Monday, March 26, 2012

Home buying much cheaper than renting according to CNN Money

The answer has never been clearer: Buy.
In 98 of the top 100 housing markets, buying a home is more affordable than renting, according to the online real estate company Trulia. Only Honolulu and San Francisco buck the trend.
There are several reasons. Home prices are falling. Mortgage interest rates are at historically low levels. And rents are on the rise.
Of course, many renters are not in a position to buy. For one, it's hard to get a mortgage these days, despite low rates. And paying rent can push them further away from being able to afford to buy.
"Rising rents make it harder for people to save for a down payment, which is the biggest barrier to buying a home that aspiring homeowners face," Jed Kolko, Trulia's chief economist.
The nation's cheapest buyer's market is Detroit, where purchasing is only 3.7 times more expensive than renting.
Other top five metro areas where buying is much better than renting are Oklahoma City, Dayton, Ohio,Warren, Mich. and Toledo, Ohio.

Rankings like these, however, can obscure the factors that go into each decision.

Housing markets, even within a single metro area, typically have local submarkets. Take New York City, for example. Renting in Manhattan is more affordable than buying. But in suburban Westchester County just miles to the north, buying is the more affordable option.
The size of the home can also make a difference. In some markets, renting can be a better deal on larger homes, according to Trulia.

In San Francisco, for example, studio and one-bedroom apartments sell for 13.1 times rent, while three bedrooms or larger sell for more than 18 times rent.

The Trulia survey does not take into account home price trends, which are another factor for individuals choosing whether to buy or rent.
"People will pay more for a home if they expect prices to rise and give them a better return on their investment," said Kolko.
Those calculations are about to change, according to Ken H. Johnson, a professor of real estate at Florida International who has studied the buy-vs-rent question extensively. He believes home prices nationally have bottomed.
"The ship has turned," he said. "Markets should slowly start to recover. Housing will return to its traditional role of a safety investment."
If so, that adds an incentive to buy. And investing in many of the most expensive markets may be even safer.

Kolko pointed out that places like Honolulu, San Francisco and Boston have strong long-term growth prospects. They also have little physical space to grow, a factor that tends to keep prices strong.

On the other hand, old areas that aren't growing much -- while cheap -- may not return much in the long run.
"Buying is much cheaper than renting in slow-growing places with high vacancy rates and land to spare, like Detroit and Cleveland, where prices are unlikely to improve much in the future," he said.
Original article found here.
Smitha and Rahul Ramchandani are a licensed real estate Broker-Salesperson/Sales Representative Team with Keller Williams in New Jersey. They are Buyer Specialists and a Home Marketing Experts. You can reach Smitha and Rahul and their team online at: http://www.Morris-Homes.com.
Their team specialize in North Central New Jersey including towns such as Boonton, Chatham, Chester, Convent Station, Denville, East Hanover, Florham Park, Hanover, Harding Twp., Mendham, Montville, Morristown, Morris Plains, Morris Twp., Mountain Lakes, Parsippany, Randolph, Rockaway, Whippany

Tuesday, March 20, 2012

Warren Buffett: "I'd Buy Up 'A Couple Hundred Thousand' Single-Family Homes If I Could"

Some interesting housing comments from Berkshire Hathaway’s Warren Buffet:
Warren Buffett says along with equities, single-family homes are a very attractive investment right now.
Appearing live on CNBC's Squawk Box, Buffett tells Becky Quick he'd buy up "a couple hundred thousand" single family homes if it were practical to do so.
If held for a long period of time and purchased at low rates, Buffett says houses are even better than stocks.  He advises buyers to take out a 30-year mortgage and refinance if rates go down.
Encouraging words, Mr. Buffet! With interest rates steadily at an all time low, you really can’t afford to miss the opportunity to buy your dream home, or if you’ve already found it, the chance to invest in real estate. One property, two properties, or more! Lending is tight, but it’s a real possibility that investors will see some great long term returns on purchases!
Call us today to for more information!
You find the original article by Alex Crippen here.
Smitha and Rahul Ramchandani are a licensed real estate Broker-Salesperson/Sales Representative Team with Keller Williams in New Jersey. They are Buyer Specialists and a Home Marketing Experts. You can reach Smitha and Rahul and their team online at: http://www.Morris-Homes.com.
Their team specialize in North Central New Jersey including towns such as Boonton, Chatham, Chester, Convent Station, Denville, East Hanover, Florham Park, Hanover, Harding Twp., Mendham, Montville, Morristown, Morris Plains, Morris Twp., Mountain Lakes, Parsippany, Randolph, Rockaway, Whippany

Friday, March 9, 2012

March 2012-Market Update

Opportunities in the housing market continue to grow for buyers and sellers. Home affordability, driven mostly by record low interest rates, is among the lowest it has ever been. According to the National Association of Realtors, and based on national averages, the payments on a home today represent 12.8% of the median household income. This is both a good sign for those looking to purchase a home, and for the economy overall as consumers are keeping more money in their pockets.
If you’re a seller, the housing market shows signs of transitioning from a buyers’ market more of a balanced one. This means that home owners should start to see prices stabilize and begin to grow, presenting more favorable opportunities for those looking to sell their homes. In regards to the number of homes on the market, a key indicator of the health of the housing market, Lawrence Yun, NAR chief economist, said, “The broad inventory condition can be described as moving into a rough balance, not favoring buyers or sellers.”
With continuing job creation, the improving housing sector, and signs that the banks are beginning to lend more, 2012 looks to offer promising opportunities to both those looking to buy or sell a home.

Home Sales
in millions
Home sales were up 4.3% in January from December 2011 to 4.57 million (seasonally adjusted), and this is up from 0.7% from the year before.  The steady increase in home sales over the last few months is positive encouragement for a continued housing recovery. Lawrence Yun said, “The uptrend in home sales is in line with all of the underlying fundamentals– pent-up household formation [lack of new home construction], record-low mortgage interest rates, bargain home prices, sustained job creation, and rising rents.”

.
Home Price
in thousands
Adding to home affordability in January, the median home price was down 2% from a year ago, to $154,700. While prices are still declining, foreclosed and other distressed properties, which have been putting downward pressure on home prices, are being moved more efficiently off the market, and default rates on home mortgage payments for the past three years are among the lowest in history.


Inventory- Month's Supply

in months
As sales increase with a growing demand for homes, the inventory of properties for sale fell 0.4% to 2.31 million, or a 6.1-month supply at the current sales level. This is down from a 6.4-month supply in December 2011. Historically, a 6-month supply has meant that the housing sector is balanced–favoring neither buyers’ nor sellers’.

Source: National Association of Realtors

Interest Rates
The most powerful indicator of home affordability, interest rates on mortgage loans, were down again in January. The national average for a 30-year fixed mortgage was 3.92%, down 0.04% from the month before, and down nearly an entire percentage point (0.84%) from a year ago. These historically low rates, coupled with today’s home prices, represent an incredible opportunity for home buyers.


This Month's Video


Topics For Home Owners, Buyers & Sellers
Preparing your home for sale can seem daunting, but these tips will help you get the best price in the least amount of time.
1. Organizing and cleaning are crucial when prepping a home for sale. Potential homebuyers have a more positive reaction to a home that is clutter-free and that gives them the feeling it is “move-in ready.”
2. Determine replacement estimates before listing your home, even if you are not planning on making the replacements yourself. This information can help buyers make informed decisions.
3. Have your warranties ready—especially for home appliances that will stay with the home after the sale.
4. Curb appeal is a crucial factor because it determines first impressions. A poor first impression can cloud their entire opinion about the home.

Contact me,your local real estate expert, for information about what's going on in our area. 
Brought to you by KW Research. For additional graphs and details, please see the This Month in Real Estate PowerPoint Report. 
The opinions expressed in This Month in Real Estate are intended to supplement opinions on real estate expressed by local and national media, local real estate agents and other expert sources.  You should not treat any opinion expressed in This Month in Real Estate as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of opinion.  Keller Williams Realty, Inc., does not guarantee and is not responsible for the accuracy or completeness of information, and provides said information without warranties of any kind.  All information presented herein is intended and should be used for educational purposes only.  Nothing herein should be construed as investment advice.  You should always conduct your own research and due diligence and obtain professional advice before making any investment decision.  All investments involve some degree of risk.  Keller Williams Realty, Inc., will not be liable for any loss or damage caused by your reliance on information contained in This Month in Real Estate.
Smitha and Rahul Ramchandani are a licensed real estate Broker-Salesperson/Sales Representative Team with Keller Williams in New Jersey. They are Buyer Specialists and a Home Marketing Experts. You can reach Smitha and Rahul and their team online at: http://www.Morris-Homes.com.
Their team specialize in North Central New Jersey including towns such as Boonton, Chatham, Chester, Convent Station, Denville, East Hanover, Florham Park, Hanover, Harding Twp., Mendham, Montville, Morristown, Morris Plains, Morris Twp., Mountain Lakes, Parsippany, Randolph, Rockaway, Whippany

Thursday, March 1, 2012

Is It the Price of Your Home or the Price of Your Happiness?

When it comes to real estate, it’s easy for sellers and buyers to get caught up in statistics and numbers as the most important aspect of their transactions… getting the most profit, the best deal, at the lowest rates, etc. Those are certainly important, but at its heart,  this industry is really about families and dreams and people living their lives to the fullest. Sometimes a better price comes at the cost of you or your family’s happiness, and it can be hard to keep that perspective.
With that in mind, we wanted to share this heart-warming story from one of the industry’s foremost leaders, Steve Harney.
'I recently gave a presentation about the current real estate market to a group of home sellers in a city in the Northeast.  That night, I explained to them that home values in their area were about to be negatively impacted by a surge of distressed properties entering their region over the next year. As I have often found to be the case, the homeowners were very receptive; many felt that they now had the information they needed to make a good decision with regard to pricing their home to sell in this market.
After the class that night, several of the homeowners came up to me to privately discuss their personal situations. One of these owners said something I will never forget. He shared with me that he had come to a revelation that night.
This particular homeowner had put his home on the market with plans to move to Florida, where his daughter and his infant grandson live. He missed his daughter very much and missed his grandson even more. He hated every passing day that he wasn’t able to “hold the baby in my arms and rock him to sleep”. That night at the seminar, he thanked me for reminding him of the reason he put his home on the market in the first place – he needed to rejoin his family. I was struck by the wisdom of his final words to me before he turned to walk away.
“I thought I was putting a price on my home. While I hold out– hoping to get a few more dollars, I am actually putting a value on my happiness.”
He adjusted his asking price that night and sold it three days later. Very soon, he will be able to rock his grandson to sleep in his arms, both of them happy and content.'

The story from Steve Harney was originally read by us here.
Smitha and Rahul Ramchandani are a licensed real estate Broker-Salesperson/Sales Representative Team with Keller Williams in New Jersey. They are Buyer Specialists and a Home Marketing Experts. You can reach Smitha and Rahul and their team online at: http://www.Morris-Homes.com.
Their team specialize in North Central New Jersey including towns such as Boonton, Chatham, Chester, Convent Station, Denville, East Hanover, Florham Park, Hanover, Harding Twp., Mendham, Montville, Morristown, Morris Plains, Morris Twp., Mountain Lakes, Parsippany, Randolph, Rockaway, Whippany