By Joe Szabo, Scottsdale Real Estate Team Mortgage rates have spiked 0.5 percent since the U.S. presidential election earlier this month. On a 30-year fixed loan of $300,000, this increases your monthly payment by $85. If you were waiting to refinance, this is a wake up call, and if you plan to buy a home, it’s time to reevaluate your budget — because rates are unlikely to drop. Let’s review what happened, and where we go from here.

Why rates are rising

Rates rose after Donald Trump became president-elect because market participants believe his proposed policies — infrastructure spending, tax cuts, and trade tariffs — will be inflationary if enacted. Rates are tied to bonds, because bonds pay a rate of return to investors each year. If policymaking fuels inflation, a bond investor’s rate of return will be worth less in the future. Investors sell bonds on inflation fears, and rates rise when bond prices drop in a selloff. This is exactly what has happened. Since the election, bond selling has led to the biggest bond losses in 26 years. Thirty-year mortgages have jumped into the low 4-percent range from the mid 3-percent range at record speed. This dramatic rate spike might level off near-term, but don’t count on a reversal back to record lows.

Where we might go from here

Jeffrey Gundlach, one of the world’s most respected bond investors, thinks we’ve seen about 80 percent of a post election rate spike ahead of the Federal Reserve meeting on December 14. This means rates could rise a bit more in the coming weeks, then the next catalyst will be Fed policy. The Fed has two main policy influences on rates. First, they control an overnight bank-to-bank lending rate that serves as a benchmark for overall rate levels in the economy. In December 2015, they hiked this rate 0.25 percent after keeping it near zero since December 2008, when the financial crisis was at its worst. There’s almost 100% probability of a rate hike at the Fed’s December 14 policy meeting. If the Fed does hike, this will reinforce inflationary expectations, driving higher rates. It will also increase rates on home equity line of credit (HELOC) second mortgages. Second, the Fed has helped to keep rates low since January 2009 by buying bonds that directly impact mortgage rates — rates have dropped (or stayed low) on this Fed buying. Rising rates will hurt the Fed’s ability to buy enough bonds to continue holding rates down. All of this means the Fed won’t be as rate-friendly as we’ve become accustomed to since 2008. This is why it’s very unlikely rates will drop from here, and may rise instead. Nobody knows how much more until we get policy clarity from the first 100 days of a Trump administration, and the corresponding Fed reactions February 1, March 15, and May 3.

Implications for home buyers and owners

Below are some things you should be aware of as you evaluate your options in a rising rate environment. These predictions incorporate the latest available economic estimates (from November 16) from the Mortgage Bankers Association.

• Last call to refinance. Rates are still low historically, but if you’ve been waiting to refinance — for a lower rate/payment or to take cash out of your home — look at your options immediately, before rates rise further.
• HELOC rates will spike next. If you have a HELOC second mortgage, it’s tied to the Prime rate, which will rise in lock step with the Fed rate noted above. The Prime rate is expected to rise .25 percent in December, then rise steadily to be a full 1 percent higher than today by late 2017. Talk to your loan adviser about refinancing your HELOC into a fixed rate second mortgage so your rate can’t rise.
• Homeowners, re-calculate your budget. If you’ve been pre-approved to buy a home, that pre-approval was done using a debt-to-income ratio, which will increase with rising rates. Ask your lender to refresh your pre-approval with current rates to see what your budget looks like, and to ensure you still qualify for your target home price.
• Home prices shouldn’t spike. Rising rates may help keep home prices from rising too quickly. Median existing home prices are expected to go from $233,300 in 2016 to $244,100 in 2017, and median new home prices are expected to go from $305,900 to $311,500 in the same period.

• Healthy home-buying market in 2017. Total home purchase loans made will increase from $990 billion in 2016 to $1.1 trillion in 2017, while refinances will plummet from $901 billion in 2016 to $484 billion in 2017. Existing home sales will increase from 5.4 million in 2016 to 5.7 million in 2017, and new home sales will increase from 575,000 in 2016 to 649,000 in 2017.

Please note that this Scottsdale Real Estate Blog is for informational purposes and not intended to take the place of a licensed Scottsdale Real Estate Agent. The Szabo Group offers first class real estate services to clients in the Scottsdale Greater Phoenix Metropolitan Area in the buying and selling of Luxury homes in Arizona. Award winning Realtors and Re/MAX top producers and best real estate agent for Luxury Homes in Scottsdale, The Szabo group delivers experience, knowledge, dedication and proven results. Contact Joe Szabo at 480.688.2020, [email protected] or visit www.scottsdalerealestateteam.com to find out more about Scottsdale Homes for Sale and Estates for Sale in Scottsdale and to search the Scottsdale MLS for Scottsdale Home Listings.

By Joe Szabo, Scottsdale Real Estate Team Just once, wouldn’t it be wonderful to enjoy entertaining your friends and family rather than focusing on the clean up and preparation? You can! All you have to do is adopt a foolproof pre-entertaining organization method: the “GO” approach. Often, we prepare for events focusing on details that our guests will never really notice. The truth is, you can do far less preparing than you think. The “GO” approach is all about “guest observation.” In other words, to get your house pre-organized for a party or the holidays, think about what your guests will observe, rather than all the things you think you ought to do. Guests adhere to a particular pattern when they enter your home. Usually they stop in four locations, and in a specific order: the front door, the kitchen, the bedroom, and the bathroom. Focus your efforts on these four locations using the GO approach so you can lighten your workload and increase your time spent enjoying the holidays.

Start at the front door

The front door is where you can set the first impression for how you manage the “look and feel” of your organized home. Just tackle a few key tasks:

1. Shake out the outdoor mat and sweep.
2. Place a flowering plant outside on a table at the front door (even if you have a small apartment or bungalow).
3. Write a little note saying, “I’m/We’re seriously thankful you’re here. Welcome!” The note transforms your guests’ frustration from traffic or family upsets while in the car to feeling appreciated. It also sets the tone of care and kindness before they even enter your home.

The kitchen

Typically, guests come to the kitchen first to drop off a pie, salad, or bottle of wine. Now, the turkey in the oven usually provides the yummy aroma, but how do you handle those first visual impressions, including having the proper tools and space for cleaning up after the meal?

These high-impact tasks will help:

• Clear the clutter from the counters. Remove small appliances, bottles of vitamins, piles of paper, phone chargers, and put it all in a box labeled “stuff from kitchen counter.” Place it in the garage or even the trunk of your car, if you’re short on storage space.
• No time to clean the oven? Line it with tin foil to give it a clean and shiny look inside.
• Break out a fresh sponge for doing dishes. Place a notecard above the sink that says “I’m thankful for your help with my dishes. I appreciate you.” Guaranteed your guests will smile and pitch in. If you wind up stuck doing the dishes on your own, that little note you wrote will surely remind you of your self-worth, and those dishes won’t seem like such a chore.

The bedroom

Next, your guests will need to put their coats and bags somewhere; the usual spot is in a bedroom. How do you hide the mess and clutter? Try my “dim some” lighting method. That means dim most of the lighting in the room with some lighting on an accent piece. If you don’t have a dimmer switch, change out your light bulb to a lower wattage, or change the bulb to a colored bulb of your choice. You can also change the lamp shade to one that is orange or yellow to give the room a warmer hue. If you have a pretty picture or photo, put an accent light on that piece to divert attention away from messy areas.

The bathroom

The key here is to keep your guests’ embarrassment level to a minimum and their impression of you at a high. An overflowing toilet is something guests will remember (especially if it happens to them). If you minimize the possibility of mayhem before it starts, you’re golden.

1. If the toilet is a little wonky, help out your guests with a cute sign that says “Hold handle down for 10 seconds” or “Jiggle handle to flush.”
2. Have a plunger nearby.
3. Put a spray deodorizer on top of the tank.
4. Keep lots of extra toilet paper stored in an obvious location.
5. Embroidered or white guest towels can be intimidating for folks to use for fear of ruining them. Use paper towels with a holiday design and place the trash can in a visible spot.
6. Finally, a small bunch of beautiful flowers (such as an orchid or sweet-smelling roses) will serve you more here than a centerpiece on the table.

Eliminate obvious stains and odors

While making beds and putting away laundry are definite pre-hosting, don’t forget to focus on the obvious — stains and odors — before your guests do! Here are a few last-minute tips that will leave you proud and your guests impressed:

• Hang scented pine cones near key hooks and plants, inside closets, at the front door, above litter boxes, or on door handles in the bathroom.
• Rustle up some vanilla extract from your spice rack and dab it on light bulbs around the house. As the bulb heats, the pleasant vanilla scent lingers.
• Most of us have little stains in our carpet. If you do, too, spray shaving cream on the stain to bring the dirt to the surface. Pat with a paper towel and vacuum. (Note: Always test new stain treatments in a remote area of the carpet or rug first.)
• If you have a scratch or nick in your wood table or other wood furniture, try rubbing a walnut on it to make it less noticeable.

And remember, whatever you do, don’t sweat the small stuff. Your guests will remember the tone your attitude sets more than anything else. Please note that this Scottsdale Real Estate Blog is for informational purposes and not intended to take the place of a licensed Scottsdale Real Estate Agent. The Szabo Group offers first class real estate services to clients in the Scottsdale Greater Phoenix Metropolitan Area in the buying and selling of Luxury homes in Arizona. Award winning Realtors and Re/MAX top producers and best real estate agent for Luxury Homes in Scottsdale, The Szabo group delivers experience, knowledge, dedication and proven results. Contact Joe Szabo at 480.688.2020, [email protected] or visit www.scottsdalerealestateteam.com to find out more about Scottsdale Homes for Sale and Estates for Sale in Scottsdale and to search the Scottsdale MLS for Scottsdale Home Listings.

By Joe Szabo, Scottsdale Real Estate Team Most people think their real estate concerns end once they’ve closed on and moved into their new homes. But given the constant access to information and the changing nature of society today, smart homeowners know that their real estate awareness should continue after the closing. When a neighbor’s house goes on the market, there can be some important implications for you. Here are some tips for staying real estate aware.

Document important disclosure items

For the most part, good fences make good neighbors. But sometimes the folks on the other side of the fence don’t cooperate, and unresolved neighbor conflicts tend to arise when one of the homes goes on the market. Have a property line dispute or an issue with a broken fence and want to make sure that the new buyer knows about it? While sellers in most states have a duty to disclose issues to potential buyers, not all areas require this. Do your new neighbor-to-be a favor and alert the seller’s agent to anything the buyer needs to know about your neighbor’s property.

See things differently

Open houses allow buyers to spend some time exploring a home, but these events also present you with a chance to see your home from your neighbor’s perspective. Once, at a busy open house in San Francisco’s Noe Valley neighborhood, an open house visitor made a somewhat obvious beeline for the back of the house. He immediately got on the phone, and was clearly communicating with someone about where he was standing, and giving orders to move left and right. It turned out this visitor lived in the home behind, and was checking to see the neighbor’s view into his home. The open house is your chance to check your home’s paint job from the neighbor’s yard or simply to see your home from a different perspective.

Know and learn the market in real time

Typical sellers claim and save their home online, but also keep searches going after the fact. Why? To keep tabs on the market, see the comps and have a real-time sense of what’s happening nearby. Just like when you were a buyer, knowing about the area and types of homes in the market is a good move for any homeowner. Take a neighboring home for sale as an opportunity to see what the market bears. You can also learn about the latest trends in home design. Speaking to a real estate agent can help inform you of changes to property taxes, or how assessments are changing in your town. A smart real estate agent, working their listing, will be an incredible resource to would-be clients down the road. Leverage their experience when your neighbor sells. Take note when your neighbor goes to sell their home. It’s not just a time to nose around, but to document, inspect or learn from the home sale. Some homes get listed once in a lifetime. Take advantage of the opportunity. Please note that this Scottsdale Real Estate Blog is for informational purposes and not intended to take the place of a licensed Scottsdale Real Estate Agent. The Szabo Group offers first class real estate services to clients in the Scottsdale Greater Phoenix Metropolitan Area in the buying and selling of Luxury homes in Arizona. Award winning Realtors and Re/MAX top producers and best real estate agent for Luxury Homes in Scottsdale, The Szabo group delivers experience, knowledge, dedication and proven results. Contact Joe Szabo at 480.688.2020, [email protected] or visit www.scottsdalerealestateteam.com to find out more about Scottsdale Homes for Sale and Estates for Sale in Scottsdale and to search the Scottsdale MLS for Scottsdale Home Listings.

By Joe Szabo, Scottsdale Real Estate Team Division is one of the coolest magic tricks a gardener can pull off. It involves digging up a single plant, breaking it into two or more pieces, and replanting them to multiply all by themselves — until you decide to divide again. So, really, plant division is multiplication. (Mind blown.)

Why and what to divide

Dividing a plant not only creates “new” plants, it also rejuvenates old, congested plants, and allows you to pull out any diseased portions or weed roots in the process. Best of all, making new plants from your existing landscape plantings will save you a lot of money, especially if the plants in question are expensive or hard to find. Any perennials, grasses, bulbs, or suckering shrubs are good choices for dividing, as long as each division has a sturdy, rooted base that can grow independently. However, there is a handful of plants that don’t like to have their roots disturbed, including lupine, poppy, false indigo, butterfly weed, peony, and sea holly to name a few. A good rule of thumb is to avoid dividing plants with a taproot (a downward-pointing root that resembles a carrot).

When to divide

Some gardeners (the author of this article included) choose to divide whenever it’s convenient. For example, if you’re digging up plants while rejuvenating a garden bed, you might as well divide them before replanting. If you’re repotting an overgrown houseplant, it makes sense to break it up into smaller plants while it’s out of the pot. Generally speaking, the best seasons to divide are in spring or fall. If you’re dividing a hardy plant, do so in fall so the roots have plenty of time to grow, giving the divisions a hearty head start. Divide tropical plants in summer when they’re most active, but do it when rain is in the forecast so that they’ll become better established. Divide cold-sensitive plants in spring, especially if you live in a particularly cold climate. Divide plants on overcast days if possible, or wait until the late afternoon so that the newly exposed divisions won’t be scorched by direct sunlight.

How to divide plants

Start with a plan for your divisions so that they can go right into the ground without drying out. Proper preparation will allow the new divisions to become established and thrive. Prepare the new planting site by pulling all weed roots, removing spent mulch, fluffing up the soil with a cultivator, and adding some well-rotted compost and topsoil. Now it’s time to remove the “mother” plant. Cut a circle around its dripline (the soil beneath the outermost leaves) to loosen up the soil. A small transplanting shovel is ideal for most perennials, but a full-sized shovel will also work. Gently lift the entire plant out of the soil by rocking your shovel like a lever at different points around the plant. Remove the plant with your hands and place it in a shady spot to begin dividing. Dividing is often as easy as loosening up the soil and pulling apart the plant with your hands, but some plants require more effort. Pull apart the uprooted plants with the tines of a cultivator and slice right through the roots with a clean, serrated knife, in a sawing motion. You may also cut through the root ball with a sharp shovel. To prevent moisture loss and help the new divisions get started, cut off the upper two-thirds of their leaf growth. New growth will quickly return, and the plants will fill out entirely within a year.

Planting divisions

To plant, lay out the divisions in the new planting site, giving them ample room for a few years’ growth. Dig a hole for each division, leaving a small mound of soil in the center of each hole. Hold the divisions over the mound so that their crowns (where the plant originally emerged from the ground) line up level with the surrounding soil, and fan out the roots over the mound. Replace the soil with a hand trowel, and use the back of the trowel to pack the soil in place. Finally, water the divisions deeply to ensure there are no air pockets that will dry out the roots. Once you’ve planted each of your divisions, add a 1.5-inch layer of mulch to your bed to keep the soil moist and prevent weeds while you wait for the plantings to fill in. This is the important part: Water newly planted divisions regularly until they’re firmly rooted and self-sufficient. A tell-tale sign that a plant needs water is when the leaves start to wilt or dry out. Please note that this Scottsdale Real Estate Blog is for informational purposes and not intended to take the place of a licensed Scottsdale Real Estate Agent. The Szabo Group offers first class real estate services to clients in the Scottsdale Greater Phoenix Metropolitan Area in the buying and selling of Luxury homes in Arizona. Award winning Realtors and Re/MAX top producers and best real estate agent for Luxury Homes in Scottsdale, The Szabo group delivers experience, knowledge, dedication and proven results. Contact Joe Szabo at 480.688.2020, [email protected] or visit www.scottsdalerealestateteam.com to find out more about Scottsdale Homes for Sale and Estates for Sale in Scottsdale and to search the Scottsdale MLS for Scottsdale Home Listings.