing executive in the lighting industry based in the Chicago area.

 

Luck, Superstition May Influence Real Estate Decisions

Many Americans admit to being superstitious when it comes to choosing what home to buy—in fact, they say if a home feels unlucky, they aren’t buying it. More than a third—or 38%—of Americans have decided against buying a home because of superstition, according to a newly released survey from LendingTree of about 1,500 Americans. And consumers who find their self-described lucky house are willing to pay even more for it.

 

Reasons some consumers reconsidered a home purchase due to luck or superstition

                                                                                                                                                               

Source: LendingTree survey of 1,550 consumers conducted Feb. 19-22, 2021. Only those who chose not to buy a certain home due to luck or superstition answered this question. 

Homes a buyer perceives as lucky can nab more at resale. Nearly 47% of survey respondents say they would blow their budget for a lucky house—and are willing to go an average of $38,000 above their range for the home, the LendingTree survey shows. What qualifies as a lucky home? More than a third of buyers say they’d pay extra for a home whose street number was their lucky number.

The younger generations appear to be the most superstitious in real estate—55% of Gen Z and 50% of millennials said they’ve bypassed a home because of something related to luck or superstition. Overall, men are more likely than women to decide against buying a particular home because of superstition, at 51% of men and 37% of women.

Here are some additional findings from the LendingTree survey:

  • 39% of homeowners refuse to live next to a cemetery.

  • 32% would not buy a home with an unlucky street number. (On the other hand, the majority of respondents did say they’d buy a house with an unlucky street number like 13 or 666, but 20% would prefer to pay less because of it.)

  • 30% say they would not buy a home where the previous owners experienced a tragedy inside the home, like death.

  • 43% say they have at least one deal breaker related to the home’s feng shui, with the most cited reasons being a staircase that faces the front door, back and front doors in the same path, or a bathroom door that faces the front door.

  • 43% of survey respondents who reported being previous home sellers said they’ve had difficulties selling their home due to superstitious buyers.

 

Source: "Nearly Half of Americans Would Burst Their Budget for a "Lucky" Home," LendingTree (March 16, 2021)

The Top Green Features Buyers Seek in New Homes

Energy efficiency is on many buyers’ minds when they shop for new-home construction, according to a consumer survey from the National Association of Home Buyers. The NAHB surveyed more than 3,000 home buyers—both recent and prospective—on the features they most desire in their new home.

Many buyers said they’d go with the more sustainable option, such as the use of more durable materials in their home, when presented the option.

When the cost savings of these features are pointed out, they may be even more tempted—and they say they are willing to pay up front to help lower their utility bills. On average, buyers would pay up to $9,292 more for a home in order to save $1,000 annually on utility costs, according to the NAHB’s study.

“We’re doing a lot more in our homes now,” Brandon Bryant, founder of Red Tree Builders, a green home building company in Asheville, N.C., said during February’s virtual 2021 International Builders’ Show. But he added education is key. “We’ve got to teach people how to live in green homes, how these homes operate, and even before we build to let them know what we could do because a lot of times we could do so much more for their life.”

The top eco-friendly components and designs consumers said they desired:

  • Energy Star–rated windows and appliances

  • Efficient lighting that uses less energy than traditional bulbs

  • Energy Star rating for the whole house

Other trending features center around health and wellness, such as zone heating, purified air appliances (like UVC fans), indoor air quality sensors, and connections to the outdoors, the NAHB said.

"There are a wide range of green features that buyers feel are desirable," said Paul Emrath, vice president of surveys and housing policy research at the NAHB. "Energy efficiency, though, tops the list of what they most want."

 

Source: National Association of Home Builders

The Brighter Path Ahead

More inventory and better access to vaccines are welcome news.

Courtesy of Lawrence Yun

The 2020 pandemic-induced recession was unique in terms of the sudden and massive slashing of jobs. It was also the first recession during which overall income grew. No doubt there are families struggling paycheck to paycheck, but due to the massive stimulus packages—including the initial deposit of $1,200 and enhanced unemployment benefits—the financial condition of many families was better in a recession than before the pandemic.

Total income for the country in late 2020 was 4% higher than a year earlier. This was the figure reported just before the second stimulus checks of $600 per person went out in late December. It also does not include wealth accumulation from the record-high stock market or rising home prices. Also not reflected in the totals are the proceeds from mortgage refinances last year or the relief expected from a new stimulus. Still consumers remain cautious, as spending opportunities have been restricted by COVID-19. For the year, consumer spending fell by 2%. And the savings rate consequently rose to twice the pre-pandemic levels.

The situation translates into the potential for a great unleashing of spending in 2021. The positive impact will be increasingly felt as jobs come around. The full effect will be evident once herd immunity is established with the vaccine, likely in autumn. That is to say, 2021 is a growth year that will take us out of the recession.

The housing market continues to shine brightly. The main frustration is for buyers who find themselves outbid during multiple offer situations. More inventory is needed to give buyers more options and lessen the heat.

It's encouraging to see that builders are ramping up production of homes with backyards, which are now at their highest level in 13 years. Activity has been particularly robust in Southern states where land is more plentiful and building regulations are less onerous.

Moreover, with the wider availability of COVID-19 vaccines, homeowners, especially older Americans, who have been more hesitant about strangers visiting their homes, now may be more ready to list. Many seniors own their homes outright and have sizable housing equity for their next home purchase. They may even need to buy a larger place to accommodate more family visitors. After all, in the new economy, remote-work flexibility may mean more days working from grandma’s house.

 

Lawrence Yun, Chief Economist and Senior Vice President of Research at the National Association of REALTORS®


9 Steps to Help Decide on Solar Energy for a Home

With federal tax breaks for solar panels ending in 2021, this could be time for your home energy independence. When it comes to deciding if an investment in solar will pay off, you have to do research and make smart decisions for your home and financial situation. 

By Brandon Doyle

3 Takeaways

  • You should make your home as energy efficient as possible before investing in a solar system so you don't pay for a bigger system than you need.

  • A solar system is an investment with a typical payback period of eight years. 

  • You should know the warranty terms of a solar system and who will maintain the system when there are inevitable issues.

Here are some steps to take along the way:

Step 1: Figure out the home’s solar potential.

To get an initial idea about a roof’s solar potential, you can enter the address at Google Project Sunroof or check out solar resource maps from the National Renewable Energy Laboratory. One common misconception is that solar panels only pay off in hot, sunny parts of the country. To test this idea, you should look around your yard. Are there trees and other green plants? Plants use the sun’s energy to grow their leaves, so they are a good indicator of solar energy in your yard. Solar panels actually perform more efficiently in cooler temperatures.

Step 2: See what the home’s utility bills tell you.

Are the annual utility bills high enough that a solar investment will pay off in a reasonable period of time? For most homeowners, a utility bill tells you one basic fact: monthly usage. But a high monthly electricity bill can be caused by many factors ranging from old appliances to inefficient HVAC systems to poor insulation. Make the home as energy efficient as possible before buying a solar system so you’re not paying for a bigger system than you need.

Step 3: Plan ahead.

Will you be living in the same house in the next decade? A solar system is a big investment with a typical payback period of eight years. If you plan to move in the next couple years, buying or leasing solar panels could be a money-losing decision. If you decide to move after leasing, you’ll need to buy the system, assume the lease, or pay the provider to terminate the lease altogether.

Step 4: Establish an accurate baseline.

A home energy monitor like Sense will track energy consumption both before and after solar is installed. Get a couple months of data and use that information to calculate how much of the current bill can be offset with solar and how big an installation is needed.

Step 5: Consider financing and payoffs.

Solar panels are an investment that needs to pay off financially. You should take your time analyzing whether buying or leasing will be most advantageous. If you decide to buy, most solar providers and websites like EnergySage will factor the 26% federal incentive into their estimates as well as any state incentives. Together, those incentives have a big impact on the final cost. If you need financing, you should talk with your bank, mortgage provider, or a lender, which offers solar-specific loans and resources. You should do the math to figure out how much you’ll need to invest and when that investment will pay off.

Loan and lease options are attractive because they can be cash-flow positive as soon as the solar panels are installed without a cash outlay in advance, but with a lease, customers don’t benefit from the federal tax credit. But you shouldn’t view leasing as a short-term decision since most loans and lease agreements are for longer than 10 years. The monthly lease prices of a solar system in the U.S. vary depending on how much energy a house requires and can produce. The higher the electricity bill, the higher the lease cost will be since it will demand higher solar productivity. To get an idea, Tesla calculates solar panel rentals based on the home’s address and electricity bill.

Step 6: Decide on storage or no storage.

Energy storage is still a premium option, but prices are dropping significantly every year. To help you decide if you need storage, consider two factors: when you use electricity and how frequently it’s interrupted. In areas with rolling brownouts or downed power lines from storms, solar storage can get you through without an interruption and batteries can store solar energy to use at night or on cloudy days. Do the math to figure out the payoff for storage.

Step 7: Make a short list of providers.

Once you've decided to install solar panels, you should research providers online and check their reviews. Identify three or four companies that look promising and ask for online quotes based on remote solar audits, then, narrow the candidates down to two or three installers. Their construction experts will visit the house to measure and assess the roof, conduct a shade analysis, and check to see if the electrical panel will need to be upgraded. Their final quote will reflect all those factors. When evaluating proposals, be sure it includes any costs to update the roof or remove trees that create shade.

Step 8: Ask more questions before deciding on a provider.

Once you have two or three final estimates based on in-person home assessments, you should ask the providers about how they’ll handle the installation. For instance, does the provider design and install the systems themselves, or do they subcontract to local companies? If the provider uses subcontractors, are the subcontractors licensed? Make sure the contractor can explain the components of the solar system they’re installing.

You should ask if they’ll file the necessary permits, including the electrical permit, building permit, and the dedicated solar photovoltaic permit. A reputable provider will help you file for rebates and tax incentives or do it for you. Make sure you know the warranty term and who will maintain the system when there are inevitable issues. And, finally, if you are leasing, you should ask the provider to disclose what the system is worth so you’ll have that information if you decide to sell your home.

Step 9: Patience required.

You should evaluate all the proposals to make sure they correctly address the home’s energy needs, then choose a provider you can trust. Once a contract is signed with a provider, the installation and permitting process can be surprisingly long as contractors file all the paperwork on your behalf with the utility and municipality. It can take a few weeks to get permits sorted out before the installer can get the solar panels on the roof.

When the system is installed and connected to the utility, it will start producing energy whenever the sun shines. You will save money on your utility bill while relying on clean energy that’s good for the planet.

 

Brandon Doyle, ABR, e-PRO, is a second-generation real estate pro with RE/MAX Results in the Twin Cities. He is also coauthor of the book M3—Mindset, Methods & Metrics: Winning as a Modern Real Estate Agent

Mortgage Rates Rise But Stay Near Historic Lows

The 30-year fixed-rate mortgage came off its recent all-time lows to average near 3% last week. The 10-year Treasury yield, which mortgage rates closely follow, hit its highest level in the past year, prompting the increase in rates.

“As the economic recovery progresses, mortgage rates are expected to rise further in the upcoming months,” writes Nadia Evangelou, senior economist and director of forecasting at the National Association of REALTORS®, for the association’s Economists’ Outlook blog. “Nevertheless, the upcoming rise in mortgage rates should not be alarming to would-be home buyers. The Federal Reserve recently assured that it would keep interest rates unchanged for a long time.”

Rates continue to remain near historic lows, said Sam Khater, Freddie Mac’s chief economist. The all-time low for the 30-year fixed-rate mortgage was set in January, averaging 2.65%.

Freddie Mac reports the following national averages with mortgage rates for the week ending Feb. 25:

  • 30-year fixed-rate mortgages: averaged 2.97%, with an average 0.6 point, up from last week’s 2.81% average. Last year at this time, 30-year rates averaged 3.45%.

  • 15-year fixed-rate mortgages: averaged 2.34%, with an average 0.6 point, rising from last week’s 2.21% average. A year ago, 15-year rates averaged 2.95%.

  • 5-year hybrid adjustable-rate mortgages: averaged 2.99%, with an average 0.1 point, rising from last week’s 2.77% average. A year ago, 5-year ARMs averaged 3.20%.

Freddie Mac reports average points along with average commitment rates to better reflect the total upfront cost of obtaining the mortgage.

Source: Freddie Mac and "Instant Reaction: Mortgage Rates, February 25, 2021," National Association of REALTORS® Economists’ Outlook blog (Feb. 25, 2021)