Buying a Home Young is the Key to Building Wealth

Buying a Home Young is the Key to Building Wealth

Homeowners who purchase their homes before the age of 35
are better prepared for retirement at age 60, according to a
new Urban Institute study. The organization surveyed adults
who turned 60 or 61 between 2003 and 2015 for their data
set.

“Today’s older adults became homeowners at a younger age than
today’s young adults. Half the older adults in our sample bought
their first house when they were between 25 and 34 years old, and
27 percent bought their first home before age 25.”

The study goes on to show the impact of purchasing a home
at an early age. Those who purchased their first homes when
they were younger than 25 had an average of $10,000 left on
their mortgage at age 60. The 50% of buyers who purchased
in their mid-twenties and early-30s had close to $50,000
left, but traditionally had purchased more expensive homes.

Many housing experts are concerned that the
homeownership rate amongst millennials, those 18-34, is
much lower than previous generations in the same age range.
The study results gave a great reason why this generation
should consider buying instead of signing a renewal on their
lease:

“As people age into retirement, they rely more heavily on
their wealth rather than their income to support their
lifestyles. Today’s young adults are failing to build housing
wealth, the largest single source of wealth, at the same rate as
previous generations.

While people make the choice to own or rent that suits them at a
given point, maybe more young adults should take into account the
long-term consequences of renting when home ownership is an
option.”

Bottom Line
If you are one of the many young people debating whether buying
a home this year is right for you, or you know a young person who
can benefit from buying their first home, contact me to explore
available options!

Source: Keeping Current Matters

ftcollinshomes.com

6 Reasons Why Selling a House in the Winter May Be the Best Decision Ever

Spring is generally the most popular time of year to sell a house, with hordes of buyers looking to move into a new place before the school year begins. But if you decide to sell your home during the winter, experts say you could reap a reward in cold, hard cash.

“I have personally had my best months in real estate during the holiday season, so the idea that the markets are very tough to sell in the winter might be a myth,” says Emil Hartoonian, managing partner of The Agency in Beverly Hills, CA.

He’s not the only one who believes selling in the winter can make you a real estate winner. Read on for the top reasons why you should consider unloading when the temperatures drop.

1. Low inventory = less competition

Since spring is the most popular home-selling season, the housing market is ultracrowded with options at that time of year. And if you paid attention during Econ 101, you understand the law of supply and demand.

“Most sellers still think they need to sell in the spring, but that means there is more competition for buyers’ attention,” says Matt Van Winkle, founder of Re/Max Northwest in Seattle.

But in the winter, there are fewer homes for sale. That competition over low inventory can make winter an ideal time to sell your home.

“In the Atlanta market, January is one of the strongest months for homes to go under contract,” says Ally May of Atlanta Fine Homes Sotheby’s.

2. You get to show your home’s winter-readiness

Selling in the winter also gives you the opportunity to show that a home is designed to handle the harsh elements.

“Sellers in places like Lake Tahoe can show off features like a south-facing driveway to speed up snow melting, how snow will fall off of a roof, a short driveway that will minimize shoveling or plowing, heat tape on the north side of the roof to avoid snow accumulation, and how recently the roof and furnace have been replaced,” says Sandy Soli, regional manager at Engel & Volkers in Lake Tahoe, NV.

Plus, during winter months, homes with features like fireplaces and hot tubs are certainly more appealing.

3. New parents may be looking to upgrade

The baby boom in September may lead to more buyers later in the year. According to data from the Center for Health Statistics and the Social Security Administration, there are more birthdays in the month of September than any other time of the year. Therefore, there’s likely to be a crop of growing families looking to buy a larger house.

“Once baby is home and settled, these parents may want to start the year in a new, and more spacious, family home,” according to Melissa Temple, real estate adviser and partner at Engel & Volkers in Aspen, CO.

4. Winter brings out the serious buyers

News flash: Not everyone looking at houses intends to make a purchase. Some people are contemplating moving and may just want to see what’s on the market. Since more homes tend to go on the market in spring and fall, this is also when window shoppers are likely to be out looking.

However, these looky-loos tend to be scarce during winter months, according to Jennifer Baldinger, licensed associate real estate broker at Julia B. Fee Sotheby’s international Realty in Scarsdale, NY.

“When I have buyers looking for homes in January and February, they’re real buyers looking to make a purchase–especially if it’s a great house. They don’t want to take the chance of waiting until spring and losing out on the home,” Baldinger says.

“There may be less people at these open houses, but I would rather have 10 real buyers come through than 20 people who are just curious,” she says.

5. Year-end financial bonuses and payouts

As a seller, year-end performance reviews could mean that more people have money to spend on a home.

“End-of-year financial bonuses or workers retiring with large payouts could mean opportunities for these buyers to upgrade their living situations or for first-time buyers to enter the housing market,” according to Temple.

6. Corporate relocation

You could also encounter buyers who are relocating for a job.

“One of the biggest months for corporate relocation is January/February, so those buyers, who need to move quickly, are out in full force looking for new homes,” Baldinger says.

Relocators typically have a limited amount of time to uproot their families and, as a result, don’t have the luxury of spending a lot of time looking at properties. The kids need to get settled into school, and dealing with selling their old home can add another level of urgency and stress. So it’s likely that once they find a home that meets their requirements, these buyers will be ready to sign on the dotted line.

Source: Terri Williams | www.realtor.com

If you’re looking to buy or sell a home this holiday season, give us a call at 970-221-5995!

5 Myths Perpetuated By “Fixer-Upper” Television

The chances are good that you’ve seen “reality shows” featuring BEFORE/AFTER home renovation projects. While these popular home improvement shows have made buyers more interested in fixer-upper properties, they also have the potential to create unrealistic expectations. Consider these five common myths about “fixer-upper” properties.

Myth #1 – It’s Easy To Find A Good Fixer-Upper

This may have been true over a decade ago when home prices were rising. It seemed easy enough to sell a house for a handsome profit after a few easy updates. While there are still good investment opportunities in today’s market, it takes some time and effort to find them. If you want to bargain-hunt, understand that you will be competing with investors who likely have extensive experience and are often able to pay cash.

Myth #2 – I Can Save (Or Make) A Lot of Money

Renovation costs vary widely depending on how much work is needed, who is doing it, and other factors. Professional real estate investors suggest that the budgets quoted on home improvement shows are unrealistically low and the final resale price is overly optimistic.

This could be due to regional cost variations. However, many expenses are completely overlooked, including transaction costs (closing fees and commissions), building permits, dumpsters, insurance and other carrying costs.

It’s also possible that the “real world” cost differences stem from comparing cosmetic updates to more expensive structural issues or requirements to meet stricter building codes.

Myth #3 – Things Will Go According to Plan

Most renovation projects require strong doses of both patience and tenacity due to cost overruns, delays and unexpected repair issues. While the reality shows often include a “bad news” discovery, these “surprises” may be designed to merely inject a little drama into the story. With real life “fixer-upper” homes, things rarely go according to plan.

Myth #4 – It Won’t Take Very Long

Finding, purchasing, and moving into any home is a time-consuming process. Add a major renovation project or the need to find buyers when the project is complete extend timelines even more.

Home improvement shows give the impression that everything falls into place at lightning speed. Of course, an episode that only featured waiting on inspectors to show up, or a delayed delivery of new windows is about as interesting as watching paint dry.

Myth #5 – It Will Be Easy To Nail The Design Updates

The proliferation of home renovation websites has armed consumers with many excellent design tips. However, good home design still requires both skill and judgment, and there are a number of ways things can go wrong.

In an attempt to impose a particular style on a home, important architectural details might be inadvertently removed, such as solid wood six-panel doors or elaborate moldings. Or, the purchase of any home can go wrong by executing the updates poorly.

When you’re thinking about a home remodel project, or possibly embarking on your own “fixer-upper” investment, give me a call and let’s discuss your ideas!

Source: Real Estate Buyer’s Agent Council, Inc., Newsletter, March 2018

How Big a Home Do You Truly Need? 5 Questions to Ask to Figure That Out

When it comes to homes, the popular credo is that bigger is better. More square feet = a larger slice of the American dream, right? Not necessarily. For one, bigger homes obviously cost more, and oversized McMansions can be harder to sell. As such, you’ll want a home that’s neither too big nor too small. But how do you strike that balance? Here are five questions to ask yourself that will help you determine how much space you really need.

1. Is this my ‘forever’ home, or is ‘right now’ good enough?

While you can’t predict the future (darn those unreliable crystal balls), it is possible to evaluate the likelihood you might be moving in coming years. If so, then maybe you don’t need to buy that perfect ‘forever home’ where you’ll grow old; maybe a ‘right now’ home is good enough.

“There’s a common perception that you should be searching for your ‘forever home,’ and that pressure to find a place that has all the space you might ever need often leads buyers to purchase a home that might be too big,” warns Jackie Hinton, a real estate agent with Center Coast Realty in Chicago. “It’s OK to know that you’ll only live in a home for the next five or six years, and to buy a home that will serve your needs during that period. You can always re-evaluate and upgrade to a bigger space later.”

2. What will my income look like later?

If you’re early in your career, odds are decent that your income will increase over the years. Or, if you’re reaching the end of your career, you may be looking at flattened or declining income. In either case, it’s never a good idea to get a mortgage at the max of what you can afford, it’s better to go small and have some wiggle room.

“Nothing causes more stress than financial strain,” says Bill Rice, president of MyPerfectMortgage.com. “A mortgage on a home that is a size too large is most likely to be your biggest burden, and a hard one to overcome. Happiness is often one size smaller than your dream home. That way, you can enjoy your home without dreading your monthly mortgage payment.”

Also, remember more space means more time and money spent on upkeep and maintenance, more rooms to fill with furniture, and higher utility bills to heat and cool the home.

“Any future improvement projects, like installing new floors or replacing windows, will cost more when the space is bigger,” says Hinton.

3. What are my priorities?

Another question to consider is what you’ll use all that space for-and be honest: While you might dream of hosting epic dinner parties in that big formal dining room, will you really? Can you say with honest certainty that your in-laws will descend on you during the holidays and need a guest bedroom to crash in, or might they be just as comfortable in a nearby Airbnb?

Aside from justifying what you’ll use each space for, ask yourself what you’re giving up. If you dream having a secret “travel fund” so you can see the world, that maybe be possible only with a smaller mortgage (and house). Or, perhaps you value things other than space, like school district or a walkable location. So make sure to factor those variables, too-and make sure you aren’t sacrificing them for space you don’t need.

This is why real estate investor Kathy Kettke decided to buy a smaller home so she could live in her “dream location” near the beach. “Being open to a smaller home allowed us to be in a higher-priced market we wouldn’t have been easily able to afford otherwise,” she says. And best of all, her home doesn’t feel cramped-particularly since she can pop out and stroll along the ocean anytime.

4. How much space do I want from my own family members?

If you absolutely must have privacy-to, say, get work done in a home office or chill out in your man cave-then that extra square footage may be well worth the money. But if you’re more the type who loves having their family members nearby, a large home gives people plenty of alone time…sometimes too much.

Fettke, for one, is glad her home is small because it keeps her in close contact with her kids. “I’ve found that my daughter’s friends who live in large homes rarely even run into their parents,” she says. But since her own home is smaller, her kids are constantly underfoot-just the way she likes it.

“Plus it seems that most of our daughter’s friends hang out at our place, even though it’s tiny,” she says. Sure, the beach nearby may be one draw, but so may be the cozy, close-knit family environment a smaller home forces you to have. “Maybe they like the homey environment and being able to smell the cookies being baked around the corner,” she says.

5. Does this home feel spacious even if it doesn’t have much space?

Keep in mind that even small homes can feel spacious purely based on an open floor plan and lots of light. Meanwhile, large homes can still feel cramped if they’re dark or poorly laid out. So, when shopping real estate listings, know that the little number next to square footage may not tell the whole story.

“The total square footage of a house can be deceiving,” says Patrick Ryan, senior vice president and managing broker of Chicago-based Related Realty. “Features like a long hallway may increase the total, but they are spaces you pass through, not a true destination within the home.”

So instead of homing in on total square footage, “buyers should focus on the size of individual rooms where they see themselves spending the majority of their time,” says Ryan. In other words: Who cares if your bedroom isn’t massive, since all you plan to do there is sleep?

Source: Julie Ryan Evans | www.realtor.com

Game-Changing Real Estate Trends in 2018

From housing inventory to price appreciation to generational shifts, look for real estate markets to “reshape” in 2018, according to the National Association of REALTORS®.

Game-changer #1: Supply finally catching up with demand

After three years of a shrinking supply of homes for sale, the realtor.com economists predict that the shortfall will finally ease up win the second half of 2018.

“The majority of the year should be challenging for most buyers. But we do expect growth in inventory in the fall,” says Danielle Hale, chief economist for realtor.com.

If housing inventory increases as predicted by fall, that will be the first net inventory gain since 2015.

Bullish construction is the engine that’s turning this ship around, bringing new home inventory to the market and creating opportunity for people to trade up into new homes.

But first time buyers may have to be patient for a while longer.

“Overall, prices are expected to increase, and we’re expecting to see more of that in lower-priced homes,” Hale says.

Along the Front Range, appreciation for homes priced above $750,000 will slow down while homes priced less than $500,000 will continue to see appreciation but not at the rate seen in recent years. This is due to the lack of supply (many builders are focusing on higher price point properties) and a large demand for real estate as a result of continued net migration.

Game-changer #2: Millennials starting to come into their own

The housing market in 2018 will continue to present challenges for millennials but there are some bright spots on the horizon.

Because of the strengthening economy and their developing careers, millennials are taking on larger mortgages and bypassing entry level homes.

As millennials reach their 20s to 30s when they’re settling down and starting families, they’re particularly motivated to buy. Millennials could make up 43% of home buyers taking out a mortgage by the end of 2018, up from an estimated 40% in 2017.

With mortgage rates expected to increase during 2018 due to stronger economic growth, millennials would be wise to buy sooner than later.

Game-changer #3: Tax reform

The new tax plan will change things up, in a nutshell causing short-term rates to rise more rapidly than anticipated as the Federal Reserve seeks to “get ahead” of possible inflation. The tax plan will also flood the market with a little more liquidity, keeping the economy moving at least another year.

Sources: Glen Weinberg, www.cobizmag.com, Cicely Wedgeworth, www.realtor.com