Rising Rents Make Home Buying a Better Choice

Fallen home prices and record-low mortgage rates have pushed housing affordability to a 40-year high. Meanwhile, rental prices are continuing to rise at a fast pace, according to a new report released by Hotpads.com, a rental listing service.

Rental prices in 20 of the largest metro areas increased 3.75 percent in 2011, and prices are expected to continue to rise in 2012. Meanwhile, home prices fell by 1.83 percent in 2011, according to the report.

“In a lot of cases it’s getting to a point where it makes more sense for people to buy because rent has been going up significantly faster, while home prices have been falling,” Paul Gleger, author of the report, told AOL Real Estate.

According to the report, New York has the highest rental prices, with a two-bedroom apartment’s median rent at $2,653. Other cities posting some of the highest median rents in the country: Boston ($1,929), Miami ($1,748), San Francisco ($1,607), Los Angeles ($1,717) and Chicago ($1,552).

Dan Statlander
Broker and Owner
(www.statelandbrown.com)
(http://boca.statelandbrown.com)
(http://luxury.statelandbrown.com)

Fed Vows to Keep Rates Low Until 2014

The Federal Reserve announced that short-term interest rates will likely stay near zero for nearly three more years, a move that is expected to spillover to long-term mortgage rates for home buyers and home owners.

In August, the Fed had made a rare move to say it would keep rates near zero until at least mid-2013. The Fed said Wednesday that the economy still needs more help and it will now extend that period to 2014.

Fed Chairman Ben Bernanke said in a news conference that the Fed isn’t happy with the modest economic recovery and that the Fed may need to take additional steps to spur recovery. He did not comment further on what those steps might be, though.

While the economy has improved somewhat in recent weeks, Fed officials say it’s worried about “strains in global financial markets” and the still high unemployment rate.

Some critics say that the Fed’s vow to keep mortgage rates low won’t do enough to help the economy and the housing market. They argue that too many Americans are already unable to take advantage of the record low mortgage rates because of the tightening of lending standards.

Bernanke shared that concern, saying that millions of home owners were unable to refinance because of damaged credit or being from underwater in their homes.

Dan Statlander
Broker and Owner
(www.statelandbrown.com)
(http://boca.statelandbrown.com)
(http://luxury.statelandbrown.com)

Kitchens Sell a House

It’s a tool used by house flippers all across the nation. Stagers know its power. Real estate agents push its importance. What is this not-so-well-kept secret of real estate? A kitchen can sell a house.

A kitchen is the heart of a home. This is true all across the globe. The old saying that the “stomach is the way to the heart” carries a lot of truth. Kitchens are where we spend much of our time and most of that is with our families. It’s the room where we nourish our bodies and our spirits.

Kitchens are integral to entertaining and in today’s age of open floor plans, they’re a focal piece of many family rooms. It’s because of this that kitchens play such an important role in the buying and selling process.

This one room is the showpiece of the house. You’ll see it every day and your guests will see it during most visits. This means buyers want homes with up-to-date kitchens.

Kitchens, however, can be one of the most expensive rooms to renovate. These projects can also be the most labor and time intensive of all home renovations. It’s not just a new layer of paint.

Instead you find a complicated array of flooring, tiling, cabinets, and counters. This means buyers may want a home with an up-to-date kitchen but they aren’t willing to tackle this problem themselves. Most buyers want a kitchen that is ready to use the day they move in.

What do buyers look for in up-to-date kitchens? A lot of this depends on what price range your home is in.

The main thing to remember as a seller is to not price yourself out of your market. If homes in your neighborhood are selling for $100,000 with tidy, but not luxury kitchens, then this is no time to upgrade to granite, travertine, and marble at the price tag of $40,000+. You simply won’t find a buyer.

Scope out the competition. Use open houses in your area or MLS listings to find out what your competitions’ kitchens look like.

Do area homes have new solid wood cabinets and granite counters in today’s designer colors? You’ll be wise to consider making the same move. Are they including new stainless steel appliances and add-ons like dishwashers, wine-coolers, and trash compactors?

Are you in a higher-end neighborhood? It’s time to think high-end. Your older home may have a highly functional kitchen, but a buyer will take one look at your formica counters and white appliances and become lost in the stress of how much money and time it would take to remodel. If you don’t want to put in the time yourself to make upgrades then you’ll have to make concessions in the price.

Don’t become overwhelmed, though. Sometimes a kitchen update can mean doing just a few minor changes. Change the paint color to a warm, neutral tone. Get rid of any clutter. Update your appliances, paint your cabinets, change the pulls, or get a high-end looking counter for a fraction of the cost (faux-granite or lower end granite). You might even save a bundle by doing much of the work yourself.

The bottom line is a kitchen can sell a home. Do a little research and find out what your kitchen needs to make it competitive with area listings.

Dan Statlander
Broker and Owner
(www.statelandbrown.com)
(http://boca.statelandbrown.com)
(http://luxury.statelandbrown.com)

Top 10 Tips for Sellers

Today’s sellers may face challenging conditions in many markets, but that doesn’t mean choosing to sell is a bad idea. There are many reasons to sell and most are good ones.

Here are ten tips to get you on your way to getting your home sold.

1. Hire a Professional.This is no time to be navigating the rough waters of the real estate market on your own. You want someone who can help you accurately price your home, bring in potential buyers, handle contracts, and market your home to the masses.

2. Fully Disclose.Are you selling because your current home needs more work than you can handle? Are there infestation problems you’d rather not talk about? You must disclose all of these facts to potential buyers. If they find out after the fact that you withheld information you could be in a whole heap of trouble.

3. Be Realistic about Pricing.It is much wiser to price a home correctly from the start of the selling process than to have an overpriced home sit on the market for months only to have to do a price reduction. You get much more traffic on a well-priced home and newly listed home.

4 . Detach Emotions.Sellers may have the inclination towards adding sentimental value to a home. They see the memories and work they’ve put into a property and think every buyer should recognize this. This kind of attachment will make it harder to make smart and timely decisions about offers.

5. Be Involved.Yes, you’ve hired a professional to handle the legwork and legality of your sale, but you’ll rest much easier at night if you understand the process and all that is going on. Be sure to have regular conversations with your agent.

6. Stage your Home.Staging is a perfect way to help buyers see the true potential of each room. This may mean, however, that you have to tone down your own style and pack away any clutter or extraneous decor.

7. Don’t Hover.Sellers can put a lot of heart and soul into staging and getting a home ready for the market. They might want to hang out during an open house. Resist the urge. This makes it very uncomfortable for buyers. So, during showings of any kind, be sure to make yourself scarce.

8. The Next Step.Are you going to be buying another home? Have you decided to rent? Under normal sales, you’ll have plenty of time to make arrangements, but you also might get a buyer who needs to move in right away. Be ready to take your next step.

9. Be Flexible.It’s no secret that today’s market can be challenging for many sellers. Some markets have seen sharp price declines and shallow buyer pools. This means you need to be flexible on both price and terms. Don’t compromise on your bottom line, but understand that you must be willing to negotiate.

10. Positivity.Focus on the good in today’s market. Pull your attention to the feedback you get from your agent and prospective buyers! Most of all, don’t get discouraged. You will find a buyer!

Selling in today’s market can be a tough, but rewarding. So, whether you’re selling to move up, downsize, avoid foreclosure, or are following a job, be sure to keep these ten tips in mind for smooth sailing.

Dan Statlander
Broker and Owner
(www.statelandbrown.com)
(http://boca.statelandbrown.com)
(http://luxury.statelandbrown.com)

Relying On Your Agent

The latest NAR Profile of Home Buyers and Sellers showed a growing trend among recent buyers.

The latest figures show that 89 percent of buyers purchased their home with the help of a real estate agent or broker. This is a sharp increase from a decade ago in 2001, when only 69 percent of buyers enlisted the help of an agent or broker.

Why do today’s buyers buyers choose to work with an agent? Let’s look at just a few of the many reasons an agent can be your biggest ally.

First, agents are licensed professionals, which means they had to complete coursework and pass an exam in order to become and agent. They have the education and experience to help you navigate what will be one of the biggest purchases of your life.

They also have access to a wide range of properties and can guide you to those that are the best fit for you, which can save you time and energy. If you are unsure what type of property you’re interest in, an agent can help explain the pros and cons of things such as condo life versus single-family detached living.

Where are the up and coming neighborhoods? Which areas are more walkable or have access to better schools? These are all issues an agent deals with daily.

They can also ease the burden of buying by simplifying the process. They set up showings, drive you to appointments if needed, and help you handle the intricacies of negotiations.

Today’s market also presents challenges that simply weren’t present or didn’t dominate the market a decade ago. Buyers are faced with some great deals, but through some complicated channels, such as short sale or foreclosure. How does one handle these sort of contracts? Your agent or broker will know.

According to the NAR, “More than ever home buyers are relying on real estate agents and brokers to help them with their home purchase regardless of whether the home they are buying is a foreclosure, short sale, or even a FSBO sale because they need a real estate agent to help them through the process.”

Finally, buyers are unsure if now is really a good time to buy. They need to rely on someone with local market knowledge. Is this a good neighbor to invest in? Are prices still dropping in this community? How long do homes take to sell? What is the median selling price? Buyers want the best deal out there.

The 2011 Profile found that more buyers are opting against dual agency, where the agent represents both the buyer and seller. This could signal that today’s buyers are very cautious about getting into the market. While a dual agent isn’t supposed to harbor any bias, buyers now want to be extra sure they are getting the best deal possible. In fact, “60 percent of recent buyers had an oral or written arrangement with the real estate agent or broker so that the buyer’s agent only represented the buyer and not the seller.”

If you are considering buying a home this year, be sure to strongly consider using a real estate agent. They could be your biggest ally.

Dan Statlander
Broker and Owner
(www.statelandbrown.com)
(http://boca.statelandbrown.com)
(http://luxury.statelandbrown.com)

Homes and New Babies

Welcoming a new baby into a household can be both exciting and terrifying. How do you know that your home will fit a child’s growing needs? Is it safe and practical for an infant? These are both important questions to ponder as you prepare your current space or look for a new one.

First, there are simple safety precautions all parents should take. Be sure to put plugs in all outlets. Babies are fascinated by things that are at their level and this includes electrical outlets. Keep unsafe areas, such as slick floors and stairs, off-limits by using safety gates. Today’s models are adult-convenient with easy, but child-proof, latches to free up adult movement.

One of the biggest hazards in a home can be water. Be sure that any fountains, koi ponds, or swimming pools are carefully watched or covered. It takes only inches of water for a child to drown.

Finally, consider using video and audio monitors so that when you are in another room working you can still keep tabs on your bundle of joy

A newborn doesn’t need much space. Many parents even opt to share their bedroom with the child’s nursery for the first year. As a child grows, though, it will become obvious that more room is needed. Are you in the position to buy a new home that has that space?

It is much easier to go house hunting and buying before a baby arrives. If finances allow, this is a great time to buy. Interest rates are at historical lows and continue to drop. Buyers with excellent credit are seeing 30-year fixed rates averaging less than 4.0 percent.

Affordability is calculated by figuring the ratio of median household income and today’s home prices. Recent affordability is at record highs. This means more home for the buck as well as more access to homeownership for lower income buyers.

If you are in the market to buy, it’s good to consider a few home baby issues. A popular trend in today’s housing is a first floor master bedroom. While this is perfect for families with older children or for aging adults it can be problematic when a new baby arrives.

This generally means that if the baby is to have its own bedroom, it will be on a separate floor from the parents. Is there a downstairs office that can double as a bedroom until the child is older? If so, then this floor plan may still work.

Next, think about stairs. Going up and down stairs while pregnant or carrying a young child is a lot of work. Carrying laundry, toys, and other baby items up and down may get you in shape, but it will probably also try your nerves. Stairs can also pose a serious safety risk. Young families may do best with one-story homes.

Are you looking at homes with pools? Older children that are experienced swimmers will love having a pool, but this recreational draw while an infant or toddler is in the house means parents and sitters must be constantly vigilant.

Adding a new member to your family is a joyful occasion. Take a moment to consider what your family needs will be today and in the future. If you’re ready for a move, be sure to consider your growing family.

Dan Statlander
Broker and Owner
(www.statelandbrown.com)
(http://boca.statelandbrown.com)
(http://luxury.statelandbrown.com)

Why Buy a Home Now?

You’ve probably heard it all over media outlets. “Affordability is at an all-time high.” “Interest rates are below 4.0 percent!” The question remains, however, why buy a home? What do these proclamations actually mean for you?

Let’s look at these claims. Affordability is at an all-time high. This is calculated by a ratio of median household income to median home prices for any given area.

According to the National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI) this record level is around 73 percent of all new and existing homes. To put this number into perspective, before recent years’ developments it was rare to see the HOI go above 60 percent.

“With interest rates at historically low levels and markets across the country beginning to improve, homeownership is within reach of more households than it has been for nearly two decades,” said Bob Nielsen, chairman of the National Association of Home Builders (NAHB) and a home builder from Reno, Nev. “However, tough economic conditions — particularly in markets that experienced major changes in house prices and production — as well as extremely tight credit conditions confronting home buyers and builders continue to remain significant obstacles to many potential home sales.”

Some areas are fairing better than others. Topping the list for affordability, as one example, is Lakeland-winter, Florida, where a median household income of $53,800 made 92.5 percent of all homes sold within reach of buyers.

What does this mean for you, the buyer? It means that you should ask your local real estate agent what home prices are like in your area and compare those to your own family income. What is the median household income for your region? It varies greatly by city, state, and region. Are you in the position to buy a larger home or move up thanks to low rates and low prices?

The market is the perfect climate today for buyers with cash for downpayments, steady incomes, and good credit scores. Buying today is full of opportunity. You can buy more home for less money and pay less interest over the life of the loan thanks to incredibly low interest rates.

Rates have never been this low. They are currently under 4.0 percent for buyers with good credit (think credit scores at least 720). Even if you don’t have an excellent credit score you may still be eligible for other good rates or deals. Now is the time to find out!

There are fewer buyers on the market, which means you have more leverage at the negotiating tables. Sellers are willing to make more concessions and many are motivated to sell, especially if their home has been lingering on the market.

Additionally, there are incredible deals to be had on the glut of foreclosed and short sale homes which are now on the market. Recent reports have indicated that this deluge of foreclosed home isn’t going away any time soon due to delays from banks. Many homes that have been delinquent for years are just now hitting the market. These banks are ready to unload.

Why should you buy a home right now? You’re going to find better deals, lower prices, and the best rates in history for buying a home. That sounds like an ideal time to enter the market!

Dan Statlander
Broker and Owner
(www.statelandbrown.com)
(http://boca.statelandbrown.com)
(http://luxury.statelandbrown.com)