Is this the best time to invest in a second home? Many people think so, why is that? Many stock market investors have enjoyed a surge in the value of their portfolios over the last few years. Should these trends continue? No one knows for sure. The Stock Market is definitely more volatile and is bringing in higher returns than investing in real estate, but buying a second home might stand as one of the smartest moves you can make in your life. Taking some of your profits off the table and investing in a vacation home not only can be smart, it can also bring a whole new quality of life to you and your family. Over time, the likelihood that it will also increase in value is historically accurate. Between 1991 and 2016, stock prices have definitely outperformed housing prices, growing at a far higher rate than real estate price and sales, which is the reason that many believe that the stock market is more likely to suffer a possible set back in the not so distance future. Now may be the time to hedge your bet.
What will our local market look like this spring? The spring housing market will typically see a sharp increase in our housing inventories. However, due to an increase in our median price point, less buyers are going to being able to enter the market. I believe it will be slower than many expect. The continued threat of rising interest rates will also adversely impact our market. New construction or housing starts in our area continue to be slow, due to the higher cost of materials and high costs associated with site preparation and infrastructure. Looking forward, I see a modest real estate market in the days ahead with increased inventories on the higher end of our market, where the reality of the new tax laws limitations have become an issue. These high end home owners are seeing their tax deductions reduced to just 10,000. If your starting your search for a home this spring, get an early start in order to not be competing with other buyers, often being forced into a bidding war which results in paying more then necessary.
What Real Estate Buyers Need To Know
The internet has done so much to help consumers shop for a home. Gone are the days when buyers had to read ads in the paper and then call an agent to get the facts on a particular property. Today’s savvy buyers simply go online and often search websites like Trulia, Realtor.com, or Zillow to begin their search. There they can find just about all the information they will need to narrow their search. However, they might not realize that often the realtors that show up on these searches are paying to appear on these sites and may not be familiar with these properties. Sometimes buyers want to only deal with the agent who listed the property, this could prove costly since it is the duty of the listing agent to represent the seller, and therefore try to get the best price for their clients. My best advice, hire your own buyers agent to represent you. They know the market and can prove to be invaluable in helping you secure you home.
Recently there have been signs indicating that the Real Estate Market is beginning to shift in the direction of buyers. There are a number of factors that may be contributing to this. First, mortgage interest rates have begun to rise and this is always a cause for concern as it keeps some potential buyers on the sidelines. Median prices here in Columbia County have begun to drop from $275,000 a year ago, to $245,000 currently. Residential inventory has also seen an increase, partly because the new tax laws now limit the deduction for state and local taxes to just $10,000 which encourages more sellers to put their houses on the market. For buyers who may be waiting until spring to start shopping, maybe you should take advantage of this time of year when there is less competition and sellers tend to be more motivated.
The first and most important step is to examine you financial situation. You can start with getting your credit score. This is easy, you can get one for free at annualcreditreport.com If you are married or plan on buying with someone else they should do it as well. Your next step is to go to your local bank or meet with a local mortgage broker. Be sure to bring along your current income records, as well as any debts you may have, such as student loans, car loans etc. This information will provide them, and you as well, with an estimate of what you would be qualified for in the way of a loan. Avoid going to any online mortgage web site, they are often misleading and designed to attract buyers without providing any direct access to a person to speak directly with. You will also be advised as to what projected cost will be part of the application. Now, before you rush to the internet to shop for houses, I strongly recommend you get a referral from someone you know and trust to put you in touch with a realtor with experience in the area you want to be in and one that has worked with first time home buyers. He or she needs to have experience as a buyers agent. That is, they will be working solely in your best interest and therefore be able provide guidance and direction when you are ready to make an offer. Following these steps will keep the entire home buying process less stressful and even quite enjoyable.
Should I be shopping for a home in this Fall and Winter, or wait until spring? It all depends on your circumstances. If you are relocating for a job and you need to buy now, then by all means go for it. Fall and Winter are actually some of the best times to be shopping. Fewer buyers are out there so there will be less competition and less likely you’ll have to deal with a multiple offer situation. Sellers who keep their houses on the market during this time may be far more motivated to sell and likely to negotiate more aggressively. Another advantage, is that you get to see the houses at the worst time of the year. With the leaves off the trees you get to see all the neighboring properties and your views are unobstructed. Also, many Real Estate agents are generally not as busy during this time, so you’ll be able to hire your own buyers agent who will often be able to spend more time previewing existing homes on your behalf. Spend the time out shopping now while other buyers sit back stay warm and wait for spring.
Renting an apartment close to your work makes a lot of sense. But, what happens when you out grow that space? One option is to buy a bigger space rather then continuing to rent.Then a reality check comes to attack your thinking, to buy a bigger space is very costly, especially if you want to stay close to your job. How much added space will you be getting for the big investment you are about to make? There is another option. Why not invest and buy a home away from your place of business? There are so many advantages to this choice. First, you now will have a place to call home, a gathering place for your family and friends where you can truly spread out. It’s no longer about how many square feet your apartment is, but how many acres you own. Wow, what a new feeling of well being! When your week’s work is done, it becomes your great escape. When the stress of everyday living gets you down, you’ll look forward to getting away to your home. It may be large enough that you even have a dining room to celebrate the holidays. Another recently added bonus is being able to add your home to Airbnb to be used as a rental when and if you choose not to use it. Finally, you’ll be amazed at how much you will be able to afford as compared to buying in or near a big city. It’s always a smart idea to examine all your options before making such a big decision.
Today, more then ever before, smart home buyers start their search on the internet. This makes a lot of sense. It not only saves you time, but also you can actually be shopping online. Most search engines provide complete listing data, including the address, taxes, assessments, lots of photos, and in some cases even videos and drone ariel images. Once you have identified some potential properties you would like to see, the next step is equally important. Often even savvy consumers don’t realize that some agents are paying for leads on sites like Trulia and Zillow, and may not actually be the listing agent of the property you are interested in. At this point in your search you need to find your own Real Estate agent. This agent should be experienced in the area you are interested in. It’s a good idea to, at a minimum, have a telephone interview, making certain you are comfortable with that agent. Ask questions like how many years in the business, their knowledge of the neighborhood, market conditions, their familiarity with the properties you have interest in. What comparables have sold in the area. Once you have selected an agent to work on your behalf, they will be able to preview new properties as they come on the market. There is no better way to buy your home than having an experienced agent looking out for your best interest.
-Charles “Chuck” Bartolo
It had to happen, all markets operate in cycles ours is no different. The housing stats are showing very positive signs at this time for our local residential market. The first five months 250 residential properties sold, that’s over a 14% increase in closed transactions compared to the same period last year. There’s more, the median price has gone up again & is now at $252,500, a number that makes it very difficult for our many first-time homebuyers. For Sellers the news is even better as home prices have gone up 3% since last year, the average days on market has dropped to just 146. So, if you have been thinking of selling, don’t wait, as markets are always fickle, and some are predicting a slow down may come in the not to distant future.
Lately, all too often I’m hearing from upset buyers about their experiences with online mortgage brokers. It’s quite easy to be drawn into the lure of low interest rates. Once you get started and are well into the process you are often told you are not eligible for those low rates. Since you have already spent so much time, you continue the process, sometimes to discover the rates and fees are a lot higher than using a local mortgage lender. Securing financing can be very stressful, especially for first-time homebuyers. It is far better in these cases to deal face-to-face, or unlike many of these online sites, to have a real person you can talk to and ask questions. Mortgage brokers also have more flexibility, work with a variety of lenders and may have other loan products better suited for your particular needs. Remember it is not only the rate that matters, but good customer service is vital as well. Feel free to reach out to our office if you need help finding a local mortgage broker.