Buying a home is not a decision to be taken lightly. Personal finance gurus warn against purchasing unless you plan to keep it for a minimum of five years and, since the housing bubble burst, many say it’s best to buy only if it fits your lifestyle – not your investing portfolio.
For first-time home buyers shopping for a permanent, full-time residence, it’s advice to heed. But say you do simply want a place to park some of your hard-earned money, perhaps a fixer-upper you could occupy for a few years or maybe a house you believe you could rent out right away and easily oversee?
See full story: The Best Cities To Buy A Home Right Now
You wouldn’t be alone: investment-homes sales jumped 64.5% from 2010 to 2011, with investors making up 27% of all single-family, condo and co-op purchases last year, according to the National Association of Realtors. And it’s no wonder why. Home affordability is at the highest level ever in the 42 years that NAR has been tracking it. Nationally, home prices are down more than 30% from their 2006 peak. Mortgage rates hover near all-time lows, with 30-year fixed loans just under 4%. And while the 10-year Treasury note yields around 2% and a 1-year CD an even stingier 1% or less, housing investments, specifically homes purchased as rental properties, return a 6.3% yield on average, according to Goldman Sachs.
So you have cash or financing to make a purchase, you’re aware of the responsibilities that come with homeownership, and despite the woes continuing to hinder a full-on housing market recovery, you believe in brick and mortar investments. Now comes the tricky part: where to buy that house.
“A lot of what we read is national but you have to take housing down to the local level and look at the reasons why a market may be turning around, may be a good place to buy,” says Steve Berkowitz, chief executive of Realtor.com, a Campbell, Calif.-based home listing site.
To determine the best places to invest in a real estate purchase now, Realtor.com created a list which sorted through February housing and jobs data for 146 Metropolitan Areas and Metropolitan Divisions (cities and their neighboring suburbs) across the U.S. The company, which boasts millions of home listings filtered from over 900 Multiple Listing Services, looked at listing price data, sales data and inventory trends such as the amount of homes available in each market and number of days on market. Realtor.com also utilized the peak-to-trough home price index from Fiserv Case-Shiller, which tracks how much home prices have fallen in the past five years and can serve as an indicator of whether they have bottomed. Lastly, unemployment rates from the Bureau of Labor Statistics were factored into the rankings, since jobs (or lack thereof) are a leading indicator of housing demand.If you want to buy low, foreclosure-riddled Tucson, Ariz., may be just the place. It ranks No. 1 on this list.“In the case of Tucson, you are looking at foreclosures dropping back quite a bit coupled with a stable employment market,saysBerkowitz. The area has a 7.8% unemployment rate, a tad lower than the national average of 8.2%, helped by the presence of sizable employers in the recession-resistant education and government sectors, including the University of Arizona, Davis-Monthan Air Force Base and the U.S. Army Intelligence Center. All of this suggests Tucson’s housing market may be bottoming.
Here are the top 5 cities to buy a home:
5. Fort Worth, TX
2.Baltimore, MD
3. Kansas City, MO
2. Austin, TX
Photo: Don Klumpp/Getty Images
Median List Price: $229,500 (up 12% y-o-y)Inventory Level: 8,329 homes for sale (down 19% y-o-y)Median Days On Market: 77 (down 21% y-o-y)Price Drop From Peak: 2.9%Unemployment Rate: 6.1%
1. Tucson, AZ
Median List Price: $170,000 (up 3% y-o-y)Inventory Level: 6,600 homes for sale (down 23% y-o-y)Median Days On Market: 86 (down 12% y-o-y)Price Drop From Peak: 45.1%Unemployment Rate: 7.8%
In pictures: The Best Cities To Buy A Home Right Now
Sunday, April 15, 2012
Sunday, April 8, 2012
Did you ever think to look for? The top 5 details most home buyers miss.
When you’re looking for a new home, you probably have a list of “wants” and “needs”, like the distance from your work, the school district and the home size. It’s easy to overlook the details…those little things that can make a home wonderful or a nightmare once you settle in. Sure, most of the little things can be fixed, but that can make living in your new home more of a project than you might want. Here’s a list of 5 things home shoppers forget to check out before they buy.
Electrical outlets – Some homes seem to have been built with the idea that “less is more” should apply to electrical outlets. That means you’ll have to run extension cords, add multi-plugs or daisy-chain cords. All dangerous choices, especially if your home includes pets, children or the elderly. Ideally, there should be at least one outlet per wall in bedrooms and two per wall in public rooms like family rooms and dens, plus one double outlet per section of kitchen counter.
Cable access – Most homeowners expect to have some way to connect to cable or satellite TV and Internet. If the only access is in the living room, you may be looking at big costs to add additional outlets in bedrooms, your home office or the kitchen. Consider where you are most likely to watch TV or locate a home computer to determine if the wiring works for you.
Nighttime noise – It’s easy to get distracted by daytime noise when you’re house-hunting. But what does the neighborhood sound like when you’re trying to relax on your porch or get a good night’s sleep. Before you place a offer, drive over to the new neighborhood, roll down your windows and listen. You may hear road or business noise that would become an issue once you’re in the home.
Soil – Whether you like to garden, or just want to have beautiful landscaping, the quality of the soil matters. Look at the existing plants and lawn. Is it thriving? Or are you seeing dry, cracked ground or hard clay soil? That could mean big expenses ahead when you need to have good soil delivered to your new home before you can plant.
Privacy – If you have children or other family members at home, or if you often have overnight guests, consider how the layout of the house would impact your privacy. Do you share adjoining walls? Share a bathroom? It some houses you may have to walk through one room to get to another…no problem when you’re using it as a craft room, but when Great-Aunt Bertha comes to visit, it could become a major issue.
Electrical outlets – Some homes seem to have been built with the idea that “less is more” should apply to electrical outlets. That means you’ll have to run extension cords, add multi-plugs or daisy-chain cords. All dangerous choices, especially if your home includes pets, children or the elderly. Ideally, there should be at least one outlet per wall in bedrooms and two per wall in public rooms like family rooms and dens, plus one double outlet per section of kitchen counter.
Cable access – Most homeowners expect to have some way to connect to cable or satellite TV and Internet. If the only access is in the living room, you may be looking at big costs to add additional outlets in bedrooms, your home office or the kitchen. Consider where you are most likely to watch TV or locate a home computer to determine if the wiring works for you.
Nighttime noise – It’s easy to get distracted by daytime noise when you’re house-hunting. But what does the neighborhood sound like when you’re trying to relax on your porch or get a good night’s sleep. Before you place a offer, drive over to the new neighborhood, roll down your windows and listen. You may hear road or business noise that would become an issue once you’re in the home.
Soil – Whether you like to garden, or just want to have beautiful landscaping, the quality of the soil matters. Look at the existing plants and lawn. Is it thriving? Or are you seeing dry, cracked ground or hard clay soil? That could mean big expenses ahead when you need to have good soil delivered to your new home before you can plant.
Privacy – If you have children or other family members at home, or if you often have overnight guests, consider how the layout of the house would impact your privacy. Do you share adjoining walls? Share a bathroom? It some houses you may have to walk through one room to get to another…no problem when you’re using it as a craft room, but when Great-Aunt Bertha comes to visit, it could become a major issue.
Subscribe to:
Posts (Atom)
