In an article by Phoebe Chongchua, The Wall Street Journal is reporting that “affordability” is the top reason for home buying in 2010.
The driving force for buyers has been getting a bargain but low home prices and low interest rates also comes into
WSJ is claiming that buying a home because they didn’t want to rent, was not the driving force. In the San Diego market among the clients we are seeing (Senior/Staff Engineers, Managers, etc) that there are plenty that are seizing low prices to buy and "pride of ownership" is the kicker.
Another influencer was the desire for more living space. According to the Wall Street Journal the survey reported that 28% of the respondents said, “they bought a house because they wanted more living space or a larger property”. However, 11% of those surveyed said that “potential financial growth” motivated them to purchase a home. In San Diego, this continues to hold true. Many of the moves are triggered because kids have grown up and need more room for play.
Real estate experts believe that buyers are still motivated by the potential financial growth, but indeed a good value in the form of low interest rate and discounted home prices is the driving force these days. So, if you are listing your home for sale, focus on value. Detailed marketing materials that showcase your home’s amenities, walking-distance retail outlets, and neighborhood parks and schools will also help create value.
Don’t underestimate the importance of valuable upgrades such as new appliances, water heater, solar panels, green technology, smart wiring for commonly used technology, and, of course, any energy-saving lighting and/or heating/air conditioning systems that you might have installed.
Light up your house as much as possible when showing or holding an open house. Even if you typically keep the shades drawn, open them up, turn on light fixtures and, if you have skylights, make sure they’re clean.
Value increases for buyers the more they can see themselves living in your home. So, make it cozy, comfortable, and attractive. In the bathrooms, hang color-coordinated towels; some fresh flowers in a vase. And if the walls are scuffed, try using a Magic Eraser. If that doesn't work, touch up the paint or paint the entire bathroom.
In the dining room or the kitchen, set the table. But don’t overdress the table. Too much stuff on a table makes it look crowded, small, and can be a turn-off.
Remember, selling your home is about creating value for buyers. That means how you live in your home may not be the way you show your home. You may have to put away a lot of the clutter such as trinkets, family photos, pet toys, electrical cords, kids’ toys, and anything else that is personal to you. By doing this you’ll create a greater chance of buyers viewing your home as theirs. And that's value.
Additional information: http://www.rashidrealty.com/pages/prepare_your_home_for_sale.pdf
Additional information: http://realtytimes.com/rtpages/20110121_homes.htm.
For Buying or Selling, You Need a Teacher that gives you straight answers. For more information on buying, selling, or renting out an income property in San Diego, please call Frank Rashid's cell phone at (858) 676-5250 or email him at rashid@rashidrealty.com. More to follow within the next couple of weeks.
Monday, January 31, 2011
Friday, January 21, 2011
Don’t Bet On Lower Housing Prices In 2011
If you were thinking of buying or selling a home and looked at the latest price data, you’d probably agree with what many experts are saying — prices will continue to drop in 2011. Although average house prices more than doubled from January 2000 to July 2006, they had plunged 33 percent from their peak by April 2009.
Because prices are still 39 percent higher than at the start of century, some analysts warn that they have further to fall. After briefly stabilizing and rebounding a bit, the latest data suggests that prices are falling once again.
The S&P/Case-Shiller Index is down three months in a row, and for the first time in nine months, is lower on a year-over-year basis.
Despite the deteriorating trend, don’t bet on housing prices to fall this year. The Case-Shiller Index has a two-month lag and the most recent report is for the month of October. Since that time, we’ve had a power-shifting midterm election, an extension of the Bush-era tax cuts, an arms treaty with Russia, and a possible trade agreement with South Korea. While there is good reason to assume that housing prices could fall further, there are also encouraging signs that prices might strengthen instead because of a growing economy.
On the negative side, delinquencies, foreclosures and inventories are still much too high. Furthermore, mortgage rates have jumped. This is particularly worrying because the rise in rates comes in spite of the Federal Reserve’s $600 billion effort to drive interest rates down. The Fed is using the money to purchase long-term Treasury bonds. In theory, the Fed’s effort should increase demand for Treasury bonds, raising their prices and reducing their yields. Because mortgage rates are tied to Treasury rates, they too should go lower. So far, however, things are not going according to plan.
Yet the rise in interest rates could actually be a sign that investors are growing more optimistic about the economy’s prospects. This means housing prices could strengthen even if interest rates go marginally higher — especially if potential buyers who have been sitting on the fence think they better buy now before rates rise further. The Fed has a dual mandate: price stability and full employment. Right now the Fed is focusing its efforts on the latter. This is good because in the current environment employment is affecting housing prices more than interest rates are. The Fed’s real intention is to prompt banks to lend more money to businesses. Once businesses invest those funds, jobs should follow.
There is some evidence that the Fed’s plan is working. Business loans held by U.S. banks had been falling ever since the financial crisis began in 2008. According to the St. Louis Fed, in October 2008, large U.S. banks had more than $800 billion of commercial and industrial loans on their books. Two years later, the balance had plunged to just $600 billion. However, business loans during the past two months have inched up to $612 billion. The gain isn’t enough to get anyone overly excited, but at least it is a move in the right direction.
In addition, there is encouraging news on the jobs front. Initial jobless claims fell to 388,000 for the week ending Dec. 25, down from 422,000 in the prior week. The improvement may simply be due to temporary hiring during the holiday season, yet it marks the first time since July 2008 that initial jobless claims dipped below the critical 400,000 level.
Finally, the National Association of Realtors said its Pending Home Sales Index jumped 3.5 percent from October to November. This index, which anticipates closings by a month or two, has been improving over the past five months, providing hope that buying activity is picking up.
This article originally appeared in The Fiscal Times.
Read more: http://www.businessinsider.com/dont-bet-on-lower-housing-prices-in-2011-2011-1#ixzz1AxlvBoyU
For Buying or Selling, You Need a Teacher that gives you straight answers. For more information on buying, selling, or renting out an income property in San Diego, please call Frank Rashid's cell phone at (858) 676-5250 or email him at rashid@rashidrealty.com. More to follow within the next couple of weeks.
Because prices are still 39 percent higher than at the start of century, some analysts warn that they have further to fall. After briefly stabilizing and rebounding a bit, the latest data suggests that prices are falling once again.
The S&P/Case-Shiller Index is down three months in a row, and for the first time in nine months, is lower on a year-over-year basis.
Despite the deteriorating trend, don’t bet on housing prices to fall this year. The Case-Shiller Index has a two-month lag and the most recent report is for the month of October. Since that time, we’ve had a power-shifting midterm election, an extension of the Bush-era tax cuts, an arms treaty with Russia, and a possible trade agreement with South Korea. While there is good reason to assume that housing prices could fall further, there are also encouraging signs that prices might strengthen instead because of a growing economy.
On the negative side, delinquencies, foreclosures and inventories are still much too high. Furthermore, mortgage rates have jumped. This is particularly worrying because the rise in rates comes in spite of the Federal Reserve’s $600 billion effort to drive interest rates down. The Fed is using the money to purchase long-term Treasury bonds. In theory, the Fed’s effort should increase demand for Treasury bonds, raising their prices and reducing their yields. Because mortgage rates are tied to Treasury rates, they too should go lower. So far, however, things are not going according to plan.
Yet the rise in interest rates could actually be a sign that investors are growing more optimistic about the economy’s prospects. This means housing prices could strengthen even if interest rates go marginally higher — especially if potential buyers who have been sitting on the fence think they better buy now before rates rise further. The Fed has a dual mandate: price stability and full employment. Right now the Fed is focusing its efforts on the latter. This is good because in the current environment employment is affecting housing prices more than interest rates are. The Fed’s real intention is to prompt banks to lend more money to businesses. Once businesses invest those funds, jobs should follow.
There is some evidence that the Fed’s plan is working. Business loans held by U.S. banks had been falling ever since the financial crisis began in 2008. According to the St. Louis Fed, in October 2008, large U.S. banks had more than $800 billion of commercial and industrial loans on their books. Two years later, the balance had plunged to just $600 billion. However, business loans during the past two months have inched up to $612 billion. The gain isn’t enough to get anyone overly excited, but at least it is a move in the right direction.
In addition, there is encouraging news on the jobs front. Initial jobless claims fell to 388,000 for the week ending Dec. 25, down from 422,000 in the prior week. The improvement may simply be due to temporary hiring during the holiday season, yet it marks the first time since July 2008 that initial jobless claims dipped below the critical 400,000 level.
Finally, the National Association of Realtors said its Pending Home Sales Index jumped 3.5 percent from October to November. This index, which anticipates closings by a month or two, has been improving over the past five months, providing hope that buying activity is picking up.
This article originally appeared in The Fiscal Times.
Read more: http://www.businessinsider.com/dont-bet-on-lower-housing-prices-in-2011-2011-1#ixzz1AxlvBoyU
For Buying or Selling, You Need a Teacher that gives you straight answers. For more information on buying, selling, or renting out an income property in San Diego, please call Frank Rashid's cell phone at (858) 676-5250 or email him at rashid@rashidrealty.com. More to follow within the next couple of weeks.
Monday, January 10, 2011
Housing Crisis or Opportunity?
Only History Will Tell
Historically, Real Estate Has Been a Solid, Long Term Investment
Looking at the last 40 years of real estate in California, we have seen very few times in which real estate values have dropped. In fact, according to the California Association of Realtors®, since 1970 the real estate market in California has only dropped seven times, six times under 3.7% and only once at 4.5%. On the contrary, our market has seen remarkable growth. In 1970 the median cost of a single-family home in California was $26,000. Today, 37 years later, homes have seen a 2,165% increase, now selling for $588,970.
Recent Years Have Shown Even Stronger Success According to the California Association of Realtors®, in 1990 the median price of a single family home in California was $194,952. Today, just 17 years later, that same single family home is selling for $588,970 – a 202% increase. Certainly in recent months we have seen a shift from a seller’s market to a buyer’s market, but that switch was necessary to continue a healthy flow of exchange amongst buyers and sellers. The bottom line is that our economy couldn’t maintain the double-digit increases we saw in home prices in 2003 and 2004 without seeing a shift. If we continued to see an upstream of that magnitude, we would nearly eliminate the first-time homebuyers which could potentially drastically hinder our economy. Shifts in our market are what keep our economy running smoothly.
Is Now the Time to Buy? Now may be the time to buy. Mortgage rates remain low (certainly by historical standards), prices have stabilized and there is a large selection of homes to choose from. Certainly it makes a more exciting news story for journalists to dwell on the negative, but for smart consumers, it is definitely more economically advantageous to seize opportunities as they present themselves. And this market may offer some tremendous opportunities. While no one can predict the future, if history is any indication, then real estate over the long run will continue to be a solid investment. And that’s good news for everyone – buyers, sellers and the real estate industry.
Graph: Median Median Home Price of Existing Detached Homes, California - 1990-July 07 - Source: California Association of Realtors.
For Buying or Selling, You Need a Teacher that gives you straight answers. For more information on buying, selling, or renting out an income property in San Diego, please call Frank Rashid's cell phone at (858) 676-5250 or email him at rashid@rashidrealty.com. More to follow within the next couple of weeks.
Historically, Real Estate Has Been a Solid, Long Term Investment
Looking at the last 40 years of real estate in California, we have seen very few times in which real estate values have dropped. In fact, according to the California Association of Realtors®, since 1970 the real estate market in California has only dropped seven times, six times under 3.7% and only once at 4.5%. On the contrary, our market has seen remarkable growth. In 1970 the median cost of a single-family home in California was $26,000. Today, 37 years later, homes have seen a 2,165% increase, now selling for $588,970.
Recent Years Have Shown Even Stronger Success According to the California Association of Realtors®, in 1990 the median price of a single family home in California was $194,952. Today, just 17 years later, that same single family home is selling for $588,970 – a 202% increase. Certainly in recent months we have seen a shift from a seller’s market to a buyer’s market, but that switch was necessary to continue a healthy flow of exchange amongst buyers and sellers. The bottom line is that our economy couldn’t maintain the double-digit increases we saw in home prices in 2003 and 2004 without seeing a shift. If we continued to see an upstream of that magnitude, we would nearly eliminate the first-time homebuyers which could potentially drastically hinder our economy. Shifts in our market are what keep our economy running smoothly.
Is Now the Time to Buy? Now may be the time to buy. Mortgage rates remain low (certainly by historical standards), prices have stabilized and there is a large selection of homes to choose from. Certainly it makes a more exciting news story for journalists to dwell on the negative, but for smart consumers, it is definitely more economically advantageous to seize opportunities as they present themselves. And this market may offer some tremendous opportunities. While no one can predict the future, if history is any indication, then real estate over the long run will continue to be a solid investment. And that’s good news for everyone – buyers, sellers and the real estate industry.
Graph: Median Median Home Price of Existing Detached Homes, California - 1990-July 07 - Source: California Association of Realtors.
For Buying or Selling, You Need a Teacher that gives you straight answers. For more information on buying, selling, or renting out an income property in San Diego, please call Frank Rashid's cell phone at (858) 676-5250 or email him at rashid@rashidrealty.com. More to follow within the next couple of weeks.
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