Author Archives: Josh McIntire

Current Research Shows There Are Homes Available for First-Time Buyers

Over the past seven years, housing prices have been steadily increasing. A number of housing marketing analysts use this information to determine that first-time home buyers are slowly being squeezed out of the market due to prices reaching a point at which they are out of reach.

According to a report issued by the National Institute of Realtors (NAR) covering the number of first-time home buyers (FTHB) on both a monthly and yearly basis, the percentage of FTHB has increased by 33% rather than dropping as some pundits would have us believe. Bear in mind that the NAR uses information obtained comes solely from their members and as such doesn’t include every transaction during the reporting period.

The AEI Weighs In

At the same time, the American Enterprise Institute (AEI) also reports on the FTHB share of the market. Accordingly, the data used by the AEI is derived from mortgage applications that define a first-time home buyer as a “borrower who did not have a mortgage in place during the three preceding years.”

This means that the data used by the AEI includes those who had owned a home beyond the three-year point and had applied for a new mortgage within this same three-year period. In the report shows that the FTHB market share consisted of 57.5% of all mortgages applied for and approved in the month of August 2018. During this same period of time, the NAR reports a 31% share of the market.

And from the New York Federal Reserve

According to the latest research available from the New York Federal Reserve (NYFR) includes data showing that traditional reports covering first-time home buyers may no longer be able to accurately reflect how much FTHB are involved in the market. The NYFR collected their information by using consumer credit data to determine when a mortgage entered a consumer’s credit report.

By using this information, the AEI was able to show that the FTHB market share was actually ten percent higher than reported by the FTHB. At the same time reports issued by the National Association of Realtors were equivalent with their findings in 2010, when the NAR share dropped to the same 11 percent gap we are seeing today.

What’s It All Mean?

Unlike the beliefs of numerous pundits, who seem to think that first-time home buyers are becoming a steadily decreasing segment of the home-buying population, this is not the case. In fact, current reports show that the American Dream of buying a home is still alive and kicking for younger Americans in much the same way as it was for their parents and grandparents.

At the same time, the reports show that steadily increasing housing prices have not deterred first-time home buyers from seeking out the American Dream. Instead, many first-time home buyers are doing everything they can to save for a down payment in order to realize their dreams. If you are among those looking to buy your first home and get out of the endless renter cycle, the nation is filled with opportunities to make your dream come true.

Low Inventory Levels Are Still Affecting the Housing Market

Most of us now believe the housing crisis is over and we are well on our way to a full recovery. Average home prices are up, and the number of foreclosures and short sales has dropped to the lowest level seen in years. Most real estate professionals believe the housing market will continue to get stronger throughout 2019.

Sounds Good So Far, Doesn’t It?

While this is certainly good news or at least it should be, there is one small problem that many of us seem to have forgotten. One that may put the brakes on what is otherwise a very welcome improvement in the market. This is simply the lack of available houses on the market and with summer just around the corner buyer demand is sure to increase (it does so every summer), supply is expected to continue coming up short.

The market needs a steady increase in the supply of available houses if prices are going to remain within the realms of affordability. The only way a sustained growth in housing sales is for housing appreciation to continue growing at approximately the same rate as wages. To go along with this, there needs to be a solid increase in the availability of lower end properties, It may also be necessary for price cuts for those properties at the upper end of the spectrum.

Heading into Spring

As we head into spring, housing prices in the U.S. are expected to continue increasing. At the same time housing inventory is also expected to increase, but at a slower pace than we have seen over the course of the past few months. Part of this is because fewer of those with homes to sell are willing to deal with the current conditions which are more challenging than we have seen in recent years.

For those in the market to buy a new house, their buying experience is likely to be different depending on what the current market is like in the area they are planning to make a purchase and the price point they are willing to work within. Those who are in the market for lower-end properties are still likely to find that locating affordable properties will continue to be challenging.

At the same time, those looking for homes in the mid-price point range are likely to find more houses available but can still expect to pay more. At the upper end of the market, we can expect prices to drop slightly as the demand for homes in this bracket are becoming harder to sell with a dwindling market for them.

For Those Planning to Sell

However, this is good news for those who are considering putting their homes up for sale. With the market expected to remain at this status, demand for available houses is expected to continue increasing with so little competition. Not only does this mean you shouldn’t have any trouble finding buyers who are interested in your property, but that you should be able to sell it for an excellent price.

Picky About Choosing Your Tenants – You May Be in Trouble with the Fair Housing Act

You’ve purchased your first rental home, and now you are ready to start looking for your first tenant. You think to yourself, “I am going to be extremely picky about whom I let rent this house.” However, what you may not realize is how easy it is to run afoul of the Fair Housing Act. The Fair Housing Act of 1969 was established by the Housing and Urban Development Office or HUD. The intent behind the law was to ensure that everyone had an equal opportunity to buy or rent a home.

You May Not Discriminate

According to this law, as a landlord, you are not allowed to discriminate against a person because of race, sex, religion, familial status, handicaps color, or national origin. However, what exactly does discriminate mean? Here is a list of discriminations provided by HUD.

Based on the facts above, you may not:

  • Refuse to rent to a person
  • Refuse to sell to a person
  • Make your housing “unavailable.”
  • Deny a person a dwelling
  • Have different conditions, terms, or privileges for the rental or sale of a dwelling
  • Falsely state that housing is available for inspection, rental, or sale
  • Provide different housing facilities or housing services
  • Deny anyone access to or membership in a facility or service (such as a multiple listing service) related to the sale or rental of housing
  • Or For-profit, persuade owners to sell or rent (blockbusting)

(All information courtesy of HUD)

One Year to File a Complaint

Under HUD regulations if your current tenant of one who is applying to rent your dwelling feels as though they have been discriminated against in any of the ways above, they have 365 days to file a complaint against you. That’s right; they have an entire year to file a claim stating they feel as though their rights have been violated. Even if they no longer live in your property or never lived there at all.

HUD and the federal government, in general, take a very dim view of those who transgress these laws. The penalties for doing so vary, but you can count on them being severe based on HUD regulations and any local laws that are in place.

Think Very Carefully

If this makes you wonder about getting into the rental business, don’t let it. Just use this information to help ensure you stay within the realms of this law. You have no choice but to abide by them, but this doesn’t mean you have to cave in just because of the laws and rent to just anybody.

However, what it does mean is that you need to be very aware of the rights of your tenants and prospective tenants, as well as your own. Having this knowledge can help to avoid any potential misunderstandings before they have a chance to cause significant legal trouble for you. By following these rules and regulations, you set yourself up to become a respected and successful landlord.

Retiring – Do You Know What to Look in Your Retirement Home?

If, like many baby boomers you are getting close to retirement age, it might be time to look at your home and decide whether it can be adapted to meet your needs. When you look at the real estate market today, you will find there is a shortage of both starter homes and “trade-up” homes. If you should decide that you want to move after you retire, there has never been a better time to sell. We have put together a few things you should consider before you make your final decision.

1. Cost

In this case, cost is more about added expenses on top of the cost of buying your new home. This could include things like HOA fees, paying for lawn care services, and any other contractors you need to keep your house up. What about taxes? Are they going to increase or decrease? Weigh costs such as these against your expected monthly retirement income.

2. How Much Equity Do You Have?

If you have equity built up in your current home, it could be enough to help you buy your retirement home without having to take out a mortgage or perhaps be able to minimize how much you must borrow to purchase your new home. According to the latest figures, the average homeowner here in the U.S. saw an increase in the equity of their home of approximately $9,700.

3. Routine Upkeep

One issue we all face as we age is the slowly diminishing ability to handle many of the routine upkeep tasks that we once performed with ease. This includes tasks such as moving the lawn, cleaning the gutters, shoveling snow, etc. As your health declines, you might find a condominium with a home owner’s association that takes off all maintenance and upkeep rather than having to do it yourself or pay someone to do the work for you.

4. What About Fido or Smoky

Whether your furry friend is a dog or cat and you plan to rent, you need to make sure your new home allows pets. Pets are wonderful companions and provide both physical and emotional support. If you can’t bring your pet with you, you might want to reconsider. Points to ponder, will you be required to pay a pet deposit or fee? Is there a fenced-in yard where your dog can run around and play? Is there a good vet’s office or animal hospital nearby?

5. Is the Area Safe and the Property Secure?

Sadly, in today’s world, the elderly are the most common targets of a wide range of scams and break-ins. Consider looking at homes within gated communities with resident-only access and a security system. The more security features your new home has, the more comfortable you will feel living there during your golden years.

6. Mobility and Access

While none of us want to think about the possibility that we might need a walker or wheelchair, but you should be looking at homes designed with these issues in mind. You should consider things like ramps, handrails in the bathroom, and doors/hallways that are wide enough to accommodate walkers, wheelchairs, and possibly electric scooters. It’s a lot easier to buy a home that has these features already installed than having to pay for them on top of purchasing the property.

7. Location, Location, Location

Hollywood is not the only one who needs to worry about location. When you are looking for your retirement home, consider local amenities. These include things like golf courses, shopping centers, hospitals, doctor’s offices, and great restaurants.

If your current home can be adapted to meet your needs as they change during your golden years, you might want to consider aging in place. If the idea of buying a home that is already adapted to meet your changing needs, you should contact a realtor in the area you are considering moving to.

Should You Consider Buying a Fixer-Upper?

With the available housing inventory at what some consider to be an all-time low, more first-time home buyers are willing to buy a fixer-upper. According to Move.com, approximately 60% of home buyers today are quite happy to settle for a home that needs a little TLC. On top of this, 95% of those considering buying fixer-upper think that by completing the various repairs and upgrades, it will increase the value of their new home.

Home Repair TV and YouTube Make a Difference

One of the most common reasons given for the surge in home buyers who are willing to buy a house that needs a little TLC is the surge in home renovation shows on TV, educational videos on YouTube, informational pages on Instagram, Pinterest, and numerous other web sites. These have made it possible for the average homeowner to complete a wide range of tasks that fifteen years ago they would never have dreamed they could achieve. These tutorials make it easier for many to get into a home that meets their budget.

More than fifty percent of those looking to buy a home say they would be happy to buy a home that needed a little work done to it and spend over $20,000 to do so. One of the most common upgrades on the list is a complete makeover for the kitchen, which can cost anywhere from $20,000 to $60,000 and more.

Not a New Trend

Buying fixer-uppers is by no means something new in the housing industry. In a study released by the Joint Center for Housing Studies based at Harvard University, 2018 saw a new high in the amount of money Americans spent on home improvement projects. In numbers it looks like this, homeowners in the U.S. spent approximately $336 billion on renovations and home improvement project in 2018. This is an increase of 7.4% from the previous year where figures were around $313 billion.

One of the most common reasons given for this significant increase is the number of home improvement shows now available on the TV and internet. These shows and tutorials walk you through a project one step at a time, give you ideas for things you’d like to see in your new home, and more. The show people that it is still possible to achieve the American Dream of home ownership in areas where inventories of home in need of a little TLC are higher than any other type of home.

Be Aware of What You Are Buying

It can be very easy to buy a home in need of repairs and major renovations thinking you will be able to handle the many tasks involved in creating your dream home. But just because it looks easy on the TV or your computer doesn’t mean it will be. Most of the people who create the shows and tutorials are experts in their field, which of course means they make it all look easy.

Be sure you know what you are getting into before you invest in a house with more problems than you are capable of handling or you may find yourself spending more than you can afford to pay for the necessary repairs and upgrades.

When Putting an End to Renting and Moving into Home Ownership

The time has come when you’ve had enough paying rent every month, and you’re ready to move into a home of your own. There’s a lot that goes into buying a home ranging from loans to what to take with you into your new home. It can all get more than a little confusion, which is what we are here to help with.

It All Starts with the Right Loan

While there are many different types of loans out there, most first-time buyers (except veterans who have access to VA loans) begin with either a conventional or FHA loan.

FHA Loans

FHA loans are perfect for those who cannot come up with a 20% down payment or perhaps have a low credit score. The FHA only requires you to have a FICO credit score of 570 or better and as little as 3.5% for your down payment. If you have more than the minimum 3.5%, you may even be able to squeak by with a lower score. Sounds good so far, right? However, like anything that seems too good to be true, there are a couple of significant downsides to what might otherwise appear to be a perfect set up.

The first of which is that you must carry mortgage insurance for the length of your mortgage, the other is the FHA has restrictions on the type of home you can buy. This could include condos as many do not meet with the standards established by the FHA. However, for the first-time buyer with a small down payment or credit issues, an FHA loan might be your best option. These loans are also insured by the federal government, which protects the lender, not the borrower.

The Conventional Loan

Conventional loans are not protected by the government; they follow the guidelines established under Freddie Mac and Fannie May. You can use this type of loan to buy both a primary residence and secondary home such as a rental property. One good thing about this type of loan is that you are not required to purchase loan insurance. This is as long as you have the required 20% for your down payment.

Moreover, if you do purchase loan insurance, you are only required to keep it in place until you have reached the point at which your payments have reached the point at which you have 20% equity in the home. The upside to buying mortgage insurance for a conventional loan is that it tends to cost less than it would for an FHA loan in many cases.

No matter how much you have saved for your down payment or where your credit score lies, be sure you talk to your realtor about the various loan options available to you. You should also talk to the mortgage specialists at your bank, between the two of them you should be able to find a mortgage that best suits your financial situation and ensures you will be able to purchase your dream home with a minimum amount of personal and financial stress.

Considering A Historic House – Consider These 3 Potential Problems

While many people prefer to buy a brand-new house loaded with all the latest features and where everything works and is covered by a builder’s warranty, others prefer to buy an older home that has character. However, before you rush out and sign the papers on a historic Victorian-era house, here are three potential problems you need to think about.

1. Many Historic Districts Have Strict Rules

One of the first issues you are likely to run into is that most cities and towns in the U.S. have rules and regulations in place designed to protect historic properties and neighborhoods.

These regulations may require separate permits and can involve a great deal of bureaucracy if you plan to renovate, remodel, or in any way alter the home you are considering buying. For example, if the home is 100 years old, you may find you won’t be allowed to make certain changes. Something you should seriously consider before buying.

2. Restoring a Historic House Can Be Both Challenging and Expensive

Here’s where things start to get interesting. Let’s stick with the Victorian house for now. These homes date back to the mid to late 19th century. This means they were built using methods and materials that are no longer in use or available.

When you buy a Victorian-era home that is not in perfect condition, you never know what you might have to replace. Things like crown molding, wainscoting, picture rails, and many other decorative moldings, carvings, and fixtures can prove to be very expensive to repair. Most of these items can be found in architectural salvage yards (they can take months to find), others will have to be crafted by hand, which can be very expensive.  Keep these costs in mind as you think about buying that older home.

3. The Costs for Maintenance and Repairs Can be Astronomical

The average home buyer wants a house that is ready to move into and is not likely to need much in the way of maintenance. They want everything to work, the latest in technology, and minimal risk of things breaking down.

When you plan to buy a historic home, it is very important that you have a maintenance plan in place. Unless you plan to do a complete renovation of the home, you need to be prepared for things to break down, leak, and fall apart at any moment. The best thing you can do is to make sure you have plenty of money stashed away for the costs.

Even the most devoted history buff may not be able to handle the costs and work needed. There are those who will do anything to restore a historic home. Those that do have a serious appreciation for the architecture of the period and are well aware of the costs and work involved in restoring a historic home. If you aren’t prepared to go “all-in” with everything it takes to own and care for this type of home, then you should look for something a little newer.

3 Questions to Ask Yourself if You Are Considering Buying a Home

If you are considering buying a home for you and your family, it can be a scary process. Of course, everyone and their brother is going to start handing out advice like candy at Halloween. Despite their best intentions, chances are good that they are unaware of your budget and needs. Unless you have a realtor in the family, they probably don’t have much of an idea of what’s going on in the real estate market.

With this in mind, here are three questions you should be asking yourself to make sure this is the right time to invest in a home of your own.

1. Why Are You Buying a House?

This is definitely the first and most important question you need to ask yourself. Put the money part of the decision to the side and think very carefully about why you are buying a house in the first place. If you are like most people, money probably has very little to do with why you decided to buy. In a recent study conducted at Harvard University by the Joint Center for Housing Studies, these were the most common reasons given for buying instead of renting.

  1. Buying a home in a good neighborhood where there are good schools.
  2. Buying a home in a safe neighborhood.
  3. More room for everyone in the family.
  4. Ownership means having total control over your environment.

All things considered, you need to decide what buying a home means to you and your family. What will you gain from doing so? These are the most important questions, once you know why you are buying a house, then you can move on to the next question.

2. Are House Values Going Up or Down?

The prices in the housing market have been known to fluctuate over the years, but in a recent report issued by the Nation Association of Realtors, entitled Existing Home Sales Report, the median price of a house in the U.S. in February 2019 came in at $249,500. According to the report, this figure represents an increase of 3.6 percent. This increase makes it 84 months in a row that housing prices have increased in accordance to year-over-year gains.

When you look at past history and the current state of the market, you can expect prices to continue increase by as much as 4.6 percent by this time next year. So, if the house you are considering buying is listed at $250,000, but if you wait a year and prices continue to rise, you will be paying an extra $11,500. Can you afford to wait for another year?

3. Are Mortgage Rates Going Up or Down?

Interest rates hit historic low rates over the past years, which is something you should be concerned about. Why? Because the interest rate on your mortgage has a significant impact on the long-term cost of your home or in plain English, how much you will have paid for your house by the time you make the last payment. Even an increase of 0.1% can have a significant impact on the final payoff. According to Freddie Mae, Fannie Mac, the National Association of Realtors, and the Mortgage Brokers Association, interest rates are projected to continue rising for the foreseeable future. Here again, can you afford to wait?

Only you can know if this is the right time for you and your family to buy a house. The answers to these three questions should help you come to the right decision.

Spring Cleaning Time is Here

Spring is finally here, which of course means it’s time for spring cleaning. Along with tidying up the inside of your home, several critical things need your attention at this time of year. Whether you are planning to sell your home or not, here are ten essential maintenance tasks you should be taking care of this spring.

  1. Clean those gutters– This is an excellent time to clean all the debris and leaves out of your gutters. While you are at it use a garden hose to check them for any signs of leakage and make the necessary repairs.
  2. Clean your siding– Use a power washer to clean vinyl siding, not only will this make it look better but it will prevent mold from growing. If you don’t own a pressure washer, they aren’t that expensive to rent. If you have wood siding, now is a good time to go over it and touch it up.
  3. Door and Window Screens– Go around your entire house looking at both window and door screens looking for holes or signs of damage. Replace any damaged screens and while you are at it, wash the windows inside and out.
  4. The Hot Water Heater– This is an excellent time to call in a professional to service your water heater. A properly serviced water heater is more efficient, which will help keep your utility bills down.
  5. The Roof– Spring is an excellent time to have your roof inspected and have any loose or missing shingles/tiles replaced. To reduce the risk of leaks when spring rains are heavy.

6.The Porch or Deck– Take a good look at your porch or deck. If there are damaged or missing boards, replace them. If it needs to be re-stained or weather treated, get it done. If there are loose railings, be sure to secure them firmly in place.

  1. The Sprinkler System– If your home has an automatic lawn sprinkler system, it’s time to check and make sure everything works. If you have any broken sprinkler heads or valves that don’t work, get them replaced.
  2. The Landscaping– If you are selling your home, fantastic curb appeal is vital as first impressions go a long way towards making the sale. Start by cleaning up any dead leaves, weed the gardens and trim back any bushes. It wouldn’t be a bad idea to plant a few colorful flowers as most people love seeing a splash of color when they pull up to the house. Even if you aren’t selling you still need to clean up your yard after the long winter.
  3. A Solid Foundation– This is a good time of year to check the foundation of your home for signs of cracking or any other problems. If you see problems, call a professional foundation service to make the necessary repairs. Foundation cracks are something buyers look for, and even if you are not selling, they can lead to severe damage as they worsen.
  4. The Bathrooms– Look for missing caulking around the tub and shower, don’t forget the sinks too! If it is discolored, missing, or shows signs of mold, remove it and re-caulk. No one wants to look at “gross” caulking, and if you are selling, this is a significant detractor. It doesn’t cost much to make this type of repair, but it could make a substantial difference in your final selling price.

Spring cleaning like this doesn’t take long, but you might be surprised at how much nicer it will make your home and the difference in how much you are likely to get if you are selling can be significant.

Did You Know Pet-Friendly Homes are In High Demand?

For many homeowners, one of the many benefits must be the fact they can have as many pets as they like. One way to make your listing stand out from the crowd is to take pains to list it as pet-friendly. Did you know that 68% of all households have at least one pet?

More Than “Just” a Pet

To most pet owners, their animals are far more than “just” pets, they are members of the family, just as much as their kids are. When looking for a home, the vast majority of pet owners look for a pet-friendly community. A recent study conducted by the National Associate of Realtors shows there our pets have a significant impact on buying, selling, and owning a home. Did you know we spent $27 billion on our pets in 2018?

How much power do our pets have in our choice of home?

Consider these percentages:

  • Pet owners who would not give up their pet to buy a particular house – 89%
  • Pet owners in the US who claim their pets play a part in the house they choose – 81%
  • Pet owners who declined to make an offer because the property would not suit their pet – 31%
  • Pet owners in the US who say they would move because of their pet – 19%
  • Pet owners who admit they have moved because of their pet – 12%

Many contractors are now building retractable pet gates in door jams as part of new construction. These have rapidly gained in popularity and are considered an excellent way to attract pet owners to new developments.

Point Out Those Pet-Friendly Features

If you are ready to sell your home and want to attract pet owners, you must take the time to point out all pet-friendly amenities in your home and the local area. Pet owners need to know that they are moving into a pet-friendly community. Here are three critical things you can do to attract pet owners.

If your home has a fully fenced-in backyard, be sure you include this in your listing. A full 91% of pet owners say this is one of the first and most important things they look for, especially among dog owners.

In your listing include things like the locations of public dog parks, walking/hiking trails/and any pet-friendly beaches in the area. According to surveys, 71% of pet owners cite this as one of the most important things they look for. The more information you can provide, the more pet owners you are likely to attract.

Finally, be sure you provide information on local veterinarians, pet hospitals, pet supply stores, and groomers. These are all essential services that 31% of pet owners say being close to is important.

We Love Our Pets

Here in America, we truly love our pets. So much, so that pet owners spend more time worrying about finding a pet-friendly home in a community that also happens to be pet-friendly. Armed with this knowledge, you are now poised to take advantage of this vast section of the home buying public.