September 19th, 2010 The following is an excerpt from Brett Arends of The Wall Street Journal on September 16th:
Why is now a great time to buy? Here are 10 reasons:
1. You can get a good deal. Prices are down 30 percent on average. They’re at a level that makes sense for people’s income.
2. Mortgages are cheap. At 4.3 percent on average for a 30-year fixed-rate mortgage, your costs to own are down by a fifth from two years ago.
3. You can save on taxes. When you add up the deductions for mortgage interest and others, the cost of owning can drop below renting for a comparable place.
4. It’ll be yours. The one benefit to owning that never changes is that you can paint your walls orange if you want (generally speaking; there might be some community restrictions). How many landlords will let you do that?
5. You can get a better home. In some markets, it’s simply the case that the nicest places are for-sale homes and condos.
6. It offers some inflation protection. Historically, appreciation over time outpaces inflation.
7. It’s risk capital. If the economy picks up, you stand to benefit from that, even if you’re goal is just to have a nice place to live.
8. It’s forced savings. A part of your payment each month goes to equity.
9. There is a lot to choose from. There are some 4 million homes available today, about a year’s supply. Now’s the time to find something you like and get it.
10. Sooner or later the market will clear. The U.S. is expected to grow by another 100 million people in 40 years. They have to live somewhere. Demand will eventually outpace supply.
August 28th, 2010 This past week marks the eighth time in the last nine weeks that mortgage rates have continued to decline and hit record lows. According to Freddie Mac the average 30-year fixed loan interest rate was 4.36% which is down from 4.42% the week before. Rates for 15-year fixed rate loans also hit a new low of 3.86% down from the previous weeks of 3.90%. These record low interest rates are an enormous incentive for those considering purchasing a home to take action. Coupled with substantially reduced prices it is undobtedly an attractive time to be making a real estate purchase. Even should homes see any additional modest decline in pricing, the advantages of securing a phenomenal interest rate can easily outweigh the overall price should rates increase. For those considering a purchase, right now may well be the ideal time to move forward.
August 26th, 2010 Recent news from the Mortgage Bankers Association shows that foreclosures are declining, but undoubtedly a substantial increase in new construction starts and sales will be triggered by jobs being created. The labor force must be reinvigorated with positive momentum in job creation before consumer confidence will return on a scale large enough to drive home sales forward. Currently there are savvy buyers and those with comfortable positions that are taking advantage of decreased home values and exceptional interest rates, but a widespread return to home ownership and investment won’t occur until the economy sees job growth. Hopefully this will occur sooner than later, although the general consensus among most economists is that this recovery will be longer and slower than in recessions past.
August 9th, 2010 Getting a good value is rightfully on the mind of every buyer, especially in today’s market. However, make sure value is defined as more than just the lowest price. Each buyer should do their due diligence to compare all properties as closely as possible based upon the price, condition, and desirability for your needs. Price itself can be misleading to many buyers, particularly discounts and how consumers relate discounts with being a good deal. A home that you’re able to get a substantial discount on may have simply been priced too high to begin with and isn’t as much of a deal as another like property which no discount could be had on but is overall a lower price. Don’t be tricked by marketing ploys but compare apples to apples at overall final price.
Some of the lowest prices on the market can often be foreclosed properties, also referred to as REO’s, but they aren’t always the best value. Sold “As Is” with frequently no disclosures of any kind represented, these homes demand a complete and thorough inspection to determine their habitability and overall condition. In some cases these properties can have extensive damage inflicted by the previous homeowners and some of the more sensational cases get reported by media outlets. More commonly though it is deferred maintenance and hidden defects that are seen throughout this class of properties. Closely examine each aspect of a foreclosure property and get quotes for any damage or maintenance items that will be needed.
Depending upon your motivation for buying and expected timeline within a property it is the home’s overall appeal and practicality that drives most purchases. Finding a good value though is certainly feasible and should be sought after on each purchase, just make sure your definition of value includes more than the purchase price.
August 7th, 2010 While not moving dramatically downward mortgage rates continued this past week to set new record lows. According to Freddie Mac and as reported by the Wall Street Journal the average 30-year fixed rate loan fell to 4.49% this past week, down from 4.54% the week prior. Other products trending lower were 15-year fixed loans at 3.95% and five-year adjustable-rate loans at 3.63%. While these rates likely won’t stay this low for the long term, there seems no indication of an immediate move away from these low marks. Homeowners with sharply a higher current rate or who would like a fixed rate loan can look into refinancing. Of course this continued trend of mortgage rates also bodes well for those still looking to buy or may be looking to buy in the near future.
August 1st, 2010 If you’re a buyer in today’s market there are many home options available. However, when you do find the home you’ve been looking for how do you go about making sure your offer is accepted? One somewhat unconventional manner that has seen growing popularity is to appeal directly to the seller, often in the form of a letter. This can be particularly effective when a home has multiple bids or your offer has some unusual circumstances that preclude you from being overly aggressive.
While every seller is concerned with getting the best value they can for their home, most homeowners do have a personal attachment to the home their selling and would like the incoming purchaser to care for it as deeply as they do. Writing a letter detailing your specific circumstances and investment in that particular home can definitely pay dividends in a seller’s decision. Now, of course if this unconventional method is used it is extremely important that all statements are made with complete honesty. While definitely not the normal approach, this direct appeal to a seller could make the difference in securing the home of your dreams.
July 25th, 2010 A recent study conducted by Princeton Survey Research Associates International and released by BankRate, Inc. revealed that 90% of all homeowners don’t regret their housing purchase, even with the recent sliding prices. Among those that did regret their decision the most popular reasons were being unable to sell to move to a new location and being unable to comfortably afford the monthly payments. Another encouraging aspect of this survey was the revelation that all but 8% of homeowners surveyed knew what type of mortgage they had, in stark contrast two a similar poll two years ago where 26% of borrowers were unaware of their product type.
July 5th, 2010 In the desert Southwest there are absoultely termites lurking around most homes and having a proper termite prevention barrier in place is key. New homes will very typically come equipped with a five year warranty, so should you see any termite activity the original subcontractor that treated the home will come out to take care of the issue. However, after the five year warranty period expires it’s often overlooked to continue prevention techniques and/or barriers.
Some things you can do to keep your home in top shape and avoid termite problems and resulting large bills is to purchase an extended warranty (or similar service plan) and/or practice good lanscaping practices to avoid higher risk of termite activity. Most often we recommend a full retreat of the property which while sometimes expensive up front can prevent larger bills from multiple spot treatments for years to come. After this new application you should have a similar warranty period in place and any other activity will be covered.
Another avenue to mitigate your risk, regardless of whether you have a warranty or not, is to prevent conditions which are conducive to termites. This means making sure your yard drainage is away from the slab and structure of your home. Standing water near the foundation is a recipe for inviting in termites. Therefore be sure your landscaping and plants are a few feet away from the house too. You should also try to maintain a 4″ height between the outside ground level and the bottom plate of your home’s framing. This leaves a stem of concrete visible at which you can easily notice termite “mud tubes/tunnels” and keeps termites from direct contact with the wood framing of your home.
Practice these few tips and consider an extended termite warranty or service plan to ensure your home remains in top shape. Remember, many homes will experience some termite activity in this desert Southwest area, but it’s those left untreated that can have devastating consequences down the road.
July 1st, 2010 Average rates for a 30-year fixed loan fell once again this week down to 4.58% according to Freddie Mac. This represents a new record low avearge and is an additional decrease from the previous record low set last week which was at 4.69%. This continues the good news for buyers in the market today and becomes an even more compelling reason to make a purchase. Refinancing activity hasn’t been tremendously active since many of the eligible borrowers refinanced nearly a year ago when rates were almost as low.
July 1st, 2010 It came down to the last day, but Congress did finally pass the Home Buyer Assistance and Improvement Act. Within this bill lies a provision for extending the closing deadline of the Extended Home Buyer Tax Credit from the original date of June 30th to now September 30th. In order to receive this credit home purchasers still must have signed a purchase contract no later than April 30th of this year, but it now allows as many as an estimated 180,000 people more time to finalize those transactions. Many buyers have run into issues closing these deals because of short sale scenarios or often a delay from lending companies who were overloaded by the surge of people trying to take advantage of this government tax credit program at the very end.
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