Every three years the Federal Reserve conducts a Survey of Consumer Finances in which they collect data across all economic and social groups. The latest survey, which includes data from 2010-2013, reports that a homeowner’s net worth is 36 times greater than that of a renter ($194,500 vs. $5,400).
In a recent Forbes article the National Association of Realtors’ (NAR) Chief EconomistLawrence Yun predicts that in 2016 the net worth gap will widen even further to 45 times greater. Don’t wait to purchase. You may call (714)815-6215 for a free buyer consultation to answer any of your Real Estate questions. DeAnna Rehnert – Capre Real Estate
The median list price for single family homes in Huntington Beach, CA this week is $992,000. Market conditions (sufficiently low inventory) point to a Seller’s Market. If the market heats up, prices are likely to resume an upward climb.
How much is your home worth? Call for a free market analysis.
Some homeowners may consider trying to sell their home on without the assistance of a real estate professional, known in the industry as a For Sale by Owner (FSBO). We think there are several reasons this might not be a good idea for the vast majority of sellers.
Here are five of our reasons
1. There Are Too Many People to Negotiate With
Here is a list of some of the people with whom you must be prepared to negotiate if you decide to FSBO.
The buyer who wants the best deal possible
The buyer’s agent who solely represents the best interest of the buyer
The buyer’s attorney (in some parts of the country)
The home inspection companies which work for the buyer and will almost always find some problems with the house
The appraiser if there is a question of value
Your bank in the case of a short sale
2. Exposure to Prospective Purchasers
Recent studies have shown that 92% of buyers search online for a home. That is in comparison to only 28% looking at print newspaper ads. Most real estate agents have an extensive internet strategy to promote the sale of your home. Do you?
3. Actual Results also come from the Internet
Where do buyers find the home they actually purchased?
43% on the internet
9% from a yard sign
1% from newspapers
The days of selling your house by just putting up a sign and putting it in the paper are long gone. Having a strong internet strategy is crucial.
4. FSBOing has Become More and More Difficult
The paperwork involved in selling and buying a home has increased dramatically as industry disclosures and regulations have become mandatory. This is one of the reasons that the percentage of people FSBOing has dropped from 19% to 9% over the last 20+ years.
5. You Net More Money when Using an Agent
Many homeowners believe that they will save the real estate commission by selling on their own. Realize that the main reason buyers look at FSBOs is because they also believe they can save the real commission. The seller and buyer can’t both save the same commission.
Studies have shown that the typical house sold by the homeowner sells for $184,000 while the typical house sold by an agent sells for $230,000. This doesn’t mean that an agent can get $46,000 more for your home as studies have shown that people are more likely to FSBO in markets with lower price points. However, it does show that selling on your own might not make sense.
Before you decide to take on the challenges of selling your house on your own, sit with a real estate professional in your marketplace and see what they have to offer. KCM Blog
CaPre Residential Real Estate
If you are looking to hire a real estate professional to help you buy or sell a Huntington Beach or Fountain Valley property, contact me today! I would love to help you get started on this exciting process, and look forward to hearing from you soon.
A recent study revealed that the number of existing home owners planning to buy a home this year is about to increase dramatically. Some are moving up, some are downsizing and others are making a lateral move. Another study shows that over 75% of these buyers will, in fact, be in that first category: a move-up buyer. We want to address this group of buyers in today’s blog post.
There is no way for us to predict the future but we can look at what happened over the last year. Let’s look at buyers that considered moving up last year but decided to wait instead.
Assume they had a home worth $300,000 and were looking at a home for $450,000 (putting 10% down they would get a mortgage of $405,000). By waiting, their house appreciated by approximately 10% over the last year (based on the Case Shiller Pricing Index). Their home could now sell for $330,000. That would mean an additional $30,000 in equity assuming they didn’t incur any expenses in selling the home.
But, the $450,000 home would now be worth $495,000. Adding the original 10% down payment ($45,000) to the additional equity ($30,000), they would now have a $75,000 down payment. That would still need a mortgage of $425,000.
Here is a table showing what additional monthly cost would be incurred by waiting:
According to the Home Price Expectation Survey, home prices are projected to appreciate by approximately 6% over the next eighteen months. Interest rates are also expected to rise by as much as another full percentage point in that same time period according to FreddieMac. If your family plans to move-up to a nicer or bigger home, it may make sense to move now rather than later.
Today, many real estate conversations center on housing prices and where they may be headed. That is why we like the Home Price Expectation Survey. Every quarter, Pulsenomics surveys a nationwide panel of over one hundred economists, real estate experts and investment & market strategists about where prices are headed over the next five years. They then average the projections of all 100+ experts into a single number.
The results of their latest survey
- Home values will appreciate by 4.4% in 2014.
- The cumulative appreciation will be 19.5% by 2018.
- That means the average annual appreciation will be 3.6% over the next 5 years.
If you are thinking of selling, feel free to call or email, I’d love to hear from you.
Harvard recently released an article on homeownership, telling on the top 5 financial reasons to buy a home.
Here are the five reasons, each followed by an excerpt from the study:
1.) Housing is typically the one leveraged investment available.
“Few households are interested in borrowing money to buy stocks and bonds and few lenders are willing to lend them the money. As a result, homeownership allows households to amplify any appreciation on the value of their homes by a leverage factor. Even a hefty 20 percent down payment results in a leverage factor of five so that every percentage point rise in the value of the home is a 5 percent return on their equity. With many buyers putting 10 percent or less down, their leverage factor is 10 or more.”
2.) You’re paying for housing whether you own or rent.
“Homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord.”
3.) Owning is usually a form of “forced savings”.
“Since many people have trouble saving and have to make a housing payment one way or the other, owning a home can overcome people’s tendency to defer savings to another day.”
4.) There are substantial tax benefits to owning.
“Homeowners are able to deduct mortgage interest and property taxes from income…On top of all this, capital gains up to $250,000 are excluded from income for single filers and up to $500,000 for married couples if they sell their homes for a gain.”
5.) Owning is a hedge against inflation.
“Housing costs and rents have tended over most time periods to go up at or higher than the rate of inflation, making owning an attractive proposition.”
We realize that homeownership makes sense for many Americans for many social and family reasons. It also makes sense financially.
If you are looking to become a Huntington Beach or Fountain Valley homeowner soon, contact me for more information. I would love to help you along this exciting process! I look forward to hearing from you.