I just got done reading an article from CNN money magazine talking about foreclosure sales. Are they a good deal. Apparently so. One third of all sales in the first three months of 2010 were homes that were foreclosures or short sales.
What was even more dramatic was the price difference people paid for these homes. They bought them for an average of 27% less than a comparable home in the same area.
Now, foreclosed homes commanded a substantial difference in price in part to the fact that the previous homeowners were unable or unwilling to maintain the home when they knew the bank was going to take it over.
This has put a huge burden on existing home sales in the market today and helped keep prices at lower levels than anticipated. What has made it even more troublesome is the influx of inventory that is out there right now and the anticipated flood of homes going into foreclosure after the moratorium from the end of last year.
So people looking for good deals out there right now can still find them in a foreclosure. Banks are stuck right now with an influx of inventory and have held off putting homes on the market out of fear of driving prices down even farther. But what are they going to do as the inventory piles up? That answer can have a tell tale sign on what the market will do in terms of recovery and home prices for years to come.
Dave dicecco
Realtor/Broker
www.davedicecco.com
Wednesday, June 30, 2010
Tuesday, June 29, 2010
How Much Home Can You Afford?
This is a question that I ask each and every day to every client I talk with. I NEVER ask them what their price range is; instead Ii ask them what they are comfortable paying a month. The Internet is a great tool for prospective home buyers. You can search from the comforts of your home and see what is available in any given area at anytime.
In addition, you can calculate mortgage payments based on a sale price and down payment. However; there are variables that not even the mortgage calculators can equate in properly. How much is the property taxes for that property? Homeowners Insurance? Any HOA fees or dues? Financing through FHA where you need to pay mortgage insurance? What rate do I use? These all factor in and affect the final monthly payment. So what on paper may look like to you an affordable payment may in reality not be. Once you start adding in all the additional expenses that come with owning a home the payment can increase $100.00 to $300.00 a month.
So, I always ask my clients the same question. "what are you comfortable paying a month for a mortgage payment?" I have found this answer has gotten me to a more true sale price point that is affordable or the client. A lot of times; they think they can afford X amount only to find out they need to be looking less than that to achieve what is comfortable for them monthly.
Once you know what you are comfortable at monthly ; you need to talk with a Mortgage broker about interest rate and back into a sale price...Otherwise you may end up looking at homes that you are not comfortable in making the monthly payments on and fall in love with a home.
Dave diCecco
Realtor/Broker
www.davedicecco.com
In addition, you can calculate mortgage payments based on a sale price and down payment. However; there are variables that not even the mortgage calculators can equate in properly. How much is the property taxes for that property? Homeowners Insurance? Any HOA fees or dues? Financing through FHA where you need to pay mortgage insurance? What rate do I use? These all factor in and affect the final monthly payment. So what on paper may look like to you an affordable payment may in reality not be. Once you start adding in all the additional expenses that come with owning a home the payment can increase $100.00 to $300.00 a month.
So, I always ask my clients the same question. "what are you comfortable paying a month for a mortgage payment?" I have found this answer has gotten me to a more true sale price point that is affordable or the client. A lot of times; they think they can afford X amount only to find out they need to be looking less than that to achieve what is comfortable for them monthly.
Once you know what you are comfortable at monthly ; you need to talk with a Mortgage broker about interest rate and back into a sale price...Otherwise you may end up looking at homes that you are not comfortable in making the monthly payments on and fall in love with a home.
Dave diCecco
Realtor/Broker
www.davedicecco.com
Monday, June 28, 2010
School Assignments Affect Home Prices
I recently read an article from the Wall Street Journal about school boundaries and home prices. As a society we are more concerned now than ever before about the schools our children will be attending than ever before. That has impacted the home values in pockets of Charlotte and the surrounding communities.
When i got done reading the article and subsequent articles about the topic; I went back and started thinking about my last move eight months ago. Price was important in the home I chose. As was the amount of space and certain features we were looking for in a home. But was it the underlying decision on what I bought? No. My wife and i were mostly concerned about staying within the school boundaries of where our children were attending and would be attending as they progressed through the grade levels. We felt the quality of education they were receiving outweighed the cost to stay within the boundaries of the school assignments.
The article in the Wall Street journal mentions nationally how school assignment can affect a home price dramatically. In some instances it caused a similiar home to be as much as 18% more because of the schools they would be assigned to. Nationally, research is showing that it affects the value of a home anywhere between 5% and up to as much as 20%more based on availability of homes.
People looking to sell their homes still have seen prices drop. However; the drop in prices has not been as dramatic as other areas because of the schools. With a higher quality of education parents were paying more to live in those areas. Buyers today looking for a great deal are finding it more difficult to find a home in the school area they want at a bargain rate. That is because the competition for those homes is higher right now.
The internet has helped this out as well. With websites posting ratings for schools there is an abundance of information out there for people to take advantage of when looking for homes. I personally use greatschools.org for families moving into the area or asking about what the schools are like.
Dave diCecco
Realtor/Broker
www.davedicecco.com
When i got done reading the article and subsequent articles about the topic; I went back and started thinking about my last move eight months ago. Price was important in the home I chose. As was the amount of space and certain features we were looking for in a home. But was it the underlying decision on what I bought? No. My wife and i were mostly concerned about staying within the school boundaries of where our children were attending and would be attending as they progressed through the grade levels. We felt the quality of education they were receiving outweighed the cost to stay within the boundaries of the school assignments.
The article in the Wall Street journal mentions nationally how school assignment can affect a home price dramatically. In some instances it caused a similiar home to be as much as 18% more because of the schools they would be assigned to. Nationally, research is showing that it affects the value of a home anywhere between 5% and up to as much as 20%more based on availability of homes.
People looking to sell their homes still have seen prices drop. However; the drop in prices has not been as dramatic as other areas because of the schools. With a higher quality of education parents were paying more to live in those areas. Buyers today looking for a great deal are finding it more difficult to find a home in the school area they want at a bargain rate. That is because the competition for those homes is higher right now.
The internet has helped this out as well. With websites posting ratings for schools there is an abundance of information out there for people to take advantage of when looking for homes. I personally use greatschools.org for families moving into the area or asking about what the schools are like.
Dave diCecco
Realtor/Broker
www.davedicecco.com
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