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Home Sales Hit New Low in January
We all know that the housing market has been struggling for quite some time. Certain areas have been hit harder than others, but just like with other markets in the economy, everyone is feeling the impact of the housing market as it struggles.
Last Wednesday, February 24, 2010, the Commerce Department said that new home sales have dropped 11.2 percent in January, the lowest level on record for nearly a half a century. This came as a big shock and surprise to many economists who were expecting a five percent increase over December’s sales. Some say that this major drop was partly due to winter weather conditions, but that the housing market has been struggling for several months despite government support and assistance.
January’s weaknesses were seen in all regions except the Midwest which saw a 2.1 percent increase. Government mortgage programs have tried to keep rates down by using the Federal Reserve to buy $1.25 trillion in back mortgage securities but that program is due to end by March 31, 2010. Other tax credits and incentives are also set to end in April.
Many people do not believe that the housing market will go under, but it will take longer to reach a good point of recovery. This means that real estate agents need to do everything they can to sell, sell, sell, and sellers need to hang in there. We all need to keep our fingers crossed, do the best we can, and hope for the very best.
Preparing for Spring
After a long winter, spring is finally right around the corner. The temperatures are starting to inch their way up, and the snow is going to start melting away. If you’re preparing to sell your home this Spring or Summer, now is the perfect time to get started.
Start planning your curb appeal. This is what buyers see first, so make a great first impression. A little landscaping and a fresh coat of paint can give your property the “wow” factor it needs to sell. Although it’s still to early to plant seeds or bulbs, start planning now. Make a list of which plants you want, and where you want to put them. Pay attention to colors, heights and the amount of light each flower type needs.
If you will be painting your home before the sale, start picking out colors. Soft gray, blue or white are the most popular colors, but you don’t have to limit yourself to those choices. However, try to stay away bold bright colors. You want your home to stand out in a good way; you don’t want to stand out for having a gaudily painted property. This is also a good time to start looking for patio furniture, if you have a deck or front porch. This small staging step can make the house feel more inviting.
If you have major landscaping work to complete, or if you will be hiring someone to do the landscaping for you, start preparing now. Find a landscaper you like, and book early. If you will be doing the work yourself, check to make sure your tools are all in good shape. Do any maintenance work that may be needed on your lawn mower, rototiller or other outdoor lawn care equipment. Research local pick-up days for cut shrubbery, sticks and landscaping scraps.
Inside, it’s time to lighten up and put out some brighter colors. Light purples, blues, yellows, greens and other spring colors will give your home a fresh feel. If you are showing your home, make sure your windows are very clean, and letting in lots of light. After a long, gloomy winter, the natural sunlight will make a huge impact on buyers. Don’t use any strong household fragrances– try to stick with clean linen, lightly scented rose or other seasonal scents. Don’t overpower your home, though, and it’s better to not use any scents at all. Some buyers may have allergies or may be super-sensitive to those scents.
Spring is one of the busiest times of the year in real estate. Take advantage of the increase in buyers, and make sure your home makes a great impression. With the help of an experienced Syracuse real estate agent, you could have your home sold, and be into your new home, by summer.
Simple Fixes for Your New Home
Finding the perfect home is tough. There are a lot of properties available in the Syracuse area right now, so there are a lot to choose from. What happens, though, when you finally find the perfect home, only to find that it’s not quite as perfect as you were hoping for? Do you walk away, or just accept the home as it is? What you need to do is figure out if the problems are fixable. Here are some common problems with simple fixes.
- Fleas, ants or other pest problems. Although this is more common in the warmer summer months, some homes have pest problems year round. The current owner should take care of the problem before you move in, but if they don’t (or if the problem returns) hire a professional exterminator. There are a lot of safe and effective ways to get bugs and rodents out of your home, and to keep them out, and a professional will be able to get it done quickly.
- No air flow. If the property has a closed floor plan, meaning that rooms are closed off with doors, it can be hard to get air moving between rooms. Stuffy rooms are no fun, especially when the weather heats up. Consider installing ceiling fans; it sounds a lot harder than it really is, especially if you already have overhead light fixtures. Alternatively, purchase some floor fans to keep air moving in and between the rooms.
- Dark and dingy. You love the home, but it feels like the bat cave. This is a really, really easy fix. Start by painting the rooms lighter colors, and putting up light-colored curtains that let in the light. Clean the windows, floors, walls and other surfaces really well. If the room is still dark, install extra lighting and use higher-quality light bulbs to give the room a more natural glow.
- Outdated… everything. Maybe the home looks like it fell out of a 1970’s Better Homes and Gardens magazine. Older homes, especially if they were owned by older couples, might be in need of a serious make-over. Tear out the shag carpeting and replace it with something more modern. Hardwood floors give the home a timeless look. Paint the walls and ceilings, and consider replacing any older fixtures. Kitchen cabinets can be transformed by a coat of paint and new handles. If you’re looking at new appliances, you might be able to get some great deals (and rebates) on Energy Star models, thanks to new green government initiatives.
If the home is almost everything you wanted, and there are no huge problems, don’t let a few small issues chase you off. Small problems can be fixed, usually with less of a hassle than you might first assume. Ask your Syracuse real estate agent for advice, or visit a local hardware store for information on how to handle the problem. Chances are, with a little bit of effort, the almost perfect home can be the home of your dreams.
How to Get Top Dollar for your Home
Home prices are down. If you have lived in your home for several years, you might have a hard time getting back what you paid for the property originally. Fortunately, there are some things that you can do to improve the selling price of your property.
Start by cleaning. It sounds basic, but it can make a huge difference. Dust, scrub, wash the windows. Hire someone to come in and deep clean the carpets, and make sure the floors are mopped and waxed, if necessary. Don’t forget to organize cabinets and shelves, and to clear out any clutter and personal items (pictures, refrigerator magnets, ect.).
You also need to clean up the outside of your home. This is a little harder in the winter, but it still needs to be done. Shovel all walkways and clear off the deck. Knock down large icicles. Make sure any outbuildings (garage or storage sheds) are cleaned out and organized. If you have pets, don’t forget to clean up their droppings. Buyers don’t want to see, or step in, the remainder of what Fido had for breakfast. Remember that the outside of the home is the first thing the buyer will see. Make sure their first impression is a good one.
Once everything is clean, it is time to start staging. If cleaning makes your property presentable, staging is what gives it the finishing “wow factor” touch. There are two main parts to staging. The first is that every room has a purpose, and only one purpose. Move the office out of your bedroom, for example. Clear out “storage” rooms and give them a purpose. Put the office in there, or set up a den or spare bedroom. Your goal is to make buyers feel like they could make the property their own.
The second part of staging is that the home has to look neutral. Paint the walls a soft, neutral color, such as light green or an off-white. Take down heavy drapes and put up something lighter that lets in a lot of natural sunlight.
You also need to go through the home and make note of any repairs. Leaky faucet? Loose floorboard? Fix it. Taking care of these tiny problems will make your home look well-cared for. That’s going to assure the buyer that he or she is getting a great property, which can up their offer price.
A buyer will only pay what they think your home is worth. It is up to you to impress them, as soon as they pull up to the property and then again as soon as they step foot inside your home. Prove to a buyer that your home is a great buy, and they’re more likely to pay what the home is worth.
Buying a Bank Owned Property
There are more homes in foreclosure right now than ever before. Homes that do not sell during the foreclosure process become the property of the bank that was holding the mortgage. These homes can be a great bargain, if you know where to look and what to look for.
A bank owned property (also known as REO- Real Estate Owned- property) can sell for as much as 20% off the actual value of the home, and the bank may allow a lower down payment, and discounts for repairs needed. They can be a great opportunity for investors or first time home buyers who don’t mind a challenge. With the help of a Syracuse real estate agent, buying an REO property can be a low-stress, easy way to achieve your home ownership goals.
Bank owned properties are sold “as is,” or in whatever condition the previous owners left it. Sometimes, the home is left in great shape; other times, you’ll be facing major repairs. If the bank will give you access to the property, make sure you hire a home inspector to give you a list of problems that will need repair. Keep these repairs in mind when making your offer to the bank. The bank will probably counter-offer with a higher price, and then you can either accept it, walk away, or try to reduce their asking price. You might be more successful with getting the price dropped if the home needs extensive work.
The bank will take care of all prior debts against the home, and evict the previous owners (if they haven’t already done so). If you have decided to buy the home, a contract will be drawn up. Review it carefully, and make sure you know exactly what you will be responsible for. Have your real estate agent or lawyer review the contract with you.
A bank owned property can be a great bargain, but you need to do your homework. Add up the cost of repairs, and get an accurate picture of the value of the home, both before and after the repairs have been completed. It is not unusual for a buyer to spend more on a bank owned property than they would have to buy a traditionally sold home. To avoid that, know what the home is worth, hire a great property inspector, work with a Syracuse real estate agent that will put the time into making sure your decision to buy a bank owned property is the right one.
Green Home Improvements to Consider
These days saving the planet and saving money seem to be the best way to go. This is also true when considering home improvements to make in your home. These home improvements may cost more now but they will save you money later on and if you consider selling, they will greatly improve the value of your home. Here are a few green home improvements to consider in your home.
Make sure your home is tightly sealed
By making sure your home is tightly sealed, you safe more energy and your heat and electric bills will not be as high. Make sure to seal up any leaks that may be by doors, windows, or in basements. Some sealing materials may even qualify for a federal tax credit.
Insulate your upstairs
Many homes are not as well insulated as they could be, especially upstairs. Have an inspector or other home professional check the insulation on your home and make sure it is properly insulated. This will keep your home comfortable and keep your bills lower.
Get a Programmable Thermostat
These help save on energy and cost because they can be set to only go on and off when the thermostat reaches a certain temperature. They can save you tons of money each month so they will pay for themselves.
Add storm doors
These are quick and easy and will help you avoid a whole window or door repair in the future. They also will keep energy costs low and keep the house comfortable despite any bad weather conditions.
Efficiency Water Heaters
These can save up to twenty-five percent in heating water costs. Some of them also qualify for a federal tax credit. They keep the water warmer longer than traditional water heaters would.
If you decide to make improvements to your home, it may be well worth it to make them green home improvements. They will save you money on bills, keep your home comfortable and nicer to live in all year round and will increase the value of your home in the future. It is a win win situation all around.
Demographic Trends that May Affect the Housing Market
When trying to sell any product or service, it is important to know not only who buys the product or service but why they do or do not and to keep an eye out for any changes. This is also true in the housing market. Older couples want different features in a house than a younger couple does and it is important to know why. Here are some demographic trends that may affect the housing market in the future.
Ask a Syracuse real estate agent for advice
It is a real estate agent’s job to know about demographic and other trends that may affect the housing market. If you have any questions, they are an excellent first resource.
Older baby boomers (55-64)
Many older baby boomers are stuck where they live now because they may owe more in payments than their house is worth. Many older people are also choosing retirement places closer to family and friends. They also may choose not to move because they feel a sense of pride for their home.
Younger baby boomers (46-54)
Many of these people are finding it hard to sell their homes to the younger generation. This restricts options and forces many of these people to consider home improvements and building on to their current home instead of buying a new one. Many are also buying smaller second homes than they were before.
Generation Y (late teens-early 30s)
Many of the people in this generation are seeing their loved ones and friends lose homes to foreclosure. They are willing to rent homes or buy smaller ones to afford the lifestyle they desire. They want to be close to friends, family, and services.
Immigrants
Many of these people have moved to central cities and may move to larger suburban homes in the future when prices for these homes are reduced. They tend to like to be close to family and friends.
In the future, when you might be considering buying a new home or selling yours and moving on, it is important to consider these demographic trends. What people want and why they want it may change and it is important to know all the information. This way you can make a well informed decision when you buy or sell a home.
Ask a real estate agent for advice
It is a real estate agent’s job to know about demographic and other trends that may affect the housing market. If you have any questions, they are an excellent first resource.
Older baby boomers (55-64)
Many older baby boomers are stuck where they live now because they may owe more in payments than their house is worth. Many older people are also choosing retirement places closer to family and friends. They also may choose not to move because they feel a sense of pride for their home.
Younger baby boomers (46-54)
Many of these people are finding it hard to sell their homes to the younger generation. This restricts options and forces many of these people to consider home improvements and building on to their current home instead of buying a new one. Many are also buying smaller second homes than they were before.
Generation Y (late teens-early 30s)
Many of the people in this generation are seeing their loved ones and friends lose homes to foreclosure. They are willing to rent homes or buy smaller ones to afford the lifestyle they desire. They want to be close to friends, family, and services.
Immigrants
Many of these people have moved to central cities and may move to larger suburban homes in the future when prices for these homes are reduced. They tend to like to be close to family and friends.
In the future, when you might be considering buying a new home or selling yours and moving on, it is important to consider these demographic trends. What people want and why they want it may change and it is important to know all the information. This way you can make a well informed decision when you buy or sell a home.
Fix it Up, or Sell As Is?
Not every home is ready to be sold when a seller decides to put it on the market. If your home needs repairs, you have a choice to make. You can fix it up yourself, or sell the home as it is, and let the buyer worry about fixing it up.
How do you decide? There are a few things to consider. For starters, realize that buyers will expect a lower price to make up for the time and expense of taking care of the repair. For example, your home is worth $150,000 after repairs. Repairs will cost $20,000, but you will probably get offers closer to $120,000, if not less. If you do take care of the repairs yourself, you’ll be able to bring in the full $150,000.
What needs to be done? Smaller projects, such as replacing a sink fixture or patching up an interior wall, are going to take less from the sale price than a new roof or water heater. The less expensive and inconvenient a repair is, the better chance you have of getting offers close to the actual value of the home. Again, you pay for the convenience of not worrying about a repair yourself; the factor to consider is how much that convenience will end up costing you.
The more economical choice is obviously to take care of the repairs yourself. Even if you choose to leave major repairs, taking care of smaller projects can have a huge affect on what your home sells for. Clean up the property, put a fresh coat of paint, in a neutral color, on the walls. As you go along, make a list of anything that is broken, worn out, or otherwise in need of repair or replacement. If you have to choose between repairs, pick the ones that will yield the most value for the smallest price. Kitchens and bathrooms will almost always improve the sale price, sometimes drastically.
Even if the home needs repairs, you should still try to make the property look well cared for. Replace worn or stained carpeting, fix broken windows, and scrub until the home shines. If a home looks like it hasn’t been taken care of, buyers will be more likely to wonder what else could be wrong with the property, and you won’t get as high of an offer.
The decision to fix a home up, or to sell it as is, is one that you should put some thought into. Even hiring someone to do the repairs for you will cost less than leaving them for the buyer to handle, but if you don’t have the money for repairs immediately available, or if you are in a hurry to move, it might be more practical to accept the home selling for less.
Mortgages 101
A mortgage is loan offered by a lender for the purpose of buying property. The word comes from the old French word ‘mort’, which means deed, and ‘gage’, the old English word for pledge. A lender provides the money for your home purchase after you sign several documents stating that you will pay the lender back, plus a hefty amount of interest. If you fail to pay, the lender gets your home in exchange for the amount you still owe.
There are several types of mortgages, but most fit into one of two categories. Adjustable rate mortgages start off with a low interest rate; this rate might stay the same for the first six months to a year or two, depending on the terms of your mortgage. After that, you’ll be paying interest rates based on whatever the current market rate is. It might start out low, at 4% or even less in some cases, but can go up to three or four times that amount during the course of the loan. It depends entirely on what the current interest rates are at any point and time.
With a fixed rate mortgage, the rate you sign up for is the rate you have throughout the length of your loan. If you sign up now at 5.5%, you will be paying that same rate 20 years from now, as long as you don’t refinance your loan. If you are staying in your home for longer than five years, a fixed rate mortgage is often your best option.
Most lenders want 20% of the home’s purchase price as a down payment, not counting fees and closing costs. If you cannot provide that amount, you will have to pay private mortgage insurances (PMI) until you have paid that 20%. If you have good credit, you may qualify for an FHA loan with only 3.5% down. Buyers with poor credit will be asked to pay 10%.
When you refinance a loan, you are taking out a second mortgage to pay back the first. Refinancing a mortgage allows you access to your equity; it also gives you a chance to get a better interest rate. If interest rates have dropped significantly since you took on your mortgage, or if your credit rating has greatly improved, refinancing might be a good way for you to lower your monthly payments.
When you first take out a mortgage, most of your monthly payments are paying off interest. As you continue to make payments, the amount of interest paid drops down, and by the end of your loan, you are paying almost entirely on the home itself, known as the principle. This is known as amortization. It’s frustrating to see the amount you owe on the home barely decreasing as you make your first several payments, but you will eventually pick up speed (as principle payments go up and interest payments go down) and start seeing a sizable dent in the amount you owe.
Mortgages can be very confusing, especially for a first time home owner. Make sure you are working with a lender that will happily answer all of your questions, in a way you can understand, and don’t hesitate to ask. It’s always better to ask too many questions than to walk away confused and unsure of what you’re agreeing to when you accept a mortgage.
Bank Program to Help Some Homeowners
Many homeowners because of the economy, and loss of jobs, or a different financial situation are facing foreclosure on their homes. In a typical foreclosure situation, a lender would take over the deed to the property and evict the homeowners. Since it is hard for many victims of foreclosure to find a new and affordable place to live, some banks are coming up with other foreclosure programs to help some homeowners.
One of these programs is called “Foreclosure Alternatives” and this program allows those homeowners in Texas, Florida, Illinois, Michigan, New Jersey, and Ohio who used Citi as their lender to stay in their foreclosed home for six months if they turn over the deed to the property. This helps the borrower’s credit score to avoid being hit so hard and allows homeowners more time to figure out their financial situation and living arrangements. This program will help at least 1,000 homeowners and may be expanded nationwide.
Other programs and lenders are extended the time it takes to complete a foreclosure in an effort to help homeowners as well as lenders. Many people feel that if they owe more than current home’s value, they should not even considering buying another home and this is also hurting the housing market. This program and others like it are attempting to help fix this problem and hopefully increase the housing market and financial situations for many in the future.
This program will also help homeowners with relocation and other costs to get them started, although the homeowner will still need to pay utility bills and costs. This program will also help those homeowners that may not qualify for a short sale or mortgage modifications. This will hopefully help not only homeowners, but lenders, and the whole housing market in general.