The spring homebuying season so far has been marked by mixed signals as the nation’s housing supply remains limited, causing home prices to remain high year-over-year. At the same time, mortgage rates have moderated.
While hopeful homebuyers may be feeling the whiplash of the last few years, their outlook remains optimistic. According to Bank of America’s 2023 Homebuyer Insights Report, while more than half of prospective homebuyers surveyed (55%) believe the market is more competitive than last year, just as many (54%) plan to either speed up their home purchases or buy when they originally planned – including 62% of Gen Z and 55% of Millennial homebuyers.
Even the experts don’t hold a crystal ball to the ins and outs of the homebuying market, but these are three broader trends Maryland buyers can anticipate in the months ahead:
- Limited housing supply: Low inventory has created a challenging market in Maryland for the past several years. The reality is this might not change any time soon given owners have locked-attractive mortgage rates making them reluctant to sell.
- A steady start to the year: High rates are challenging affordability, but Bank of America expects mortgage rates to fall to 5.25% by year-end. That said, a common mistake that potential homebuyers make is waiting and trying to time the market. Instead, consider your personal timeline and when you’re financially ready to buy.
- Buyers hold more decision-making power: At the height of the homebuying frenzy, there were stories of homebuyers overbidding by enormous sums or making numerous concessions. As we shift to a more balanced environment between buyers and sellers, buyers will have more time to think and negotiate – making the shopping experience more manageable.
Homebuying Strategies
The challenges and opportunities that the homebuying environment presents will require some careful planning for those looking to buy. Whether 2023 is the year you become a homeowner or purchase your second home, here are a few strategies to get you started:
- Take advantage of digital tools: Looking for more convenience and control over home financing? Online resources can guide you through the mortgage process from start to finish and prevent any delays in the process, whether it’s checking the status of your loan or submitting required documentation electronically. They’ll even provide you with a to-do list of outstanding tasks and status and details of a loan application.
- Show sellers you can meet financial obligations: Whether you’re getting additional down payment assistance or earn a larger income, putting down a larger down payment could lower your mortgage rate. Anytime you can showcase to the seller that you’re in a good financial position, you should do so, as it’ll make your offer stronger.
- Pay discount points on your mortgage: Mortgage points, also known as discount points, are fees you pay your lender at closing for a reduced interest rate on your loan. While this might not be the right strategy for everyone, paying discount points on your mortgage could offer potential savings over the course of the loan. In general, the longer you plan to own the home, the more you’ll save using points. Also determine whether you have the cash available to buy points up front.
- Research assistance in upfront costs: Even if a monthly mortgage payment fits into your larger financial picture, many homebuyers might still be struggling with saving for the down payment and closing costs. Recognizing cash reserves are often the biggest barrier to homeownership, Bank of America offers down payment and closing cost assistance – no repayment necessary. Additionally, the Bank of America Down Payment Center helps homebuyers find state and local down payment and closing cost assistance programs in their area and the Bank of America Real Estate Center® identifies down payment and closing cost grant-eligible properties for sale across the country.
- Take your time: Finally, don’t rush into it. Take time to improve your credit score, research lender options, and understand what you can comfortably afford before jumping in.
While buying a home today may require a bit more patience and persistence, taking the time to prepare for what’s ahead, going in with the right mindset and taking advantage of the resources available to you can put you well on the path to your next home.
Takwin Ventures Breaks Barriers, Supports Arab Israeli Startups
Arab Israeli social entrepreneur Imad Telhami has seen phenomenal success from the Babcom customer-service centers he and partner Dov Lautman established to employ Arab women and men in the north, and south of Jerusalem.
Babcom (“Your Door” in Arabic) now employs 5,000 people providing outsourced services, including call centers and software development, to Israeli companies. In 2018, Harvard Business School built a case study about Babcom into its curriculum.
But Telhami was increasingly troubled to note that no Babcom client companies were owned or managed by Arabs.
So in 2014, he joined forces with venture capitalists Chemi Peres of Pitango and Erel Margalit of JVP to found Takwin Ventures, the only VC firm in Israel dedicated to investing in startups with at least one Arab Israeli co-founder.
Since 2015, the Takwin 1 and Takwin 2 funds have given 10 early-stage startups monetary support, office space, research assistance, and connections to professional networks.
“After I got to the point of employing 1,000 people through Babcom, I wondered why there weren’t many Arab companies that could do the same,” said Telhami in his interview with ISRAEL21c.
Arabs make up 21 percent of Israel’s population and less than 2% of its high-tech workforce. Very few are founders.
Telhami’s research revealed that Arab Israelis aren’t less educated than Jewish Israelis, but they are much more likely to go into healthcare than to found high-tech startups.
“I realized that Arabs cannot be involved in startups because they don’t know how to dream big, or they are afraid to dream big. And you need to have the courage to dream big to build a company,” said Telhami.
“They feel they are victims, and I’ve always said that the opposite of an entrepreneur is a victim. An entrepreneur cannot think as a victim.”
Telhami identified five specific obstacles. First, fear of failure (“for Arabs, failure is equated with shame, and they therefore won’t take risks”). Second, fear of the government (“they think the government will not allow Arabs to be anything but second-class citizens, so why bother working hard?”). Third was fear of the banking system and taking out business loans, fourth was lack of entrepreneurial success stories as inspirational models. Fifth was the lack of professional networking opportunities, partly because Arab citizens usually live far from central Israel’s high-tech cluster and partly because they don’t have mandatory military service where Israelis make valuable connections for their future.
Telhami decided to tackle all these issues at once.
“I came up with the concept of Takwin to help people not feel like victims,” said Telhami. Takwin is Arabic for “genesis.”
“Chemi Peres and Erel Margalit loved the idea, so they joined me as partners, and then we found Itzik Frid to become our CEO, to make our dream happen.”
Takwin gives portfolio startups “all the infrastructure to build their own companies. We are a VC, an incubator, and an accelerator. We are their consultants, advisers, investors, and connection to networking,” said Telhami.
“We have to be everything, or we can’t make our entrepreneurs successful.”
Today, even in an uncertain economy where fundraising is difficult, Telhami sees his dream coming true.
Haifa-based Takwin Ventures was ranked by Early Stage Magazine as the top Israeli early-stage fund for fintech startups in 2022.
Among Takwin’s portfolio companies are several in which Telhami and Frid, now its managing partner, see unicorn potential.
One of these is Industry 4.0 startup Feelit. The founders – Technion Prof. Hossam Haick and two of his former PhD students – designed an ink-based sensing technology for predictive maintenance in smart manufacturing environments. Feelit won the 2023 Factories of the Future “Most Disruptive Startup in the Industrial Sector” award at the Advanced Factories and Industry 4.0 Congress in Barcelona. Clients include Henkel, Merck and Continental.
Another is Imagry, developer of a location-independent autonomous driving technology. Under founder Adham Ghazali, Imagry has been testing its software on vehicles in the United States, Germany and Israel. Several months ago, it bested competitors including GM and Mobileye in a bid to install the first autonomous system on electric public buses in Israel. In June, the ambassador of Bahrain took an Imagry-equipped car for a spin.
Soos, co-founded by an Arab man and a Jewish woman, is developing a technology to change the sex of male chicken embryos to address the problem of 7 billion male chicks being killed each year in the egg-laying industry. In 2020, Soos won the $1 million grand prize in the Grow-NY global challenge for food and agriculture innovation.
Other Takwin companies are in sectors as diverse as gaming, fertility tech, and prevention of pressure sores.
“All our portfolio companies were founded by leading Arab Israelis, some by a mix of Arabs and Jews, and they all employ both Arab and Jewish Israelis,” said Frid.
“Many are managed by Jewish Israelis because they have more experience, but we see more Arab Israelis gaining experience and growing as great entrepreneurs.”
Frid emphasizes that “Israeli” is an essential part of each Arab entrepreneur’s identity.
“They are Israelis, like I am Israeli. They have the ambition and just need somebody to put them on the runway to success.”
Takwin also runs 3D Generation, the first venture creation program of its kind in Arab society, in partnership with the Google and Reichman Tech School at Reichman University in cooperation with the Israel Innovation Authority. Takwin VP of marketing and business development Fadi Swidan says the six-month program enables ambitious would-be Arab entrepreneurs “to accelerate from high potential to high growth.”
Telhami, who is Catholic, points out that Israeli Arabs aren’t monolithic. “There are Muslims, Druze, Christians, Bedouins, and Circassians, just as there are many types of Jewish Israelis. I like to put everyone together because I believe that together we are stronger and better.”
He aims to invest in an additional 10 to 20 entrepreneurs through Takwin.
“We’d like to prove to the Arab community, and to the world, that Arabs in Israel are able to build their own companies and make unicorns exactly as Jews can. We would like to break this glass ceiling that is above the head of the Arab by building success stories,” said Telhami.
Produced in association withISRAEL21c