buy real estate

Homeowners and Renters Show Increased Interest in Homebuying

Increased Interest in HomebuyingDespite the recession and declines in home prices, Americans still view homeownership as being important to the economy and the American family, according to the “Housing 360 Survey” conducted among more than 3,005 homeowners and renters across the U.S.

“We thought people would be soured after watching home values fall but instead we found the typical American still places high value on homeownership,” said Frank Anton, CEO of Hanley Wood, LLC, the nation’s premier media and data research company serving the housing and construction industries. “We found this holds across all demographic groups and across the country, even in hard-hit places like Nevada and Arizona where there have been 50 percent or more declines in value. The increase in the rise of rental rates in many markets is one factor driving people to consider buying.”

The survey found that despite the recession and housing crisis, homeownership is still very important—that both renters and homeowners feel it is a good time to buy a home and 19 percent of homeowners and 29 percent of renters are considering buying a home in the next two years. In fact, the survey findings support that up to two million potential home buying consumers are waiting to jump into the market when the time is right.

The “Housing 360 Survey” answers why renters and homeowners are not buying. For homeowners, there is no urgency to buy, and given the turmoil in the markets, many of them are happy where they are. For renters, there is also no urgency to purchase a home. There are major problems they are facing: First, they have the challenges of being able to qualify for a mortgage and raise the down payment. And second, they have concerns about the economy and their jobs.

The survey covers 70 questions relating to Americans’ decision-making process and attitudes on homeownership, renting, remodeling, financing, home buying, gasoline prices, household relationships, and retirement planning. Sixty two percent of respondents were first-time homeowners. The survey found 89 percent of owners and 59 percent of renters feel that homeownership is important to the American family while 87 percent of owners and 73 percent of renters feel homeownership is important to the economy overall.

Some significant findings in the survey include:

  • Now is a good time to buy. 72 percent of owners and 59 percent of renters think now is a good or very good time to buy.
  • New and existing homes both attractive. 29 percent of owners and 12 percent of renters would prefer to buy a new home. 34 percent of owners and 41 percent of renters would prefer to buy an existing home. People prefer new homes because they are new and there is less maintenance. They prefer existing homes because they are more affordable and they want to live in an existing community.
  • Renting is a preferred choice for many. People rent for financial reasons, for convenience and for flexibility.
  • Doubling up trends increased. 30 percent of respondents are “doubling up” – living with adult children or parents.
  • Now is a good time to remodel. 42 percent of owners say now is a good time to remodel. Top remodeling priorities are maintenance and energy efficiency. Most homeowners will pay for remodeling from personal savings.
  • Staying put in retirement. 60 percent of homeowners plan to stay in their current home for their entire retirement.

All data is courtesy of the “Hanley Wood Housing 360 Survey”.

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Home and Commercial Inspections in the Columbia SC area is our specialty! Every year we help hundreds of clients save tens of thousands of dollars, by responsibly finding and exposing conditions that threaten property, value and safety. To learn how we may be able to serve you, please click and read, or call 803-261-5810.

Real Estate: To Buy, or Not to Buy?

Buying a home is a major emotional and financial decision. Often times, people want to buy a home; however, emotionally cannot afford to commit to the home-buying process. They are, in fact, afraid.

“My payment will be too high” or “What if I lose my job,” are some of the “excuses” people often use.

Here are some of the major advantages of buying a home:

  1. Quality of Life. Home-buying and living in your home affects the quality of life. It adds to your confidence, giving you a sense of pride and satisfaction. You have a sense of emotional well-being as well as peace of mind.
  2. Tax Deductibility of Mortgage Interest. The entire mortgage interest payment is tax-deductible and the “net” cost of the mortgage payment actually puts money in your pocket.
  3. Tax Deductibility of Property Taxes. Similarly, property taxes are due and payable and may seem like a lot of money. Property taxes are also tax deductible and you get it back in the form of tax savings.
  4. Appreciation Potential. Typically and historically, nationwide property values have gone up in value at around 7% per year. In some areas properties have, in certain good economic times, appreciated at the rate of over 20% per year. At 7% conservative rate, the property doubles in value every 10 years. So, a property worth $500,000 will be worth $1,000,000, equaling a gain of $50,000 on a yearly basis. For an average person, it is difficult to save that kind of money.
  5. Deferred Capital Gains. Real estate investment capital gains can be deferred by exchanging the property for like-kind property. So, when the property appreciates and you decide to sell it and do no want to pay the capital gains tax, you can buy another property of like-kind and avoid capital gains tax. This allows you to switch properties when required.
  6. Once in a Lifetime Exclusion. Upon the sale of a personal residence, the IRS allows an exemption and one does not have to pay taxes on a gain of $250,000, if single and up to a gain of $500,000, if married. For example, if you’re single and buy a property and live there for five years and the property appreciates by $250,000, you can sell the property and not pay any taxes at all.
  7. Principal Accumulation. This is strongly tied to appreciation in the property value. Payments made toward the mortgage payment help you accumulate principal which essentially helps you establish a reserve savings account which you can later tap into by obtaining an equity line of credit or getting an equity loan, if needed.
  8. Pride of Ownership. It is fun to invite people to “your” home and feel good about it. It also instills confidence in your family, your children and makes them more confident individuals.
  9. No Landlord. You are in-charge and do not have to deal with a landlord who might not make repairs or maintain the property as you would like.
  10. Leverage. Where else can you buy this size of an investment with 0-5-10% down. You can buy a property for a personal residence for as low as zero down if your credit is good, and watch the investment grow. This, in turn, allows the net investment return to be much higher (than the actual appreciation rate on the value of the property). To follow up on the example earlier, if the property grows at 7% and doubles in value, since the amount invested in buying the property might be only $50,000 (at 10% down payment), the actual return is much higher on $50,000 investment.
  11. The Real Cost of Renting! At $700 per month, with a 6% rental increase per year, you will pay $110,719 over a 10 year period. If the rent is higher, you can count on paying much more and not getting any return or tax benefits at all.

Can you add more to this list of advantages to buying a home? We’d love to see what you could add to our list. Just use the comment link below.

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Home and Commercial Inspections in the Columbia SC area is our specialty! Every year we help hundreds of clients save tens of thousands of dollars, by responsibly finding and exposing conditions that threaten property, value and safety. To learn how we may be able to serve you, please click and read, or call 803-261-5810.

Real Estate: Tips for Timing Your Purchase

While you’re trying to decide when the best time to buy real estate might be, line up a team who can help you accomplish your goal when you decide to move forward. You can do this by researching online, attending open houses in the area and asking a real estate agent to keep you on top of market fluctuations.

Your decision to buy should be based on your personal financial situation, not on the national or global economy.

If you’re a home buyer, make sure you have job security, a relatively healthy economy in your local area and a plan to stay put for at least 10 years.

Good economic news will help fence-sitters make the decision to get serious about moving. Bad news of any sort can cause the market to stall.

Find a good local real estate agent to work with who understands your needs, and wait to buy until the time is right for you. It could take you a year or so to make the final decision. Some agents don’t have the patience to stick it out.

One of the most difficult aspects of the current home buying process is financing the transaction. Find a mortgage broker who is a real professional, has been in the business for years and who understands what current underwriters will require from you to process your loan.

Assemble all the financial documents you’ll need for loan approval even before you start looking. Ask your real estate agent or broker to have your loan package previewed by an underwriter so you know beforehand if there are any problems.

Take care of any possible closing issues in advance so they don’t cause last-minute delays in closing. Your real estate agent can help you with this area.

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Home and Commercial Inspections in the Columbia SC area is our specialty! Every year we help hundreds of clients save tens of thousands of dollars, by responsibly finding and exposing conditions that threaten property, value and safety. To learn how we may be able to serve you, please click and read, or call 803-261-5810.