Category Archives: Buying

Rent vs. Buy

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Rent or Buy? For many Americans this decision has been more difficult than ever. What makes the most sense for you?

Here are some of the latest facts to consider:

According to a national real estate website’s data, it is now less expensive to own a home than to rent one in 72% of U.S. cities.

This percentage will likely increase because analysts feel rental costs are about to explode. The demand for rentals has increased with the economic downturn, while the supply of rentals has quickly dropped. In this scenario, the only place for prices to go is UP!

Even though home prices could still soften in some markets, the cost of owning a home may increase. This is because mortgages may soon get more expensive. Researchers with the Mortgage Bankers Association expect mortgage rates to rise the last three months of this year and continue to increase gradually through 2012.

For most folks, it makes utmost sense to buy a home at a discounted price and secure a 30-year mortgage at a historically low fixed interest rate. This lets you set your housing expense for the next thirty years–while rents keep heading skyward.

Outer Banks Featured Home: 758 Starfish Court, Corolla

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This property is located at 758 Starfish Court in Corolla, NC. It has 7 bedrooms and 5.5 bathrooms and is being listed at $599,900. MLS #70951

This property has had an exceptional rental history in one of the most desired communities in Corolla (over $51k in 2010!) It is in wonderful condition and has lots of space. The home includes a large kitchen, dining and living area with gas fireplace and a flat screen TV. It also has a lot of deck area for getting the OBX tan! A game room and wet bar are located in the downstairs. The large heated pool and convenient hot tub are just outside the game room and make this ideal for a great rental. It is just a short walk to the beach access and high dunes that protect this area. This home is located by some of the best beaches in the Outer Banks. Put this one on your list!

The Listing agent for this property is Mike Pringle. Mike can be reached directly at (252) 255-6516 or by email, mikepringle@seasiderealty.com.

Major Changes Likely to QRM Proposal

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“No hardwired mortgage down payment requirements for well-qualified homebuyers. Not 20 percent. Not 10 percent. Not 5 percent.”- Inman News

An alliance of dozens of civil rights, real estate, labor, mortgage and consumer advocacy groups, along with a substantial percentage of the members of Congress have been addressing six federal agencies for the past two weeks to convince officials to change their minds about the controversial “QRM” (qualified residential mortgage) proposal that would mandate 20 percent down payments and strict debt-to-income rules.

While the regulatory agencies cannot discuss the proposal, industry sources say the rule writers are getting the message and are believe to back down in their final QRM plan.

“If they don’t back down enough, however, say sources on Capitol Hill, Democrats and Republicans in the Senate and House are prepared to force them to do so with corrective legislation.”

Bipartisan groups of 160-plus members of the House and 40 members of the Senate wrote to the six agencies last week, urging them to focus on sound underwriting, safe loan products, and borrowers’ ability to repay, plus full documentation… not down payments. The six agencies include, the FDIC, SEC, HUD, the Office of the Comptroller of the Currency, the Federal Housing Finance Agency and the Federal Reserve.

Americans Say Home Ownership is Still a Great Investment

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In an article recently posted to REALTORMag, 75% of Americans say that “owning a home is the best long-term investment they can make and is worth the risk of ups and downs in the housing market,” according to a survey conducted by the National Association of Home Builders.

Regardless of their current housing situation, the survey conducted suggests many Americans are still hopeful about home ownership.

“Eighty-one percent of those who own their homes outright, 76 percent with mortgages, 67 percent of renters, and 65 percent who have underwater mortgages cited home ownership as the ‘best long-term investment.’”

With such negative news surrounding the current real estate market, it is encouraging to know that 73% of those surveyed who do not own a home said that it is their goal to eventually by one.

Whether underwater on the home or even renting, Americans still realize home ownership as the “American Dream”.

For more information about the real estate market on the Outer Banks and Northeast North Carolina, contact one of our agents at www.coldwellbankerobx.com.

Homebuyer Tax Credit Closing Deadline Extended

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 Late last night, the United States Senate passed an extension of the Homebuyer Tax Credit closing deadline.

Known as the “Homebuyers Assistance and Improvement Act of 2010,” the bill was passed by unanimous consent. The extension applies only to transactions that have ratified contracts in place as of April 30, 2010 that have not yet closed.

This legislation is designed to create a seamless extension, and the new closing deadline for eligible home sale transactions is now September 30, 2010. There will not be any gap between June 30 and the date the President signs the bill into law.

Why is now a smart time to buy?

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Why is now a smart time to buy?

  • I.I.I.P.  Inventory, interest rates, incentives and price.  In most markets around the nation, home inventory has increased giving buyers a greater choice.  At the same time, mortgage rates remain at near historic lows and home prices have decreased the last two years which is the first time that has ever happened since World War II.  Prices dropped about 2% in 2007, 9.3% in 2008 and 12.4% in 2009 according to the National Association of Realtors.  This has made home affordability the best since at least 1973 and maybe ever.  Add in the first-time homebuyer incentive to make it a smart time to buy.
  • Consumers also have to gain confidence in housing.  Reading headlines is not a great way to gain information.  Real estate professionals need to educate the local community on such issues as inventory, appreciation and time on market and remind everyone that all real estate is local.
  • We have to remember that homes are selling when they are well-prepared for sale and priced right.  The reason is because people buy and sell homes for lifestyle reasons.  Births, marriages, new jobs, job transfers, retirement and others are all drivers.  Following the advice of a full-service professional, who knows market conditions and a home’s competition, is critical in readying a home for sale.
  • What has happened is that sellers have become much more realistic in setting the price and continue to understand that a home is home, not a winning lottery ticket.
  • We also have to see a reduction in foreclosed homes and short sales on the market.  These are a drag on prices and inventory. 
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    • We need to have Main Street American homeowners buying from Main Street American homeowners.  While getting first-time homebuyers back into the market is critical and the extension of the tax credit helps, the nation’s economy also needs the move up buyer back in the market.  That is why the tax credit expansion is so important.

Is it tougher for buyers to secure mortgage money?

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Is it tougher for buyers to secure mortgage money?

  • Mortgage funding remains available for consumers who meet the classic lending standards – including proof of income and solid credit.
  • The reasons that most people purchase a home are overwhelmingly lifestyle-driven – from having a baby or getting married, to moving to a smaller home after retirement.  These types of lifestyle changes occur year-in and year-out, in every kind of market.  So even despite the headlines focused on economic issues, we will continue to see people buy and sell homes

Outer Banks November Sales Statistics

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Below are some great statistics on the local Outer Banks real estate market for November provided by The OBX Team.

 

OBX housing market overall:

·         100 residential homes in the Outer Banks sold.

·         November had an increase of 5 and 3 units sold from September and October respectively.

·         An additional 42 homes sold November 2009 compared to November 2008.

 

OBX distressed sales (foreclosures and short sales):

·         Distressed sales made up 27% of the total sales

·         17 foreclosed homes were sold in the month of November, along with 10 short sales for a total of 27 transactions.

·         Down from distress homes being 34% of the total sales in the month of October.

 The OBX Team is a group of three Realtors from Coldwell Banker Seaside Realty that is ready to handle all of your buying and selling needs. 

Luxury Homes the Next Big Thing?

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luxury-homeThere has been much talk about the sale of luxury homes in the real estate industry as a result of our current economic conditions.  Research appears very positive for the short term future of luxury home sales. 

 

Million dollar homes are selling in many markets for steep discounts.  As mentioned in a previous post, this can largely be attributed to low interest rates on jumbo loans, which have dropped significantly over time. 

 

In cities such as San Francisco, $1 million dollars in 2007 bought about 1150 square feet; now it buys an additional 400 feet.  In Las Vegas, time on the market increased from 220 to more than 260 days, and the size of the house available for $1million has increased by 50% to 5400 square feet.  In South Florida, homes listing for $1 million and more average well over 100 days on the market. One particular waterfront home has been waiting for a buyer for almost 4 years. 

 

Here on the Outer Banks, there a plenty of $1 million dollar plus homes that are on the market.  However, with interest rates the way that they are, this inventory is steadily shrinking.  Now may be the time to buy that Outer Banks dream home.

A Historic Time to Buy

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There is no doubt that first-time homebuyers have been stimulating the housing market in these tough times.  In fact, most of these first-time homebuyers are between the ages of 35 and 45.  This age demographic has accounted for around 45% of all sales for the year.

 

“This is a historic time,” says George Jaramillo, a 35-year-old business analyst in Atlanta, who recently bought three homes, two of them foreclosures. “It’s a great opportunity to make some great gains in the future.”

 

A study by investment company T. Rowe Price points out that investing when prices are low can result in amazing gains.  For instance, between 1970 and 1990, the annualized rate of return for the S&P 500 was 11.5%.  With affordability the way it is, it may be time to pursue your dream home.  In times like these, it is more feasible to make these dreams a reality.