Expectations of Rising Home Prices Spur Some Buyers!

Reading an article by Esther Cho  from DS News.com, titled "Survey:  Rising Prices Motivate Buyers Now", and found some things I'd like to share with the general public who are interested in real estate news.

"The expectation for prices to continue rising is creating URGENCY among consumers to buy NOW, according to a Redfin survey of 1,084 active homebuyers.  The percentage of homebuyers who believe prices are bound to move higher in the next 12 months increased to 71% in the 4th quarter from 61% in the third quarter....The 4th quarter share is also more than double from 34% in the 1st quarter." 

Rising prices was cited as the main reason they were buying by 33% of respondents, ad in the 3rd quarter that number was 29% and 195 in the 1st quarter. 

But there is a low inventory of houses on the market at this time, which causes some people to hold off buying.  38% of respondents decided to wait,  while 46% of those searching for a home are expanding thir search into areas not previously considered. 

LOW interest rates are still being cited as the leading reason to buy this year with 57% of the people citing that as their reason; however in the 3rd quarter 64% cited that reason.  I can't understand that as we are lower now than back then, as a matter of fact an economist that spoke at our MLS meeting says its hasn't been this low since Thomas Jefferson (our 3rd president) was in office. 

More buyers plan to buy bigger, 49% say much bigger.  Others are buying same size but nicer and others are moving to a different location. 

Buyers who are also sellers doubled this quarter from 8% to 16%.  So would that mean that 84% don't already own a home or plan on keeping both houses?  Very interesting statistic that needs questions answered about that response. 

Hope these incites helped you make a decision whether to get off the fence and buy NOW.  If you are in the Amarillo area, call me and lets discuss your options, especially if you are a Veteran, as I am a Veteran's Land Board preferred realtor.  Prudential Ada Realtors, 355 9601. 

Cheaper to Own Than Rent

Rent or Buy?

The question plaguing every tenant who wants a home of their own is whether they should continue to rent or is it the right time to buy?
The combination of good prices and low mortgage rates make it considerably cheaper to own than rent in most markets. Assuming a person is qualified with a down payment and won't be moving for several years, there may not be a better time to buy a home.
In the example below, the total house payment is $1,281.01 compared to $1,500 to rent the same home. Before you consider any of the financial benefits attached to home ownership, it's cheaper to own than to rent.
The net cost of housing falls to $764 or just more than half the house payment when you consider the principal reduction due to normal amortization, a modest appreciation and the tax savings along with a reasonable maintenance expense that a tenant would not have to pay.
One of the biggest benefits is the growing equity. As the value goes up, the unpaid balance goes down. A favorable leverage causes their low down payment to grow to $40,609 in a short seven years based on a modest 1% appreciation.

There's an expression often heard in real estate circles: "Whether you rent or buy, you pay for the house you occupy." You're either buying it for yourself or you're helping the landlord buy it.
Check out a Rent vs. Own to see how your numbers will compare to this example or call me to do it

Aging Realtors and FHA Flop

There are several concerns in real estate today, none to do with the fantastic availability of money for loans at ridiculously low rates:  3.375% for 30 years and 2.75 for 15 years.  This makes buying a house so much cheaper than buying a car or using your credit cards.

But one of the concerns in real estate is that the average realtor is 56 years old, where the average in other industries is 42.  Why is that a concern?  As older realtors retire, the brain drain is critical.  The experienced older realtor knows so much about what to expect in a real estate deal, how to put it together, where to get the $$$, and so many things that help the consumer.  Getting younger realtors trained in time to replace all these experienced realtors could be hard.  On HGTV you see realtor shows with the younger ones, and I think from my opinion you see greed, underhanded dealing, lack of morals, and not the professionalism I see daily among the older realtors. 

We need to train realtors to put the customer first, not their pocketbook or their career.  Reputation, integrity, knowledge, and honesty need to be at the forefront of a career in real estate.

Another problem in real estate right now from the broker's opinion survey was that they can't recruit enough realtors, or get good ones.  Again, they mention the younger generation having a problem with training and going where the $$ is. 

FHA loans are a slight problem, due to the increase in the mortgage insurance costs back in April, more and more people are choosing to go conventional.  That's not a real problem, now that you can get 5% down money with conventional loans, but it is a change from earlier in the year when most everyone was using FHA (at least here locally).  It's just as cheap to go conventional now once you add in the upfront money insurance costs, and it's easier with less restrictions. 

Now is the time to purchase a home since the rates are so low, money is available, and there's no shortage of homes on the market.  It's the time to sell also if you plan to in the near future, as a shadow of repossessed homes will soon be on the market, lowering the value of your home, so now is the perfect time to buy or sell.  We don't know what we'll see once this election is over, so don't waste the next two months on the sidelines.  Now is the time to make your real estate transactions while all the ducks are in a good row, easy for shooting.