First-Time Homebuyer's Guide | AOL Real Estate

 

Mike Valdez fits the profile of a savvy first-time homebuyer perfectly. A 34-year-old financial analyst from New Rochelle, N.Y., he and his family had grown sick of living the renter's life. So two years ago he decided to test the market and find a townhouse for his growing family. But despite his financial aptitude, he quickly ran into a setback.
"We found a place we liked and ran the numbers," he says, but the young couple soon discovered that they had underestimated the burden of their college debt. They were forced to back out.

Click here for the rest of the story

Fannie Mae National Housing Survey 2012

Each quarter, Fannie Mae releases their National Housing Survey. They survey the American public on a multitude of questions concerning today’s housing market. We like to pull out some of the findings we deem most interesting each time it is released. Here they are for the most recent report:
84% of the general population believes that owning a home makes more sense than renting.

The Most Important Reasons to Buy a Home

When we talk about homeownership today, it seems that the financial aspects always jump to the front of the discussion. However, the study shows that the four major reasons a person buys a home have nothing to do with money. The top four reasons, in order, are:

1. It means having a good place to raise children and provide them with a good education
2. You have a physical structure where you and your family feel safe
3. It allows you to have more space for your family
4. It gives you control of what you do with your living space (renovations and updates)

The Home as an Investment

Though most people purchase a home for non-financial reasons, everyone realizes there is a money component to homeownership. Here is what they said on this issue:

• 63% of the general population believes that homeownership is a ‘safe’ investment.
• 53% believe that homeownership has more potential as an investment than any other traditional asset class.

Rent vs. Buy

We are always interested in the difference people see in renting vs. owning.

• 64% of renters have aspirations to someday own their own home
• 70% of renters think that owning is superior to renting

Bottom Line

Our belief in the value of homeownership grows each time this survey is released.

Feel free to contact me if you would like more info about homeownership!.

Neal Paskvan, Baird Warner    neal.paskvan@bairdwarner.com

Baird & Warner redefines real estate search

Baird & Warner has done this with the launch of our new website
. Watch this video to get a sense as to what’s possible with Baird & Warner’s new search processes.

With the launch of our new site, we give options to consumers to personalize their search process, from Local Search, Neighborhood Search, Lifestyle Search, Map Search, and Proximity Search.





Baird & Warner redefines real estate search

DOWNERS GROVE Homes On Average 12,551 Homes Sell Every Day in the U.S.

 

Here is a Breakdown of who the Buyers are.

The Facts Show  If you are FIRST TIME BUYER, Investor or CASH buyer, your investment will pay off.

If your Goal is to find a place of your own, and make it your Home, a Home where you can live the lifestyle you want to live, Now, may be the right time to take the first step.

Contact me if you would like to explore the the possibilities of having a home of your own. No cost consultation.

Neal Paskvan- DOWNRES GROVE Homes for Sale-Baird and Warner   neal.paskvan@bairdwarner.com

 

 

*No one telling you where to park of if you can have a pet.  No more waiting for the the washer and dryer to be available.. No more  concerns about who may is moving into the space  above or below or next to you. No one telling you when to turn the music down and well you get the idea.

NAR affordability index breaks new threshold | Housing Wire

 

The National Association of Realtors' affordability index broke the 200 mark for the first time ever, rising to   206.1 in January.

NAR President Moe Veissi said the breakthrough means a typical family has roughly double the income needed to purchase a median-priced home.

“For buyers who can qualify for a mortgage, now is a very good time to become a homeowner," he said.

The index is based on the relationship between median home price, median family income and average mortgage interest rate. A score of 100 is defined as the point where a median-income household has exactly enough income to qualify for the purchase of a median-priced, existing single-family home.

Considering the likelihood that interest rates and home prices will change little in the near future, NAR projects its affordability index to remain at elevated levels throughout 2012.

Home Prices by State-Provided by Corelogic

Remember all Real Estate is Local. Your area may not reflect your States overall change! Contact me if you would like to find out what home values are in your area. Downers Grove Real Estate Darien Real Estate

What Does Warren Buffet Think About Buying A Home?

Warren Buffet is seen by many as the greatest investor of our time. When he speaks, people listen. Like anyone else in his position of influence, he is criticized by some for using his bullhorn to promote his own business agendas at times. That makes it very interesting when we occasionally learn of how he privately advises those closest to him. Learn what he told his secretary.

Click here for the rest of the story

Energy Savings at Home | Energy Efficiency Tips | HouseLogic

 

Are You Looking for Energy Savings in All the Wrong Places?

Ack! Our energy costs are going up because too many of us are making the wrong judgment calls about how to save energy. Here’s why we’re having a disconnect.

Do you see your energy bills rising even if you’ve implemented up to three projects to save energy? In the first of our two-part Q&A with an expert on consumer attitudes toward energy efficiency, we look at the energy-saving truths many of us ignore. Hint: Replacing windows isn’t your best bet. Tomorrow, we’ll show you what you can do to actually start seeing some savings.
Suzanne Shelton is president and CEO of Shelton Group, a marketing agency specializing in sustainability and energy efficiency. Shelton Group’s annual Energy Pulse research report — released last fall — tracks consumer attitudes toward energy-related topics.

Read more: Read More from House Logic

 

Energy Savings at Home | Energy Efficiency Tips | HouseLogic

Downers Grove Real Estate In Real Estate, Keeping Current Matters!

 

There is too much misinformation being spread about today’s real estate market. Studies are being misinterpreted. Prominent names are being used to foster a point even if their quote is from years ago.

As an example, we want to look at a story published last week by The Fiscal Times titled The New American Dream: Rent, Don’t Buy. In the article, they claim:

“Call it the Big Selloff—America is headed toward a future in which fewer people own the spaces they call home… Those trends are just the beginning.”

We are not arguing that the homeownership rate is under downward pressure in this country. We are disputing some of the ‘evidence’ used in the article. Here are three points we want to refute:

The Homeownership Rate IS NOT in a Freefall

The article quotes a Morgan Stanley study from July 2011 which did make the argument that the homeownership rate was trending downward. Many others made the same point at that time. What the article failed to mention is that the homeownership rate unexpectedly increased in the third quarter of 2011! As DSNews reported in early November:

“After falling to a 13-year low during the second quarter, the homeownership rate posted a highly unexpected rise in the third quarter, according to a Census Bureau report.”

The jury is still out as to whether the homeownership rate will continue to fall or whether it has already bottomed out.

The Founders of Case-Shiller ARE NOT Saying Renting is Better

In the article mentioned above, they claim that the team that founded the prestigious Case-Shiller Pricing Index believes that buying makes little sense. The article explains that back in 2006 Robert Shiller presented a study based on data collected prior to 2005 showing that, over time, it made more sense to rent than buy. They use this information to conclude:

“Another skeptic is Yale economist Robert Shiller, co-creator of the Case-Shiller Home Price Index.”

They claim Shiller is a skeptic today based on what he said six years ago!

The major challenge we have with this is that Karl Case, the other founder of the Case Shiller Index, came out ten days ago saying that now is the time to buy. The New York Times in a story published on 12/30/2011 quotes Professor Case as saying:

“If you’re buying a house or apartment to live in and pay for over time, and can afford the payments, then it’s a terrific time to buy.”

Beracha and Johnson DID NOT Conclude That You Shouldn’t Buy

The Fiscal Times article went on to say:

“And in a paper this June in the journal Real Estate Economics, two researchers calculated that over the past 30 years, most often it would have been better to rent than buy.”

They were referring to the great study done by Beracha and Johnson titled Lessons from Over 30 Years of Buy versus Rent Decisions: Is the American Dream Always Wise? We are very familiar with this study as we posted on it back in May of last year. The paper does explain that over the last thirty years the financial benefits of buying vs. renting could be debated.

However, the conclusion of the paper left no room for argument. According to professors Beracha and Johnson, NOW IS THE TIME TO BUY!

“(F)undamental drivers now appear to be in place that favor homeownership over renting in the near term future…

“[This] might seem unwise to many given the recent crash in the real estate markets around the country. However, rent-to-price ratios now seem to be in place along with other fundamental drivers that favor ownership over renting.”

They conclude their research paper with this sentence:

“Conditions (historically low mortgage rates and relatively low rent-to-price ratios) now seem in place to favor future purchases.”

Dr. Johnson, Ph.D. — Florida International University (FIU) and Editor of the Journal of Housing Research, is now a guest blogger on this site and in November shared with us his current presentation on this issue. To download the presentation, go to http://realestate.fiu.edu/buyer-or-renter-nation.html.

Bottom Line

We attempt to keep our readers current on this very rapidly evolving housing market with this blog, our tweets, our facebook posts and our subscription service. The letters K-C-M preface each offering. They actually stand for ‘keeping current matters’. We believe that helping our followers stay on top of the latest information available will help correct the housing market.

 

 

The Power of Assumability

 

One of the rarely touted advantages of people taking FHA mortgages today is the fact that they are assumable. What that means is, when the FHA homebuyer of today is looking to sell his home, a qualified purchaser can “take over” their loan.

Most people believe that interest rates will return to a “normal” range (between 6.5% and 7%) in a couple of years. When you assume a mortgage, the terms remain the same. This means that a buyer five years from now can enjoy a 4 – 4.5% mortgage by assumption rather than the 6.5% – 7% mortgage they would get without it. Since most people buy homes based on how the monthly payment fits into their personal monthly budget, this is extremely impactful.

As an example, a $300,000 loan at 4% today carries with it a $1,432.25 principal and interest payment on a 30 year fixed mortgage. If offered for sale in five years, the purchaser could assume the $271,858.56 balance with the same $1,432.25 payment and remaining term of 25 years. The total payments over the 25 years would be $429,675.

Compare that to a new $272,000 loan at 6.5% for 25 years, which would carry a monthly payment of $1,836.56 (over $400 more a month than the assumption and more than $120,000 more over the 25 year term).

At 6.5% for 25 years, to wind up with the same payment as the assumed mortgage, our borrowers would only be getting $212,000…$60,000 LESS!

The point here is that, when rates go up, homes with assumable mortgages will have more value and will sell at higher prices because they are more affordable. As an additional bonus, the closing costs on assumable mortgages are significantly less (especially here in New York where NYS Mortgage Tax is such a large component of closing costs).

The borrowers must be credit-worthy of course (have good credit, qualifying income, and necessary assets to close), but they would have to be credit-worthy to get a new mortgage too!

Besides the multiple other reasons to obtain an FHA mortgage (low down payment requirements, extended income ratios, lower credit scores, and easier sourcing of funds), there is another perk. In the future, there is a good chance that you may be able to sell your home for more money because of the FHA loan’s assumability.

credit Dean Hartman

5 Real Estate Trends to Look For in 2012

 

Need some help Selling or Buying a home?  Contact me for a consultation.

 

5 Real Estate Trends to Look For in 2012

by The KCM Crew on January 3, 2012

Predicting trends during the most volatile housing market in American real estate history is no easy task. We strongly believe these are the five real estate items we should keep an eye on in 2012:

1. Buyers Will Return

In 2011, a lack of consumer confidence in the overall economy dramatically impacted the housing market. Buyers were afraid to make a purchasing decision on any big ticket item. By the end of 2011, consumer confidence began to return and sales increased. Economic conditions will continue to improve throughout 2012 and consumer sentiment will solidify. Once that happens, home buyers  will  realize   that now is the time to buy.

2. Foreclosures Will Increase

The ‘shadow inventory’ of foreclosures which has been growing since the robo-signing challenges of late 2010 will finally be introduced to the market. Distressed properties sell at discounted prices. They will impact the housing values of the non-distressed homes in the area.

3. Prices Will Soften

As more and more foreclosures come to market, there will be greater downward pressure on the values of houses in the region. Foreclosures impact values of non-distressed properties in two ways:

• They will eat up some of the buyer demand in the market.
• They will impact the appraisal on ALL transactions in the area.

An increase in foreclosures will have a negative impact on values. This will cause more homes to be underwater.

4. Short Sales Will Increase

As mentioned above, we strongly believe that home prices will soften through at least the first half of 2012. Falling prices will force more homeowners into a position of negative equity. Negative equity is one of the triggers that cause people to strategically default on their mortgage obligations. If this happens, there could be an increase in the number of foreclosures. However, we predict that banks will take preventative measures which will help many of these homes avoid foreclosure by easing the requirements in the short sale process for both homeowners and real estate professionals.

5. Great Agents Will Be VERY Successful

Real Estate professionals who have invested the money, time and energy to truly understand what is happening and why it is happening will separate themselves from their competition and do very well this year.

Those who take that next step of learning how to simply and effectively communicate the market to their clients will be seen as industry leaders. These experts will dominate their markets.

Bernanke calls for nationwide REO rental program « HousingWire

 

The government should consider helping the nation's vacant, unsold stock of foreclosed properties by supporting initiatives to occupy.

Federal Reserve Chairman Ben Bernanke believes that one aspect should be a government support program that allows renters to move into those houses.

In a letter Wednesday to ranking members on the House Committee of Financial Services, Reps. Spencer Bachus, R-Ala., and Barney Frank, D-Mass., Bernanke said that inefficiencies in the foreclosure and mortgage origination processes are dragging on the economic recovery.

Click Here to get the story by Jacob Gattney at HousingWire

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Open House update 7-24-11 Over 1,700 Open Houses In Chicago Land

Over 1,700 Open Houses In Chicago Land ... Check them out on line First..
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