WHY OLDER HOMES ROCK

You’re ready to buy a home, but there hasn’t been a new home built in your area in 10 years, leaving you no choice but to buy an older home. You could appreciate older homes more if you know a little about their history and why they were designed the way they were at the time.

You can trace expansions and contractions in the economy easily by home sizes and standard features. In the 1950s, suburbs grew quickly because of new highway systems that allowed homeowners to commute to their jobs. Yards grew larger and homes sprawled on single-story foundations because land was cheap.

Post-war parents gave birth in record numbers to the baby boomers and decorated their homes with space-age Sputnik Formica, luxurious wall-to-wall carpeting, built-in cocktail bars, and furniture-quality black and white TV sets.

In the mid 1970s at the height of the oil embargo, new homes got smaller and closer together. They began to advertise innovations such as “zero-lot-lines” (which is a fancy way of saying land’s too expensive) over traditional homes with front, back and side yards.

Skylights helped get light from above as common townhome walls and lack of side yards in new communities limited natural light. “Great rooms” were introduced as a spacious but smaller square footage alternative to separate living and den areas. And the “Jack and Jill” bath became the norm to provide kids with some privacy while sharing a bathroom.

By the 1980s, the economy was moving from a single wage earner in the household to DINKS — dual income, no kids. As fortunes improved, McMansions grew like mushrooms, featuring third living areas, three-car garages and private en suite baths for every bedroom. Eat-in kitchens joined palatial dining rooms as must-haves for every homeowner.

By the 1990s, a strong movement in favor of natural materials crowned hardwood floors and granite countertops as the new luxury standard. In-home computers became more popular and affordable and the Internet changed reading and information access forever. Recessions were still six month affairs and CEO pay rose to several hundred times that of ordinary workers.

By 2005, McMansions were everywhere, boasting four or more bedrooms, media rooms, master living areas, private studies, flexspaces, island kitchens, mud rooms, and exercise rooms. Then the housing downturn hit, and very little new construction was being built.

Now it takes two incomes just to tread water, but hard-working families don’t want to compromise. They’re conscious of operating costs as well as purchase costs. Energy-efficiency has steadily moved up the ranks of most important considerations for homebuyers. Homes that have been well-maintained, regardless of age, are desirable.

When you look for an older home, consider the advantages. The neighborhood is established, so what you see is what you get. An older home might work best for a decorating style you love, like mid-century modern. You can get the same square footage as a new home for far less cost. And you can remodel the home to make it your own.

Written by  on Thursday, 16 April 2015 3:12 pm

DON’T LET MORTGAGE MYTHS SCARE YOU

The national average for the 30-year fixed-rate mortgage last week was 3.86 percent, according to Freddie Mac’s most recent survey. Freddie’s Deputy Chief Economist Len Keifer believes 2015 will be a great year, with the highest number of housing sales since 2007. The outlook for 2015 is even better, assuring almost instant equity if you purchase now.

Keifer names several reasons why Freddie Mac is optimistic:

1. Jobs have grown at a rate of 250,000 per month for over a year, with strong job growth in the first-time homebuyer age group.

2. About 80 percent of metro markets are affordable for the median family income to purchase the median priced home.

3. Rents have risen 11 percent over the last three years, which may be the tipping point for renters to become homeowners.

So with interest rates only slightly above record lows, why aren’t you running to the nearest lender to get a home loan? Maybe you’re spooked by two mortgage myths – that you have to have 20% down to buy a home and that only buyers with perfect credit can get a loan. Neither one is true.

Lending requirements aren’t as strict as media horror stories might lead you to believe. Freddie Mac is making it possible for more borrowers to meet conforming loan standards. Qualifying borrowers who buy within maximum loan limits, up to $417,000 in most areas and $625,000 in high-cost areas such as parts of California can get loans with less than 20 percent down. Of course, any loan with less than 20 percent down will require private mortgage insurance, but PMI is tax deductible along with the interest you pay on your mortgage if you itemize.

Low-income and first-time buyers can get a conforming loan with as little as three percent down from Fannie Mae, and after March 23, 2015, so will Freddie Mac borrowers. You’ll have to meet certain credit and income qualifications, but the upside is you can start building equity now.

Government-guaranteed loans are also available with as little as zero down through the Veterans Administration for veterans and active-duty military. And the Federal Housing Administration has programs as low as 3.5 percent down. All FHA loans require PMI for the life of the loan.

It’s also not true that only borrowers with perfect credit can get loans. Higher credit scores help borrowers qualify for a better rate. You can get an FHA loan with a credit score as low as 580 if you can provide the 3.5 percent down payment. A credit score of 650 or above will get you in the game for a Fannie or Freddie conforming loan if other variables in your financials are in order.

The rule of thumb is simple — less money down requires a higher credit score and vice versa.

Credit scores tell you how much money you have to put down and they’re a factor in your interest rate. If you put 20 percent down, you can get a loan even if you have a low credit score of 580 or 620. If you have a 740 or 760, the lender will allow you to put less money down.

Other lending myths are also out there, such as lenders are no longer doing stated income loans or jumbo loans. Again, that’s not true. Lenders are doing loans that don’t require an income verification if the customer has a large portfolio of liquid assets.

You may qualify for a better rate on one criteria, but not qualify on another. Lenders look at approximately 15 to 20 pieces of criteria, including credit scores, downpayments, liquid assets, current employment, revolving loans, ownership of other properties, and much more.

The lesson for you is this – don’t try to outsmart the market. The housing market is getting stronger. In fact, there’s rarely been a better time to buy a home.

Written by  on Wednesday, 18 March 2015 12:38 pm

COLOR TREND: SAGE GREEN

Gray continues to invade every space and surface of our homes as the modern-day neutral (aka beige replacement). But other hues continue to bubble up, providing options for those looking to inject a little personality into their space. The latest color trend: olive green.

“This cool, muted shade has been popping up everywhere, from our favorite bloggers’ pads to the design magazines we pore over each month,” said One Kings Lane.

Ask Huffington Post and they’ll say that sage green is always a good choice, no matter the prevailing trends. “Sage green hues are perennially popular because they work like a neutral while still adding a little color to a space,” they said. “They also come across as soothing.”

Here are a few of our favorite ways to show off your sage.

Sage green kitchen cabinets play nice in a gourmet kitchen, pulling together high-end countertops, a rustic ceiling, and commercial stainless steel appliances.

In a light and bright space, sage green is the perfect foil for an otherwise white color palette.

Or, use sage in one key area to make your island even more of a centerpiece.

Sage walls in a large living room give the space a bit of intimacy and luxury.

A darker sage creates a moody space and sets the foundation for eclectic décor.

In a bedroom, sage provides a soothing tone. For a little extra pizzazz, go with a sage-based metallic wallpaper.

Don’t want to paint the walls? Use sage on your built-ins.

Paint the interior a bold shade or wallpaper it in a graphic print to create a standout piece.

Sage green in a bathroom invites a spa feel and integrates a little color without being too bold—a look you can achieve with paint or tile.

See more ideas for incorporating sage green into your home on Houzz.

Written by Jaymi Naciri on Sunday, 22 February 2015 9:44 am

INTEREST RATES AND YOUR MONTHLY PAYMENTS

National average 30-year fixed rate mortgage interest rates have been under five percent for over five years. They should stay low forever, right?

Economists predict that the soaring economy, improved job outlook and ebullient consumer confidence will cause the Federal Reserve to start raising overnight borrowing rates to banks. Mortgage interest rates will become volatile, and things can change quickly for consumers.

To illustrate changing mortgage interest rates and their impact on your monthly payment, consider what a difference even a small dip and rise in interest rates means to you.

In December 2014, the median-priced home in the U.S. was $209,500, according to the National Association of REALTORS®. If you purchased this home for $200,000 and with 20 percent down and a benchmark fixed-rate mortgage with the December national average commitment rate of 3.86 percent (Freddie Mac), your payment would be $751.01 a month.

You’ll make 360 total payments of $270, 362.59, with $110,362.59 in interest over the term of the loan.

The same home with the same loan on February 5 would be very different. The national average commitment rate is 3.59 percent, your payment is 726.53 and your total payments add up to $261,552.16 and 101,552.16 in interest.

The difference isn’t much — just under $25 a month and $8,810 in round numbers.

But what if interest rates go up as economists predict? The January 2015 outlook by Kiplinger’s predicts that interest rates could go as high as 4.9 percent. What would your monthly payments look like then?

Your monthly payment would be $849.16, for a total of $305,698.59, and interest payments of $145,698.59, a difference of $122.63 monthly and $44,146.43 in interest by the end of the loan.

If you’re interested in buying a home, mortgage rates are unlikely to stay low much longer.

Written by  on Wednesday, 11 February 2015 12:46 pm

14 WAYS TO MAKE YOUR HOME – AND YOUR LIFE – EASIER

14 WAYS TO MAKE YOUR HOME – AND YOUR LIFE – EASIER

Life is busy. Everyday, so many things to do. Finding a few shortcuts is key to keeping on track—and keeping your sanity. Employ a few of these tricks to make your life easier (and better!)

1. Put it on the list

It stinks to be driving home from Lowe’s only to remember the one thing you didn’t pick up. Or be reminded of four other things you wanted your handyman to fix—after he’s already left. Keep two running lists on your phone: one for the home improvement store and one for your fix-it person. That way you’ll always have the lists accessible and can add to them as necessary.

2. Stock up on vinegar

It can be used to unclog a drain, take ink off a wall, freshen up your washing machine, clean your coffeemaker, get rid of bugs, and about 90 other things.

3. Throw that newspaper in the trash the right way.

Wadding it up at the bottom of your trash gives you a place to soak up food juices and keep your trash can fresher.

4. Personalize your luggage.

Run a line of colorfully patterned tape across the top of your suitcase. When everyone else is trying to figure out which black bag is theirs, you can easily swoop in, gather your stuff, and be on your way.

5. Set an appointment.

No one knows when it’s time to change their air filters. It’s the truth. But keeping them clean is key to having an efficient heating and air conditioning system. And don’t forget about having good tasting water from your fridge thanks to a properly working filter. According to Energystar.gov, you can check the product information on the filters for the manufacturer’s suggested usage. Then, put the change-out dates in your phone’s calendar so you’ll always know when it’s time for a new one. Do this with your dryer too so you know when it’s time to have the lint trap cleaned.

6. Avoid the beeps.

Apply the same idea to your smoke detectors. Because when the batteries die, they will die at 3am.

7. Go LED.

Climbing ladders to change a bulb is no fun. Using the longest-lasting bulbs on the market will cut down on ladder time and also save on energy bills.

“LEDs have a lifespan of up to 60,000 hours compared to 1,500 hours for incandescent bulbs,” said myLEDlight. “An LED light will last over 7 years (constant use) before needing replacement. And, LEDs consume up to 90% less power than incandescent bulbs.”

8. Shortcut your cleaning.

Investing in a few products that do the work for you can help cut down on the time you spend scouring. For bathrooms, good old Scrubbing Bubbles is a favorite because you can spray it in your tub, shower, or toilet, and come back in a few minutes and wipe away. The Bissell Spotbot is one of our favorite items ever. This hands-free carpet cleaner allows you to spot clean with no effort at all. Put it on a spot, turn it on, and leave. Come back in a few minutes and the spot is gone.

9. Keep the sun out.

Looking for a way to cut your electric bills? Solar screens are effective and cost-effective, dropping the temps inside your home by 10 to 15 degrees and energy bills by 20 percent.

10. Keep your shoeboxes.

“Why pop for manufactured drawer dividers? You can make a completely customizable set with just scissors and shoeboxes,” said Real Simple. “Simply cut the boxes in half by length or width, as needed for your space, then tuck into a drawer.”

11. Go nuts

Forget about spending money on expensive furniture polishes. “Just rub a shelled walnut on the damaged area, and watch in amazement as the dings, scrapes and scratches all begin to darken and disappear,” said Apartment therapy.

12. Charge it!

Add USB chargers to your electrical outlets and end your constant search for a charger. Adding electrical outlets inside bathroom and kitchen drawers will greatly increase the functionality of your spaces while streamlining the look.

13. Make-your-own cleaning wipes.

Perfect for the DIYer, Paper towels and Pine Sol are a magical combination.

14. Mulch it.

A few bags of the stuff can transform your front yard, improving your curb appeal and providing great ROI—up to a 200 percent return on investment!

Written by Jaymi Naciri on Thursday, 05 February 2015 2:46 pm

HOME RENOVATIONS TO INVEST IN AND AVOID IN 2015

Conventional wisdom tells us that any home renovation is a positive thing: money in is money out. Unfortunately, that’s not always the case. Some remodeling projects are a better investment than others, and the projects that yield the best return on investment can change from year to year. According to Remodeling Magazine’s 2015 Cost vs. Value Report, these five replacement projects will make the greatest percentage impact on the value of your home this year — accounting for cost-to-value ratio, the key to making smart home improvements with resale in mind:

1. Roofing Replacement

Roof replacement gives you the biggest bang for your buck in 2015, rising 5.9% over 2014 values at an average cost of $7,740. Roof replacement includes removing the existing roof and installing new shingles with underlayment, flashing, galvanized drip edges and trim.

2. Garage Door Replacement

A well-chosen garage door can make a powerful statement and add a beautiful accent to your home. Garage doors come in four basic types: swing-up, roll-up, swing-out or side-sliding. The cost to install a new garage door will vary depending on style and material, but average around $1,150. This cost generally includes the new door, galvanized steel tracks, rollers or hinges, and removal and disposal of the existing door and tracks.

3. Steel Entry Door Replacement

You can add elegance and security to your home by replacing your old entry door with a steel door. Not only is this the least expensive of 2015’s cost-to-value projects at an average of $923, but it also has the highest resale rating. This project includes the new door unit, jambs and threshold with composite stop. This also presents a great opportunity to choose a new lockset if you can’t reuse your existing one.

4. Vinyl Siding Replacement

While vinyl siding replacement is among the more expensive home renovations, it’s also the very definition of curb appeal. New siding and trim can transform the look and vitality of your home, increase resale value, and improve weatherproofing and energy efficiency. You can expect siding installation to cost between $5,600 and $8,000, depending on your location.

5. Fiberglass Entry Door Replacement

Fiberglass and steel offer superior strength and durability compared to their wooden counterparts. The cost-to-value ratio of replacing an entry door with a fiberglass door boasts an increase of 72% over 2014. The replacement process involves removing the existing door and jambs and mounting the new door unit and jambs along with exterior trim.

Projects to Avoid in 2015

2014 was the year of the major renovation; ironically, many of those projects are now at the top of the opt-out list for 2015. Opt-out projects for 2015 include:

Installing a Back-Up Generator: Last year’s biggest cost-to-value hero dropped like a stone in 2015. This one was hot after Hurricane Sandy but soon lost momentum.

 Adding a Second Story: This big ticket renovation slowed in terms of investment by the end of 2014 — the result of an 11% drop in its cost-to-value ratio.

Home Office Remodel: The lowest reported return on your investment (reportedly 47.5%) is in converting a room into a home office. Potential buyers will be grateful not to have to pull out shelves or commercial grade carpeting when making your home their own.

Sunroom Addition: A potential buyer might see your sunroom as a heat siphon, maintenance nightmare or privacy concern. Like a backyard pool, a sunroom is a true matter of preference — and as an investment, it doesn’t even reach 50% on the cost-to-value rating.

Conclusion

All of these projects are worthy given the right home and the right conditions. Always make sure you’re using licensed, bonded and insured contractors for any projects you don’t want to take on yourself. Hiring a pro with a proven track record will more than pay off in the long run.

Photos courtesy of DesignMine

Andrea Davis is the editor for HomeAdvisor, which helps homeowners find home improvement professionals in their area at no charge to ensure the best service in the shortest amount of time.

Written by Andrea Davis on Tuesday, 03 February 2015 12:03 pm

14 SNEAKY WAYS TO GET YOUR HOUSE SOLD

Let’s face it: Selling a home is stressful. The longer it’s on the market, the more stress it brings and the more it typically costs sellers. Having to lower the sales price, sometimes multiple times, carry two mortgages, or delay the purchase of a new home if an existing home won’t sell – stinks. You need every advantage you can find to get your home sold. Try a few of these and you’ll be packing in no time.

1. Get your neighbors involved.

Neighbors who like you will be happy to help you get your home sold. Same for those who don’t like you. Everyone else might need convincing to lift a finger. Offer a $200 prize to anyone who brings you a buyer who closes.

2. Crowdsource it.

Accessing the power of social media will naturally increase the number of people who see your home for sale. Up the ante by offering the same incentive to the person responsible for bringing in the buyer.

3. Throw in the kitchen sink.

Incentives can create additional interest in your home and maybe even convert a “maybe” to a “yes.”

“Individual sellers should consider price and other incentives that could entice a buyer to take a look. You have to attract their attention somehow,” said Bankrate. “You want to create the buzz.”

Everything from gas cards to movie tickets to the furniture you were getting rid of anyway, to a year of homeowners’ fees can do the trick.

4. Entice with cookies.

You know how they say the way to a man’s heart is his stomach? Chocolate chip cookies are an equal opportunity seduction tool. Have a couple of packages of Nestle Tollhouse cookies on hand to throw in the oven before home viewings and you just might convert a prospect into a surefire buyer.

5. Toy story

Is there a family touring your home? Set out a few key toys in the play room or put some crayons and a few coloring pages on the kitchen table to occupy the little ones.

6. Research your buyers

Don’t become a stalker…but uncovering a few facts you can use to your advantage could help make that connection with a buyer. Are they golfers? Conveniently leave out your clubs. Wine enthusiasts? Borrow a few bottles from your best friend’s wine collection and arrange on the countertop.

7. Write it out.

Leave a personal note for the potential buyers touring your house telling them how much you have enjoyed living there and offering a few tips about the neighborhood (the best place for ice cream, where to find a good babysitter). The personal touch will endear you to buyers and help make your home memorable.

8. Create a list.

Another way to make your home memorable is to create a “Top 10 reasons to love our house” list. Have it printed and/or laminated and leave it for buyers.

9. Another kind of “leave behind.”

Use the best picture of your home to create a magnet or key chain for buyers to take with them.

10. Stage it.

“Sellers need to understand that the way we live in our home is not the way we sell our home,” said Front Door.

Homes that are staged “spend 73 percent less time on the market; typically sell for more money; end up on buyers’ “must see” lists; are viewed as “well-maintained;” and have fewer concessions requested of the seller,” according to the Real Estate Staging Association, said the Daily News.

Staging can cost up to $2,500, but by using tactics used in model homes, sellers might be able to do it themselves. The first step “is a thorough de-cluttering. Sellers should purge the house of all personal belongings, family photos and countertop appliances,” said Front Door. “Furniture should be rearranged so as to make the room appear larger. Space sells.

11. Underprice it.

This is no new tactic, but it is one that can result in a bidding war and a higher sales price that would have been achieved otherwise.

12. Forget the open house.

Ditch the typical open house and throw a wine tasting party instead. Feature a few local wines, pull together a couple of appetizers and voila. Not only is this a different approach that will make your listing stand out, it will also showcase the home’s entertainment potential.

13. No bones about it.

If there’s a loud barker in your neighborhood, offering to pay for a day of doggie daycare during an open house may be warranted. Handing out special dog bones packaged as “Open House Bites” will help occupy dogs on your street and help keep them quiet while potential buyers are touring your home.

14. Borrow some bikes.

If you live in a family neighborhood, make sure it looks like you live in a family neighborhood. Enlisting some neighbor kids to leave their bikes outside—and maybe parents of babies can leave out a stroller or two—during an open house will warm up the street and illustrate who lives there.

Have any more ideas for sneaky tactics you can use to get a home sold? Let us know in the comments.

Written by Jaymi Naciri on Thursday, 29 January 2015 12:37 pm

SMALLER REMODELING JOBS DELIVER BETTER ROI

Your home may need some work, but that doesn’t mean you want to lose money on it when you sell. That’s why you might be interested in the 2015 Remodeling Cost vs. Value Report from Remodeling Magazine and the National Association of REALTORS®.

It may surprise you to learn that large remodeling jobs won’t return their full cost in home price gains, while other could return 100 percent or more of their cost.

Any improvements should help your home sell faster and for more money in the aggregate, but if you’re choosing remodeling projects, you may need to decide which ones are more important for resale, and which ones will bring you and your family the most enjoyment.

Keep in mind that buyers may not get excited about your choices unless the improvement is attractive and makes sense for them, too. It also has to look organic to the home, not like an add-on or afterthought.

Think of how you want the home to flow. Floors in new additions should be installed at the same levels as the original house, whereas a step-down is a dead giveaway that the home has been expanded and not very well.

According to Remodeling Magazine editor-in-chief Craig Webb, the simpler and lower-cost the project, the bigger its cost-value ratio is likely to be. Three of the four projects that cost less than $5,000 for a professional remodeler to do were ranked in the top five for cost recouped at resale, while no project costing more than $25,000 ranked any better than 14th.

That’s useful to know if you want to do improvements according to resale value. For example, replacing the front door with a steel entry door returns more than 101.8 percent of its cost, but if you don’t need a new door, that won’t make much difference to you.

Further, the cost-vs.-value ratios aren’t based on real property resales. They’re based on resale value as a percentage of construction costs, as well as surveys of Realtors and their opinions of value in their own markets.

Explains Webb, “When cost and value are equal, the ratio is 100%; when cost is higher than value, the ratio is less than 100%; when value is higher than cost, the ratio exceeds 100%.”

That means there could be wide regional variations in the value of most home improvements. Within the 102 markets surveyed in the 2015 report, only 269 of the 3,672 total projects recouped 100 percent. The steel entry door job recouped all its costs and more in 43 markets. Midrange garage door replacements topped 100 percent in 28 markets.

Suggests NAR’s vice president of business-to-business communications Stacey Moncrieff, “The replacements that offer the greatest payback are the ones that are most obvious to buyers when they first view a house in person or online, such as new door or garage door.”

When grouped by job type, siding jobs fared better than most, said Webb, perhaps because of a rising perception nationwide of the value of curb appeal. Out of remodeling jobs, kitchens still reign supreme returning nearly 20 percent of value on resale.

New to the annual list is manufactured stone veneer, which returned 100 percent of investment in 27 markets, followed by upscale garage-door replacements which topped 100 percent in 17 markets. Midrange wood window replacements returned all costs in 16 markets, while minor kitchen remodels did so in 15 markets.

To Moncrieff, the Cost vs. Value Report is a starting point, but she says there are also factors that vary from house to house and sale to sale, such as what updates are typical for the neighborhood, the quality of the work, and how important the improvement is to a particular buyer.

Written by  on Thursday, 22 January 2015 10:10 am

FOUR WAYS TO FIND THE VALUE OF YOUR HOME

Would you like to know the current value of the most expensive asset you own—your home?

With a click of your mouse you can find out how much money you have in the bank or the current value of your investments to the penny. You can look up the value of your car in the Blue Book and surf ebay to see what antiques and prized art pieces similar to yours are selling for.

Unfortunately, determining how much your home is worth is a lot more complicated. Every piece of property is unique and therefore has a value all its own. The rules of supply and demand government real estate markets and changing market forces impact the value of every property, but market trends impact different properties in different ways. By making improvements or by poorly maintaining their homes, owners affect values. When sellers and buyers use the less than perfect ways described below to price homes or make offers on homes, they can impact the values of nearby properties.

Technology is improving the valuation of homes and the appraisal profession works hard to refine techniques and improve accuracy, but at the end of the day, a house is basically worth what someone will pay for it.

You might begin by deciding why you want to know your house’s value. Taxes too high? Pricing to sell? Refinancing or financing a purchase? Taking out a home equity line of credit? Valuing an estate? Personal net worth? You can answer some of these questions with a lot less effort than others.

Ranked from easiest to most difficult, here are four ways to find out how much your house is worth.

AVM Estimates. Those calculators on real estate web sites that value homes are called automatic valuation models or AVMs. They were developed by lenders like Fannie Mae and popularized by Zillow. AVMs are algorithms that estimate values based on the wide range of data, including local sales, prices and inventories. Like all calculators, they are no better than the quality of their data. They have difficulty accounting for factors like improvements to homes. Some tend to value on the high side, others on the low side. If you a good picture of the value of your home, look it up on four different AVMs. You’ll be surprised at the variations, which suggests you might get a rough estimate if you average all four. You might also think twice about using an AVM estimate to make major decision like selling your home or making an offer.

CMA. If you are already working with a real estate agent, ask them for a CMA, or competitive market analysis, or your home. Unlike the AVM, a real estate professional will do the analysis and will include the value of improvements and hyper-local changes that might affect the value of your property like transportation improvements, new retail services and schools. Your real estate agent also has access to the latest sales and inventory data from your local multiple listing service. Ask for a download of the latest data for your locale.

Do it Yourself. Even if you know a lot about real estate and economics it’s hard to come in with a good valuation on your own because good local data is so hard to find. The best sources are multiple listing services and firms like DataQuest, CoreLogic and RealtyTrac that cost money. Few MLSs make their data available to the public but you can get good, current MLS data from your Realtor if you ask for them. By monitoring listings and sales activity in your neighborhood through online real estate sites you can get a good feel for the market. Long times on market and price cuts are not good signs; fast sales are good signs.

Appraisals. When it comes to financing a home, an appraisal by a licensed professional is almost always required. Sometimes lenders will do an AVM estimate on a refi when they know the owner. Appraisals include on-site inspections and the selection of “comps” or comparable sales – homes of the same size close to you that have sold in the past six months. Appraisers also review local market trends. An appraisal may not be the final word on the value of your home in an absolute sense; appraisers are human and two appraisers may come up with two different values. However, it’s unlikely someone would buy your house for more than the appraised value plus the down payment.

By following market trends on local real estate web sites including your local newspaper, real estate brokerages and the larger real estate listing sites that provide research and data you can get a good feel for what to expect in your local market. Real estate is all about supply and demand. When a new employer comes to town or a new plant opens, the demand for housing increases and prices rise. When the opposite occurs, prices fall. Keep track of inventory trends – they are the keys to tomorrow’s prices.

Steve Cook is editor and co-publisher of Real Estate Economy Watch and former vice president of public affairs at theNational Association of REALTORS®.

Written by Steve Cook on Wednesday, 14 January 2015 11:08 am

WHY INFRASTRUCTURE UPGRADES MATTER FOR HOME BUYERS

Making infrastructure a major consideration when you buy a home is a smart investment strategy that many people overlook. Much in the way that buying in a good school district pushes up the value of your property regardless of whether you have kids, locating property near good infrastructure historically affects appreciation rates positively. This works both ways, of course, and Emerging Trends in Real Estate 2015 explicitly expresses concerns about how lack of infrastructure spending and maintenance will damage the value of real estate holdings this upcoming year. The quality of roads, water access, sewer, and other public works considerations can greatly affect property values for better or for worse.

Looking at the broader picture of what markets are excelling right now, transit infrastructure is at the center of what makes many metro areas desirable. Cities with good public transit, especially trains and subways, appeal to a wide range of demographics from Millennials to retiring Baby Boomers. Neighborhoods that have developed a bike infrastructure with lanes and municipal racks are also popular. Proximity to rail transit brings up the value of homes considerably (so long as there is enough distance between the property and the rail itself). Outside the urban core, inner-ring suburbs and railway suburbs on the outer edges of more densely populated areas are also gaining popularity due to the convenience of taking commuter rails into the city for work.

Bike lanes and small urban parks improve the walkability of neighborhoods, which in turn makes them more desirable places to live. Places that are actively pressing forward with infrastructure upgrades are going to be the places where property values appreciate regularly and stay competitive.

The power of transit infrastructure on housing prices is illustrated by an example provided by StreetDirectory.com. Using two examples based on proximity to a highway project outside Raleigh, North Carolina. Each was defined by its distance from the construction and the amount of impact the work would have on the property (direct and indirect). In both cases, the procession of work on the highway tied closely to the value of the properties, losing value during construction and leveling off as the project neared completion. Researching and planning out your purchase based upon projects is a smart way to get a deal on a future winner.

However, infrastructure quality can go both ways. Our national infrastructure is something we don’t think about until something fails: a water main pops or the power goes out. A bridge collapses or levee breaks. Currently the United States ranks 19th in the world for quality of infrastructure behind Spain, Portugal, and Oman. Staggering numbers of roads and bridges are in substandard-to-unsafe condition, and in many places water delivery and sewer systems are upwards of 100 years old. At the same time, our train system is pitifully outdated when compared to comparable industrialized nations–at a time when commuting via train is becoming more popular with the public.

Unfortunately, it can be difficult to assess the structural integrity of public works infrastructure first hand. It’s simply not something you can crawl down a manhole and investigate. Because of this, doing research in local newspapers and recent public meetings, as well as ongoing municipal works projects, will give you a better idea of how dedicated your local government is. Look into how recent local sewage treatment facilities were built, and look into the water quality of the area. Looking into these factors can also give you clues to any upcoming projects that may help or hurt the value of your investment. Like any other element of smart real estate buying, research is key for finding the type of infrastructure that will appreciate value on your property investment.

Written by Nicholas Brown on Wednesday, 07 January 2015 12:18 pm