The big picture on the current local market is that it is a good time to sell, a historically phenomenal time to buy and a great time to invest in rental property.
This week we will discuss each of these market segments in a 3 part series. Today is part 1 of 3: It’s a Good Time to Sell!
There are three types of real estate markets: a buyer’s market, a seller’s market and a balanced market. A buyer’s market is considered more than 7 months of inventory while a seller’s market is less than 5 months of inventory. A balanced market is between those two with an inventory of 5 to 7 months. Collin County Association of Realtors current statistics show that from February 2011 to January 2012 we had an average of 6.2 months supply of inventory – a balanced market. However it also shows that in December and January we had less than a 5 month supply (4.3 and 4.2 respectively) – a seller’s market. Several years ago our market went through a shift and our inventory began to exceed the supply of buyers on the market. Buyers were not buying due to uncertainty in the market, loss of value on current home or job loss so homes were not selling. Many people determined that was not a good time to move so they did not try to sell their homes. The national news still paints a gloomy housing crisis picture and sellers continue to wait, but locally we are doing rather well and starting to see the indicators moving in a continuously positive direction. Sellers need to know that there is minimal competition on the market (down overall 17% on the average over last year –see chart) and many homes arriving on the market that are well-prepared with staging, properly priced according to the current market and in overall good condition are receiving multiple offers within 60 days. It is a good time to SELL and locally we are moving toward a seller’s market.
Give us a call and let’s start discussing today what you need to be preparing to make your move this year!
December is a big shopping month so is it a good time to buy real estate also? Many people do enjoying buying during the holidays while some do so purely out of need, but at any rate there are some positives to choosing to buy a new home during the holidays.
Tax Savings. Closing on your new home by Deceber 31st means you can deduct mortgage interest, property taxes and points on your loan on this year’s income taxes return.
Sellers are more motivated. With inventory still on the market, many sellers will also be anxious to sell by the end of the year so they can start fresh in their new home/location.
If you are buying a new home, there is a chance builders will be offering incentives. Many builders will offer extras to sell as many houses as they can by the end of the year.
Your housing choices during December are still relatively plentiful.
It’s easier to move. Many moving companies are booked six or so weeks in advance during the busy summer months. In the winter it is normally easier to secure the services of a moving company on shorter notice.
A new home for the holidays. The holiday season is a great time to celebrate your new home with family and friends.
If you buy a home this year you will be able to homestead it on January 1 and it will save you money on your taxes.
Rates are at an all-time low giving you more purchasing power to buy your home right now.
Home prices are still fairly low and sellers are competitive. With our strong negotiations you will be able to get a good deal on your new home now!
You know a couple successful Realtors on the Marr Team that can give you all the information you need to make the best decision for your family and help you accomplish your real estate goals! Rates are low and prices are great – call us today!
Know Someone who wants to spice things up with a new home?
If you or someone you know is looking for a great deal in today’s market – we can find it for them! Whether moving or making a real estate investment we know the market and can negotiate the best deal for you!
Give us a call and let us show you the deals out there in the market now!
Trying to decide whether to rent or to buy? Trulia recently released their 2011 3rd Quarter numbers that calculates the price-to-rent ratios for the 50 largest U.S. cities using the median list price to buy compared with the median rent on two-bedroom apartments, condos and townhomes. In the July 2011 numbers Dallas was ranked 13 with a ratio of 12. Trulia categorizes cities between a 1-15 ratio to be much less expensive to buy than to rent. Overall according to the study, buying was cheaper than renting in 74 percent of the country’s 50 largest cities.
Oddly, Fort Worth ranks number 49 at an ratio of 32 which indicates that renting in this city is much less expensive than owning a home. To see more large cities and where they rank check out Trulia’s interactive map.
Our team has had several lease prospects turn into happy buyers over the past few months once we showed them the numbers. In today’s buyers market with softer real estate prices combined with rock-bottom interest rates a buyer in Dallas and Collin County can easily purchase a home with a lower monthly mortgage payment (including taxes and insurance) than compared to a rental rates in the current competitive rental market that continues to drive rental rates higher. Add that fact to some of the benefits of homeownership like building equity, more choices in location and stability for you and your family then it may make sense to start looking for a home to buy instead of renewing your lease.
Of course there are a few more things to consider before deciding to make a purchase:
Do you have cash for the closing? (visit with a mortgage consultant to see how much you will need – ask us for recommendations on who to call)
How long do you plan to stay?
Can you afford the added expenses of home ownership? (HOA dues, maintenance, etc…)
The ultimate decision depends on each person’s situation and their plans for their future, but if you need more information to make your decision contact The Marr Team, your real estate consultants, we would be happy to help. And even if leasing is a better option for you – we can help there too.
Frequently when showing buyers properties or discussing making an offer on a particular property a buyer will want to know the tax valuation on the home. Of course we always provide the answer, but remind them that the tax assessment on the home is not related to the market value, the two figures are mutually exclusive. Market valuation is the price currently set for a home based on recent neighborhood sales and the overall real estate market, it is what a buyer would pay to purchase the property. Property tax valuation is the basis for which an owner will pay property taxes.
The appraisal district for a county assesses homes based on an exterior analysis along with general market knowledge as of January 1st each year. Since Texas is a non-disclosure state (meaning the price you pay for a property is not public knowledge) the appraisal district is not able to use an actual sales price of a property unless a new property owner replies to the appraisal districts optional purchase price survey giving them that particular information. Homeowners will receive the districts assessment in May each year with their valuation for the year. In order to save money on property taxes owners will want the tax assessment value to be as low as possible and have the option protest the valuation if they believe it to be too high.
Market valuation is determined through an analysis of similar properties that have recently sold. The information used to determine this value is not public information so you will need a real estate agent or an appraisers to share the information and how your home fits into the market.
To further demonstrate the disconnect between these two numbers, consider two home owners in the same neighborhood with the same floor plan and amenities. Owner A has consistently and successfully protested to keep his tax valuation lower for several years while Owner B has accepted the ever increasing tax valuation each year without protest. When these owners put their homes on the market should it really matter what the property tax valuation is? In fact as a buyer you may prefer the home with the lower valuation so your taxes will also be lower, but it does not mean the property is worth any less on the real estate market.
Tax valuations will be coming out in May so if your home goes down in value, just breathe a sigh of relief for a lower tax bill and if you need a market valuation on your home contact us to provide you with our solid, market information and knowledge without any obligation.
(Of course, this information is most relevant to to the North Texas area where I specialize. If you live in another area, please consult a local REALTOR(r) for information about tax assessments and valuations in your area.)
In a recent Forbes blog post, multimillionaire hedge fund manager John Paulson declared that today’s record-low interest rates made this the best time to buy homes in fifty years. “If you don’t own a home, buy one,” Paulson said. “If you own one home, buy another one, and if you own two homes, buy a third and lend your relatives the money to buy a home.” Why should we care what Paulson thinks? Well, he was among the few to accurately predict the subprime collapse and, while no one has a crystal ball, a closer look at the numbers supports his call to action. Historically low interest rates are the key…and they aren’t likely to hang around for long.
Buyers who “choose to wait until prices come down more” are gambling that interest rates will hold steady or drop. The truth is even a 10 percent drop in home prices is nullified by a 1 percent increase in interest rates. The figure below illustrates how this works for a $250,000 home purchase and the relative likelihood of each scenario.
To figure out which was a smarter bet–counting on home prices to fall further or interest rates to rise– the Keller Williams research department took the last ten years of monthly home price and mortgage interest rate data and ran the numbers to see which was more likely: an increase in mortgage rates or a further drop in home prices.
Here’s what they found:A one percent increase in mortgage rates is ten times more likely to happen than a ten percent drop in home prices.A one percent rate increase more than offsets a ten percent reduction in home prices.When interest rates fall by one percent, the total interest paid is almost three times more than the interest savings from a ten percent drop in home prices.The probability of both happening at the same time is ridiculously small, and homeowners would still pay 15 percent more in interest over the life of the loan.
Interest rates have dominated the news in recent months as we’ve shattered record low after record low. Potential home buyers need to understand the positive financial impact low interest rates have on the cost of home ownership and the thousands of dollars that can be saved over the life of a typical mortgage loan. For those who can afford to buy, trade up, or invest, our current market presents a lifetime opportunity – call me, your local real estate consultant, to help provide you the information you need to make an informed decision.
Tax Savings. Closing on your new home by Deceber 31st means you can deduct mortgage interest, property taxes and points on your loan on this year’s income taxes return.
o rent or to buy? Trulia recently released their 