How Will the Fed’s Latest Decision Affect Buyers and Sellers?

The Fed’s announcement to cut back its balance sheet means the longer you wait to buy or sell a home, the harder it might be for you.

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The Federal Reserve just announced a move that will have a big impact on both home buyers and sellers.

At the latest Fed meeting on September 20th, Fed Chair Janet Yellen announced that the Fed would start to cut back its balance sheet. While that might sound boring compared to the usual announcements of Fed rate hikes, it's actually a very big deal. 

You see, when the financial crisis hit 10 years ago, the Fed needed to take emergency measures, so it injected a huge amount of money into the economy. The Fed did this by buying up various financial assets totaling $3.5 trillion, an enormous sum that made up almost 25% of the entire U.S. economy at the time. 

This money helped stabilize various markets and get the economy back on track. However, the Fed is confident that the economy is now doing well enough for it to slowly start taking some of that money back. And that's exactly what this announcement was all about. 

As you can imagine, this is going to have a massive impact throughout the economy, including on real estate. According to experts, it will inevitably put upward pressure on consumer borrowing costs, such as mortgage rates, which have stayed fairly low in spite of the Fed's actions so far.

if you’re thinking of entering the real estate market, now’s the time to do so.

In other words, if you are thinking of buying a home, the Fed's most recent move will eventually make it more expensive for you to do so because you will be paying more in interest. If you are looking to sell your home, this might mean there will be fewer interested buyers, which might drive prices down and might make it harder to sell.

Now, this won't happen immediately, because the Fed's balance sheet rollback will be gradual. As a matter of fact, the Fed is only reducing its balance sheet by a mere $10 billion a month to start with—just a drop compared to the $4.5 trillion total.

But make no mistake, while the Fed's moves will take time to bear fruit, they will drive up interest rates, particularly as the Fed ramps this process up in the coming months. 

That's why if you've been thinking of getting into the real estate market, now is such a crucial time. 

If you have any questions about buying or selling a home, give me a call at 703-328-3434 or send me an email at Janet@TheGreshGroup.com. We can discuss all your real estate needs, as well as details about the Fed's recent announcement and what it means for you. I look forward to hearing from you!

5 Remodeling Projects With the Best Return

Home remodeling is as hot as it's ever been. Here are five projects that bring the best return on investment.

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Home remodeling is hotter than ever.

According to researchers at Harvard University, remodeling investment is up 6% over last year, and now makes up a $324 billion market. 

According to a survey of remodelers and real estate professionals, there are five remodeling projects that offer the best returns:

1. Your kitchen. Kitchen remodeling can be as simple or as elaborate as you like. However, to maximize your return, keep your investment to under 20% of the value of your home—as is recommended by surveyed real estate professionals. The outcome? A whopping 85% return on your investment.

2. Your bathroom. A thorough bath remodeling project can cost up to $20,000. However, not only will it pay for itself, it should give you an added 80% return.


3. Your deck. Replacing your deck can cost you anywhere from a few thousand dollars to tens of thousands of dollars, depending on the size. The expected benefit will be similar to a bathroom remodeling project—around an 80% return for a fresh, new deck.

Some will make more sense for your home than others.

4. Your siding. Fading or worn-out siding can turn off potential buyers before they even step foot in your home. Replacing old siding will make it much easier to sell your home, and in addition, it should give you an 80% return on an investment of around $10,000.

5. Your windows. New windows can mean greater energy efficiency, increased thermal and acoustic comfort, and a more modern look. Homebuyers are well aware of this, and they are willing to pay accordingly. That's why a typical window replacement should yield at least a 70% return on your investment. 

Clearly, some of them will make more sense for your home than others. If you're considering selling your home, then just one of these projects could add tens of thousands of dollars to the price you'll be able to get.

If you have any questions or want additional advice about which remodeling projects make sense for you, give me a call at now 703-328-3434 or send me an email at Janet@TheGreshGroup.com. We can discuss all the details and I can give you an accurate estimate of what these projects could be worth. I look forward to hearing from you!