According to a recent report from Zillow, more than 30% of the U.S.
home-owning population is underwater on their mortgages. This is a grim
outlook for the real estate market despite increasing property values,
which we can attribute only to the shortage of homes built within the
last 12 months. As 2013 looms, will these upside-down homeowners weather
the rough economic storm or will they list their properties and try to
move on?
The fed is desperately trying to come up with a solution to rescue
those individuals who are drowning in negative equity in hopes to free
up some of their finances. The logic is that those individuals will then
turn to the marketplace with their newly freed funds and bolster the
sluggish economy with it. But the fed may be in no position to bail
anyone else out with the looming fiscal cliff.
It’s
great that home prices are rising, but it will provide little relief to
the still-crippled real estate market as we move into 2013. Although some markets are seeing sales gains,
the current environment may not have enough of an effect on potential
buyers as they weigh the pros and cons of investing in a home.
Primarily, will the property’s value increase enough to outweigh any
potential for negative equity?
But as property values go up, even slightly, so do the ambitions of
property owners who may feel they can capitalize by asking for higher
selling prices or increasing monthly rents. As such, commercial and
residential renters should look to lock in low monthly payments by
securing long-term occupancy contracts before prices go any higher in
the upcoming year.
“That might be problematic for some rent-to-own properties,” says Brian McNerma, credit consultant with rent to own property listing service, HomeStarSearch.
“Sellers will try to make up for their financial losses by passing the
negative equity on to potential homeowners.” But not all property owners
are underwater on their mortgages, he insists, and he urges those
interested in lease-option to research the contract and the seller
carefully.
Renters unable to escape higher monthly rents, however, just might
consider making the long-awaited home purchase.Record-low interest rates
and affordable prices are definitely enticing to new home buyers, but
they do little to help those currently upside-down on their mortgages.
Therefore, the number of home sales in 2013 – while trending upward
slowly but surely – will be greatly limited by those who can’t afford
and cleanly walk away from negative equity and start anew.
In fact, those affected most by negative equity are young owners
who purchased homes with low down payments and didn’t have a chance to
see equity improve before the housing bubble burst. Now they’re left
with financial security enough to maintain the mortgage, but not enough
to get out from underneath it.
Despite rising property values, the market is far from healthy. Even
with seeming upward trends in major markets, it’s important to look at
the other factors that influence those trends prior to making the
assumption that things are going well.
The slow growth however, is good long-term as it allows potential buyers to establish down payments, build credit,
and take advantage of various financing options without housing
becoming too unaffordable. The market depends on this type of behavior,
which is much more stable than the easy credit days prior to the
recession.
Monday, December 31, 2012
Tuesday, December 18, 2012
Holiday Season = Perfect Time to Find Your Next Home
The Holiday Season is the Perfect Time to Find Your Next Home
Here are my top 12 reasons that the holiday season is the best time to find your perfect home:
- December is a great time to envision future family gatherings while visiting homes that are beautifully decorated and presented at their finest.
- Mortgage rates remain near historic lows.
- Selection is excellent. With more available properties on the market, finding just the right home has never been easier!
- Discovering the home of your dreams is a great way to relax and escape the crowded stores and malls.
- Fewer buyers are actively looking at homes during the holidays, making it the perfect time for you to buy with less competition.
- Keep that New Year's resolution by moving into your dream home and adding a fitness room.
- A new home is the gift that keeps on giving throughout the year.
- We're open for business every day in December, except Christmas, and our full-time sales professionals are dedicated to serving your real estate needs.
- Cooler weather makes home shopping a pleasurable experience.
- Change is good. Start the New Year off right, with a new home.
- Planning an open house tour via FloridaMoves.com has never been easier.
- The holidays are the perfect time to treat yourself!
Contact me today to find your dream home! Simply go to www.floridamoves.com/tim.shelton or visit timsheltonrealtor.com.
Wednesday, December 5, 2012
Tips to Avoid Common Home Buyer Mistakes
What's missing from your current home? Storage space? Decent
parking? Privacy? You might not have noticed these missing features when
you and your home were in the honeymoon phase, but sometime in the
first few months, they became obvious.
When you tour a home, it's normal to get caught up in the granite kitchen countertops that you might not notice there's insufficient square footage to butter your morning toast. And while that master bedroom looks stylish and neat, you don't realize it's small.
Sometimes, there's a fix. You can downsize the bedroom furniture. You can install shelving or buy bookcases to add storage. And for privacy, you can put up curtains or a fence. And sometimes you just have to learn to live with it. Or you vow next time around, you won't make the same mistake.
No one ever walked out of an open house thinking, "Nice place, but too many closets." On the other hand, a good staging job can disguise that a home has precious little storage.
This is where it pays to use your X-ray eyes. Visually strip away the furniture in a for-sale home and place your furniture and belongings there. Or simply measure - the rooms and the closets - and compare the square footage to what you have now, said Eric Tyson, author of "Home Buying for Dummies."
Ditto for kitchen cupboards, pantries and counter space, said Michael Corbett, author of "Before You Buy." Those countertops may look spacious until you get out your kitchen toys and discover there's not enough room, he said. Really look at a kitchen in terms of what you need when you cook to make sure the home offers the counter space you need.
You're only 15 miles from work. How long is that in traffic time? That daily commute factor is "a really big one that a surprising number of people don't properly research before they commit to a house," Tyson said. He advised trying the commute a few times, driving both ways, before you buy.
Some buyers shop for homes where "commute" doesn't automatically mean "car," said Ron Phipps, immediate past president of the National Association of Realtors and principal broker with Phipps Realty in Warwick, R.I.
"We're seeing a lot more urbanization and a lot more people moving toward public transportation links," he said.
One college professor wanted a home that was a comfortable walking distance from campus, he said. "Five years ago, that wouldn't have been a priority."
It could be the Saturday night party house, the guy who thinks Sundays were made for leaf blowing or the kid who practices the tuba 24/7.
Every neighborhood has its eccentrics, and you need to know if you can live with them.
One of the best ways to find out what's going on in the neighborhood is to chat up the neighbors, Corbett said.
"You must find out if there are any existing neighborhood problems."
From the minor issues (such as one neighbor's casual mechanic "shop") to the major (a string of crimes in the area), you want to know the concerns of the people who live there.
"It's really about asking questions up front," Corbett said. Ask the seller, and do your own research.
One smart move is to visit during morning rush hour, afternoon and evening rush hour, Corbett said.
Most people flip lights and faucets on and off when they tour a home to make sure they get the expected result.
But that's hardly the test of whether the water pipes or electric wiring will meet your needs, Corbett said. You'll need to determine if the plumbing and wiring can accommodate the way you live.
Flipping a bedroom light on and off doesn't compare to a busy morning with two blow-dryers and an electric shaver running while the microwave heats breakfast, the air conditioning clicks on and the TV blasts the traffic report.
If you are showering while someone does laundry and a third person flushes the toilet, will you feel a drop in pressure or a blast of cold water? With water, you can run a few things at one time and see how the home handles the pressure, Corbett said.
As for the electrical systems, you might want to talk to your home inspector, he said. Explain how many of people are in the household who may use electricity simultaneously, and ask if it will hold up, Corbett said.
It's a great home for you, but does it fit your car? Tyson said one home he owned came with street parking. It was great, but simple errands such as a trip to the market required a little more planning and a few extra steps.
"In retrospect, we wouldn't have done it differently," he said. "But you have to make sure you understand the ramifications of not having a garage in the city."
Some neighborhoods have rules about parking in the driveway or on the street. So if you have a preference or other plans for your new garage, it's smart to check any covenants before buying.
Privacy is a factor some buyers overlook until it's too late. Notice "if when you're in the bathroom, you're staring into your neighbor's shower," Corbett said. "You really have to be smart. Try to spend some time in the house."
The goal is to get the feeling of what it's like to really live in the house before you buy it, he said.
"I think the biggest mistake people make is they have to see not only do they fit," Corbett said, "but does their lifestyle fit (the home)?"
When you tour a home, it's normal to get caught up in the granite kitchen countertops that you might not notice there's insufficient square footage to butter your morning toast. And while that master bedroom looks stylish and neat, you don't realize it's small.
Sometimes, there's a fix. You can downsize the bedroom furniture. You can install shelving or buy bookcases to add storage. And for privacy, you can put up curtains or a fence. And sometimes you just have to learn to live with it. Or you vow next time around, you won't make the same mistake.
No one ever walked out of an open house thinking, "Nice place, but too many closets." On the other hand, a good staging job can disguise that a home has precious little storage.
This is where it pays to use your X-ray eyes. Visually strip away the furniture in a for-sale home and place your furniture and belongings there. Or simply measure - the rooms and the closets - and compare the square footage to what you have now, said Eric Tyson, author of "Home Buying for Dummies."
Ditto for kitchen cupboards, pantries and counter space, said Michael Corbett, author of "Before You Buy." Those countertops may look spacious until you get out your kitchen toys and discover there's not enough room, he said. Really look at a kitchen in terms of what you need when you cook to make sure the home offers the counter space you need.
You're only 15 miles from work. How long is that in traffic time? That daily commute factor is "a really big one that a surprising number of people don't properly research before they commit to a house," Tyson said. He advised trying the commute a few times, driving both ways, before you buy.
Some buyers shop for homes where "commute" doesn't automatically mean "car," said Ron Phipps, immediate past president of the National Association of Realtors and principal broker with Phipps Realty in Warwick, R.I.
"We're seeing a lot more urbanization and a lot more people moving toward public transportation links," he said.
One college professor wanted a home that was a comfortable walking distance from campus, he said. "Five years ago, that wouldn't have been a priority."
It could be the Saturday night party house, the guy who thinks Sundays were made for leaf blowing or the kid who practices the tuba 24/7.
Every neighborhood has its eccentrics, and you need to know if you can live with them.
One of the best ways to find out what's going on in the neighborhood is to chat up the neighbors, Corbett said.
"You must find out if there are any existing neighborhood problems."
From the minor issues (such as one neighbor's casual mechanic "shop") to the major (a string of crimes in the area), you want to know the concerns of the people who live there.
"It's really about asking questions up front," Corbett said. Ask the seller, and do your own research.
One smart move is to visit during morning rush hour, afternoon and evening rush hour, Corbett said.
Most people flip lights and faucets on and off when they tour a home to make sure they get the expected result.
But that's hardly the test of whether the water pipes or electric wiring will meet your needs, Corbett said. You'll need to determine if the plumbing and wiring can accommodate the way you live.
Flipping a bedroom light on and off doesn't compare to a busy morning with two blow-dryers and an electric shaver running while the microwave heats breakfast, the air conditioning clicks on and the TV blasts the traffic report.
If you are showering while someone does laundry and a third person flushes the toilet, will you feel a drop in pressure or a blast of cold water? With water, you can run a few things at one time and see how the home handles the pressure, Corbett said.
As for the electrical systems, you might want to talk to your home inspector, he said. Explain how many of people are in the household who may use electricity simultaneously, and ask if it will hold up, Corbett said.
It's a great home for you, but does it fit your car? Tyson said one home he owned came with street parking. It was great, but simple errands such as a trip to the market required a little more planning and a few extra steps.
"In retrospect, we wouldn't have done it differently," he said. "But you have to make sure you understand the ramifications of not having a garage in the city."
Some neighborhoods have rules about parking in the driveway or on the street. So if you have a preference or other plans for your new garage, it's smart to check any covenants before buying.
Privacy is a factor some buyers overlook until it's too late. Notice "if when you're in the bathroom, you're staring into your neighbor's shower," Corbett said. "You really have to be smart. Try to spend some time in the house."
The goal is to get the feeling of what it's like to really live in the house before you buy it, he said.
"I think the biggest mistake people make is they have to see not only do they fit," Corbett said, "but does their lifestyle fit (the home)?"
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