Provided By Realty Times
Economists and real estate experts have discussed, debated, and driven home the important role a housing recovery has in helping the overall economy recovery.
In a recent speech during the 2012 National Association of Homebuilders International Builders' Show, Federal Reserve Chairman Ben Bernanke emphasized the need for just that, a housing recovery.
Despite the end of the recession in 2009, many American households continue to struggle. The unemployment rate remains elevated, hovering between 8 and 9 percent. Home prices are on the downturn, falling over 4 percent in the last year, and distressed properties still dominate many markets.
Additionally, potential would-be buyers have been sidelined by tightened credit standards, including the need for excellent credit and at least 20 percent down.
Bernanke commented on today's conditions, noting, "Though some progress has been made in reversing the losses in jobs and income sustained during the recession, the pace of expansion has been frustratingly slow and the unemployment rate remains very high by historical standards. The state of the housing sector has been a key impediment to a faster recovery."
Existing-home sales and new construction have seen minor rises in recent data studies, but the pace has not been enough to offset the large inventory glut of home.
In his speech Bernanke gave an overview of the state of housing. He showed how the past few years have seen a big disparity between supply of single-family homes and demand for these homes. Supply has far outweighed demand. This has left lots of unoccupied homes.
He said, "While this figure has declined slightly during the past few years, it is nonetheless up dramatically from the first half of the 2000s, when readings of about 1-1/4 million vacant homes were the norm."
Additionally, "In each of the past few years, roughly 2 million homes have entered the foreclosure process, and many of these homes have been put up for sale, crowding out much of the need for new building."
Declines is home prices have meant a reduction in homeowner equity by more than 50 percent from the peak of the boom. That translates to a loss of $7 trillion in household wealth. Even more troublesome is the group of 12 million homeowners who are now upside down in their mortgages.
It is these problems with housing that have kept the economy from recovering as quickly and robustly as it should. Bernanke notes, "The state of housing and mortgage markets may also be holding back the recovery of our financial system and the normalization of credit conditions. Mortgage delinquencies surged between 2007 and 2009 and remain high, imposing losses on lenders, mortgage insurers, and investors."
In order to help the depressed housing market, and in turn help the overall economic recovery and employment situation, there need to be "sustained efforts to address the many interlocking factors holding back the housing market will pay dividends in the long run."
Monday, April 9, 2012
Friday, April 6, 2012
Happy Easter!
Jesus said unto her, I am the resurrection, and the life: he that believeth in me, though he were dead, yet shall he live. (John 11:25)
Thursday, April 5, 2012
Bigger Isn't Necessarily Better
Provided By Realty Times
From young, qualified first-time home buyers to 50-and-olders, moving, up, over or down, a new breed of buyer is descending upon the Silicon Valley Housing market.
They've worked hard to save, they have solid jobs and they are qualified to buy big.
But offer them what they can really afford and they'll give you the thumbs down.
They are the new financial conservatives.
They'd rather not be house poor.
They can afford much more, but they want less -- less square footage, a smaller energy bill, fewer cleaning and maintenance headaches, but most importantly, less to pay out on the monthly mortgage.
They want a simpler, smaller American Dream.
It's all about the "more" that comes with the "less."
A smaller, less expensive home means more financial freedom in terms of more cash to save, more discretionary income to spend on nights out or travels away. A smaller home also means a smaller maintenance noose around your neck.
"Since new home prices peaked in 2007, new single-family sales of homes costing more than $500,000 have been more than cut in half, dropping from 13 percent to just 6 percent of all new home transactions," said Rick Palacios Jr., senior research analysis of John Burns Real Estate Consulting.
"During this time, sales of home for under $200,000 have risen from 33 percent to 42 percent of transactions (nationwide). In fact, sales of homes priced under $300,000 now account for roughly 75 percent of all new single-family transactions. Of course, price declines and a shift to smaller homes played a role in this change, but consumer attitudes have shifted too. Our surveys and our consulting work show that today's buyer is frequently very focused on affordability, and this broad macro theme will continue to play itself out in the new home space during 2012," Palacios added.
A young couple in Silicon Valley with a combined income of $150,000 and top-notch credit can qualify for a mortgage with an debt-to-income ratio of up to 50 percent and their friends may be impressed, but the deal comes with a massive forever-property-tax-bill, uber cleaning and maintenance costs and yard upkeep from hell, not to mention massive energy bills. Home buyers are wisely saying "no thanks" to that. "We don't want house poor. We'd rather have extra money to enjoy life, travel, eat out and save a few bucks." That's a decided change from boom times when buyers wanted the biggest, baddest, most expensive home money could buy.
It's a lot like the change from the old fitness regimen of bulk and brawn to one of a more svelte approach for endurance.
Today's economy demands a meaner, leaner bucks and brains for long-term homeownership.
From young, qualified first-time home buyers to 50-and-olders, moving, up, over or down, a new breed of buyer is descending upon the Silicon Valley Housing market.
They've worked hard to save, they have solid jobs and they are qualified to buy big.
But offer them what they can really afford and they'll give you the thumbs down.
They are the new financial conservatives.
They'd rather not be house poor.
They can afford much more, but they want less -- less square footage, a smaller energy bill, fewer cleaning and maintenance headaches, but most importantly, less to pay out on the monthly mortgage.
They want a simpler, smaller American Dream.
It's all about the "more" that comes with the "less."
A smaller, less expensive home means more financial freedom in terms of more cash to save, more discretionary income to spend on nights out or travels away. A smaller home also means a smaller maintenance noose around your neck.
"Since new home prices peaked in 2007, new single-family sales of homes costing more than $500,000 have been more than cut in half, dropping from 13 percent to just 6 percent of all new home transactions," said Rick Palacios Jr., senior research analysis of John Burns Real Estate Consulting.
"During this time, sales of home for under $200,000 have risen from 33 percent to 42 percent of transactions (nationwide). In fact, sales of homes priced under $300,000 now account for roughly 75 percent of all new single-family transactions. Of course, price declines and a shift to smaller homes played a role in this change, but consumer attitudes have shifted too. Our surveys and our consulting work show that today's buyer is frequently very focused on affordability, and this broad macro theme will continue to play itself out in the new home space during 2012," Palacios added.
A young couple in Silicon Valley with a combined income of $150,000 and top-notch credit can qualify for a mortgage with an debt-to-income ratio of up to 50 percent and their friends may be impressed, but the deal comes with a massive forever-property-tax-bill, uber cleaning and maintenance costs and yard upkeep from hell, not to mention massive energy bills. Home buyers are wisely saying "no thanks" to that. "We don't want house poor. We'd rather have extra money to enjoy life, travel, eat out and save a few bucks." That's a decided change from boom times when buyers wanted the biggest, baddest, most expensive home money could buy.
It's a lot like the change from the old fitness regimen of bulk and brawn to one of a more svelte approach for endurance.
Today's economy demands a meaner, leaner bucks and brains for long-term homeownership.
Wednesday, April 4, 2012
10 Big home buying mistakes
Provided By Trulia
Moving too fast
Purchasing a home can be an exciting experience, but many home buyers rush into it. A home is something you're likely to have for several years, but all too often, people only look at a few places, and fall in love with -- and buy -- one of the very first properties they've seen.
That's a mistake. Rushing through things, you'll miss out on other homes that may suit your needs -- or your pocketbook -- better. Worse, you could end up with a house that's a bad fit for you.
If the circumstances allow, take your time and visit as many homes for sale as you can. Keep a list, noting each home you've seen and what you liked and didn't like about each. Take the time to revisit homes high on your list, so you have a clear picture about each home's pluses and minuses. You'll find that moving more slowly and deliberately will help you make a smarter purchase.
Not researching
Too often, house hunters simply search the local real estate listings, find a home they like and buy it, knowing very little about local market conditions, the history of the home they're buying and the surrounding community.
That's unfortunate, because such information can help you find the right home, know how much to offer when bidding for a home, and even avoid purchasing the wrong house.
Trulia offers lots of real estate information, so use it. Trulia's Stats and Trends allows you to see how much homes are selling for in your area, how many properties are on the market, where prices are rising or falling, and even community information like the quality of the local schools and a neighborhood's safety. (Check out Stats & Trends for San Francisco, to see an example.) Trulia's Advice & Opinions allows you to see what other people are saying about the community and reach out to others for real estate advice.
You can also look up individual homes for sale that interest you and find out information like when a home was last sold and for how much, its size and when it was built. The more you know about a particular property and its surrounding community, the more likely you'll make a smart purchase when it comes time to buy.
Skipping a home inspection
Having a home inspected before buying seems like another step in a long and sometimes confusing process, but getting a home inspection is well worth it. A good home inspector can alert you to major home defects -- like a leaky roof, termite infestations and a shoddy foundation -- that could cause many a headache and financial hurt should the property become yours. Getting a quality inspection done can alert you to homes that are a great buy, may need a little work, or are money pits that should be avoided all together.
Choosing the wrong house
It's possible to fall in love with a home that looks perfect, but in actuality, is not the right property for you. Say, that home with the grand foyer and imposing stairs looks impressive, but once you move in with your 2-year-old, you discover that those stairs give you a fright whenever he climbs them. Or, that open floor plan looked so inviting when you toured the home, but once you move in, you can't figure out where to put the furniture in the home's non-defined spaces.
You get a view of how the owner lives in the home when house-hunting, but take the time to consider how you'd occupy the space, and whether it'd truly work for you.
Ignoring your surroundings
When you buy a home, you're not only getting the walls around you -- you're gaining neighbors and a community as well. It's a mistake to fall in love with a home without thinking about where it's situated and who your neighbors might be -- because even if the home suits you well, it could turn out that its environment doesn't.
Buying too much house
When looking to buy a home, many of us aim for the biggest house we can afford. But is biggest always better? Think about whether you really need all that space, and whether you can truly afford it in terms of the mortgage payments and the cost to maintain a home. A home might not be truly enjoyable when you're struggling to keep up with it financially.
Take a look at your monthly costs (food, debt, utilities, etc.), and try not to have your monthly debts (including your mortgage) be more than 36 percent of your income before taxes. Don't assume your income will go up and your expenses will remain steady -- you want some leeway in case your income goes down and your daily living expenses increase.
Getting the priciest home on the block
Another temptation is to buy the most expensive house on the block. If you can afford it, and you never have to re-sell it, then why not? But most of us change homes at least once or twice in our lifetimes. That's when buying the best house on the block isn't a good idea. When it comes time to resell the house, you may find that your asking price far exceeds the price range of other homes in your area and that buyer interest in it will be limited.
Not getting pre-qualified/approved
Getting pre-qualified for a loan gives you an idea of how much you can afford to borrow. If you start house hunting without this pre-approval, you may waste time and energy on homes you can't afford.
The next step is getting pre-approved for a loan -- this gives you an edge once you find that house you want to purchase. A pre-approval letter from a lender shows a seller that a lender has agreed to lend you a specified amount. Without this approval, you will be at a disadvantage when bidding on a home -- buyers with financing in place are more attractive to sellers than those without financing. Also, by having pre-approval, you'll avoid being beat out by another buyer who gets his financing together quicker.
Making an unconditional offer
Putting in an offer without any contingencies may seem like a hassle-free way to purchase a house (and a way to win over a seller who has multiple offers), but it's actually not a very smart move. A contingency protects you should you have to back out of an offer. Without a contingency, you may be penalized should you have to break a contract and not follow through with the purchase. Among the contingencies you should think of adding to your contract are:
Make your offer contingent on your ability to get mortgage financing. That is, if you don't get financing, your contract is null and void.
Ask for the right to conduct a home inspection. Make your offer contingent on your acceptance of the home inspection's findings. This gives you the opportunity to ask the seller for fixes, or to back out of the contract should the home be in need of severe repair.
If you have a house you need to sell before your next home purchase, make the purchase of your next home contingent upon being able to sell the first. That way, if you can't find a buyer for your home, you're not roped into going through the purchase of a new one.
Not getting everything in writing
You may think that the stainless-steel fridge comes with your new house, but the home's seller may have other ideas. So it's best to put into writing everything that will and won't be included with the sale of the home, just so you won't have any surprises when you move in.
Moving too fast
Purchasing a home can be an exciting experience, but many home buyers rush into it. A home is something you're likely to have for several years, but all too often, people only look at a few places, and fall in love with -- and buy -- one of the very first properties they've seen.
That's a mistake. Rushing through things, you'll miss out on other homes that may suit your needs -- or your pocketbook -- better. Worse, you could end up with a house that's a bad fit for you.
If the circumstances allow, take your time and visit as many homes for sale as you can. Keep a list, noting each home you've seen and what you liked and didn't like about each. Take the time to revisit homes high on your list, so you have a clear picture about each home's pluses and minuses. You'll find that moving more slowly and deliberately will help you make a smarter purchase.
Not researching
Too often, house hunters simply search the local real estate listings, find a home they like and buy it, knowing very little about local market conditions, the history of the home they're buying and the surrounding community.
That's unfortunate, because such information can help you find the right home, know how much to offer when bidding for a home, and even avoid purchasing the wrong house.
Trulia offers lots of real estate information, so use it. Trulia's Stats and Trends allows you to see how much homes are selling for in your area, how many properties are on the market, where prices are rising or falling, and even community information like the quality of the local schools and a neighborhood's safety. (Check out Stats & Trends for San Francisco, to see an example.) Trulia's Advice & Opinions allows you to see what other people are saying about the community and reach out to others for real estate advice.
You can also look up individual homes for sale that interest you and find out information like when a home was last sold and for how much, its size and when it was built. The more you know about a particular property and its surrounding community, the more likely you'll make a smart purchase when it comes time to buy.
Skipping a home inspection
Having a home inspected before buying seems like another step in a long and sometimes confusing process, but getting a home inspection is well worth it. A good home inspector can alert you to major home defects -- like a leaky roof, termite infestations and a shoddy foundation -- that could cause many a headache and financial hurt should the property become yours. Getting a quality inspection done can alert you to homes that are a great buy, may need a little work, or are money pits that should be avoided all together.
Choosing the wrong house
It's possible to fall in love with a home that looks perfect, but in actuality, is not the right property for you. Say, that home with the grand foyer and imposing stairs looks impressive, but once you move in with your 2-year-old, you discover that those stairs give you a fright whenever he climbs them. Or, that open floor plan looked so inviting when you toured the home, but once you move in, you can't figure out where to put the furniture in the home's non-defined spaces.
You get a view of how the owner lives in the home when house-hunting, but take the time to consider how you'd occupy the space, and whether it'd truly work for you.
Ignoring your surroundings
When you buy a home, you're not only getting the walls around you -- you're gaining neighbors and a community as well. It's a mistake to fall in love with a home without thinking about where it's situated and who your neighbors might be -- because even if the home suits you well, it could turn out that its environment doesn't.
Buying too much house
When looking to buy a home, many of us aim for the biggest house we can afford. But is biggest always better? Think about whether you really need all that space, and whether you can truly afford it in terms of the mortgage payments and the cost to maintain a home. A home might not be truly enjoyable when you're struggling to keep up with it financially.
Take a look at your monthly costs (food, debt, utilities, etc.), and try not to have your monthly debts (including your mortgage) be more than 36 percent of your income before taxes. Don't assume your income will go up and your expenses will remain steady -- you want some leeway in case your income goes down and your daily living expenses increase.
Getting the priciest home on the block
Another temptation is to buy the most expensive house on the block. If you can afford it, and you never have to re-sell it, then why not? But most of us change homes at least once or twice in our lifetimes. That's when buying the best house on the block isn't a good idea. When it comes time to resell the house, you may find that your asking price far exceeds the price range of other homes in your area and that buyer interest in it will be limited.
Not getting pre-qualified/approved
Getting pre-qualified for a loan gives you an idea of how much you can afford to borrow. If you start house hunting without this pre-approval, you may waste time and energy on homes you can't afford.
The next step is getting pre-approved for a loan -- this gives you an edge once you find that house you want to purchase. A pre-approval letter from a lender shows a seller that a lender has agreed to lend you a specified amount. Without this approval, you will be at a disadvantage when bidding on a home -- buyers with financing in place are more attractive to sellers than those without financing. Also, by having pre-approval, you'll avoid being beat out by another buyer who gets his financing together quicker.
Making an unconditional offer
Putting in an offer without any contingencies may seem like a hassle-free way to purchase a house (and a way to win over a seller who has multiple offers), but it's actually not a very smart move. A contingency protects you should you have to back out of an offer. Without a contingency, you may be penalized should you have to break a contract and not follow through with the purchase. Among the contingencies you should think of adding to your contract are:
Make your offer contingent on your ability to get mortgage financing. That is, if you don't get financing, your contract is null and void.
Ask for the right to conduct a home inspection. Make your offer contingent on your acceptance of the home inspection's findings. This gives you the opportunity to ask the seller for fixes, or to back out of the contract should the home be in need of severe repair.
If you have a house you need to sell before your next home purchase, make the purchase of your next home contingent upon being able to sell the first. That way, if you can't find a buyer for your home, you're not roped into going through the purchase of a new one.
Not getting everything in writing
You may think that the stainless-steel fridge comes with your new house, but the home's seller may have other ideas. So it's best to put into writing everything that will and won't be included with the sale of the home, just so you won't have any surprises when you move in.
Monday, April 2, 2012
Curb Appeal For Rental Properties
Provided By Realty Times
When it comes to common-knowledge approaches to curb appeal, first impressions are lasting impressions, and property managers can build on that axiom to boost love-at-first-sight interest in rental properties.
"You never get a second chance to make a good first impression. No matter how great the service is, or how great the programs are, if the property doesn't look good, you'll never get the chance to go further with," a potential tenant, says Cris Sullivan, senior vice president and executive director of operations at Gables Residential, a Atlanta, GA-based real estate acquisition, development and management company for multifamily properties and mixed-use communities.
Potential tenants expect a manicured property, a tamed yard, fresh paint and an overall neat presentation, but, as niche or more unique properties become more popular, a creative curb appeal strategy with a personal touch can add value.
Jared Meadors, owner of Medusa Properties in Houston, TX says property owners should expect to make an investment that enhances the appeal of the property from the outside in because the effort will pay for itself over time.
"That's the thing about improvements in general. They pay for themselves five to 10 times over," says Meadors who specializes in resorted, older properties.
"It took me a decade before I learned that competing on price alone is a race to the bottom. Apple products are the most expensive in every category where they compete, but they dominate those categories, and make more money than everyone else while doing it," he added.
Meadors also says curb appeal investments allow him to charge slightly higher rent and they reduce vacancy periods because nicer looking properties rent faster than their less appealing competitors.
Meadors' first addresses a property's character to add curb appeal.
He often selects properties that may appear to look "boring," because the property was built in the 1920s or 1930s and may have been stripped of its character over time due to shifting attitudes about style. These architecturally-stripped properties are like a blank canvas. He selects the most appealing qualities of an era and restores them to the property. This often means modifying the facade with renewed architectural detail.
"The style of the building itself is really important. From an architectural approach, I take the coolest elements of an era and apply them to a building," Meadors says.
Meadors also says fencing can serve as a multi-functional addition to a property. Fencing frames a property's boundaries, it's a friendly bonus for pet owners, it acts as a backdrop for landscaping and it acts as a buffer between the front door and the street a major benefit in high traffic areas.
"In a really dense urban environment, any kind of buffer you can give your tenants from the street is really nice. Rather than having a big, open yard, add a cool fence or wall and a private patio. Now they have a buffer from the street and private space," Meadors said.
Meadors also encourages creative landscaping.
Appealing foliage is an eye-catching addition to a property, but it doesn't have to be high-maintenance or an expensive addition. Climbers, for example, require little attention and they add a colorful flair to a rental property and the benefit of added privacy.
Do you have suggestions for improving a property's curb appeal? Share your efforts - successes and failures - as insight for others planning to boost a property's first impression.
When it comes to common-knowledge approaches to curb appeal, first impressions are lasting impressions, and property managers can build on that axiom to boost love-at-first-sight interest in rental properties.
"You never get a second chance to make a good first impression. No matter how great the service is, or how great the programs are, if the property doesn't look good, you'll never get the chance to go further with," a potential tenant, says Cris Sullivan, senior vice president and executive director of operations at Gables Residential, a Atlanta, GA-based real estate acquisition, development and management company for multifamily properties and mixed-use communities.
Potential tenants expect a manicured property, a tamed yard, fresh paint and an overall neat presentation, but, as niche or more unique properties become more popular, a creative curb appeal strategy with a personal touch can add value.
Jared Meadors, owner of Medusa Properties in Houston, TX says property owners should expect to make an investment that enhances the appeal of the property from the outside in because the effort will pay for itself over time.
"That's the thing about improvements in general. They pay for themselves five to 10 times over," says Meadors who specializes in resorted, older properties.
"It took me a decade before I learned that competing on price alone is a race to the bottom. Apple products are the most expensive in every category where they compete, but they dominate those categories, and make more money than everyone else while doing it," he added.
Meadors also says curb appeal investments allow him to charge slightly higher rent and they reduce vacancy periods because nicer looking properties rent faster than their less appealing competitors.
Meadors' first addresses a property's character to add curb appeal.
He often selects properties that may appear to look "boring," because the property was built in the 1920s or 1930s and may have been stripped of its character over time due to shifting attitudes about style. These architecturally-stripped properties are like a blank canvas. He selects the most appealing qualities of an era and restores them to the property. This often means modifying the facade with renewed architectural detail.
"The style of the building itself is really important. From an architectural approach, I take the coolest elements of an era and apply them to a building," Meadors says.
Meadors also says fencing can serve as a multi-functional addition to a property. Fencing frames a property's boundaries, it's a friendly bonus for pet owners, it acts as a backdrop for landscaping and it acts as a buffer between the front door and the street a major benefit in high traffic areas.
"In a really dense urban environment, any kind of buffer you can give your tenants from the street is really nice. Rather than having a big, open yard, add a cool fence or wall and a private patio. Now they have a buffer from the street and private space," Meadors said.
Meadors also encourages creative landscaping.
Appealing foliage is an eye-catching addition to a property, but it doesn't have to be high-maintenance or an expensive addition. Climbers, for example, require little attention and they add a colorful flair to a rental property and the benefit of added privacy.
Do you have suggestions for improving a property's curb appeal? Share your efforts - successes and failures - as insight for others planning to boost a property's first impression.
Subscribe to:
Posts (Atom)