Why a Real Estate EXPERT?

You need to work with someone who is an expert in the Real Estate field - you are making probably the largest investment you have ever made.  You need a person that understands the market, understandings how all the pieces it together, and can simply and effectively explain it to you so that you can make the best decision for yourself and your family.

I am ready to be that expert.  Carol Skees www.albuquerquenmhomesearch.com

Move Up Buyers - How to Save $100,000 over the Life of Your Loan

According to the Mortgage Bankers Association, interest rates that have been bumping against the bottom for awhile - are projected to rise to 4.4 percent by the end of the year, compared to 3.4 percent right now.

If the Buyer delays the purchase of the home until the end of the year, the price will be 3.1 percent higher.   Which along with the higher interest rate means that the buyer will be paying $262.09 more per month, or $3,384 more per year, or $101,520 over a 30 year mortgage.

Those a pretty massive savings for buying a home today verses waiting until the end of the year.

Financial Considerations for the Move-Up Buyers

Let's look at a scenario for Move-Up Buyers.  If we take a look at the 2006 price right here on the table - back in 2006, their house was worth 300,000.  They were thinking about moving to that house down the block - that really beautiful house with the built-in pool with the extra accrage.  But that house was $450,000 and they couldn't afford to buy it back in 2006.

They bought the $300,000 house instead.  Well now both of those house have dropped 20 percent. As the chart shows while their house dropped $60,000, the other dropped $90,000.  

So making your move now to the home of your dreams, you saved $30,000 by buying the house now and not in the crazyiness of 2006. Buyers know that prices have bottomed out, this is the time to move up.

Remember the recent Home Price Expectation Survey, 105 of the leading housing analysts call for a 3.1 percent increase in home values by the end of 2013.

Move Up Buyers

There are studies out there that Move-up buyers are entering the market, they are now saying "You know what? I have some equity in my house".  Negative equity is shrinking as prices are going up.  I feel a little bit more confident about housing right now.  They are thinking "Maybe I shouldn't wait to move up to that house of my dreams.

Why are these people moving forward? Well we can see that 49 perce say that they want a significently bigger house.  17 percent say they want the same size, they just want to live in a different neighborhood in the same town.  8 percent want the same size, but a nicer home.   Three percent are looking for a same size but more affordable.  Some of these sellers are moving across the country for a different job.

 Next we are going to the financial considerations of the move up buyer.

I appreciate any comments on this or my other blogs.

Finances - The Cost of Waiting to Purchase a Home.

We already know from the Home Price Expectation Survey that prices are going to go up 3.1 percent between December 2012 and January 2013   Looking at a house that costs $210,000 now, that means by year end that same house will cost $216,510. That is the 3.1 percent price increase.

We also know that the Mortgage Bankers Association projects that interest rates are going to inch up to 4.4 percent by the end of the year.

As the chart below shows, what that means to a buyer purchasing a $210,000 home today, that the purchase price of the house will be $216,510 by the end of the year.  And if they buy now their monthly principal & interest charge will be $931.31; but if they wait until the end of the year to purchase a home they will be paying $1,084.20  for their housing.

Buying now verses later is going to save them $153 a month; or a savings of $1,800 a year.  Over a 30-year mortgage, they will save over $55,000.  Yes that is right, the difference between buying now and buying a year year from now is $55,000 to the buyer.

Buyers - this is the impact on your pocketbook, and your financial future.

Tomorrow I am going to talk about MOVE-UP Buyers.

All comments are appreciated.

Do Generation X & Y Believe That Owning is Financial Better than Ranting

The  question is do the Generation X & Y believe they would be financially better off rent or buying.  For a answer to that question, I turned to the Joint  Center for Housing Studies at Harvard University.  According to their report, seventh-nine person of those under 25 years old believe owning a home is financially better than renting a home.  That number jumps to 86%  when they surveyed 25 to 34 year olds.

 

So  let's not get caught up in what people are talking about or what people are prophesying on.  Just look at the numbers.

Your comments are always appreciated on any of my blogs.

How Does Generation X and Generation Y Feel About Homeownership

Let's first talk about the Generation X and Generation Buyer and their belief in homeowners and whether or not they are going to jump in.  There has been way too much written about the fact that, well that generation doesn't believe in homeownership. That generation wants to be much more mobile.  That generation had too much student debt.  That generation likes living with their parents and theirs parents love have them living there.

There are all sorts of people writing beautiful essays on the fact that homeownership is dead in the country, because that Generation has decided that homeownership isn't important.

Well, let's look at the facts.  Let's not look at what people are thinking. The facts are number ONE - 43 percent of the X and Y generating are already homeowners.

Seventy-two percent say that homeownership is part of their personal American dream.  Not a part of the American dream, part of their personal American dream.

Ninety-three percent of those generations that are currently renting plan to purchase a home.  

So the people telling you that they don't plan to purchase a home, well the problem with this is every survey out there, including this one, shows that over 90 percent of the Generations X & Y plan to purchase a home sometime in the future.

Bears and Bulls Forecast of Home Pricing

Let's divide the Home Price Expectation Survey between what the top one quarter, the most aggressive people, the bulls of the market, what did they think?  This is the green line on the chart.  Then the purple line is the average of all one hundred.  Than take the bottom quarter, the bears, the  people who think most negatively about pricing going forward, of those hundred - the red line.

We could see that there are some  people, the bulls that think by 2017 we are going to see a 33.6 increase in prices, cumulatively, over those years.

The average is 23 percent.  But even the negatives, even the bears to the market, the people who are looking at pricing most negatively, are still seeing over the next five years an 11 percent increase in pricing.

Buyers are starting to understand the important of these numbers. Here is a survey done by Redfin.  What they ask is what percentage of buyers who believe that prices will rise in the next twelve months.  We can see just in the last year, the first quarter of 2012 to the fourth quarter of 2012, the number is climbing.  Meaning that just a year ago now, people were saying, "Well there is a 34 percent chance that prices are going to go up in the next 12 months."  That number had more than doubled to 71 percent going into 2012.

That is creating an urgency in the buyer.  If a buyer knows - if they are sitting on the fence and they believe strongly that prices are going to go up, guess what they are doing?  They are jumping off the fence.  That is why I believe very strongly that there is going to be continued demand for housing going through 2012.

The next series of my blog will breakdown the Buyers down into two groups:
       Generation X and Generation Y Buyers
       Move-Up Buyers

Home Price Expectation Survey

Yesterday I told you that we would look at the forecast of home prices on a broader basis than a few individual analysts.  "Home Price Expectation Survey" done by Pulsenomics talks to over a hundred of the leading analysts in the country. People who know what they are talking about.  Then they mesh their answers together.  So it is not one person saying, "This is what we think." Or one organization saying, "This is what we think.".  What they do is take over a hundred of the leading analysts in the country and say, "What are your guesses going forward over the next few years?" Then they take all of those hundred plus projections and mesh them into one number.

The analogy I like to use when talking to you is if we had a jar of jelly beans in front of a room of a hundred people, if any one of those people guessed how many beans were in the jar, some would guess way too high, some would guess way to low.  But if we asked all hundred people to guess and then we averaged out all of there answers, we would come up with a number real close to the number of beans in that jelly bean jar.  That is what the Home Price Expectation Survey is.

Pre-bubble, the normal appreciate in real estate was 3.6 percent a year.  During the bubble, from the first quarter of 2000 to the second quarter of 2006, appreciation shot up to 10.4 percent - triple what is normally would be.  Well obviously, that was an anomaly.

What happens after an anomaly? A correction. So during the bust,  prices dropped on an annual basis of 5.7 percent. But according to the Home Price Expectation Survey, prices over the next couple of years are going to go back to a 3.3 percent appreciation on an annual basis.

Tomorrow I  am going to be talking about the bulls and bears in this survey, and their projections.

All comments are appreciated.

Professional's Price Increases Forecasts

There are a lot of people, especially at the beginning of the year, like to make their projections - where they think housing is going to be at the end of 2013. JP Morgan thinks prices are going to be up 9.7 percent. Barclay's Capital thinks they are going to be up 5.5 percent. Capital Economics, 5 percent.  Freddie Mac thinks there is going to be a two to three percent in pricing.

Now those are individual entities that are taking a guess based on what their analysis of the market and the market data as to where prices are going to be at the end of the year.  Now people could get caught up into that.  We could love - like the JP Morgan projection.  But let's not take any one group and say they are right or they are wrong.  Tomorrow I am going to blog about the Home Price Expectation Survey.

When is the best time in the annual cycle to purchase a home?

The chart below shows that year over year,  prices are going down at the beginning of the year then by mid-year that start to creep up over last year's prices.  So the year over year comparisons are continuing to mount.  I think that we will continue to see that to a certain degree.

Under $250K Four Bed home for sale - NW Albuquerque w/three car garage

Under $250K Four Bed home for sale - NW Albuquerque w/three car garage.  I have this beautiful four bedroom home for sell in Northwest Albuquerque, near Cottonwood Mall, and Paseo Del Norte.  There is a living room, family room, formal dining room, and eat-in kitchen.  One of the bedrooms is on the main floor, right next to a full bath.

Upstairs you will find a massive master bedroom, with two walk-in closets.  Master bath has a shower and a soaking tub, plus double sinks.  There is a deck off the master bedroom that has absolutely beautiful views of the Sandia Mountains, and the valley. For complete information click here.

Come see this Four Bedroom home for sale in NW Albuquerque with a three car garage for under $250K.

Four Bedroom home for sale in NW Albuquerque with a three car garage for under $250K

Large Family Room Immediately off the Kitchen

Large Master Bedroom with two walk-in closets

This is the view from the upper level. Imagine watching the balloon fiesta from here.

Forecast that 30 year mortgage rates will rise in 2013

The reason I believe that demand is going to keep on coming very strong is a look at mortgage rates.  We are now going back two years on interest rates and we can see almost every single week - because this is a weekly look - it is a little lower than it was the week before.  It seems like we are bottoming out right now at that approximately 3.5%  And there are projections, which I will talk about tomorrow that interest rates might tick up, inch up over the next year through 2013.

But right now there is a demand there.  Home affordability, prices verses interest rate is really in a beautiful place for people.   You can see that prices, whether it be the ten-city composite or the twenty-city composite, are bouncing - bouncing along the bottom there.  They are no longer in free fall.  Again, I think in most of the country right now, we are going to see some nice price appreciation over the next year.  We will get to that latter.

All comments on my blogs are appreciated.  Thank You