Posts
1. Tax breaks. The U.S. Tax Code lets you deduct the interest you pay on your mortgage, your property taxes, as well as some of the costs involved in buying your home.
2. Appreciation. Real estate has long-term, stable growth in value. While year-to-year fluctuations are normal, median existing-home sale prices have increased on average 6.5 percent each year from 1972 through 2005, and increased 88.5 percent over the last 10 years, according to the NATIONAL ASSOCIATION OF REALTORS®. In addition, the number of U.S. households is expected to rise 15 percent over the next decade, creating continued high demand for housing.
3. Equity. Money paid for rent is money that you’ll never see again, but mortgage payments let you build equity ownership interest in your home.
4. Savings. Building equity in your home is a ready-made savings plan. And when you sell, you can generally take up to $250,000 ($500,000 for a married couple) as gain without owing any federal income tax.
5. Predictability. Unlike rent, your fixed-mortgage payments don’t rise over the years so your housing costs may actually decline as you own the home longer. However, keep in mind that property taxes and insurance costs will increase.
6. Freedom. The home is yours. You can decorate any way you want and benefit from your investment for as long as you own the home.
7. Stability. Remaining in one neighborhood for several years gives you a chance to participate in community activities, lets you and your family establish lasting friendships, and offers your children the benefit of educational continuity.
Friday, October 30, 2009
Tuesday, October 27, 2009
Friday, October 23, 2009
What to Look For When Purchasing a Short Sale or Foreclosure Home
Short sales and foreclosures - seems to be all we hear about nowadays. And as popular as they are there are some areas you may want to look for when you go to purchase:
1. area/neighborhood - are there alot of rentals in the immediate neighborhood? if so this may indicate a declining area. drive around and get a good "gut feel" for the neighborhood where you will be living. Do people take care of their front yards? Are there many cars parked on the street?
2. schools - be sure to research the school systems if you have children or plan to. Buyers today are very conscious about the quality of the schools their children are attending
3. demographics - what income levels are the residents in the area? what race breakdown? ages? education levels, etc. Finding out this information may help you find an area you feel comfortable moving to. Often times if looking in a particular city the local chamber of commerce is able to produce this information.
4. the home itself - what kinds of repairs are needed? Do you have enough funds to cover them? If not and you are going to live in the home consider an FHA 203(k) loan option to finance the repairs. Are the repairs cosmetic (holes in the walls, worn carpet, broken windows, dated kitchen) or structural (roof or a/c needs to be replaced or foundation issues/cracks, etc)
5. home location - does it back/side/front a busy street? This could affect the resale value, as homes with these types of locations are less desirable due to traffic noise and potential safety hazard if children are around.
6. short sale? if the home is a short sale where is it at in the process,and when does the listing agent expect it to reasonably close? are there 1 or 2 mortgages on the property? Although in today's market banks are moving along at a faster rate than before, to wait 90-120 days to close on a short sale is not totally uncommon.
7 other offers - with the shortage of active inventory on the market, you are bound to be competing against other buyers, especially if the purchase price is less than $200,000. How good of a job is your agent doing of inquiring about other offers on the home in order to help you get the home into escrow at the lowest possible price?
1. area/neighborhood - are there alot of rentals in the immediate neighborhood? if so this may indicate a declining area. drive around and get a good "gut feel" for the neighborhood where you will be living. Do people take care of their front yards? Are there many cars parked on the street?
2. schools - be sure to research the school systems if you have children or plan to. Buyers today are very conscious about the quality of the schools their children are attending
3. demographics - what income levels are the residents in the area? what race breakdown? ages? education levels, etc. Finding out this information may help you find an area you feel comfortable moving to. Often times if looking in a particular city the local chamber of commerce is able to produce this information.
4. the home itself - what kinds of repairs are needed? Do you have enough funds to cover them? If not and you are going to live in the home consider an FHA 203(k) loan option to finance the repairs. Are the repairs cosmetic (holes in the walls, worn carpet, broken windows, dated kitchen) or structural (roof or a/c needs to be replaced or foundation issues/cracks, etc)
5. home location - does it back/side/front a busy street? This could affect the resale value, as homes with these types of locations are less desirable due to traffic noise and potential safety hazard if children are around.
6. short sale? if the home is a short sale where is it at in the process,and when does the listing agent expect it to reasonably close? are there 1 or 2 mortgages on the property? Although in today's market banks are moving along at a faster rate than before, to wait 90-120 days to close on a short sale is not totally uncommon.
7 other offers - with the shortage of active inventory on the market, you are bound to be competing against other buyers, especially if the purchase price is less than $200,000. How good of a job is your agent doing of inquiring about other offers on the home in order to help you get the home into escrow at the lowest possible price?
Saturday, October 17, 2009
What's Going on With This Wacky Phoenix market?!
As I meet people inevitably what they end up asking me is "how's the market?" As I try and get a feel for the person's situation I formulate an appropriate response. But more often than not people seem to be curious and want to be in the know, more than they are thinking about making some kind of move themselves.
Recently Arizona moved to the 2nd highest foreclosure rate in the US, behind Nevada. We still have a long way to get through all of this, as the foreclosure pipeline is quite full (50,000 statewide from what I understand). We had a slight dip in foreclosure notices in September which is good news, but this has happened to us in the past without the lasting trend, so it could go either way.
That being said there "may" be some stabilization coming to the market. Foreclosure notices have been down for the previous 2 months, however there is alot of "pent-up" foreclosure activity - owners sitting in limbo and trying to stretch out there foreclosure date as much as possible, so we have a potential looming inventory issue at hand as well.
This next statement may contradict what I just wrote, but is in fact true. MLS sales are very healthy and we only have about a 4-month inventory of homes. We have averaged about 8,000 sales a month in Maricopa County vs. the 5,000 a month sales we were seeing just 7 and 8 months prior. Prices have increased month-over-month since April.
The bulk of the action is in the under $150k price point (starter homes). Affordability has never been better, and the government has given first-time home buyers all the more reason to step out on faith, to the tune of an $8,000 almost-immediate cash-back incentive (first-time buyer defined as not having owned and lived in a primary residence in the previous 3 years).
There has been much talk about extending and expanding the credit. Recently the credit was expanded for military personnel until November 2010. Whether the credit will indeed be extended past the 11/30/09 deadline remains to be seen, however my opinion is that it will be extended.
Homeowners getting behind on payments are being taken more seriously by their lenders than ever. More and more short sales are going through (and in less time) and loan modifications are becoming the word of the day, with mortgage companies offering more than reasonable restructured payment options to keep the mortgage afloat and paid. Lenders are wising up and realizing it's simply too expensive to foreclose on the home and resell it at a dramatic loss
Recently Arizona moved to the 2nd highest foreclosure rate in the US, behind Nevada. We still have a long way to get through all of this, as the foreclosure pipeline is quite full (50,000 statewide from what I understand). We had a slight dip in foreclosure notices in September which is good news, but this has happened to us in the past without the lasting trend, so it could go either way.
That being said there "may" be some stabilization coming to the market. Foreclosure notices have been down for the previous 2 months, however there is alot of "pent-up" foreclosure activity - owners sitting in limbo and trying to stretch out there foreclosure date as much as possible, so we have a potential looming inventory issue at hand as well.
This next statement may contradict what I just wrote, but is in fact true. MLS sales are very healthy and we only have about a 4-month inventory of homes. We have averaged about 8,000 sales a month in Maricopa County vs. the 5,000 a month sales we were seeing just 7 and 8 months prior. Prices have increased month-over-month since April.
The bulk of the action is in the under $150k price point (starter homes). Affordability has never been better, and the government has given first-time home buyers all the more reason to step out on faith, to the tune of an $8,000 almost-immediate cash-back incentive (first-time buyer defined as not having owned and lived in a primary residence in the previous 3 years).
There has been much talk about extending and expanding the credit. Recently the credit was expanded for military personnel until November 2010. Whether the credit will indeed be extended past the 11/30/09 deadline remains to be seen, however my opinion is that it will be extended.
Homeowners getting behind on payments are being taken more seriously by their lenders than ever. More and more short sales are going through (and in less time) and loan modifications are becoming the word of the day, with mortgage companies offering more than reasonable restructured payment options to keep the mortgage afloat and paid. Lenders are wising up and realizing it's simply too expensive to foreclose on the home and resell it at a dramatic loss
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