Home Buyers

10March

Down Payment – Why Size Matters

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House and Money with Pad of Paper and PenWhether you are a first-time home buyer or a seasoned vet, a down payment is typically required by the lender.  The amount required can range between 3-20% of the final sales price on the property.  So how much should you put down and what will that mean for your monthly mortgage payments?

A larger down payment can benefit you in several ways.  As the size of a down payment increases, the overall monthly amount due will decrease because less money is borrowed.  The size of the down payment will also determine the types of mortgages you are eligible to apply for.  For example, if you are only able to put down 5% you will be limited in the loans you qualify for as well as the number of banks that will loan to you.  Additionally, a higher interest rate might apply.

There are several mortgage calculators available online that calculate the monthly mortgage payment based off the price of the home, interest rate and down payment amount, like this one on Zillow.

For information on effective ways to manage institutional and individual portfolios nationwide, or to shop for real estate visit First Preston HT. Like us on Facebook. Follow us on Twitter.

24September

Lessons on How Not to Annoy your Real Estate Agent

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AnnoyedAgentHaving a good relationship with your real estate agent can make things easier and it’s important to remember that treating them kindly can go a long way and will encourage them to go the extra mile for you.  Here are a few things NOT to do to your real estate agent:

  1. Don’t cheat on your agent.  Find one agent to work with that you like and stick with them.  They work hard for you in hopes of getting paid.
  2. Don’t haggle over price.  If you are selling your home and your agent thinks you have received a great offer, don’t hold out for a better one.  If you are buying, don’t significantly low-ball the asking price.
  3. Don’t skip out on showings.  If you set up an appointment with your agent to see a home, don’t be a no-show.  This is inconsiderate to your agent.
  4. Don’t waste your agent’s time.  If you aren’t serious about making an offer on a particular property, do not request multiple showings pretending that you are interested.
  5. Don’t stick around for an open house.  If your agent is trying to sell your home, it’s proper etiquette to leave the premises until the event is over.  This allows potential buyers to feel more comfortable to explore your home.
5August

Pay Your Mortgage Off Quicker

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PayQuickerAs people inch closer towards retirement, owning their home outright can help give a since of financial security.  Especially for those that have lived through a financial crisis and/or the recent foreclosure crisis.  About two-thirds of the nation’s homeowners are paying on a mortgage while more than 20 million own their homes free and clear.  What are some ways you can get closer to making that last mortgage payment?

  1. Pay more than you owe – You can do this monthly or once a quarter.  Paying a few extra dollars a month or making an extra payment each quarter can help you get closer to your goal.  When you pay more than you owe, the extra amount goes towards the principal which effectively decreases the amount of interest you will owe over the course of the loan.
  2. Refinance your mortgage or pretend you did – Obtaining a 15-year fixed rate mortgage will have higher payments than a 30 year fixed rate but you won’t have to pay twice as much.  If you are unable to refinance you can act like you did by making payments as if your loan were a 15-year mortgage.  This can lead to a lot of interest savings.
  3. Split up your payments – By taking your regular monthly payment and breaking it up into 2 monthly payments or weekly payments during the month you avoid paying extra interest since interest accumulates daily.  If you made biweekly payments on a 30-year mortgage you could end up paying off the loan six years earlier depending on your loan’s terms.

For information on effective ways to manage institutional and individual portfolios nationwide, or to shop for real estate visit First Preston HT. Like us on Facebook. Follow us on Twitter.

29July

Pocket Listings on the Rise

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Liblice Chateau HotelYou might be familiar with the term pocket listing by now since it has become more popular during this current housing market. A pocket listing, also known as a “quiet” or “off-market” listing, is a property for sale that an agent doesn’t officially list on the MLS (multiple listing service), but instead keeps in their “pocket.”

Pocket listings started several years ago as a way to market expensive homes or properties of high-profile people while staying under the radar. This allows the seller and agent to test the market’s reaction of the property sales price without the days-on-market clock ticking as it does when listed on the MLS.  The agent can also potentially reap commissions from both the buyer and the seller.

Housing inventories have remained low but pocket listings could be skewing the numbers since they are not tracked. Lawrence Yun, chief economist for the Realtors said, “Statistically it appears that we are getting back to very balanced market conditions.  However, the sentiment out there is that we still have a shortage of inventory, and I think that is due to the prevalence of pocket listings in some markets.”

For information on effective ways to manage institutional and individual portfolios nationwide, or to shop for real estate visit First Preston HT. Like us on Facebook. Follow us on Twitter.

19June

Housing Bubbles Abroad?

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With the run up in home prices in the U.S. some people are concerned about a possible housing bubble again.  But several economists have popped a hole in this belief based on market fundamentals.  Lending standards having gotten tighter and the size of down payments have increased from the pre-housing bubble burst.   However, the story aboard seems to be different.  The Deputy Managing Director of the International Monetary Fund (IMF), Martin Zhu, noted in a recent speech that housing prices were climbing in several countries.

house prices around the world_rev2 copyCanada is experiencing strong home and apartment construction and has high price-to-rent and price-to-income ratios making affordability tighter.  It is also experiencing a lot of foreign investing from China.  Real home price appreciation has almost hit 20 percent.

The country of Norway has reported around a 30 percent jump in home prices since the worst of the Global Recession which is partly due to surging population and incomes as a result of immigration. A large portion of the consumer’s wealth is sitting in illiquid real estate and household debt is high, so a housing downturn could hurt the country.

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Since the beginning of 2009, Switzerland’s home prices have increased more than 20 percent and mortgage debt has jumped to 140 percent  of GDP, which for some analysts is a warning sign.  There have been efforts to tighten lending standards, as we have seen here in the U.S. after the housing collapse, and increased bank reserves.  For these countries and several others real estate is still booming but are there bubbles looming?

For information on effective ways to manage institutional and individual portfolios nationwide, or to shop for real estate visit First Preston HT. Like us on Facebook. Follow us on Twitter.

12June

Student Debt Holding Back Housing

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One thing that could be attributing to the housing market’s lackluster performance is student loan debt.  It has been a topic of discussion over the past few years; the amount of student loan debt that today’s college graduates rack up is at all-time highs.  On average, college graduates have $35,000 in student debt and as college expenses increase every year, this amount is only projected to grow.  Student loan debt is in excess of $1 trillion today.

Cheerful Students Throwing Graduation Caps In The AirWith such high levels of debt accumulated right out of school, this leaves typical would be first-time homebuyers with less disposable income and makes it harder to qualify for a mortgage.  Couple this with still high unemployment rates for young workers (ages 25-34) and it really impacts housing.  In April, first-time homebuyers accounted for just 29% of existing homebuyers, which is down from historical rates of around 40%, according to the National Association of Realtors.

This lack of homeownership has recent grads either renting or still living at home with mom and dad.  This is good news for the rental market which continues to show signs of strong demand.  Jed Kolko,  Trulia’s chief economist commented, “For young people, the housing recovery is still in an early stage: More jobs today means they move out of their parents’ homes and become renters, while home buying remains years away for many.”

For information on effective ways to manage institutional and individual portfolios nationwide, or to shop for real estate visit First Preston HT. Like us on Facebook. Follow us on Twitter.

 

3June

Summer Real Estate in the Hamptons

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For years the Hamptons has been a hot summer destination for New York City dwellers to escape to, along with other vacationers from across the country.  The recession took its toll on the summer destination spot along with the real estate market, but this summer the Hamptons look to be coming back strong.

theHamptonsThe summer of 2007 was the last big boom the Hamptons saw and this summer is shaping up to be even bigger.  So far the high-end real estate has seen a remarkable amount of activity as vacationers seek to rent houses during their stay and investors look for investment properties.  The colder and longer than normal winter left potential buyers and renters putting off planning for their summer vacations and now they are scrambling to pin down their plans.

Prices have been on the rise and the Corcoran Report cites increased closed sales were up 38% in the first quarter of the year along with sales volume jumping 27%.  The lack of available land in some of the hot spots has contributed to higher prices and some recent big home sales in the area have encouraged other homeowners to put their properties on the market while it’s hot.

What is the Hamptons buyer looking for today in a property?  Lots of natural light, open floor plans, plenty of square footage and a combination of indoor and outdoor living space.

For information on effective ways to manage institutional and individual portfolios nationwide, or to shop for real estate visit First Preston HT. Like us on Facebook. Follow us on Twitter.

29May

Home Prices Rise in March

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HJust when you thought home prices couldn’t go any higher they are still pushing limits.  The S&P/Case-Shiller composite index recorded a 0.9% rise in March on a seasonally adjusted basis.  Economists had expected the index to report a 0.7% increase.

Although the index reported a year-over-year home price increase of 12.4% (well above Wall Street’s appraisal) this was down slightly from February’s year-over-year data of 12.9%.  As mortgage rates drop again, the housing market could see more growth and higher prices still.

March’s slight drop in year-over-year data reveals that home prices could be moderating.  Markets like Las Vegas, San Francisco, and Los Angeles have reported significant slowdowns.  Chairman of the index committee at S&P, David Blitzer, said, “Annual price increases for the two composites have slowed in the last four months and 13 cities saw annual price changes moderate in March.  The National Index also showed decelerating gains in the last quarter.”  It will be interesting to see over the next few months how much higher prices can go and even if they will or not.

For information on effective ways to manage institutional and individual portfolios nationwide, or to shop for real estate visit First Preston HT. Like us on Facebook. Follow us on Twitter.

13May

Home Prices are Hot

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Home prices continue to rise in what is undoubtedly a seller’s market.  According to Zillow, prices have increased so quickly that about 1,000 local housing markets have reached records in new home prices.

Real estate brokerage firm, Redfin, noted that 40% of the sellers it surveyed plan to price their homes above market value when they list during the second quarter this year.  This is a 33% increase from the start of the year.  Fannie Mae reported in April that 42%, an all-time high, of their 1,000 surveyed homeowners and renters believe that it is a good time to sell.

Home sellers are more likely to receive the asking price from the buyer that pays in all cash.  In markets with fewer cash buyers, home sellers have indicated they are willing to hold out if it doesn’t sell quickly.  For some homeowners they need to get their full asking list price in order to pay off a current mortgage.

home prices are hot

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6May

Homeownership Hits a 19 Year Low

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Couple looking at a houseThe American dream used to entail owning a home but has this traditional dream shifted?  The U.S. Census Bureau reported that homeownership rates have dropped to 64.8% in the first quarter of 2014, which is the lowest rate since 1995.  Home prices have soared and home sales have not been keeping pace as first-time homebuyers, in many cases, have been priced out of the market and are still finding it hard to gain access to credit.  Investors are still playing a large role in the single-family real estate market.

Robert Shiller of the S&P/Case-Shiller Home Price Indices commented on this topic, “This institutional investor dynamic is a whole new era I think.  As institutional investors start to play in the single-family market, that just changes it fundamentally.”  Those who aren’t buying are renting instead which isn’t necessarily a worse scenario.  Some prefer not having a large mortgage to worry about and not being saddled with repair costs when something in the home breaks down.

Trulia’s chief economist, Jed Kolko, pointed out, “Ironically, adding renter households could cause the homeownership rate to fall, even though these new rental households are a sign of recovery and will spur more construction starts.”

For information on effective ways to manage institutional and individual portfolios nationwide, or to shop for real estate visit First Preston HT. Like us on Facebook. Follow us on Twitter.