Homes for sale

June 3, 2013 by Leave a Comment
Home buying NOW - green light to go!

Home buying NOW – green light to go!

When To Buy a House? RIGHT NOW!
If you are looking for Homes for Sale, then you will not be surprised to note that after witnessing the housing bubble ‘pop’ just a few years ago, many would be buyers may be hesitant to pull the trigger.  Today, I want to explain that the greatest risk a buyer can take right now is actually waiting to buy a home.

I realize that every purchaser wants to be able to get the best deal. They want a great price and the lowest mortgage interest rate possible because those two items together will determine the monthly cost their family will pay.  Let’s look at each one:

Are home prices rising?

Just last week, the Case Shiller Pricing Index was released.  The index revealed that U.S. home prices increased by 10.2% over the last twelve months. Last month,  the Home Price Expectation Survey was released predicting that home values would increase by at least an additional 3.5% for each of the next five years.

If you were waiting for the absolute bottom of the home price declines, you already missed it.

Are interest rates rising?

According to Freddie Mac’s Weekly Primary Mortgage Market Survey, the 30 year mortgage rate shot up to 3.81% last week – the highest level in over a year.  This is an increase of a half of a percentage point in the last six months. And the Mortgage Bankers Association, Fannie Mae and the National Association of Realtors all predict that rates will continue rise over the next eighteen months.

Conclusion

If the right thing for you and your family is to purchase a home this year, buying sooner rather than later could lead to substantial savings.

Filed Under: Concord, Home Mortgage, Lafayette, Martinez, Mortgages, Pleasant Hill, Real Estate, Walnut Creek

Appraisals for homes

May 10, 2013 by Leave a Comment

Home appraisals

What is a home appraisal?

A home appraisal is an opinion or estimate on the value of real property. This value is generally expressed as Market Value. Obtaining an appraisal is an important part of the mortgage process that will determine the actual market value of the home being purchased or refinanced.  The appraisal allows the lender to determine if the value of the home is sufficient to support the loan amount requested.  The appraised value will also ensure that a home buyer is not paying more than a home is actually worth.

Appraisal requirements include:

  • Interior and exterior inspection of the subject property
  • A street map that shows the location of the subject property and of all comparable properties that the appraiser used
  • An exterior building sketch of the improvements that indicates the dimensions
  • Clear, descriptive photographs of the subject property and comparable sales used

When obtaining an appraisal for a home, the appraisal report (URAR) is broken up into sections. Some of the more common sections include:

  • Subject: Basic information such as the address, legal description, owner’s and/or borrower’s names. The client is also identified here.
  • Contract: Information on the contract for sale is entered here for appraisals in which a change of ownership is about to occur.
  • Neighborhood: Detailed information related to the neighborhood such as boundaries, characteristics, trends, description and conditions.
  • Site: Data on the size, shape, zoning and access to utilities as well as FEMA flood-zone information.
  • Improvements: Physical characteristics of the property such as age, materials, and condition.
  • Sales comparison approach: This is where the property being appraised is compared to recent sales of other properties.

There are three ways to approach an appraisal. These are all used to determine the final, “reconciled” value.

Sales Comparison Approach
The purpose of the sales comparison approach is to derive a value based on recent sales prices of similar properties, called comparables. The method assumes that the typical buyer pays no more for a property than the cost of purchasing an identical property.

Appraisals for homes collect data from recent sales of comparables.  Because comparables may not be identical to the home that is the subject of the appraisal, some price adjustment is necessary. To minimize the amount of adjustment required, comparables should be closely similar to the subject in size, age, proximity and condition.

Cost Approach
The purpose of the cost approach is to indicate value based on the cost to replace the property, using current materials and methods. It is not necessary to simulate production of an exact replica. Any depreciation on the subject property is estimated and subtracted from the new reproduction cost. Depreciation includes physical wear, needed repair and replacement of components, outmoded design and materials, and incompatibility with surroundings.

Income Approach
This approach assumes the property is purchased for its productivity as an investment. The appraiser will look at market level rents and operating expense ratios to determine the value. This approach can be used for investment properties as well as owner-occupied properties.

If you’d like to find a reliable local appraiser who has been in business for a long time, please contact me and I’ll be happy to refer  one to you.

 

Filed Under: Concord, East Bay Homes, Martinez, Pleasant Hill, Purchasing a home, Real Estate, Selling a home, Walnut Creek Tagged With: , , , , , ,

Should I Sell My House Today? YES! – 3 Reasons Why (Part III)

April 16, 2013 by Leave a Comment

This week, we are going to look at the three reasons to sell your house now instead of waiting: demand is strong, supply is low and new construction will soon be your competition.

Part III – New Construction Will Soon Be Your CompetitionHome Builder

Over the last several years, most homeowners selling their home did not have to compete with a new construction project around the block. As the market is recovering, more and more builders are jumping back in. As an example, the National Association of Realtors revealed, relative to last year, year-to-date new home sales are up 19%.

These ‘shiny’ new homes will again become competition as they can be an attractive alternative to many of today’s home purchasers.

Here are the numbers regarding new construction about to come to market from the Census Bureau:

BUILDING PERMITS

  • Single-family authorizations in February were at a rate of 600,000.
  • This is 25.5% above February 2012.

HOUSING UNDER CONSTRUCTION

  • Single-family housing starts in February were at a rate of 618,000.
  • This is 18.5% above February 2012.

HOUSING COMPLETIONS

  • Single-family housing completions in February were at a rate of 574,000.
  • This is 32.9% above February 2012.

As we mentioned, new construction can be strong competition to a seller of an existing home. It may make sense to list your home before this new inventory makes its way to market.

Filed Under: Interesting

Should I Sell My House Today? YES! – 3 Reasons Why (Part II)

April 15, 2013 by Leave a Comment

This week, we are going to look at the three reasons to sell your house now instead of waiting: demand is strong, supply is low and new construction will soon be your competition.Homes-for-Sale

Part II – Housing Supply is Low

A seller’s ability to sell their home in today’s real estate market will be determined by both the supply of homes for sale and the demand for that housing. In real estate, supply is represented by the current month’s supply of homes for sale (the number of homes for sale divided by the number of homes sold in the previous month).

While there is no steadfast rule that will apply to pricing in every category of housing, here is a great guideline:

  • 1-4 months’ supply creates a sellers’ market where there are not enough homes to satisfy buyer demand. Appreciation is guaranteed.
  • 5-6 months’ supply creates a balanced market. Historically home values appreciate at a rate a little greater than inflation.
  • 7-8 months’ supply creates a buyers’ market where the number of homes for sale exceeds the demand. Depreciation follows.

What is happening across the country right now?

In most parts of the country, supply is dropping like a rock. According to the National Association of Realtors, total housing inventory is below a five months’ supply. This is almost 20% below inventory numbers of just a year ago and at levels we haven’t seen since 2005.

Based on the table above, we can see that the supply/demand ratio is showing a sellers’ market where prices appreciate. This has created positive movement in housing values in most parts of the country.

Sellers have a great opportunity right now. Historically, inventory increases dramatically as we approach summer. Selling now while demand is high and supply is low may garner you your best price.

Tomorrow, we will look at the competition new construction will create.

Filed Under: Interesting
«Older Posts