TIME TO BUY A HOME OR RENT AGAIN – I KNOW YOU HEARD IT BEFORE!

Posted on May 25, 2012

 

FACT:  Interest rates are still at an amazing low.  I had a client lock in on her loan on Wednesday at 3.75% with no points.  Hello – amazing right?

QUANDARY:  Do I rent or do I commit to home ownership.

This is the time when this conflict comes up in people’s consciousness.  What do I do? Which way do I go?
Some people have leases that are about to renew.  Others are moving to a new area and are just not sure of the real estate market in the area where they are moving.  Others still feel uneasy about the economy and are waiting for the shoe to drop and maybe they lose their jobs.  

When the  time arrives to make that decision there are generally two types of people and of course shades of grey there of —

 1.  Some list the pro’s and cons and decide what makes the most sense in their lives — financially and emotionally; letting heart and logic have equal say in the ultimate decision.  

 2.  Others, wearing the glasses of indecision or fear, limit their decision to what feels right in a narrow comfort zone.
For those, it creates a great deal of angst in their lives because home ownership is a huge deal and  says a lot to to the world and to themselves.  It says “I am committed to something”– and for some commitment is a hard pill to swallow.

I heard this podcast on NPR in 2007 and they repeated it again in 2012.   Some information still quite relevant.   All about Young Home Owners.  Take a moment and have a listen.

http://onpoint.wbur.org/2012/03/07/young-homeowners/player

It’s 2012, you’re a young American, and the U.S. housing market and mortgage rates are beaten down as low as we’ve ever seen.  Is it time to buy a house?  For twenty-somethings or young thirties with college debt and no job and living in mom’s basement, that may be the cue to start laughing.

But hard times don’t last forever, do they?  Mortgage rates in the three percents.  Rock bottom.  Foreclosed houses going for a song.  Rents, as the man says, “too damn high.”  Is it time to do it?  Somehow?  Somewhere?

This hour, On Point:  If you’re young in America, is it time to buy a home?
-Tom Ashbrook

I have been selling Real Estate in Central Virginia since 1980 and have experienced all types of markets.  As anything perception are people’s reality.    You change your perception you change your reality.

 
I really encourage anyone who is in this decision making time —Owning Versus Renting — See if this form helps you in that decision making process.  Work the pros and cons for you in your life.   

http://www.nytimes.com/interactive/business/buy-rent-calculator.html

It really is a great opportunity if it makes sense for you!

Remember stepping outside your comfort zone is where the magic happens.

 
“You are always only one choice away from changing your life.” ~ Mary Blochowiak

No Regrets about Homeownership
Despite the ups and downs of the housing market, most homeowners, including those who are underwater on their mortgages, don’t regret their decision to own a home. In a recent survey by the National Association of Home Builders, three out of four Americans believe that homeownership is the best long-term investment and is worth the risk. Some 95 percent say they are happy with the decision to own a home.
That sentiment is also strong among homeowners who are underwater on their mortgages. Nearly two-thirds (65 percent) believe owning a home is worth the risk of the ups and downs of the housing market, and 83 percent of say they are happy with their decision to own a home.
Four out of five homeowners overall (80 percent) say they would advise a friend or family member to buy a home, while slightly fewer (78 percent) underwater homeowners would do the same. Only 19 percent of underwater homeowners believe homeownership is too risky.

Please give strong thought to home ownership. Interest Rates are below 4% now. If you are planning on living in your home three years or longer owning versus renting really makes sense.

In the words of Steve Harney of KCM:

“One of the things I often hear from people I meet is that real estate and mortgage professionals should have seen the current housing crisis coming and done something to prevent it. We should have realized that easing lending practices would lead to millions of families buying a home they could never afford. We should have warned our neighbors not to use their homes as ATMs. We should have realized that the economy could never withstand such growth and was about to crash.

Maybe these people are correct. Looking back, perhaps we could have been better stewards of the home buying process. We are committed to not making that same mistake again. Now, if we see a possible challenge in the future, we will speak up. That is what caused the writing of this blog post.

WE MUST SOUND THE ALARMS!

ALARM: Homeownership Percentage Has Dropped Dramatically!!

MSNBC.com, in an article entitled Housing Bust Worst Since Great Depression reported:

“The analysis by the Census Bureau found the homeownership rate fell to 65.1 percent last year… analysts say the U.S. may never return to its mid-decade housing boom peak in which nearly 70 percent of occupied households were owned by their residents.”

ALARM: People Are Losing Hope in the American Dream

In the same article, Patrick Newport, economist with IHS Global Insight is quoted saying:

“The changes now taking place are mind-boggling: the housing market has completely crashed and attitudes toward housing are shifting from owning to renting. While 10 years ago owning a home was the American Dream, I’m not sure a lot of people still think that way.”

ALARM: The Safety and Well Being of the Family Being Sacrificed

If we look at Fannie Mae’s quarterly National Home Survey, as far back as we can go, the top four reasons for buying a home are the same. The top four reasons people buy a home are:

It means having a good place to raise children and provide them with a good education
To have a physical structure where their family feels safe
It allows for more space for their family
It gives them control over what they do with their living space including renovations and updates.
Are children no longer important? Is safety less of a consideration today? Is the pride of homeownership soon to be forgotten? We must look at the long range consequences of being a renters’ society.

ALARM: Building Family Wealth Being Threatened

Let’s look at homeownership as an investment. The Federal Reserve does a survey every 3 years. In 1998 the average Homeowner’s net worth exceeded that of renters by 31 times. In 2001 it was 36 times and eventually in 2007 it was all the way up to 46 times that of renters. Now, homeownership isn’t about a guaranteed financial short-term return – the market goes up, down and back up again. We have to be prepared for the long-term and a key component to wealth is homeownership. Even in these toughest of times, the wealth of the homeowner is over 30 times that of renters.

At a time when we are discussing the gap in wealth between the top 1% and the other 99%, how does the less fortunate paying rent to pay off the mortgages of the more fortunate make any sense?

Bottom Line

Homeownership is important to the American family. If we lose this as a basic concept, what else do we lose? We didn’t realize the consequences when it was too easy to buy a house a few years ago and we are paying a price for that. We will pay an even larger price if we don’t realize the consequences of it being much too difficult for many to own a home today. SOUND THE ALARMS!



5 Credit Myths

Take a moment. This is very interesting and a good read! Of course depending on what your personal situation might be, this really is a great time to buy a home. Interest rates are now below 4%. Depending on what your real estate needs might look like, you may find with these low interest rates, you can have a monthly payment that would be less than your rental payment.

If you would like to start that process just email me or give me a call. I have been selling real estate in this area since 1980 and am very familiar with the market.

A New Day … A New Chapter

So when I drove into the office today at Montague Miller & Company Realtors and turned into our parking lot I was hit with a surprise. I noticed that there was a new temporary vinyl sign covering the old sign at Mint Printing. After maybe 2 years trying to rent the building or selling the business – there are now new residents in the Mint Printing building – It is now a Dive and Hobby Shop.

I was surprised at my reaction. After having pulled into this parking lot for 26 years (my mind always filled with “my what to do list for the day” – including today)- sometimes the Mint Printing sign and building came forward in my consciousness. Some days the building and sign were invisible to me and it didn’t register at all. This morning I noticed it.

It made me happy on one level because I have been a diver for too many years to remember and always feeling I am part fish- it brought back many memories of diving and being by the water and loving every minute of it.

On another level it was like missing an old friend. Many times in the past, I would be in Mint Printing several times a week – picking up Blue Prints for builders or large copies of drawings for displays at my new construction models or picking up signs that we would use for our Booth at The Blue Ridge Home Show. I got to know the people at Mint Printing pretty well as you could imagine. After all they were our next door neighbors.

Now mind you I have not been inside there for a while because as we all know – with the 24 hour Kinkos business model and with Overnight Prints etc. we can do things a lot cheaper and a lot quicker using the internet. It’s kind of like the days before answering machines and life was fine and then you got one and “how could I live without one”. I so remember the day we bought our first fax machine here at Montague Miller. I was the managing broker then and I remember thinking “oh my goodness our business lives will be changed forever”. And now coming from the Charlottesville Area Association of Realtor’s meeting this morning – DocuSign and e-signatures are not the future it is the NOW. What might take us a day to negotiate a contract it can happen in a 1/2 hour. Kinda crazy don’t you think?

We live in an ever changing world. The “naive me” is hoping that the past customers who used the services of Mint Printing didn’t help put them out of business. “The wise me (and the bit guilty me”) knows we did on some level. “The naive me” is hoping the owner of the company just wanted to retire and live the good life. He had worked hard and it was now time to relax. I hope that is the case anyway. I wish them all well. My only regret is that we didn’t do the neighborly thing and throw a going away party for them as all good neighbors always do.

Oh and one other thing —I always used Mint Printing as a landmark – even as recently as yesterday giving people directions to our building. I always said “we are right next to Mint Printing – in the large three story 1960′s red brick building”. Even in the time of GPS – people often like to know the landmarks to know they have arrived.

I guess from now on I will have to say we are next to The Dive and Hobby Shop – doesn’t have the same ring but I guess I will get used to it.

YMCA on Park Land or Private Club

Always many who have different needs and concerns put in their perspective on this issue. After all this is a democracy. Interesting that those that have private concerns also want park land for their use. It seems to me, when you are looking at anywhere from $60 a month (for a single – not to mention a family) on up to have a fitness membership with a private club and people are having to take hard looks at how they spend their money – isn’t it a good thing that those who are not as flush with money might have a healthy and more reasonable choice to sustain their health and fitness too?

Testimony heard in case against lease for YMCA

A Real Estate Miracle – Now is the Time!– Barbara Corcoran

Business Insider’s Money Game interviewed real estate expert Barbara Corcoran earlier this week. This is what she said about buying in this market:

We have a regular real estate miracle happening right now. We not only have record low prices, but we also have cheap money.” Barbara Corcoran

She says most people feel more comfortable buying when the market is more bullish, and will even pay more, because there are a lot of people who are doing the same thing. They are in good company. It helps to affirm their decision. In times like this, when the market is down it takes a bit more courage because you are out there on your own ( not really though – hopefully with an experienced Realtor guiding you through the process). Those are the times you make money in Real Estate.

She continues to say — ” You might be thinking – Well what if the market goes down next year?” Well even if it does, for most— you are not selling in one year. You will be selling in 6 or 7 years and that is when you will make your 30%-40%.

She made many millions buying at times like this. If you hesitating about buying a home now and telling yourself – “I’ll wait and see” take a moment and watch the interview.

Home Ownership and Tax Benefits.

This is the time of year that people really feel the impact of home ownership. Quite frankly —it means you pay less in taxes. It is especially beneficial to those who are single or have not started a family yet so. Can’t stress enough how owning a home makes sense – especially when you can own and have a payment similar to what you might pay in rent or maybe even less.

“Owning a home offers myriad benefits throughout the year, but some of the financial advantages of homeownership are most apparent at tax time,” said NAR President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I.

“As many of today’s hard-working American families are feeling a financial squeeze, the tax benefits that can come from owning a home can be a welcome relief.”

Call an experienced Realtor and see what sort of guidance you might receive from them. You may be very pleasantly surprised. Remember – a home purchase today could be the buy of a lifetime!

A good read!

B(eco)me Old News Today’s Recycling Tip!

If United States citizens recycled just 10% of newspapers, approximately 25 million trees would be saved annually. About 75% of what we throw out could be recycled into tomorrow’s news, books, and household paper products. Once you’re done reading a book, donate it or sell it to a secondhand shop or used bookstore. Start the cycle over again and buy secondhand products whenever possible.

BARE FACTS & STATS: It takes 28% less energy to recycle than to produce paper from scratch. Paper accounts for 40% of solid waste in the United States, which is about 72 million tons annually. If every household replaced one roll of regular toilet paper with one recycled post-consumer waste roll, 424,000 trees would be saved. A single tree will absorb 1 ton (yes, one ton!) of carbon dioxide over it’s lifetime.

Festival of The Book Charlottesville VA March 16-20, 2011

As many of you know who attend this event every year – This is a 5 day non-stop book bash! These 5 days of mostly free literary events are open to the public as our community honors book culture and promote reading and literacy here in Charlottesville. For one who attends the event every year – I guarantee you will have a deliciously good time!

Here’s all the skinny on the events!

International Women’s Day Celebration 2011

Today is a day we celebrate International Women’s Day 2011. This marks the 100th anniversary of this world wide event. The theme this year is —Equal access to education, training, science and technology and also a pathway to decent work for women. The world is full of inspiring women who’ve have left behind their cultural mark.

Women continue to do that all around the world. Sometimes women impact lives in really big ways with a lot of fanfare. Others don’t have the fanfare, however they still have tremendous impact in their own small world. Sometimes not a word is spoken. It is merely a look or a touch.

The Hollywood girl that I am – I often latch onto Movie or Book quotes that mean something to me. One amazing movie for me is The Power of One (the struggles within South Africa and apartheid). The quote is this – “A water fall starts with one drop and look what becomes of that”.

I read Arianna Huffington’s blog this morning about her memories of her mother and how she impacted her life. It reminded me of my mother. I have some similar and also some different stories about my mother. As many of you know she is now in Assisted Living. I am pretty much there every day shaking it up a bit. After all the average age is 85 there and many of the people don’t get a lot of visitors. Many of the people I interact with are the women (they tend to be more social) and many have very interesting stories to tell. I love to listen to their stories. I learn a lot. Many have lived very rich lives.

Probably the biggest lesson I learned from my mother and my father too (also to give him credit for his amazing parenting skills) is this “Who ever is in front of you at that moment is the most important person to you. Remember that. I don’t care if you are talking to an garbage man, a day laborer, or a nuclear physicist. Everyone has a story to tell.” There is always something to learn.

I thank both my parents for that lesson. It is a good one and one I will always remember.

A good read about the celebration of women in the world and in the work place.