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Tag Archives: buying a home
Confidence in Value of Homeownership Persists Through Bust
Source: LA Times
Despite the decline in home prices, 81 percent of U.S. adults believe buying a home is the best long-term investment a person can make, according to a national survey by the Pew Research Center.
- Home ownership topped the list of long-term financial goals for Americans, according to the study. Respondents rated home ownership, as well as living comfortably in retirement, as more important than sending children to college or leaving offspring an inheritance.
- “Owning a home is really a part of the American dream, and that is just part of the American psyche and something that people aspire to,” according to one of the study’s authors.
- Although the vast majority of adults surveyed are in favor of owning a home, the public’s faith in real estate has somewhat declined compared with the last time a comparable survey asked people about the wisdom of investing in real estate. In the Pew Research Center survey, 37 percent of respondents said they “strongly agree” that home ownership is the best investment a person can make, while 44 percent said they “somewhat agree.” The same question was asked by a CBS News/New York Times survey in 1981, and at that time, 49 percent “strongly agreed,” and 35 percent “somewhat agreed.”
- While home prices have entered a renewed decline after showing some improvements last year, many economists believe that the worst of the housing crisis is probably over, which could help explain the resiliency in Americans’ optimism.
- Homeowners in the survey were more positive about the financial wisdom of owning a home than were renters. Among renters, the desire for homeownership remains strong. According to the survey’s findings, 24 percent of renters surveyed said they rent out of choice and 81 percent said they would like to buy.
For all your real estate needs, call or email:
John J. O’Dell
Real Estate Broker
O’Dell Realty
(530) 263-1091
Email jodell@nevadacounty.com
Real Estate: Finally a Good Investment
The housing market still looks pretty bleak: There were a record 1 million foreclosures last year, home prices are still falling in many regions, and the number of “underwater” properties is at a record high.
And things don’t look much better in other areas of real estate. The number of construction jobs continues to decline, even as other parts of the economy have added jobs. And mortgage rates have moved higher as long-term Treasury yields have backed up during the past few months.
Basically, the real estate market remains a mess.
Real estate encompasses a wide range of markets – homes, apartments, hospitals, office buildings, strip malls, dormitories and other properties. But for our purposes, let’s focus on residential real estate, or homes. Here are four reasons to think residential real estate might represent a bargain – with one big caveat.
MAKING SENSE OF THE STORY FOR CONSUMERS
• Everyone hates homes – When the housing market is in the doldrums, people tend to avoid thinking about the value of their home. Sellers complain they’re not getting offers and buyers bemoan the strict lending requirements. However, prospective buyers should be contrarian and take advantage of a down housing market.
• Smart people are buying real estate – A prominent hedge-fund manager said in a speech last fall: “If you don’t own a home, buy one. If you own a home, buy another one, and if you own two homes, buy a third and lend your relatives the money to buy a home.” He believes that interest rates and home prices will rise this year, so real estate bargains won’t last much longer.
• Real estate performs well during inflation – Convention says Treasury Inflation Protected Securities, commodities, and real estate do well in an inflationary environment. Real estate performed well during the period in the 1970s, when persistent inflation and high unemployment occurred.
• Demand may be coming back – Job creation and getting people employed are the two major factors in the housing rebound. There’s much debate about when the job market will recovery. Optimists say the recovery will happen this year, while pessimists say it won’t happen for several years.
For all your real estate needs Call
John J. O’Dell
Real Estate Broker
(530) 263-1091
DRE# 00669941
Home Buying Paralysis? Tips for Getting the Best Deal Faster
The inventory of homes for sale has increased in recent months, causing some buyers to hesitate before making an offer on a home for fear a better home at a more favorable price will become available.
- Although real estate agents are showing more homes to clients, people still are buying homes, especially first-time buyers. According to the latest figures from the NATIONAL ASSOCIATION OF REALTORS® (NAR), first-time buyers now account for 50 percent of all home sales.
- Some agents claim that today’s buyers are having a problem staying committed to the home search. During the height of the market, home buyers were more apt to make housing hunting a priority and to move on a good deal. Real estate experts advise today’s home buyers do the same to be successful in their home search.
- Making a list of “musts” and “wants” for home features will help home buyers narrow down the search. Identifying key features, such as the number of bedrooms or bathrooms, will help buyers avoid being overwhelmed by the number of homes available.
- Buyers are best advised to work with a REALTOR® who is familiar with the area. Media reports that home prices will decline further may be true for some areas, but not necessarily in all areas. All real estate is local, so finding out what’s happening in a specific neighborhood is most helpful.
For all your real estate needs Call
John J. O’Dell
Real Estate Broker
(530) 263-1091
DRE#00996641
Home Buying Paralysis? Tips for Getting the Best Deal Faster
The inventory of homes for sale has increased in recent months, causing some buyers to hesitate before making an offer on a home for fear a better home at a more favorable price will become available.
- Although real estate agents are showing more homes to clients, people still are buying homes, especially first-time buyers. According to the latest figures from the NATIONAL ASSOCIATION OF REALTORS® (NAR), first-time buyers now account for 50 percent of all home sales.
- Some agents claim that today’s buyers are having a problem staying committed to the home search. During the height of the market, home buyers were more apt to make housing hunting a priority and to move on a good deal. Real estate experts advise today’s home buyers do the same to be successful in their home search.
- Making a list of “musts” and “wants” for home features will help home buyers narrow down the search. Identifying key features, such as the number of bedrooms or bathrooms, will help buyers avoid being overwhelmed by the number of homes available.
- Buyers are best advised to work with a REALTOR® who is familiar with the area. Media reports that home prices will decline further may be true for some areas, but not necessarily in all areas. All real estate is local, so finding out what’s happening in a specific neighborhood is most helpful.
For all your real estate needs call
John J. O’Dell
Real Estate Broker
(530) 263-1091
DRE#00669941
Taking the Stress Out of the Home-Buying Process
For many prospective buyers, the thought of going through the home-buying process is often filled with a lot of stress. From finding a qualified real estate agent, to narrowing down your choice of homes and then packing your belongings and moving across town can be an overwhelming process.
-Buying a home is one of the biggest financial decisions you will make in your lifetime, and along with the finances come emotions. When you are choosing a real estate agent to work with, be patient and take the time you need to find an agent that you connect with. Finding a highly-skilled agent who fits with your personality is crucial.
-Every home buyer and seller is in a different situation, so it is important that you don’t compare your timeline and decisions to anyone else’s. As you make your way through the home buying process, remember that there is no right time to buy, just as there is no perfect time to sell. If you find a home that fits your needs, don’t let it slip out of your hands by waiting for interest rates to drop lower as you run the chance of losing out on the home of your dreams.
-It is natural to want to get opinions from those you trust before you make your final choice, but too much input will ultimately make the decision process much harder. Remember to focus on what your immediate wants and needs are so that everyone will be happy with the final decision.
-You probably aren’t going to find a home that is 100% perfect, so it is important to make a list that includes your top priorities that you can’t live without. Be sure to stick to the items on your list and let go of the minor things.
-Negotiation is an important part of the real estate buying process, but be sure you don’t take your negotiating too far. Trying to get an extra-low price or refusing to budge on your offer may cost you the home in the end. Successful negotiation depends on give and take, so make sure you are being fair in your requests.
-Don’t get too caught up in all the physical aspects of a home and forget about the more important issues. While the size of the rooms and the layout of the kitchen might not be exactly what you expected, be cognizant of issues such as noise level, location to amenities and other aspects that will have an impact on your day-to-day life.
-Getting approved for a mortgage should be taken care of well before you find a home and make an offer.
-Create a budget before you move into your new home and be sure to include maintenance and repair costs. Even if you buy a new home, there will be extra costs, so it is important to not come up short and let your new home deteriorate.
-After purchasing a home, a little buyer’s remorse is inevitable, but it will pass. Buying a home is a big financial commitment, but it also yields big benefits. If you are feeling remorseful after buying your home, remind yourself why you wanted to buy a home and what made you fall in love with your new property.
-When choosing a home, buy it because you love it. A home’s most important role is to serve as a comfortable, safe place to live, so don’t get bogged down with thinking about your home’s appreciation.
For all of your real estate needs
Call John J. O’Dell
Real Estate Broker
DRE # 00669941
Telephone 530-263-1091
10 Reasons to Buy a Home Now
Enough with the doom and gloom about home ownership. Brett Arends explains why owning a home is a good thing.
With newspaper headlines declaring that foreclosures are on the rise, short sales are difficult to navigate, and the rate of home ownership is on the decline, some home buyers may no longer see the value of purchasing a home. However, there are several reasons why home ownership makes economic, financial, and personal sense.
MAKING SENSE OF THE STORY FOR CONSUMERS
- Home prices have declined approximately 30 percent from their peak, according to Standard & Poor’s Case-Shiller Index, which is good news for home buyers hoping to purchase a house at an affordable price. As a result, statewide affordability reached 64 percent in the second quarter of this year, meaning 64 percent of California households could afford to purchase an entry-level
home in the state.
- Although home buyers should not view a home strictly as an investment, generally speaking, homeownership does offer risk capital. The median home price in California has risen year-over-year for nine consecutive months, which implies home equity will increase over the next few years.
- Owning a home also can be beneficial because it acts as “forced savings.” While the monthly mortgage payment may be slightly higher than renting an apartment, most renters do not put the difference into a savings account. The portion of a monthly mortgage payment that’s allocated toward the principal of a mortgage shouldn’t be viewed as a cost, but rather as a forced monthly saving, because in the long run it’s building equity in the home.
Five Mistakes Home Buyers Make
Affordable home prices and historically low interest rates have created an ideal situation for many qualified first-time home buyers to purchase a house. Despite this opportunity, some buyers may be overconfident and make mistakes during the home-buying process.
MAKING SENSE OF THE STORY FOR CONSUMERS
- Some first-time buyers are unaware of the vast amount of paperwork and negotiations that go into purchasing a home. As a result, buyers may think they can save money by forgoing the use of a REALTOR®. However, managing the nuances of offers, inspections, financing, and other pivotal steps when buying a home often causes confusion and anxiety for buyers. Working with a REALTOR®–who is obligated to put the buyer’s best interests first–will help to alleviate buyer concerns during this process.
- Online mortgage calculators can help buyers estimate the amount of house they can afford, but calculators should not be the sole source for mortgage-approval information. Buyers are advised to meet with a mortgage broker or banker prior to beginning the home search to help determine the loan amount for which they are most likely to be approved.
- Although there is a large selection of homes available for sale, home buyers should not assume they can make low offers or unreasonable demands. Even in hard-hit housing markets, homes in desirable neighborhoods are receiving multiple offers.
To read the full story, please click here.
John J. O’Del
Licensed Real Estate Broker
Call 530-263-1091
Five Steps to Take Before Buying a Home
As the housing downturn has shown, homeownership is about more than buying a home – you have to make sure you can keep the home over the long term. If you’re thinking about buying a home, these five steps can help ensure you get the right house for you and the affordable financing that helps make homeownership a long-term success:
1. Get Educated. A little mortgage know-how goes a long way toward ensuring you get an affordable mortgage
Before you hire an agent or find a lender, get educated on the loan process and key factors that make a loan affordable. You’ll want to know about loan types – fixed-rate mortgages, adjustable-rate mortgages, FHA and VA loans – and the full range of line items that contribute to the total cost of securing the loan, including discount points, appraisals, and real estate agent commissions.
If you would like more in-depth information, the Department of Housing and Urban Development (HUD) can put you in touch with the nearest housing counseling professional in your area. Visit www.HUD.gov for more information. You can also check with local government, neighborhood associations and neighborhood bank branch offices for information sessions on home buying as well as homebuyer-education programs.
Continue reading Five Steps to Take Before Buying a Home
The Gap Narrows Between Buying or Renting a Home
Affordable home prices and low interest rates have created an ideal time for many buyers to purchase homes, and now a new week-long look at homeownership confirms it. The national study, conducted for The Associated Press, shows that the difference between monthly rents and mortgage payments is at its lowest level in nearly 20 years.
MAKING SENSE OF THE STORY FOR CONSUMERS
- The analysis of 45 metro areas found the difference between the monthly mortgage payment on a median-priced home and the median rent has declined to $256. In some areas, the difference is as low as $100, according to the study. The last time the price gap was that close was in 1993, when it decreased to $264.
- The study, conducted by Marcus & Milichap Real Estate Investment Services, used median prices for the last three months of 2009 and calculated mortgage payments by assuming a 10-percent down payment and a 30-year fixed loan at 5.07 percent. It also assumed borrowers paid for private mortgage insurance and didn’t include repair costs and tax benefits.
- Although the difference between monthly rent and monthly mortgage payments is at its lowest level in nearly 20 years, more stringent lending standards have made the home-buying process more challenging. Home buyers can prepare by ensuring their credit reports are up to date and saving for a down payment of at least 20 percent. Borrowers putting down less than 20 percent likely will have to purchase private mortgage insurance.
- Owning a home has significant tax benefits, including deductions for property taxes and loan interest. Homeowners also can enjoy building equity and creating a means of forced savings as they pay down the principal on the home.
- Although home buyers should not focus solely on future home price appreciation, according to data collected by the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) over the last 40 years, homeowners who purchase a median-priced house, live in it for at least five years, and sell it at the then-current median price, have averaged an annual rate of return of more than 11 percent.
To read the full story, please click here
John J. O’Dell
Real Estate Broker
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