September 15, 2014

The Best Time to Buy a Home

The real estate market is cyclical, moving up and down. Still, seasonal variations affect buyers and sellers alike.

The spring is the most common time to buy a home, as most home sales occur between April and July. Buyers like buying at this time because they have more vacation time, better weather, and don't have to take their kids out of school should they change school districts. This is good news from an inventory standpoint, but bad from a price perspective. Sellers who have just listed their homes in the spring will be less willing to negotiate the price than sellers who have withstood less favorable conditions. Increased competition means buyers risk losing a home if they do not act quickly.

Contrarily, buyers can generally expect to find less inventory but better prices in the fall, winter, and summer (the "off" season), when competition is reduced. Realtor.com suggests buying a home between Thanksgiving and New Years, as home prices are typically at a 12-month low in December. Also during the colder months, some mortgage lenders forgo some of their fees in order to attract customers, who in turn get good mortgage deals. Realtor.com also lists early spring as a good time to buy, just as sellers are listing their properties and determining an asking price.

Interest rates and related economic factors are also important to consider when starting your home search. Ultimately, though, the best time to buy varies from person to person, based on personal factors. Beware: waiting for the "perfect" time to buy a home may result in a lost opportunity, given the unpredictable timing of the real estate market.

Ready to start your home search? Contact me!



September 11, 2014

Most Expensive U.S. Home Debuts on MLS

Looking to upgrade? Last week, the United States' most expensive publicly listed home debuted on the Multiple Listing Service (MLS). The Hillsboro Beach estate, known as the Le Palais Royal, is to be completed in 2015. The Palace of Versailles inspired its gold ornaments, extensive balconies, and six fountains.



The mansion's 60,000 square feet of living space encompasses 11 bedrooms, 17 bathrooms, an Imax home theater, a 1,300 gallon aquarium, a spa, and other equally impressive features. The subterranean garage accommodates 30 vehicles. The house celebrates outdoor living just as much as indoor living--the presidential palace flaunts its own private pool on its terrace! The main pool has an infinity edge, swim-up bar, water slide, fire pit and Jacuzzi. The property also features a summer kitchen, an almost 500 foot dock that can accommodate a 185 foot yacht, and 465 feet of private beachfront.




However, Le Palais Royal is not the most expensive home for sale in the U.S. when you consider properties that are being shown off market. The Manor, in the Holmby Hills neighborhood of Los Angeles, is priced at $150 million. The 1991 Manor originally housed Candy and Aaron Spelling and had a bowling alley and hair salon. British Heiress Petra Stunt (daughter of billionaire Bernie Ecclesiastes) purchased the house for $85 million in 2011 and updated it to appear more youthful. Stunt is only 25 years old.

The Beverly House, in Beverly Hills, California, is available to buy at $135 million or rent at $600,000 per month. The house was built in the 1920s and was home to publishing magnate William Randolph Hearst and actress Marion Davies. The Beverly House appears in The Godfather and served as a honeymoon retreat for Jacqueline and John F. Kennedy. The compound includes the H-shaped house (complete with 40 bedrooms and 30 bathrooms, a 50-foot entry hall, and a library) three pools with a pool house, and a tennis court.

           
The Beverly House, Beverly Hills
The Manor, L.A.




September 8, 2014

The Average American Home: Bigger than Ever

In America, you've probably heard the phase, "bigger is better." This philosophy is manifested in U.S. home sizes, which have steadily increased over time. According to the Census Bureau, the average home size grew from 1,725 square feet in 1983 to 2,598 square feet in 2013--an increase of 50%!

Many trends explain this phenomenon. First, the wealthily have gotten wealthier, and are buying bigger homes to show for it. The market for homes 4,000 square feet or more has increased from 6.6% in 2005 to 9% in 2013. Homes between 3,000 and 4,000 square feet have increased even more--from 15.6 % to 21.7% over the same time period. Director of Economic Services for the National Association of Home Builders Stephan Melman states that people who have invested in the stock market have seen their money double since 2009. 

On another note, first-time homebuyers are finding it more difficult to buy homes, thanks to student debt and trouble getting mortgages. Because first-time homebuyers make up the majority of the market for small homes, the market for such homes (1400 square feet and less) has decreased from 9% in 2005 to only 4% in 2013. The average first-time homebuyer in 2013 was 31 years old according the National Association of Realtors. 

Third, people are demanding more from their homes. Buyers want home offices, play rooms, walk-in closets and oversized bathrooms. Parents want their children to each have their own room. For many, a one car garage will no longer suffice. Therefore, alongside the increase in home size, the number of rooms in the average home is increasing as well.

Another trend that helps explain the increase in home size involves the current rental market. Rental rates have increased since 2006 by roughly 20%---turning many homeowners into landlords to order to help pay off home mortgages. People who move into a larger home are more inclined to hang on to their previous home as a rental given their low mortgage rates. Glenn Kelman, CEO of the brokerage firm Redfin, points out that every home converted into a rental means one less home on the market, contributing to low inventory and limited sales growth.

If you are interested in buying a home, be it small or large, contact me to see how I can help. I work for all types of buyers, from first-time homeowners to empty nesters. Click here to view my featured listings.


September 4, 2014

Finding the Best Contractor


Home contractors have been busy since the economy began to recover, and increased material costs have raised their prices. What does this mean for people who want to renovate their home? Finding a contractor may not be as simple as it once was. Follow these tips to make sure you and your home are in good hands:


Ask friends, family members and neighbors for referrals. Take the names of at least three different contractors. When you call them, let them know you have been referred by one of their previous clients. This will incentivize them to maintain a high level of customer satisfaction. Contractors can also be found online on websites such as the National Association of the Remodeling Industry.

Know what you want to accomplish and how much money you want to spend. This shows you are serious about home renovation, which contractors admire when they are considering bids. At the same time, feel free to get the contractor's opinion. Asking for a contractor's initial thoughts about a project communicates that you value his or her expertise. It also gives you a better idea of how the contractor thinks, based on the feedback he or she provides. It's best to talk about the overarching plan before you discuss price.

Never hire a contractor solely based on price! You will be working closely with this person for a prolonged period of time. The ideal contractor is a good communicator who you feel comfortable discussing your plans and budget with. Someone who comes off as untrustworthy is not right for the job. 

Solicit bids from multiple contractors, and disregard those that come in suspiciously low or high. It's okay to let them know you are getting bids from other contractors. If a bid comes in above what you are willing to pay, tell the contractor how much lower you'd like to go and ask for suggestions on how to lower the cost of the renovation with as little impact on the overall project as possible. Simply negotiating (asking for the same amount of work but at a lower cost) might lead contractors to cut corners. Allow for an additional 10-20% for unexpected expenses. 

Finally, ask for a rough start and end date but keep in mind that you may have to wait for a good, affordable contractor. Want additional information on hiring a contractor? Click here or watch the video below:



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September 2, 2014

Mortgage Demand Dropping - Find Out Why

Fixed-rate mortgages continue to decline rather than increase, which was expected of the second half of 2014. Last week, they reached the lowest average of the year, as reported by Freddie Mac. For the week ending August 21, the average 30-year fixed-rate mortgage was 4.10 percent (down from 4.58 this time last year and 4.12 percent last week), while the average 15-year fixed-rate mortgage was 3.26 percent (down from 3.60 percent this time last year and 3.24 percent last week). Freddie Mac predicts new and refinance mortgage origination volume this year to be the lowest since 2000, at approximately $1.15 trillion.
 So why has mortgage origination declined? Freddie Mac analysts identify three reasons:
  1. The refinancing boom is over. The number of home refinances has fallen 60% from 2013 to 2014 and is expected to decrease another 50 percent from 2014 to 2015. Mortgage rates are expected to rise soon, discouraging borrowers from refinancing.
  2. Home sales are low. Compared to the first half of 2013, home sales have fallen roughly 5 percent in the first six months of this year. Reasons include slower economic growth, a phase of higher mortgage rates, a harsh winter, minimum new home construction, and limited inventory.
  3. More buyers are using cash. Although the number of buyers paying in cash is expected to decrease alongside the number of distressed homes on the market, all-cash home sales rose from 31 to 33 percent in the first six months of 2014.
Whatever the reason, now is the time to take advantage of lower borrowing costs before they inevitably rise!

August 28, 2014

Buckeyes Ready For Football Season



Football season is here! Bring out your OSU gear to cheer the Buckeyes on this fall. They play next at noon on Saturday, August 30th, when they take on Navy, who they beat 31-27 in 2009. Watch the game on CBS Sports Network. View the complete game schedule and buy tickets here.





Fast Facts:


News:

  • Braxton Miller, senior quarterback, will miss the 2014 season after re-injuring his right shoulder at practice on Monday, August 18th. He spent the spring recovering from his February surgery necessitated by an injury  acquired in the 2014 Discover Orange Bowl. His more recent injury will also require surgery. Miller has seven Big Ten Conference individual awards--the most in conference history. Sports analysts say that Miller's absence will noticeably hurt the team. Kirk Herbstreit with ESPN states that now, Michigan State is the Big Ten team to beat.  OSU teammates remain positive, pointing out that there are many more play-makers and that the team should not be discarded after the loss of their star competitor. 

August 22, 2014

Housing Market Update

Jim Weiker writes in The Columbus Dispatch that recent trends continue: home shortages, increased home prices, reduced time on the market, and declining home sales. Why is the imbalance between buyers and sellers so persistent? Weiker reports that roughly 20% of central Ohio homeowners still owe more than the value of their home.  Others are worried that their house will sell too quickly, that they won't have anywhere to live when it does sell, and that interest rates (despite being relatively low) are not as good as the ones they are currently sitting on. Another problem is minimal new home construction. According to Lawrence Yun, the chief economist with the National Association of REALTORS, claims that new-home construction needs to increase by at least 50 percent in order to create a balanced market. Is this market the new normal, or is it just facing a slow recovery? Columbus REALTORS reports in a recent article that the number of central Ohio homes and condos sold in July 2014 increased by 11.4% from June 2014, but is still slightly down from June 2013 (by 3.3%). Promisingly, inventory is up 5.5% from May 2013.  Unfortunately, price increases usurp inventory gains: the average sales price of a home rose by 9.1% since just this May.

Overall, it's impossible to predict the housing market. It seems that gains have been made in past couple of months, but that the market is not as healthy (as of June 2014) as it was one year ago (June 2013), when central Ohio sales were 3.3 percent higher (2,952 compared to 2,856), the median price was 3.8% lower ($159,400 compared to $165,500), and the average number of days on the market was 16.7% higher (72 compared to 60). Despite a market that tends to favor sellers, 100% of central Ohio REALTORS classify the housing market as moderate to strong, and expect it to remain so over the next six months, according the latest Housing Market Confidence Index.