Is There Value in Homeownership?

From: Kelsey Ball [mailto:kelseyball@premieresd.com]
Sent: Wednesday, November 17, 2010 2:21 PM
To: 'Nick Alameddin'
Subject: Is There Value in Homeownership?

Is There Value in Homeownership?

 

In early 2005 the common trend in real estate was to buy and sell within an incredibly short time frame and walk away with profits. The market quickly took a turn, and most of these buyers found they had bought at the top of the market as the prices corrected. Since then, the economy has been struggling to recuperate. Unemployment and foreclosure rates skyrocketed, while home prices plummeted. This gloomy situation has had potential homebuyers asking the question, “Is there value in homeownership?”

Historically, homeownership has been a long-term investment that brings many rewards. It was not until the last decade that “flipping” a home became a popular way of making a profit. House “flipping” and gains during this time were driven by risk and easy money financing that is no longer permitted. To find value in homeownership we need to go back to the original idea of staying for a longer period to build more equity. For homeowners that take this route, they may be able to refinance at a better rate once they have built more equity in their home. Long-term owners are more likely to see healthy gains in the value of their property. It encourages stability, and the longer you own, the better your investment.

“Flippers” and investors have also changed their ways to adjust to the current real estate market. Experienced investors are first studying the properties, neighborhoods, and demand before making the purchase. Often investors are paying cash, then making small improvements or renovations. The shift has gone from a quick flip, to an investment or rental property.

Recent surveys tell us that many homeowners are already seeing the benefits of long-term ownership. A typical seller that has been in their home for eight years will experience a median equity gain of $33,000 or twenty four percent. In this same survey, first time homebuyers are planning to stay an average of ten years and repeat buyers fifteen years. These homeowners will experience a median gain of forty percent. With more Americans buying for a particular reason such as job relocation or a changing family situation, it is the long-term owners that will find value in homeownership.

Posted via email from Nick Alameddin's

Advantages to Listing During the Holidays

From: Kelsey Ball [mailto:kelseyball@premieresd.com]
Sent: Wednesday, November 10, 2010 10:51 AM
To: 'Nick Alameddin'
Subject: blog 11/10

Advantages to Listing During the Holidays

With the holiday season quickly approaching, many homeowners who have considered putting their home on the market have decided to wait until after the season to list. Potential buyers in the market have also put off their home search for the same reason and will pick up again in January. While there are many excuses to not list your home over the next few months, there are many advantages to doing so. During the holidays people who are looking to purchase homes are the more serious buyers. Since the rest of homeowners are waiting to list, there will be less competition on the market, meaning more money for you. In January we are expecting to see a 30 to 40 percent increase in the inventory of homes on the market. With an increasing supply of homes there will be less demand, causing home prices to decrease in order to remain competitive. Therefore, if you wait to list you home might be worth less money in a few months.

Another advantage to listing your home during the holidays is that homes tend to show better when they are decorated for the season. Buyers are also more emotional during the holiday season, so they are more likely to pay your price when driven by their emotions. They usually have more time available to view homes during this time, rather than the regular work week. Also, January is traditionally a time where employees begin new jobs. Since transferees cannot wait until the spring to buy, you must be on the market now to capture that market. In addition, some people may be in a rush to make a purchase before the end of the year for tax purposes.

Most homeowners argue that the holidays are a very busy time and they do not want to deal with showings and the possibility of packing and moving. There is always the option to restrict showings to times and days that work best for you. Another option is to discuss with your agent and the buyer a delayed closing or extended occupancy until the beginning of the New Year. This will allow you to sell now for more money and not have to worry about packing up and moving over the holidays. In addition, by selling now, you may have the opportunity to be a non-contingent buyer during the spring when more houses are on the market for less money. If this is the case you will be able to sell high and buy low. While many homeowners can come up with reasons not to list over the next few months, they should first consider the advantages if they do.

 

 

Posted via email from Nick Alameddin's