Insider Secrets for the 5 Stages of Buying Your First Home

This article is a bit long, but if you’re a first-time buyer, or even a repeat buyer, this is well worth reading. It comes from Tara-Nicholle Nelson, who blogs for Trulia. We live in an era where a Facebook post of a few sentences is the extent of our attention span, but if you’re actually making what is probably the largest investment of your life, you might want to actually spend 3 minutes to read a little further. Tips include “the market is the least important factor you should consider when deciding whether and when to buy a home,” “Working with a mortgage broker referred by your real estate broker or agent may save you money,” and “your family and friends can cause you to lose your dream home.” I love that last one—it seems right now everyone has that expert in the family, the person who has owned maybe one home their whole life but knows much more than the agents who sell 25 a year.

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Buying a home is not a discrete event; it's a process - a sequence of events that happens over time, sometimes over as long as several months or even years! While general guides to buying a home are a dime a dozen, I'm excited to share with you some insider secrets you may not have heard elsewhere - one for each stage involved in buying a home. Here's to helping you make the best decisions at every phase of your homebuying process!

Stage One: Deciding Whether It's The Right Time to Buy.
Insider Secret: The market is the least important factor you should consider when deciding whether and when to buy a home.
Why: Everyone knows affordability is at an all-time high. Home prices are low, and so are interest rates. But trying to time the market is a fool's errand; many who get caught up in that game of trying to make sure they buy at the absolute bottom will end up losing out on very, very favorable conditions.

Continue reading at: http://www.trulia.com/blog/taranelson/2011/02/surprising_insider_secrets_for_the_5_stages_of_buying_your_first_home?ecampaign=anews&eurl=www.trulia.com%2Fblog%2Ftaranelson%2F2011%2F02%2Fsurprising_insider_secrets_for_the_5_stages_of_buying_your_first_home

What You Get for ... $520,000

The New York Times has a regular feature on what kind of homes you can buy in a given price range around the country. The most recent featured on the $520,000 price range. The article follows, but I thought I’d add a little something locally, in Ardsley Park, where one of my favorite houses is listed for $535,000. It’s not my listing, but of course I’d be happy to represent you as the buyer. I just love the proportions of this home. Many homes from this era don’t really have the kind of spaces that make sense for today’s living, but this house does. Plus it has a master on the main floor and a pool. Great house!




























































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By MIKE POWELL
Published: February 2, 2011

WASHINGTON, D.C.

WHAT: A duplex condo with two bedrooms and two and a half baths

HOW MUCH: $515,000

SIZE: 1,325 square feet

PER SQUARE FOOT: $388.68

SETTING: This apartment is one of nine units in a 1916 building. The neighborhood, Adams Morgan, is in Northwest Washington, and mostly residential, with a cluster of bars, restaurants and shops at the intersection of 18th Street and Columbia Road, about two blocks away. The nearest Metro stop is a half-mile away.

INSIDE: The apartment was renovated five years ago, when new bathrooms and a kitchen were installed. The main level is completely open; the living area has a wood-burning stove. Upstairs, both bedrooms have en-suite baths. The master bedroom also has a wood stove, as well as a walk-in closet and a bathroom with two sinks; the other bedroom is slightly larger and has a double-width closet. The unit comes with a parking space.

TAXES: $4,728 a year; $222 a month in condo fees.

CONTACT: Boucie Addison, Washington Fine Properties (301) 509-8827; wfp.com.

NEW ORLEANS

WHAT: A one-bedroom two-bath condo in the French Quarter

HOW MUCH: $524,000

SIZE: 1,479 square feet

PRICE PER SQUARE FOOT: $354.29

SETTING: This condo is in an 1830s building in the French Quarter. Some of the Quarter’s most famous bars and restaurants —Antoine’s and Café Du Monde — are nearby. So is Preservation Hall, a jazz and blues club. Downtown, the city’s central business district, is about a half-mile away.

INSIDE: This duplex apartment, on the third and fourth floors of a four-floor building, was renovated about 10 years ago. On the main level is the kitchen, a living room with 12-foot ceilings and a dining area. Off the living room is an iron-railed balcony. Original details include two decorative fireplaces, hardwood floors and crown molding. Upstairs is a master suite with vaulted ceilings, a walk-in closet and a bathroom with a marble shower. The condo comes with a parking spot.

OUTDOOR SPACE: The living room opens to a balcony overlooking St. Louis Street and the French Quarter.

TAXES: $4,236 a year; $452 a month in homeowner’s association dues.

CONTACT: Richard Jensen, Latter & Blum/Realtors, (504) 812-0010; latter-blum.com.

PORTLAND, ORE.

WHAT: A house with three bedrooms and one and a half baths

HOW MUCH: $524,900

SIZE: 3,514 square feet

PER SQUARE FOOT: $149.37

SETTING: This 1910 house is in Kenton, a neighborhood in north Portland. According to the listing agent, most of the homes in the area were built in the early 1900s. Within a couple of blocks is a commercial district, with restaurants, a post office, a library, a supermarket and coffee shops. The MAX Light Rail stops four blocks away. Downtown Portland is a 10-minute drive.

INSIDE: Most of the original details in this house, including woodwork, hardwood floors and leaded-glass windows, were restored by the current owners, who have lived in the house for about 25 years. On the main level is a formal living room with a brick fireplace, and a dining room with a curved bay window. Off the kitchen is a den with a half-bath. Two of the bedrooms are downstairs; the master bedroom is in what was formerly the attic. It has a beamed ceiling, two skylights and a walk-in closet.

OUTDOOR SPACE: A wrap-around deck at the front of the house; a yard in the back.

TAXES: $4,425 a year

CONTACT: Gene Moore, Re/Max equity group, (503) 880-4363; equitygroup.com.

View original article here: http://www.nytimes.com/2011/02/03/greathomesanddestinations/03gh-what.html?_r=1

Buying a home now is a no-brainer

Money Magazine has given their official approval for you to purchase your home. The article below mentions a lot of things I've been discussing the last few months, not that it wasn't common sense to start with. Remember the mantra? If you like the home and the payment makes sense and you're not moving any time soon, this is a great time to buy.

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By Ali Velshi, CNN chief business correspondent
December 13, 2010: 9:26 AM ET

(MONEY Magazine) -- Is now the right time to invest in a house?

Trick question. Actually, it's two questions.

Question No. 1: Is now the time to buy?

Question No. 2: Is buying a house a good investment?

The first answer is easy: With a few exceptions, if you have 20% to put down and good credit, now is a great time to buy. That's been the case all year, and I'd argue that we're probably closer to the end than to the beginning of the really great time. Let me explain.

Back in January home prices had dropped 28% from their peak. More important, interest rates were at historical lows. By locking in a mortgage for 15 or 30 years on a value-priced home, you were getting an incredible deal, even if home prices decreased. (I took my advice and bought a New York City apartment.)

At the time, I thought that prices and rates were more likely to rise than fall. I was half right: Home values have been inching up since the spring, but mortgage rates, incredibly, dropped further.

By August (the latest numbers available) the median home price had risen 1% over a year ago, but 30-year rates had dropped a half-point to 4.5%. Assuming 20% down and a 30-year mortgage, the total cost of owning a median-priced home is now down $16,000 from a year ago.

Home values may waffle over the coming year, but because Americans take out such large, long mortgages, rates are what really matter. And I am more likely to grow hair than see 30-year mortgage rates drop below 4%. It's far more likely that rates (and the cost of ownership) will rise.

Now for question No. 2: Is a house a good investment?

First, it depends on what you mean by investment. If your definition is strictly about dollars returned, a house probably won't be a great use of your capital. If you bought the median-priced house today with 20% down, to recoup your total costs (and I'm not including property taxes and maintenance here) over three decades, the home's value would have to rise about 3% a year.

That's likely, but you'll almost certainly (we all hope) do much better than that in the stock market. The fact is, however, that that's the normal case for housing; the booms that began after World War II and in the late 1990s were the exceptions.

Of course, there are places where you might do better. I bought my condo in Manhattan, a small island that, by virtue of the business done on it, has a sustained demand for property. And smaller, energy-efficient housing in cities or inner suburbs around San Francisco or Chicago is likely to be in higher demand than big, outer suburban homes with long commutes to Las Vegas or Atlanta.

According to urban and environmental planning professor William Lucy of the University of Virginia, this move toward urbanization in American housing is the reversal of a trend that's been in place since 1945. Keep it in mind when making your buying decisions.

That said, the key point to remember is this: Buying a fairly priced home at today's rates may be the best deal you will ever get. And who knows? It may even turn out to be a good investment.

View original article at http://money.cnn.com/2010/12/10/pf/buy_a_home_now.moneymag/index.htm

Blogger Matthew Allan is a specialist in Savannah Real Estate, focusing on Savannah's downtown historic districts, including the Landmark Historic District, Victorian Historic District, Thomas Square Historic District, Starland Historic District, Baldwin Park, and Ardsley Park Historic District.

One Reason for Housing Glut: Fewer New Households

By Alan J. Heavens

RISMEDIA, November 4, 2010--(MCT)--U.S. household formations are at their lowest since 1947, data from the Census Bureau show. And that's helping to keep the supply of unsold homes at near-record levels nationwide, even though relatively few houses are being added to the inventory.

Between March 2009 and March 2010, the number of households rose just 357,000, according to the census data. In the previous 12 months, the number increased only 398,000, the third-smallest increase on record since World War II.

Between 2002 and 2007, before the economy started on its downward trajectory, household formations averaged 1.3 million a year, U.S. census data show.

"That's the consequence of the consumer fear of what's happening with the economy and with the job market," said Lucien Salvant, a spokesman for the National Association of Realtors.

"When people are afraid of losing their jobs or not being able to get into the job market, they are not thinking about buying a home," Salvant said. "Many opt to stay at home with parents, or to share rentals with friends."

The nation's gross vacancy rate — the proportion of housing units that are vacant — stood at 14.5 percent at the end of the second quarter of 2010, census data show.

In a well-functioning economy, household formations "would be closer to 1.25 million," said Mark Zandi, chief economist of Moody's Analytics in West Chester, Pa.

During normal times, builders need to add about 1.7 million houses a year to meet underlying demand stemming from, among other things, the need for replacement homes and the desire for second homes, as well as conversions from nonresidential to residential uses and increases in the number of households.

For example, about 250,000 new homes are needed per year to replace houses that are destroyed by fires and natural disasters or that wear out from neglect or old age. Demand for second homes combined with other miscellaneous factors accounts for 50,000 to 100,000 new houses a year.

Household growth typically requires 1.3 million to 1.4 million units.

"The sharp drop in household formation largely explains why the housing glut remains stubbornly high, despite the plunge in housing starts in recent years," said housing economist Patrick Newport, of IHS Global Insight in Lexington, Mass.

Two major sources of household formation — immigration and marriage — remain well below the averages of recent years.

The National Center for Health Statistics reports that the number of marriages per thousand population fell from 8.2 in 2000 to 6.8 in 2009. Divorces per thousand population fell from 4.0 in 2000 to 3.4 in 2009.

There are no hard data on "doubling up" — young people sharing rentals or moving in with their parents in a tight job market — though anecdotal evidence indicates the latter has become more commonplace in recent years.

During the late 1990s and in the first years of this decade, the housing industry banked on immigration for a good part of its growth.

Between 1990 and 2000, the U.S. population grew by nearly 33 million, with almost half of that gain attributable to immigration, according to data provided in 2003 by James Johnson Jr., a professor at the Kenan-Flagler Business School at the University of North Carolina-Chapel Hill.

In the 1990s, census data show, immigrants accounted for 250,000 household formations a year. Immigrants typically rent for their first few years in this country, housing economists say. Then, after becoming established, they become a major factor in the for-sale marketplace.

Newport believes that a drop in immigration might have played a greater role early in the recession than it did later on. In 2009, census data show, households headed by the native-born under age 35 fell by 338,000, indicating that doubling up was the larger contributor.

The number of households headed by those ages 15 to 24 fell 124,000 (students moving back in with parents), while households with six or more people rose 355,000, an 8 percent increase.

A common misconception, Newport said, is that foreclosures account for the oversupply of houses.

"A foreclosure or a bank taking possession of a home," he said, "does not by itself add to the housing glut."

If a household vacates a home and moves into a rental unit, the housing supply is unchanged. Supply increases, however, if one household moves in with another, Newport said, or if its members become homeless.

(c) 2010, The Philadelphia Inquirer.

Wall Street Journal's 10 Reasons to Buy a Home

This is such a bipolar time in the real estate market--TIME magazine ran a cover story talking about whether homeownership is passe. Then the WALL STREET JOURNAL ran a counter-story with reasons why the time is right. I'm personally in the WSJ camp--not only in their camp, but desperately trying to find a new place. One of my clients who is under contract for a great house a block from Forsyth Park just locked into a 30-year fixed rate mortgage at 4.0%. That is absurd--not to mention the price they are paying for one of the really special houses downtown. They looked at 30 houses, at least, before finding this one, but when you find the right one, you have to make your move.

Enough with the doom and gloom about home ownership.

Sure, maybe there's more pain to come in the housing market. But when Time magazine starts running covers that declare "Owning a home may no longer make economic sense," it's time to say: Enough is enough. This is what "capitulation" looks like. Everyone has given up.

After all, at the peak of the bubble five years ago, Time had a different take. "Home Sweet Home," declared its cover then, as it celebrated the boom and asked: "Will your house make you rich?"

But it's not enough just to be contrarian. So here are 10 reasons why it's good to buy a home.

1. You can get a good deal. Especially if you play hardball. This is a buyer's market. Most of the other buyers have now vanished, as the tax credits on purchases have just expired. We're four to five years into the biggest housing bust in modern history. And prices have come down a long way– about 30% from their peak, according to Standard & Poor's Case-Shiller Index, which tracks home prices in 20 big cities. Yes, it's mixed. New York is only down 20%. Arizona has halved. Will prices fall further? Sure, they could. You'll never catch the bottom. It doesn't really matter so much in the long haul.

Where is fair value? Fund manager Jeremy Grantham at GMO, who predicted the bust with remarkable accuracy, said two years ago that home prices needed to fall another 17% to reach fair value in relation to household incomes. Case-Shiller since then: Down 18%.

2. Mortgages are cheap. You can get a 30-year loan for around 4.3%. What's not to like? These are the lowest rates on record. As recently as two years ago they were about 6.3%. That drop slashes your monthly repayment by a fifth. If inflation picks up, you won't see these mortgage rates again in your lifetime. And if we get deflation, and rates fall further, you can refi.

3. You'll save on taxes. You can deduct the mortgage interest from your income taxes. You can deduct your real estate taxes. And you'll get a tax break on capital gains–if any–when you sell. Sure, you'll need to do your math. You'll only get the income tax break if you itemize your deductions, and many people may be better off taking the standard deduction instead. The breaks are more valuable the more you earn, and the bigger your mortgage. But many people will find that these tax breaks mean owning costs them less, often a lot less, than renting.

4. It'll be yours. You can have the kitchen and bathrooms you want. You can move the walls, build an extension–zoning permitted–or paint everything bright orange. Few landlords are so indulgent; for renters, these types of changes are often impossible. You'll feel better about your own place if you own it than if you rent. Many years ago, when I was working for a political campaign in England, I toured a working-class northern town. Mrs. Thatcher had just begun selling off public housing to the tenants. "You can tell the ones that have been bought," said my local guide. "They've painted the front door. It's the first thing people do when they buy." It was a small sign that said something big.
5. You'll get a better home. In many parts of the country it can be really hard to find a good rental. All the best places are sold as condos. Money talks. Once again, this is a case by case issue: In Miami right now there are so many vacant luxury condos that owners will rent them out for a fraction of the cost of owning. But few places are so favored. Generally speaking, if you want the best home in the best neighborhood, you're better off buying.

6. It offers some inflation protection. No, it's not perfect. But studies by Professor Karl "Chip" Case (of Case-Shiller), and others, suggest that over the long-term housing has tended to beat inflation by a couple of percentage points a year. That's valuable inflation insurance, especially if you're young and raising a family and thinking about the next 30 or 40 years. In the recent past, inflation-protected government bonds, or TIPS, offered an easier form of inflation insurance. But yields there have plummeted of late. That also makes homeownership look a little better by contrast.
7. It's risk capital. No, your home isn't the stock market and you shouldn't view it as the way to get rich. But if the economy does surprise us all and start booming, sooner or later real estate prices will head up again, too. One lesson from the last few years is that stocks are incredibly hard for most normal people to own in large quantities–for practical as well as psychological reasons. Equity in a home is another way of linking part of your portfolio to the long-term growth of the economy–if it happens–and still managing to sleep at night.

8. It's forced savings. If you can rent an apartment for $2,000 month instead of buying one for $2,400 a month, renting may make sense. But will you save that $400 for your future? A lot of people won't. Most, I dare say. Once again, you have to do your math, but the part of your mortgage payment that goes to principal repayment isn't a cost. You're just paying yourself by building equity. As a forced monthly saving, it's a good discipline.

9. There is a lot to choose from. There is a glut of homes in most of the country. The National Association of Realtors puts the current inventory at around 4 million homes. That's below last year's peak, but well above typical levels, and enough for about a year's worth of sales. More keeping coming onto the market, too, as the banks slowly unload their inventory of unsold properties. That means great choice, as well as great prices.

10. Sooner or later, the market will clear. Demand and supply will meet. The population is forecast to grow by more than 100 million people over the next 40 years. That means maybe 40 million new households looking for homes. Meanwhile, this housing glut will work itself out. Many of the homes will be bought. But many more will simply be destroyed–either deliberately, or by inaction. This is already happening. Even two years ago, when I toured the housing slump in western Florida, I saw bankrupt condo developments that were fast becoming derelict. And, finally, a lot of the "glut" simply won't matter: It's concentrated in a few areas, like Florida and Nevada. Unless you live there, the glut won't have any long-term impact on housing supply in your town.

View original article here: http://online.wsj.com/article/SB10001424052748703376504575492023471133674.html

Blogger Matthew Allan is a specialist in Savannah Real Estate, focusing on Savannah's downtown historic districts, including the Landmark Historic District, Victorian Historic District, Thomas Square Historic District, Starland Historic District, Baldwin Park, and Ardsley Park Historic District.