Dream homes are great to dream about, but please don't expect everything without the money to match. Expectations that are too high might cause the first-time homebuyer to miss a golden opportunity. If you've been renting and don't have much equity, the smart thing to do is look into the future at the second or even third home as the one that really represents where you want to be. People believe their parents did the right thing by buying, but many people forget that their parents may have also built up the move-up over time.
Financial coast David Bach says, "... renters may need to take a step backward when buying their first home. It's almost always better to cut the renting cycle as soon as you can and to continue to upgrade from there," he said. "Buy what you can afford now, build equity, and move closer to that dream home."
With today's loan products, there is ample opportunity to get into that first property, where you realistically may not be staying for more than 3 to 5 years, so remembering that, compromising on home features may be easier to do. Read this article about the Wells Fargo buyer survey.
6/28/2006
6/23/2006
Southern California Home Prices Are Holding
Even though the sales rate has slowed over the last six months, Dataquick's check of the public records tells us "the median price paid for a home in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties was $485,000 last month. That was the same as April, and up 6.4 percent from $456,000 for May last year." Home appreciation is at its lowest pace within the last 6 years, however 27,282 homes were sold in May, lower than the peak May in 2002, but an increase of over 10% from April, 2006.
6/21/2006
Compare Interest Rate Trends
If you're a buyer or a seller looking for a buyer, the graphs on various interest rates should be of interest to you. Look at the trends since 2000/2001 to the present, and the trend is easily seen. the LIBOR and 11th District COFI are used in mortgage lending, but they all reveal the same story. By looking at the tables, it's easy to see specific interest rates and specific times. What is most noticeable is the steady upward trend over 2005-2o06.
6/17/2006
What a Rate Increase Does to Your Mortgage Payment
More mortgage rate increases are still on the horizon; don't wait if you have the opportunity to act in the near future. This time last year (see linked article) the overal 30-year fixed rate was at 5.63 percent, this time a year later, it's 6.62% with .5 point, meaning it would be a little higher if you paid no points. The difference to you the borrower on a $350,000 loan amount is over $200/month. At 5.63 percent, your monthly principal/interest payment last year was approximately $2015.90, and at 6.62 percent this year, your payment is approximately $2239.93. See my website at http://www.juliahuntsman.com for a property search on our local MLS, and more financial information.
6/12/2006
Public Not Buying Housing "Crisis", At Least Not In Texas
From Real Estate Center Online News:
COLLEGE STATION – Despite media reports that the housing market faces imminent collapse, a study released this week shows consumers are confident real estate values will remain solid even if mortgage rates increase.
Three-quarters of respondents to ING Direct's most recent homeowner study said they had very little concern about the future value of their homes. The study is based on a national survey conducted by Synovate, a global research firm.
Most survey respondents (85 percent) believe their homes increased in value during the last three years. While homeowners felt their homes have increased in value by approximately 6 percent in the last year, they only expect values to increase by about 4 percent in the next 12 months.
Real Estate Center Chief Economist Mark Dotzour said the survey shows many Americans are smart enough not to believe everything they see on television, such as media reports that a housing bubble is about to burst.
Dotzour said that not only is the housing market not tanking, but home price appreciation is a red-hot 12.54 percent for the entire nation.
“This is still extraordinary price movement,” he said. “You have to go back to 1979 to find this level of appreciation prior to the current boom.
“While the nation’s inventory of unsold homes was six months in April, homes typically continue to increase in value when inventories are at this level. Texas inventory levels are lower than the national average. With a five-month inventory, Texas homes are likely to continue their recent appreciation trends."
COLLEGE STATION – Despite media reports that the housing market faces imminent collapse, a study released this week shows consumers are confident real estate values will remain solid even if mortgage rates increase.
Three-quarters of respondents to ING Direct's most recent homeowner study said they had very little concern about the future value of their homes. The study is based on a national survey conducted by Synovate, a global research firm.
Most survey respondents (85 percent) believe their homes increased in value during the last three years. While homeowners felt their homes have increased in value by approximately 6 percent in the last year, they only expect values to increase by about 4 percent in the next 12 months.
Real Estate Center Chief Economist Mark Dotzour said the survey shows many Americans are smart enough not to believe everything they see on television, such as media reports that a housing bubble is about to burst.
Dotzour said that not only is the housing market not tanking, but home price appreciation is a red-hot 12.54 percent for the entire nation.
“This is still extraordinary price movement,” he said. “You have to go back to 1979 to find this level of appreciation prior to the current boom.
“While the nation’s inventory of unsold homes was six months in April, homes typically continue to increase in value when inventories are at this level. Texas inventory levels are lower than the national average. With a five-month inventory, Texas homes are likely to continue their recent appreciation trends."
6/11/2006
What's a Seller To Do?
In a market where inventory is building up and sellers are waiting a little longer for an offer, it's time for sellers to think once again about the best improvements to make--and not to make--to get their homes sold. Pools, for the post-baby boomer generation, may not be the right improvement--geographic demand, location, lot size, and maintenance should all be considered. According to the National Association of Realtors, house siding, and kitchen and bathroom upgrades are among the top four best improvements for bringing the best return. Surprisingly, a home office did not bring as high a return on the investment. Regular maintenance is very important, as buyers will move more quickly on a home that does not have deferred issues. In a somewhat slower moving market, a return to standard preparation for home selling will obtain a better offer and a more satisfied buyer.
6/06/2006
1031 Exchange: Have You Thought About It?
Do you find yourself saying:
“Why should I sell – Uncle Sam would get all the profit!”
“I’d sell, but I wouldn’t have enough left after taxes to buy another property!”
“I want to get rid of this property, but the taxes would eat me alive!”
Do you want to be rid of a management headache?
Have you thought about acquiring property in a newer and appreciating area?
Please call or e-mail me for updated information on doing a 1031 exchange. You have possibilities – let me tell you the benefits of doing an exchange and how it becomes a financial planning tool. Call me direct at 562-896-2609 or e-mail me at ocean@surfside.net, or see me online at www.juliahuntsman.com.
“Why should I sell – Uncle Sam would get all the profit!”
“I’d sell, but I wouldn’t have enough left after taxes to buy another property!”
“I want to get rid of this property, but the taxes would eat me alive!”
Do you want to be rid of a management headache?
Have you thought about acquiring property in a newer and appreciating area?
Please call or e-mail me for updated information on doing a 1031 exchange. You have possibilities – let me tell you the benefits of doing an exchange and how it becomes a financial planning tool. Call me direct at 562-896-2609 or e-mail me at ocean@surfside.net, or see me online at www.juliahuntsman.com.
5/31/2006
California's Median Price for April
The statewide median price is 10.2 percent higher than April, 2005, even though number of residential sales is less. And, according to Dataquick, there was no drop in the median price for single family homes from March, 2006; there was a .1 percent increase in the median price of a condo from March, 2006. See my earlier post about the median price of the six Southern California counties as reported through Dataquick, which is lower than the statewide median.
If Orange County economist Gary Watt is to be believed, the buyer affordability index is based on assumptions about 40 years old because there were only 3 types of loans then, one being a standard conventional loan required a much higher down payment than conventional loans on the market today, including a no down payment loan which was unthinkable back then. So yes, there's a decrease in numbers of sales, but remember medians and averages don't always tell the local story. In fact, 339 out of 401 cities and communities still show an increase in their median prices from one year ago. Just click on the link for more information through the California Association of Realtors. For an MLS property search go to http://www.juliahuntsman.com.
If Orange County economist Gary Watt is to be believed, the buyer affordability index is based on assumptions about 40 years old because there were only 3 types of loans then, one being a standard conventional loan required a much higher down payment than conventional loans on the market today, including a no down payment loan which was unthinkable back then. So yes, there's a decrease in numbers of sales, but remember medians and averages don't always tell the local story. In fact, 339 out of 401 cities and communities still show an increase in their median prices from one year ago. Just click on the link for more information through the California Association of Realtors. For an MLS property search go to http://www.juliahuntsman.com.
5/26/2006
Housing Forecasts Unpredictable
Marcie Geffner at Inman News says: "A look back at housing market forecasts over the last five or six years makes the point. Forecasters consistently under-estimated the strength of the housing boom and predicted year after year that the housing markets were headed into a period of fewer sales. That prediction may be realized this year, yet any forecast can come true eventually if the time horizon is long enough, particularly when a market is known to have been cyclical in the past."
Local market information within the larger picture is what the buyer or seller really needs to know to take action. Believing that the market is going to come down 20 percent in price is not believable at this point, yet many people continue to wait for the end of the current year believing the magic point in time will occur, and they will be ready to buy. Yet they will lose tax advantages by doing that, and an increase in interest rates may offset any reduction in market price. The best time to take action is when you're thinking about it, future events are unknown. The best plan is one that builds in contingencies for best-case or worst-case scenarios, in other words, be prepared. AS Ms. Geffner says, "Forecasts should encourage people to think ahead about what might happen and how they could prepare to make the best of whatever occurs."
Local market information within the larger picture is what the buyer or seller really needs to know to take action. Believing that the market is going to come down 20 percent in price is not believable at this point, yet many people continue to wait for the end of the current year believing the magic point in time will occur, and they will be ready to buy. Yet they will lose tax advantages by doing that, and an increase in interest rates may offset any reduction in market price. The best time to take action is when you're thinking about it, future events are unknown. The best plan is one that builds in contingencies for best-case or worst-case scenarios, in other words, be prepared. AS Ms. Geffner says, "Forecasts should encourage people to think ahead about what might happen and how they could prepare to make the best of whatever occurs."
5/24/2006
Realtor vs. real estate agent -- Tune In
Yes, there is a difference, and this week's advertisements in different spots around the state talk about just that. Click here to listen: http://www.car.org/index.php?id=MzE4NzE= . The real estate industry technology whizzes who work to make real estate "data" so available to the consumer really build from the work actually performed by the Realtor professional who effects the listing and sale of property. The foundation of expertise is provided by such Realtor professionals, and all that they must do to maintain their knowledge and their skills. Consumers benefit directly from work with a Realtor who has a commitment to the service of their clients.
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