Columbus Board of Realtors Press Release
Demand rises and inventory declines as market nears stabilization
(Nov. 23, 2009) Home sales in the month of Oct. were up 25.6 percent from this time last year. The 2,021 sales last month represents the highest number of listings sold in the month of October since the housing boom in 2006.
“At a time when sales traditionally start to taper off, central Ohio home sales are increasing,” said Gary Parsons, President of the Columbus Board of REALTORS®. “We know the first time home buyer tax credit has had an impact. But, the fact that we have a solid inventory of homes available at very affordable prices and interest rates are still at record lows has also strengthened our housing market.”
The number of homes in contract (but not yet closed) is also up. The 1,539 homes in contract is 17.2 percent higher than last year at the same time suggesting that November home sales will also be strong.
The month’s supply has dropped 30 percent from last year. Last year at this time, the months supply was 9.82 meaning that if no new homes were added to the market, it would take almost ten months to sell all remaining inventory. Today, that number is down to 6.86. A market is typically considered balanced with around a 6.5 to 7 months supply.
“These numbers are a great sign of stabilization,” adds Parsons. “Demand has picked up, inventory continues to decrease, and the month’s supply is now very close to balanced.”
“The $8,000 tax credit for new homebuyers was renewed earlier this month and added to it was a $6,500 tax credit to benefit those homeowners who wish to purchase a new residence. This incentive will further bolster the central Ohio housing market.”
Monday, November 23, 2009
Saturday, November 21, 2009
Top 8 House-Hunting Mistakes
By Amy Fontinelle, Investopedia
Oct 30th, 2009
Oct 30th, 2009
These mistakes will blow your cool -- your budget is likely to follow.
Buying a home is a very emotional process, and allowing those emotions to get the best of you can cause you to make any number of mistakes. Since buying a home has many far-reaching implications, from where you will live to how hard it will be to make ends meet, it's important to keep your emotions in check and make the most rational decision possible.
There are eight common emotional mistakes that people make when buying a home. Avoiding these pitfalls will help you find the best home-sweet-home.
More from Investopedia » Financing For First-Time Homebuyers» 10 Insurance Tips For Homeowners» 7 Tips On Buying A Home In A Down Market
Buying a home is a very emotional process, and allowing those emotions to get the best of you can cause you to make any number of mistakes. Since buying a home has many far-reaching implications, from where you will live to how hard it will be to make ends meet, it's important to keep your emotions in check and make the most rational decision possible.
There are eight common emotional mistakes that people make when buying a home. Avoiding these pitfalls will help you find the best home-sweet-home.
More from Investopedia » Financing For First-Time Homebuyers» 10 Insurance Tips For Homeowners» 7 Tips On Buying A Home In A Down Market
Mistake 1: Falling in love with a house you can't afford
Once you've fallen in love with a particular home, it's hard to go back. You start dreaming about how great your life would be if you had all the wonderful things it offered - the lovely, tree-lined streets, the jetted bathtub, the spacious kitchen with professional-grade appliances. However, if you can't or won't be able to afford that house, you're just hurting yourself. To avoid the temptation to get in over your head financially, or the disappointment of feeling like you're settling for less than you deserve, it's best to only look at homes in your price range.
Further, start your search at the low end of your price range - if what you find there satisfies you, there's no need to go higher. Remember, when you buy another $10,000 worth of house, you're not just paying an extra $10,000 - you're paying an extra $10,000 plus interest, which might come out to double that amount or more over the life of your loan. You may be better off putting that money toward another purpose.
Once you've fallen in love with a particular home, it's hard to go back. You start dreaming about how great your life would be if you had all the wonderful things it offered - the lovely, tree-lined streets, the jetted bathtub, the spacious kitchen with professional-grade appliances. However, if you can't or won't be able to afford that house, you're just hurting yourself. To avoid the temptation to get in over your head financially, or the disappointment of feeling like you're settling for less than you deserve, it's best to only look at homes in your price range.
Further, start your search at the low end of your price range - if what you find there satisfies you, there's no need to go higher. Remember, when you buy another $10,000 worth of house, you're not just paying an extra $10,000 - you're paying an extra $10,000 plus interest, which might come out to double that amount or more over the life of your loan. You may be better off putting that money toward another purpose.
Mistake 2: Thinking that a particular house is the only one that will suit you
Unless you are a high-end buyer looking at custom homes, chances are that for any home you find that you like, there are quite a few others that are nearly identical to it. Most neighborhoods have multiple homes that are the same model. Further, most neighborhoods are full of homes that were all constructed by the same builder, so even if you can't find an identical model for sale, you can probably find a house with many of the same features. If you're considering a condo or townhouse, the odds are also in your favor.
Even when you have a long list of must-haves, there are probably several homes out there that can meet your needs. Another house in the same area might be similar enough to meet your needs but be less expensive. Likewise, you could find a similar model with more of the upgrades you're looking for at a similar price.
Unless you are a high-end buyer looking at custom homes, chances are that for any home you find that you like, there are quite a few others that are nearly identical to it. Most neighborhoods have multiple homes that are the same model. Further, most neighborhoods are full of homes that were all constructed by the same builder, so even if you can't find an identical model for sale, you can probably find a house with many of the same features. If you're considering a condo or townhouse, the odds are also in your favor.
Even when you have a long list of must-haves, there are probably several homes out there that can meet your needs. Another house in the same area might be similar enough to meet your needs but be less expensive. Likewise, you could find a similar model with more of the upgrades you're looking for at a similar price.
Mistake 3: Being so desperate to become a homeowner that you buy a place that doesn't suit you
When you've been looking for a while and you're not seeing anything you like - or worse, you're getting outbid on the houses you do want - it's easy to start thinking that what you really want simply won't happen. If you move into a house you'll end up hating, the transaction costs to get rid of it will be costly. You'll have to pay an agent's commission (up to 5-6% of the sale price) and you'll have to pay closing costs for the mortgage on your new house. You'll also deal with the hassle and expense of moving yet again. If you decide not to move but to try to make the best of what you have, remember that alterations and renovations are expensive, time-consuming and stressful. The best advice is to wait if you have the luxury of time, or to correct your vision for your future to what you actually need, not want.
When you've been looking for a while and you're not seeing anything you like - or worse, you're getting outbid on the houses you do want - it's easy to start thinking that what you really want simply won't happen. If you move into a house you'll end up hating, the transaction costs to get rid of it will be costly. You'll have to pay an agent's commission (up to 5-6% of the sale price) and you'll have to pay closing costs for the mortgage on your new house. You'll also deal with the hassle and expense of moving yet again. If you decide not to move but to try to make the best of what you have, remember that alterations and renovations are expensive, time-consuming and stressful. The best advice is to wait if you have the luxury of time, or to correct your vision for your future to what you actually need, not want.
Mistake 4: Overlooking important flaws in the structure, appearance or location of the house
For any of the three reasons we just discussed, you might be tempted to ignore major problems with the house that will be difficult, expensive or impossible to change. Carefully consider your options before you make a commitment, and consider waiting until something better comes along. New houses come on the market every day.
Mistake 5: Thinking you're a handyman when you're not
Don't buy a fixer-upper that's more than you can handle in terms of time, money or ability. For example, if you think you can do the work yourself then realize you can't once you get started, any repairs or upgrades you were planning to make will probably cost twice as much once you factor in the labor - and that may not be in your budget. Not to mention the costs involved to fix anything you may have started and the fees to replace the materials you wasted. Honestly evaluate your abilities, your budget and how soon you need to move before purchasing a property that isn't move-in ready.
For any of the three reasons we just discussed, you might be tempted to ignore major problems with the house that will be difficult, expensive or impossible to change. Carefully consider your options before you make a commitment, and consider waiting until something better comes along. New houses come on the market every day.
Mistake 5: Thinking you're a handyman when you're not
Don't buy a fixer-upper that's more than you can handle in terms of time, money or ability. For example, if you think you can do the work yourself then realize you can't once you get started, any repairs or upgrades you were planning to make will probably cost twice as much once you factor in the labor - and that may not be in your budget. Not to mention the costs involved to fix anything you may have started and the fees to replace the materials you wasted. Honestly evaluate your abilities, your budget and how soon you need to move before purchasing a property that isn't move-in ready.
Mistake 6: Putting in an offer before carefully considering all the pros and cons of the property
In a hot market (or even a hot submarket, with dirt-cheap, bank-owned properties during a housing slump) it may be necessary to pull the trigger very quickly if you find a home you like. However, you have to balance the need to make a quick decision with the need to make sure the home will be right for you. Don't neglect important steps like making sure the neighborhood feels safe at night as well as during the day and investigating possible noise issues like a nearby train. Ideally you'll be able to take at least a night to sleep on the decision. How well you sleep that night and how you feel about the home in the morning will tell you a lot about whether the decision you're about to make is the right one. Taking the time to consider the decision also gives you a chance to research how much the property is really worth and offer an appropriate price.
In a hot market (or even a hot submarket, with dirt-cheap, bank-owned properties during a housing slump) it may be necessary to pull the trigger very quickly if you find a home you like. However, you have to balance the need to make a quick decision with the need to make sure the home will be right for you. Don't neglect important steps like making sure the neighborhood feels safe at night as well as during the day and investigating possible noise issues like a nearby train. Ideally you'll be able to take at least a night to sleep on the decision. How well you sleep that night and how you feel about the home in the morning will tell you a lot about whether the decision you're about to make is the right one. Taking the time to consider the decision also gives you a chance to research how much the property is really worth and offer an appropriate price.
Mistake 7: Being too slow to pull the trigger
It's a tough balancing act to make sure you make a careful decision yet don't take too long to make it. Losing out on a property that you were almost ready to make an offer on because someone beat you to it can be heartbreaking. It can also have economic consequences. Let's say you are self-employed. Perhaps for you more than anyone else, time is money. The more time and energy you have to take out of your normal activities to search for a house, the less time and energy you have available to work. Not dragging out the homebuying process unnecessarily may be the best thing for your business, and the continued success of your business will be essential to paying the mortgage. If you don't pull the trigger quickly, someone else might, and you'll have to keep looking. Don't underestimate how time-consuming and routine-disrupting house shopping can be.
It's a tough balancing act to make sure you make a careful decision yet don't take too long to make it. Losing out on a property that you were almost ready to make an offer on because someone beat you to it can be heartbreaking. It can also have economic consequences. Let's say you are self-employed. Perhaps for you more than anyone else, time is money. The more time and energy you have to take out of your normal activities to search for a house, the less time and energy you have available to work. Not dragging out the homebuying process unnecessarily may be the best thing for your business, and the continued success of your business will be essential to paying the mortgage. If you don't pull the trigger quickly, someone else might, and you'll have to keep looking. Don't underestimate how time-consuming and routine-disrupting house shopping can be.
Mistake 8: Offering more than a house is worth
If there's a lot of competition in your market and you find a place you really like, it's all too easy to get sucked into a bidding war - or to try to preempt a bidding war by offering a high price in the first place. There are a couple of potential problems with this. First, if the house doesn't appraise at or above the amount of your offer, the bank won't give you the loan unless the seller reduces the price or you pay cash for the difference. If this happens, the shortfall on your bid as opposed to your mortgage will have to be paid out of pocket. Second, when you go to sell the house, if market conditions are similar to or worse than they were when you purchased, you may find yourself upside down on the mortgage and unable to sell. Make sure the purchase price for the home you buy is reasonable for both the house and the location by examining comparable sales and getting your agent's opinion before making an offer.
If there's a lot of competition in your market and you find a place you really like, it's all too easy to get sucked into a bidding war - or to try to preempt a bidding war by offering a high price in the first place. There are a couple of potential problems with this. First, if the house doesn't appraise at or above the amount of your offer, the bank won't give you the loan unless the seller reduces the price or you pay cash for the difference. If this happens, the shortfall on your bid as opposed to your mortgage will have to be paid out of pocket. Second, when you go to sell the house, if market conditions are similar to or worse than they were when you purchased, you may find yourself upside down on the mortgage and unable to sell. Make sure the purchase price for the home you buy is reasonable for both the house and the location by examining comparable sales and getting your agent's opinion before making an offer.
Conclusion
Even knowing all of these things, it's still hard to act on them. You may still find yourself making decisions based on emotion during the home-buying process. Slow down, overcome your emotions and, ultimately, make a home-purchase decision that's good for both your feelings and your finances.
Even knowing all of these things, it's still hard to act on them. You may still find yourself making decisions based on emotion during the home-buying process. Slow down, overcome your emotions and, ultimately, make a home-purchase decision that's good for both your feelings and your finances.
Wednesday, November 11, 2009
10 Ways To Increase The Value Of Your Home
Katie Adams, Investopedia
Nov 4th, 2009
In a dour housing market, wouldn't it be nice to know that your remodeling project would pay off when you went to sell the property? Remodeling Magazine evaluated the top remodeling projects, how the cost-to-value has changed since the housing market implosion, and which projects are still worth the investment. Using the magazine's "Cost Vs. Value Report for 2008-2009," let's look at some of the best projects you can undertake and recoup the majority of your cost.
Upscale Projects
Siding Replacement (fiber-cement or foam-backed vinyl).
With the economic slump, home buyers aren't being dazzled by bells and whistles as much as they are improvements that will ensure lower repair and utility bills. Although replacing current siding with fiber-cement has lost value from 2007, it still nets an astonishing 87% ROI. If you prefer a foam-backed vinyl product replacement instead, you can still look to recoup 80% of your cost.
Window Replacement (vinyl or wood)
Windows are not only an aesthetic feature. For most homeowners, they represent one of the easiest ways to lower home heating and cooling bills. By replacing your current windows with more efficient vinyl or wood ones, you can save on your utility bills, attract future home buyers and net a nearly 80% (vinyl) or 77% (wood) return on your investment.
Bathroom Remodel
Depending on the size and amenities of your desired bathroom, you could expect to pay over $50,000 to tear out walls, repair joists and wall studs, change structural elements and make major layout changes, such as switching a toilet and shower. However big the price tag, you can still expect to recoup nearly 71% of the cost (which would be $36,400 if you have a $50K bill) when you go to sell. This project increased its value since 2007, while its sister project - adding a complete bathroom - fell in value.
Major Kitchen Remodel
Kitchens are typically the most frequently used room in a home, so it makes sense that investing money here is going to pay off when it comes time to sell. While a major kitchen renovation is usually the most time-consuming and expensive home improvement job (averaging more than $110,000), it's also one of the most profitable. Regardless of the size of your financial layout, you can expect to get a nearly 71% ROI.
Deck Addition (composite product)
With families cutting their entertainment budgets, they're spending more time at home, so it makes sense that adding a deck (composite, not wood) is a good investment. You can plan on recouping 63% of your total job cost to boost your home's value by nearly $24,000 if you paid the average job cost of $37,000.
Mid-Range Projects
While all of the mid-range projects dropped in value versus cost since 2007, there are still numerous projects that will net you a significant ROI. Here are a few of the best bets for your money:
Deck Addition (wood)
If your bank balance can't swing the higher price tag that comes with composite decking, you may still be able to afford a wood addition on to your home. While a wood deck would cost you, on average, in the neighborhood of $10,000, the resale value it will add to your home is more than $8,600 - an 81.8% return on your investment.
Siding Replacement (vinyl)
Fiber-cement or foam-banked vinyl are often more preferable siding upgrades, but getting vinyl siding replacements instead is still a good choice. You can recoup nearly 81% of your cost which, if the job cost you more than $10,000, means you could add more than $8,200 to your home's value.
Minor Kitchen Remodel
With belt-tightening in style, people are turning to minor kitchen improvement projects instead of major overhauls. It turns out that that choice is not only frugal, but financially wise. While major kitchen remodeling jobs can still, on average, return a nice 70% ROI for homeowners, minor kitchen remodeling jobs net an even higher 79.5% return.
Attic Bedroom
Anytime you can add bedrooms, you're going to add to the overall value - and listed purchase price - to your home. If your attic's dimensions allow you to convert it to a bedroom, you may want to consider investing the money to do so. You'll add some sleeping space and net a nice 74% return when a new buyer puts your home under contract.
Basement Remodel
If you're fortunate enough to live in an area with a water table high enough to permit basements, you should think about squeezing all the value you can out of it. By remodeling and finishing a previously-unfinished basement you can expect to get nearly 73% of your investment returned with a higher list price, come time to sell.
Conclusion
If you have savings or access to reasonably-priced credit, it's worth it to consider home improvement projects that will produce the best return for your time and money. Make sure you work with a reputable, licensed contractor (to avoid costly errors or budget overruns), and before you undertake any project it's a good idea to check and see if it could significantly increase your property tax bill.
While it may still make sense in the long-run to undertake the project and add overall value to your home, you may need to make a few budgetary changes so that you don't get caught off-guard when the tax bill comes.
Nov 4th, 2009
In a dour housing market, wouldn't it be nice to know that your remodeling project would pay off when you went to sell the property? Remodeling Magazine evaluated the top remodeling projects, how the cost-to-value has changed since the housing market implosion, and which projects are still worth the investment. Using the magazine's "Cost Vs. Value Report for 2008-2009," let's look at some of the best projects you can undertake and recoup the majority of your cost.
Upscale Projects
Siding Replacement (fiber-cement or foam-backed vinyl).
With the economic slump, home buyers aren't being dazzled by bells and whistles as much as they are improvements that will ensure lower repair and utility bills. Although replacing current siding with fiber-cement has lost value from 2007, it still nets an astonishing 87% ROI. If you prefer a foam-backed vinyl product replacement instead, you can still look to recoup 80% of your cost.
Window Replacement (vinyl or wood)
Windows are not only an aesthetic feature. For most homeowners, they represent one of the easiest ways to lower home heating and cooling bills. By replacing your current windows with more efficient vinyl or wood ones, you can save on your utility bills, attract future home buyers and net a nearly 80% (vinyl) or 77% (wood) return on your investment.
Bathroom Remodel
Depending on the size and amenities of your desired bathroom, you could expect to pay over $50,000 to tear out walls, repair joists and wall studs, change structural elements and make major layout changes, such as switching a toilet and shower. However big the price tag, you can still expect to recoup nearly 71% of the cost (which would be $36,400 if you have a $50K bill) when you go to sell. This project increased its value since 2007, while its sister project - adding a complete bathroom - fell in value.
Major Kitchen Remodel
Kitchens are typically the most frequently used room in a home, so it makes sense that investing money here is going to pay off when it comes time to sell. While a major kitchen renovation is usually the most time-consuming and expensive home improvement job (averaging more than $110,000), it's also one of the most profitable. Regardless of the size of your financial layout, you can expect to get a nearly 71% ROI.
Deck Addition (composite product)
With families cutting their entertainment budgets, they're spending more time at home, so it makes sense that adding a deck (composite, not wood) is a good investment. You can plan on recouping 63% of your total job cost to boost your home's value by nearly $24,000 if you paid the average job cost of $37,000.
Mid-Range Projects
While all of the mid-range projects dropped in value versus cost since 2007, there are still numerous projects that will net you a significant ROI. Here are a few of the best bets for your money:
Deck Addition (wood)
If your bank balance can't swing the higher price tag that comes with composite decking, you may still be able to afford a wood addition on to your home. While a wood deck would cost you, on average, in the neighborhood of $10,000, the resale value it will add to your home is more than $8,600 - an 81.8% return on your investment.
Siding Replacement (vinyl)
Fiber-cement or foam-banked vinyl are often more preferable siding upgrades, but getting vinyl siding replacements instead is still a good choice. You can recoup nearly 81% of your cost which, if the job cost you more than $10,000, means you could add more than $8,200 to your home's value.
Minor Kitchen Remodel
With belt-tightening in style, people are turning to minor kitchen improvement projects instead of major overhauls. It turns out that that choice is not only frugal, but financially wise. While major kitchen remodeling jobs can still, on average, return a nice 70% ROI for homeowners, minor kitchen remodeling jobs net an even higher 79.5% return.
Attic Bedroom
Anytime you can add bedrooms, you're going to add to the overall value - and listed purchase price - to your home. If your attic's dimensions allow you to convert it to a bedroom, you may want to consider investing the money to do so. You'll add some sleeping space and net a nice 74% return when a new buyer puts your home under contract.
Basement Remodel
If you're fortunate enough to live in an area with a water table high enough to permit basements, you should think about squeezing all the value you can out of it. By remodeling and finishing a previously-unfinished basement you can expect to get nearly 73% of your investment returned with a higher list price, come time to sell.
Conclusion
If you have savings or access to reasonably-priced credit, it's worth it to consider home improvement projects that will produce the best return for your time and money. Make sure you work with a reputable, licensed contractor (to avoid costly errors or budget overruns), and before you undertake any project it's a good idea to check and see if it could significantly increase your property tax bill.
While it may still make sense in the long-run to undertake the project and add overall value to your home, you may need to make a few budgetary changes so that you don't get caught off-guard when the tax bill comes.
Friday, November 6, 2009
Homebuyer tax credits extended, expanded
Posted: 11/5/2009
Columbus Board of REALTORS®
The House and Senate have overwhelmingly approved a measure that includes an extension of the $8000 first homebuyer tax credit that was set to expire at the end of the month. In addition, the bill creates a $6500 tax credit for homeowners who purchase a new residence. The $8000 tax credit will be open to new homebuyers through April of 2010. To be eligible, first time homebuyers must have an income of not more than $125,000 for individuals and must be acquiring a home for $800,000 or less. The IRS will have increased ability to recognize and stop fraudulent use of the tax credit.The $6500 tax credit is available to those who would like to acquire a new home after having occupied their current residence for at least five years. The $24 billion bill has substantial momentum due to the inclusion of jobless benefits that extend the amount of time individuals can claim unemployment by up to twenty weeks. Because of this, the measure could be on the president's desk as early as Friday.
Columbus Board of REALTORS®
The House and Senate have overwhelmingly approved a measure that includes an extension of the $8000 first homebuyer tax credit that was set to expire at the end of the month. In addition, the bill creates a $6500 tax credit for homeowners who purchase a new residence. The $8000 tax credit will be open to new homebuyers through April of 2010. To be eligible, first time homebuyers must have an income of not more than $125,000 for individuals and must be acquiring a home for $800,000 or less. The IRS will have increased ability to recognize and stop fraudulent use of the tax credit.The $6500 tax credit is available to those who would like to acquire a new home after having occupied their current residence for at least five years. The $24 billion bill has substantial momentum due to the inclusion of jobless benefits that extend the amount of time individuals can claim unemployment by up to twenty weeks. Because of this, the measure could be on the president's desk as early as Friday.
Subscribe to:
Posts (Atom)
