Now is a Fantastic Time for a Second Home

25 09 2012

Thinking of a Vacation or Retirement Home? Buy It Now

Posted: 19 Sep 2012 04:00 AM PDT

 When the economy was exploding in the early 2000s, many of us began to dream about purchasing that vacation home on the lake or securing a home in a more appropriate location for our retirement years. However, with the booming economy came skyrocketing house prices. Many of the homes we fell in love with quickly became out of reach financially. Perhaps we should take a second look at these same homes today.

With prices dropping by over 30% in some markets and with interest rates at historic lows, this may be the perfect time to do what we and our families have always dreamt of doing – buying that second home. Let’s look at the numbers.

Back in 2006 we may have seen the ‘perfect’ home but the $500,000 price tag was just out of reach. Today, we could probably get that home for $400,000 (if not less). We also would be financing it at the current mortgage rate instead of the rates available six years ago. The table below shows the difference in impact on our family’s finances:

Not every family is in the financial position to take advantage of the tremendous opportunities the current real estate market offers. But, if yours is, this may be the time for dreams to come true.

Source:  KCM Blog





East Austin named Hipster Neighborhood

24 09 2012

Forbes names E. Austin a hip hipster neighborhood

Austin Business Journal

Date: Monday, September 24, 2012, 7:16am CDT

 

Forbes magazine has ranked East Austin as one of America’s Hippest Hipster Neighborhoods.

Rankings are based on walkability, coffee shops per capita, foods trucks, locally owned bars and eateries, those with artistic jobs and the number and frequency of farmers markets. East Austin took the No. 7 spot.

The magazine used Nextdoor.com and Walkscore.com to compare 250 U.S. neighborhoods, CultureMap Austin reports.

Silver Lake, Los Angeles took the top spot, followed by Mission District, San Francisco; Williamsburg, Brooklyn; Wicker Park, Chicago; and Pearl District, Portland.





Save Money in the Kitchen!

21 09 2012

Lower your monthly energy bill and lessen your impact on the environment by unplugging electronics, turning up the refrigerator, and being mindful of your dish cleaning habits in the kitchen.

How To:

  1. First, unplug your vampire electronics. Some electronics never fully turn off, they just go into a hibernation mode. To know if your appliance goes into hibernation mode, read the owner’s manual. Coffee makers and toasters are common kitchen vampires, so be sure to unplug these appliances when you’re not using them.

  2.   Don’t use the oven as a heater. Only open and close the oven when it’s necessary for your meal. It just makes the oven work harder and wastes energy. When you run a self-clean cycle, only run it after you’ve cooked in the oven. That way, the oven is already hot and you won’t waste energy.
  3.   Turn up the refrigerator temperature. There’s no reason to have ice pellets in your milk, so raise the temperature so your refrigerator isn’t overworking. Experts say that between 38 and 42 degrees is an optimal setting to keep your items fresh and save energy in the meantime.
  4.   Skip the pre-rinse and dry cycle on your dishwasher. It takes very little time to dry the dishes by hand, and the pre-rinse cycle is doing more harm than good. If your dishes are especially grimy, rinse them in the sink before placing them in the dishwasher. Only run the dishwasher when it’s full to save energy.
  5. When you clean your kitchen, try products you already have in your cabinet instead of expensive over-the-counter remedies. An equal mixture of baking soda and water works well on countertops. To learn more about green cleaning products, read our To-Do about making Green Cleaning Products.




Why Buy Now?

20 09 2012

5 Reasons to Buy a Home Now

Posted: 17 Sep 2012 04:00 AM PDT

 

Based on prices, mortgage rates and soaring rents, there may have never been a better time in real estate history to purchase a home than right now. Here are five major reasons purchasers should consider buying:

Supply Is Shrinking

With inventory declining in many regions, finding a home of your dreams may become more difficult going forward. There are buyers in more and more markets surprised that there is no longer a large assortment of houses to choose from. The best homes in the best locations sell first. Don’t miss the opportunity to get that ‘once-in-a-lifetime’ buy.

Price Increases Are on the Horizon

Prices will bounce along the bottom this winter. However, projections call for appreciation after that. Several studies and surveys call for price increases over the next few years starting in 2013. One such survey shows that prices will increase over 10% by 2016.

Rents Are Skyrocketing

Rents historically increase by 3.2% on an annual basis. A study issued earlier this year projects rent increases of 4% for the next two years. Trulia recently reported that rents this year have actually shot up by 5.4%.

Interest Rates Are at Historic Lows

Federal Reserve Chairman Ben Bernanke has kept interest rates low in an effort to stimulate a lethargic economy. He understands that low rates will help housing and housing is a key to bringing back the economy. As the economy approves, the need to keep rates low will no longer exist. The 30-year-mortgage rate before the financial crisis was 6.57% (August 2007).

Buy Low, Sell High

We would all agree that, when investing, we want to buy at the lowest price possible and hope to sell at the highest price. Housing can create family wealth as long as we follow this simple principle. Today, real estate is selling ‘low’. It’s time to buy.

Source: KCM Blog





The finances of Renting vs. Buying

14 09 2012

The Finances of Renting vs. Buying

Posted: 14 Sep 2012 04:00 AM PDT

Trulia reported this week that homeownership is 45% cheaper than renting in the United States. Jed Kolko, Trulia’s Chief Economist explained:

“Homeownership is cheaper than renting in all of the 100 largest metros, by a wide margin. Despite the recent price rebound, rents continue to rise faster than prices, and mortgage rates are near record lows.

Homeownership makes the most financial sense for people whose strong credit scores let them snag the lowest mortgage rate and who get the biggest benefit from deducting mortgage interest and property taxes from their income taxes.”

(Trulia’s methodology is explained here.)

This news did not come as a surprise to us as we have reported that today’s rental market definitely favors the landlord. Below is a graph of how rental prices have increased recently and where they are projected to go over the next few years based on a report from Marcus & Millichap.

It cost more to rent than own right now. And you don’t get any of your rent back in the future. History shows us, in the long term, you can build equity in a home. Dr. Ken Johnson earlier this year explained in a post on this blog:

“It appears that homeownership creates extra wealth mainly through its ability to force owners to save rather than through property appreciation. Thus, homeownership appears to be a self-imposed savings plan, which through time leads to greater wealth accumulation as compared to comparable renters. In short, buying a home makes Americans save.”

The Joint Center for Housing Studies at Harvard University released a study last year titled America’s Rental Housing: Meeting Challenges, Building on Opportunities. In the study, they actually quantified the difference in family wealth between renters and homeowners:

“[R]enters have only a fraction of the net wealth of owners. Near the peak of the housing bubble in 2007, the median net wealth of homeowners was $234,600—about 46 times the $5,100 median for renters. Even if homeowner wealth fell back to 1995 levels, it would still be 27.5 times the median for renters.”

What Does This All Mean?

We believe David Shulman, senior economist with the UCLA Ziman Center for Real Estate said it best:

“The American Dream of homeownership may be comatose, but it is not dead, and the wake-up call will come in the form of higher rents.”

Source: KCM Blog





Is Real Estate Better Off Than 4 Years Ago?

13 09 2012
Is Real Estate Better Off Than 4 Years Ago?

Posted: 13 Sep 2012 04:00 AM PDT

 

That depends on whether you are selling or buying.

Source – KCM Blog





Multiple Offers from the Buyer’s Perspective

6 09 2012

Oh no, my dream home as another offer on it besides ours. How can we help the seller to choose us? Watch this video for 3 tips.

How to handle a multiple offer situation from the buyer’s perspective.

When you’re ready to buy or sell, we’re here to help!

Resident Realty REALTOR®, Austin Real Estate Specialist Nicole Cooper, http://www.HotPropertiesATX.com 512.698.2393





Pending Sales Up Over 12% – Nationally

4 09 2012

Pending Contracts Up Over 12%

Posted: 04 Sep 2012 04:00 AM PDT

 Last week the National Association of Realtors (NAR) released their Pending Home Sales Index, The Index, a forward-looking indicator based on contract signings (not closings), rose 2.4 percent to 101.7 in July up 12.4 percent above July last year. The index is at the highest level since April 2010, which was shortly before the closing deadline for the home buyer tax credit. Lawrence Yun , NAR chief economist, said:

“While the month-to-month movement has been uneven, more importantly we now have 15 consecutive months of year-over-year gains in contract activity.”

This preceded NAR’s Existing Home Sales Report which showed closed sales were up 10.4% over last year. Prices were also up 9.4% year over year. NAR expects existing home sales to rise 8 to 9 percent in 2012, followed by another 7 to 8 percent gain in 2013. Home prices are expected to increase 10 percent cumulatively over the next two years.

And even though new construction sales showed a 25% increase over last year, Yun explained that should not dramatically impact prices:

“Falling visible and shadow inventories point toward continuing price gains. Expected gains in housing starts of 25 to 30 percent this year, and nearly 50 percent in 2013, are insufficient to meet the growing housing demand.”

Housing is in the middle of a recovery without a doubt.

Source: KCM Blog