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Renting? Simple Formula Reveals If You Actually Should Buy

Yes, the interest rates are rising, but that doesn’t mean your best bet is to continue renting that home.

 By MIKE HALL

Straightforward formula helps make the decision to rent or buy your Louisville home less emotional and more strategic.

If you’re currently renting a home in Louisville, you may want to reconsider your situation. There’s a formula called the 5% rule that helps you figure out if you’re better off – financially – continuing to rent or saving to buy.

Get out your calculators!

Look at your home value of the home you’re renting in Louisville. Once you have that number multiple it by 5%. Then divide it by 12 to get your break-even number.

If your monthly rent is lower than your breakeven number, continue renting

If your monthly rent is higher than your breakeven number, save to buy.

Not into math? Or just need help deciding if buying a house is really an option for you. Reach...

What can you afford?

Higher interest rates and buying a home

by MIKE HALL

Buying a home

Don't let high interest rates scare you from the making the best decision. Let a knowledgeable agent guide you.

Your home search criteria may need to change thanks to rising interest rates. Considering your monthly payment, what you used to get for $300,000 may have be more in the $260,000 range now.

But don’t let that deter you. It’s always a good time to invest in real estate if you plan on being in the same location for a couple years. Plus, renting isn’t getting any cheaper - and there’s no return on investment for that.

It’s important to work with someone you trust to help you navigate purchasing a home that leaves you with enough money to live and enjoy life and love the home you’re in, too. At Red Edge, we talk to each potential home buyer and make sure you’re comfortable with the search parameters set. You’ll get exactly what you need in your inbox. Contact a Red Edge agent today to get started.

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I Love Louisville!

Louisville Makes Real Estate Fun

by Mike Hall

I can't say it better than this. If you'd like to love the city where you love and work as much as we do, talk to a Red Edge agent today and make the Louisville area your home!

...

Higher Interest Rates May Be Good News for Buyers

There’s more to buying a house in Louisville than locking in a low interest rate.

by Mike Hall

Soaring upwarding

Homebuyers: Rates may be on the upward swing but there are plenty of opportunities for you!

During a frenzied market, buyers often found themselves in bidding wars, skipping home inspections, or spending big bucks on pre-offer home inspections.

All those situations could and did lead to an expensive process for home buyers and possibly a little burnout too. What many people forget – there’s more to buying a home than the interest rate.

Higher rates can balance out the market and somewhat level the playing field for buyers. There should be less competition, a slower increase in the price of homes, and possibly more inventory. Also, sellers will be more willing to accept non-traditional loans and more contingencies.

If you are in the market to buy a home, whether you’re facing increasing rent, needing a larger home, or other household changes, there are ways to navigate a higher interest rate:

  1. Be open to another location
  2. Tweak your monthly budget
  3. Search a wider circle
  4. Revisit properties that linger on the market
  5. Look for new construction
  6. ...

To Rent or Buy in 2022?

With rates on the rise, first time home buyers are asking themselves this question. Luckily, a little math can solve it for you.

By Mike Hall, Broker/Agent/Owner

two doors

Question: Did you feel pressured to buy a home when the rates were historically low? Don’t worry! You didn’t miss out!

“Just because interest rates are low doesn't mean it is a good time to buy and higher interest rates doesn't mean it is a bad time to buy a home,” explains Jay Abolofia, a certified financial planner with Lyon Financial.

Instead, consider these three questions to help you decide … to rent or buy?

1.     Where do you want to live in Louisville?

Rent can vary widely depending on the area of Louisville and the number of bedrooms. Try to compare the cost of renting versus the monthly payment on a starter home in that same area. 

2.     Are you financially fit?

What does your savings look like after a down payment is taken out? What is your credit score? Do you qualify for a mortgage? Can you make the monthly payments? Also keep in mind your debt-to-income ratio. Try to keep your mortgage payment less than 40%...

Low Inventory in Louisville Housing

Now is the BEST time to sell!

By Mike Hall, Broker/Agent/Owner

Kitchen

Louisville’s housing shortage continues

Demand for houses in Louisville continues to increase without a corresponding increase in available houses. Some estimates show that while there should be around 5,000 houses for sale in Louisville, there are only about 500.

Often, buyers with high credit scores and solid down-payments are still needing to make cash offers well above listed prices and waive all inspections.

Some potential buyers are choosing to wait, save more money, and hope that the market evens out in the future. These buyers might not have the financial means to pay the difference between their offering and the house’s appraisal, or they might not want to risk potential costly issues that would have been found with an inspection. Others are engaging as competitively as they can, with perseverance as their motto.

For sellers, it’s highly likely that a good home with a solid price could sell very quickly at a much higher price than they could have gotten for it even a few years ago. Some houses have increased by $70,000-100,000 just in the last year.

Whether you’re navigating this seemingly cutthroat market...

From Community Gardens to Mixed-Income Housing

Plans for New Housing in Iroquois Area

By Mike Hall, Broker/Agent/Owner

wheelbarrows

New housing coming in South Louisville Neighborhood

About 10 years ago, a housing block called Iroquois Homes went through several phases of demolition, leaving behind only an empty lot.

In recent years, local nonprofits have leased the space to create urban farm and garden spaces for the community. The adopted purpose of the space has been a value to the area, but the intent was always to eventually use the space for housing again, according to the Louisville Metro Housing Authority.

Housing shortages have been an issue across Louisville, and the South Louisville neighborhood — with its charm, character, and diversity — is no exception. There is a considerable need in the community for mixed-income housing.

No firm plans are in place for the area, though Louisville is seeking different ideas for housing and amenities from locals and engaged community members. There is a hope that the neighborhood will feel engaged and excited about the development, and that the future housing will benefit the whole area.

If you’re looking to buy or sell a home in South Louisville — or if you’re...

Tree Coverage in Louisville Grows!

The Best Kind of Shady City

By Mike Hall, Broker/Agent/Owner

Home with trees around it

Louisville increases its tree canopy by 1%

In 2012, a report noted a decline in Louisville’s tree canopy and predicted a serious continued loss of limbs – tree limbs, that is.

Experts from the organization TreesLouisville got to work, planting, educating, and empowering the city. The most recent report indicated that Louisville not only reversed the predicted sharp decline, but also managed to increase the tree canopy in Louisville by 1%.

Why is a healthy tree canopy important?

The report measures how much of the city is covered by shade. A healthy tree canopy reflects a healthier, more sustainable city. Adequate trees assist with cleaner air, help manage storm water, aid with urban heat, provide habitats for animals, and lift the spirits of a city’s citizens.

Though most areas of Louisville saw growth in their tree coverage, a few areas, like downtown and West Louisville, still struggled. TreesLouisville knows where to focus their next efforts.

Louisville tree coverage is just another reason why it’s great to live here. Talk to an agent today about finding your perfect next house; maybe you’ll find one with...

350 Jobs Coming to Louisville

Confluent Health Will Provide Well-Paying Jobs

By Mike Hall, Broker/Agent/Owner

healthcare workers

New jobs are great for Louisville!

Kentucky Governor Andy Beshear announced in January that Confluent Health LLC will be locating and expanding their headquarters in Louisville later this year. Confluent Health currently employs more than 100 people in Louisville, but the expansion of their services will create 350 new jobs in the city.

New positions will include marketing, IT, human resources, administrative, and executive roles.

Though Confluent Health originates in Kentucky, its services currently span 29 states. It works in areas of physical therapy, medical academics, medical technology, and more.

Confluent Health is expecting to begin the expansion in the coming weeks, with an estimated completion this summer.

New well-paying jobs will support current and future homeowners as they engage in Louisville’s competitive housing market. If you are looking to buy or sell your house, talk to an agent today about how we can help you through this process!

[Source: Louisvilleky.gov]

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What to Expect in 2022

What are the housing predictions for this year?

By Mike Hall, Broker/Agent/Owner

Happy couple hugging in home

What can home buyers and sellers expect in 2022?

In 2021, the housing market across the nation saw low inventory, high demand, low interest rates, and dramatic price increases. It was a great year for sellers and a problematic year for home buyers, especially those who were hoping to buy their first house. What will 2022 hold?

Experts predict a similar situation this year, with some gentle adjustments.

One predicted change is that the record-low mortgage rates will go back up slightly, meaning there will be fewer homebuyers taking advantage of incredible rates. That should mean a slight decrease in demand for homes, giving those on the search fewer offers to compete against.

Despite a slight shift in demand, the available inventory will probably remain tight. One forecast predicts that inventory will only increase by 0.03% in 2022.

While 2021 brought dramatic price increases for houses across the nation, houses in 2022 will rise at a more moderate pace. There is an expectation that the market and economy in general will stabilize as local, state, and federal policies tackle widespread...

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