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Location, Location, Location

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By K. Diane Bowers, realtor, GRI

J&B Real Estate, Inc.

What is going on with these interest rates? Let’s discuss the impact of the “higher” interest rates on buyers and sellers.

Why Did the FED Increase Interest Rates?   

The FED (Federal Reserve) scheduled interest rate increases in an attempt to battle inflation. In layman’s terms, to try to calm down higher prices. When it comes to real estate, to slow the crazy high appreciation on housing that is caused by very low inventory. When this happens, it’s been a common practice by the FED to increase interest rates in an effort to eventually balance prices and re-ignite a competitive buyer’s market.

What Do I Think of This Strategy?   

I need to preface this by saying that my response is based solely on MY OPINION of what I am experiencing in the current market versus my 20 years of expertise. Based on the competitive market conditions over the last couple of years, things were not sustainable, so increasing rates to slow the market, I support. My biggest issue with this rate increase schedule was the dramatic impact it had on my hard-working buyers in a very short period of time. It was not fair because it hurt those already hurting from high inflation prices on everything else: the working class!

In reality, there are a ton of cash investor buyers in the current market; interest rates have practically no impact on them (some use lines of credit outside the transaction that are short-term impact). Therefore, I am not sure the increased interest rates will have the final resolution the FED expects.

How Has This Impacted Buyers?

I touched on this above, so let me give you an example. I have been working with a young family since January who are looking to buy a small home in Frederick County. They are pre-approved with a lender for roughly $360,000 (depends on taxes, etc.), but have been “outbid” on so many homes due to the low selection of homes available in their specs. Now, on top of getting pushed out of more and more homes due to drastically increasing prices, they are saddled with outrageous increases in their interest rate.

A house in March of this year at $325,000 had a mortgage payment of roughly $1,732 (PITI 3-3.5%); that very same house this summer had a mortgage payment of roughly $2,311 (PITI 5-6%)—that is a $579 monthly difference! I have several buyers that have decided to put their home ownership on hold until the economy cools down. This part makes me very sad. One of the most important reasons I do what I do is for the pride in home ownership. It is hurting the wrong people and is very frustrating for me.

How Has It Impacted Sellers?

It hasn’t had as much of an impact on sellers, but it will very soon.  Sellers will need to be more cautious with their pricing, condition of home, inspections, flexibility, etc. This is not the time to “test the market,” so trust your Realtor! If they recommend $350,000, do not list for a dollar more! Any home listed longer than 30 days gets snubbed by buyers (unfair I know, but it’s true). That home will most likely take a little longer to sell, and they most likely will not get 10-20 offers like their family/friend did six months ago. Sellers may even need to have price reductions. Showings will be fewer. Prior to May, I would prep my sellers to leave Saturday and Sunday due to the overwhelming number of buyers (20-40) scheduled to see their home. There are still plenty of sellers getting multiple offers within the first 24-72 hours on market, but to be quite honest, there sometimes seems to be no rhyme or reason to it. We still have limited inventory. Yes, it’s slightly better than it had been, but nowhere near a healthy level. There have been more buyers canceling contracts than ever before, so don’t bank on anything until you are walking away from the settlement company with a check.

Overall, Are They Bad?

Absolutely not! It’s just sticker shock like everything else since the pandemic. Still, it makes me mad to buy something at the store that is now $6.00 that was only $3.00 just two years ago—but, I’m still gonna buy it.

I bought my first house in 1999 at roughly 7% interest rate, which is still a good rate. It is all about perspective. I advise all of my current buyers to plan to refinance in two to three years when the economy and pandemic aftermath have calmed down. There are three more FED meetings scheduled for 2022, with expected rate hikes. Just prepare your budget accordingly. To be honest, what’s the alternative? The rental market is even more outrageous and competitive. Purchasing real estate is always a great investment!

Real Estate – Is It Still a Seller’s Market?

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By Elle Smith,

Realtor, J&B Real Estate Is it still a seller’s market? That is the question everyone is asking. And, everyone has an opinion on what they think will happen to the market. I don’t have the answer, but I can share with you how the market today is different from the market in 2008. And, I can share what is happening in our market right now.

In 2008, the market was different than today’s market in that the real estate growth was driven by relaxed-lender practices. Low interest rates and extremely low down-payment requirements allowed people who would otherwise never have been able to buy a home to become homeowners (per Housing Capital, https://homesitewiz.com/home-renovation/best-answer-what-caused-the-real-estate-crash-of-2008.html). The low interest rates and low down-payments created a seller’s market, which, in turn, drove prices of homes up. However, when interest rates started to increase, the buyers who bought on ARMs were now upside down on their mortgages. This caused an influx in foreclosures and resulted in prices crashing.

Today’s market is not driven by these same factors. Low interest rates have certainly played a part in this becoming a seller’s market. The significant difference is the influx of buyers today. We have seen an unprecedented number of buyers entering the market the past several years, causing a strain on the housing inventory. In addition, new home builds are down. Combine this increase in buyers with the low inventory of new builds, and we have today’s market.

So, what will happen with interest rates that have already started rising? It is hard to predict, and I wouldn’t want to even try. What I can say is that interest rates are rising and, at the time of this writing, are at 5.5 percent and are expected to continue to rise through the rest of 2022. There is currently only 11 residential listings in the 21788-zip code. The Catoctin High feeder area has 45 total listings (this number includes land, lease, commercial, and residential). So, at least for the near future, the seller’s market is not ending. It will be interesting to see where the market is when my next article comes out in the fall. Enjoy your summer and support the local carnivals and farmers’ markets.

Location, Location, Location

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The “REAL” in Real Estate

By Elle Smith,

Realtor, J&B Real Estate

For this month’s article, I asked friends and clients what they would like more information on, and several said they would like to know what to do to prepare to sell. Even in a seller’s market like we’re currently seeing, there are things you can do to make the process smoother. Houses are still selling quickly and often getting multiple offers, but there are still things you can and should do to make your home shine for listing photos and for showings. These tips will help you get the most for your property.

1.    Keep up on your maintenance and repairs. Keep service records,     receipts, and information on work you have had done to your home.

2.    Keep records on updates you have completed, such as new roof, new windows, new hot water heater, etc.

3.    Declutter.

4.    Take down most of your personal items. For example, removing family photos allows the potential buyers to imagine living in the house.

5.    Touch up paint. Repaint any loud or out of the ordinary colors or designs. A neutral color scheme presents like a blank canvas for potential buyers. Touch up doors, baseboards, and ceilings—these are often overlooked when preparing a home for sale, but buyers notice them.

6.    Make sure all lightbulbs and exhaust fans are working. These are other items potential buyers notice.

7.    Resist the urge to hide things in your microwave, oven, closet, etc. (I’ve seen this). Buyers might look, and you don’t want to appear that these items do not have a home.

8.    Don’t use too many strong scents—plug-in air fresheners, candles, etc. are very noticeable and will make potential buyers wonder if you are trying to hide something.

9.    Don’t ignore the curb appeal—mow, weed, mulch, and prune. First impressions matter.

10.  Clean, clean, clean. Consider hiring a cleaning service before listing photos are taken.

One thing I recommend to sellers—especially those with busy households—is to keep a tub or large bag by the door, and when you have a last minute showing, you can toss anything laying around into the bag and take it with you. This can alleviate a lot of stress when you have multiple showings a day. Also, whenever possible, sellers should leave for showings, being present can make a potential buyer uncomfortable. Remember to put your valuables away and out of sight. And always tell your real estate agent if you need notice for showings or if there are days or times that you cannot accommodate. It is much better to let potential buyers know this in advance instead of declining or canceling showings. These tips can make the showing part of selling your home go a little smoother and hopefully help you get even more for your property.

Everyone is always interested in how our local market is performing. Here are stats from March 2022 for the Catoctin High feeder area:           12 homes sold in March; Average Sales Price = $302,910; 19 residential properties for sale and coming soon as of April 17.*

40th Anniversary of J&B Real Estate

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Deb Abraham Spalding

If you’ve lived in the Catoctin Region for any length of time, chances are high that you or one of your neighbors have used J&B Real Estate to buy or sell a home…maybe even more than once!

Through good economic times and bad, J&B Real Estate celebrates 40 years of service and a trusted reputation.

Bonita Smith, J&B’s founding Real Estate Broker, shared that while she and her husband Jim (late) were both raised in the Catoctin area (Jim was one of the Hillside Turkey Farm family), they moved back from Glen Burnie in 1981 and, soon after, started the firm. They operated the fledgling business out of their home on Emmitsburg Road in Thurmont. Though Bonita wanted the name to be “B&J Real Estate,” Jim suggested that “J&B Real Estate” would be more memorable because of “J&B Scotch.” The decision stuck.

The Smiths also had a seafood carryout business in Laurel that was operated with a partner. That business was sold a few years into the real estate venture, as the Smiths’ focus shifted to full-time real estate.

When they opened, Bonita was the broker and Jim was an agent. In the fall of 1981, J&B became incorporated, and in a few short years, the business was moved from their home to its current location in the former Weighbright Store at 13 ½ Water Street in Thurmont. In those days, Jim Bittner, Holly Clabaugh (late), and several other agents helped carve the solid foundation upon which J&B stands. Jim Bittner is still an active agent today.

In J&B’s tenure, locals have come to depend on J&B Real Estate’s vast experience to navigate the buying and selling process. Having roots, family, and heritage in Sabillasville, Emmitsburg, and Thurmont, the Smiths not only grew their business but also raised their daughters, Jennifer, Jamie, and Anne.

Bonita said that it was her plan to retire at age 50. At this 40th anniversary, she deserves some teasing since she still keeps a consistent part-time schedule as an active agent and Associate Broker, and she just might have passed the 50-year mark.

In January 2018, J&B was purchased by veteran J&B real estate agent, Cindy Grimes. Sadly, Jim Smith passed away on December 17, 2020.

Today, Cindy leads J&B’s continued success with 11 licensed agents, 9 of which are active. “We’re a hometown boutique brokerage,” she explained, “Though we’re not a big brand, we have just as much to offer.”

“I’ve been here for fifteen years and believe most of my success is because of her [Bonita]. They’ve [Jim and Bonita] always been good to me. I love it here. In the beginning, although I had a mortgage background, my knowledge of real estate was limited, and I was running Main Street Groomers [with her twin sister, Judy Cochran],” said Cindy.

“Holly [Clabaugh] was a great mentor, too,” Cindy added, “Though she passed away soon after I started, she was always very helpful and shared a ton of knowledge with me.”

Bonita laughed, remembering,  “Holly was in the office one day when Andy Rooney walked in to ask questions about Camp David. He wanted to know how much it was worth.”

Cindy shared that the J&B team has great camaraderie in the office. “You don’t feel competition, just support in the J&B office. It can be a very stressful career, but it’s very rewarding and it really helps when you work with such a great team of agents. It’s a customer-service job more than a sales job. We are most interested in what is best for our clients and doing the best job we can for them.”

A shared characteristic of J&B’s agents is that they know the area extremely well. Cindy said, “When someone calls, I typically know exactly what house they’re talking about if it is located in Northern Frederick County. We know so many people in the area. I think it makes people more comfortable.”

Cindy wants the community to know, “We’re not planning on going anywhere. We love this community and we’re here for you. As a small boutique brokerage, we try to offer a more personal experience for our clients.”

Today’s active agents include Cathi Miller, Diane Bowers, Bonita Smith, Cindy Grimes, Elle Smith, Beth Ohler, Vinny Testa, Jim Bittner, Deb Gartner (licensed in PA), and Vonnie Frazier. Most all of the agents are licensed in Maryland and Pennsylvania. Reach out directly to any of the J&B agents for more information or to buy or sell your home.

Standing from left are Judy Cochran, Cindy Grimes, Diane Bowers, Cathi Miller, Deb Gartner, Jennifer Phillips, Elle Smith, Beth Ohler, Vonnie Frazier, and Vinny Testa. Seated are Bonita Smith and Jim Bittner. Photo by Deb Abraham Spalding