Tips on buying a home in today’s market

Good suggestions from RealtyBizNews on getting good value in today’s housing market:

  • Use comparables: Comparables give you an idea of how similar homes with similar features rate by price in the market you’re looking at. If the comps look like the house you’re considering is priced too high, you can use that as a negotiating point. If the comps look lower, consider moving quickly.
  • Use realtors to your advantage: Good realtors can be a great help in finding the right home at the right price. Take advantage of their expertise.
  • Think like a flipper: Look for a homes that need a bit of repair that you can get below retail value. Don’t forget to check home investor lists.
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Those darn Millennials!

Yes, it seems as if we’re always discussing Millennials, particularly they’re home buying habits (see , , , ) and a new report by the Urban Institute highlights the differences in their home purchase timeline as compared with other generations.

According to the report, millennials had a homeownership rate of 37 percent in 2015, which is 8 percent lower than Generation X and Baby Boomers when they were between 25 and 34 years old.

Of course, the reasons cited are familiar as well: a delay in getting married and starting a family (apparently marriage increases the probability of buying a home by close to 18 percent), massive student debt and high rents, making it harder to save up for a downpayment.

Finally, the current state of housing: high demand, low inventory, rising and rising prices might have something to so with it as well.

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“Bump clauses” can bring better prices

According to real estate agents, home sellers are adding “bump clauses” to their real estate transaction contracts as a method of getting the possible offer on their homes.

Often used when there is a contingency, a “bump clause” allows sellers to enter into a contract with a potential buyer but still market their property. If a better offer materializes, the seller can tell the original buyers to “bump” up their offer or waive the contingency.

Sellers often use this practice to get other interested parties to make a higher bid without contingencies.

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Urban population rising at the same as rate as the suburbs

For the first time in decades, population growth in urban city centers is increasing at the same pace as residential neighborhoods. Analysts cite the rise in mixed use environments as well the increase in job opportunities as significant factors.

Another reason is the more rapid increase in rental development in urban areas; between 2010 and 2017 rental inventory in cities rose twice as fast as the number of rental units in the suburbs. However, rental and prices tend be be higher in cities while the average household income is lower.

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Freddie Mac: It’s hard for young people to buy a home

Falling squarely in the “tell us something we don’t already know department” Freddie Mac issued a report stating that since home prices are rising faster than incomes, young adults are having a difficult time affording a home. However, a few eyebrows were raised when the report concluded that it may be until 2025 until the situation improves significantly.

The current rate of home ownership for those under 35 is down 8 percent from its peak in 2004. In addition to high home prices the report also cited lower marriage and fertility rates, borrowing constraints and student debt as other contribuinting factors.

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Home sales decline despite strong demand

Despite strong buyer demand, strongly reflected in increased price growth and faster sales, pending home sales fell for the fifth consecutive month in May. Analysts agreed that a lack of inventory was primarily responsible throughout the entire country.

On the positive side, experts pointed to the strong economy and healthy job market as prime indicators going forward.

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One-third of US households pay more than 30 percent of wages on housing

The term is “cost-burdened” and it means those households paying more than 30 percent on housing. That number now stands at 38 million in the United States. The problem is even worse for renters where 21 million pay more than 30 percent and 11 million pay over half of their income in rent.

The problem is that incomes have not kept pace with the growth of the economy, made even worse by the ongoing shortage in housing inventory.

There is a bit of good news, at least on the rental front. While rental prices have grown by 3.7 percent average, some markets are reporting increasing vacancies which should cause a slowdown in price gowth.

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How does your home stack up for … wellness?

A key component in the development of new homes is wellness. Whereas, initially it referred primarily to sustainable construction and energy efficiency it now may include natural lighting, air quality, nontoxic paints, exercise facilities, and the proximity to green spaces.

Some high-end developments actually feature “personal well advisors” to a wellness plan including nutrition, exercise, behavioral counselors and even spiritual wellness.

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Millennials Are Coming … to Sac & Not SF

Millennials are on the move – to Sacramento and San Jose in California – but definitely not to San Francisco!

According to a new study by SmartAsset, Sacramento and San Jose rank 3rd and 7th respectively nationwide as the cities millennials are migrating to. Overall, Seattle and Columbia, South Carolina ranked 1 & 2.

Interestingly, over two-thirds of the millennials moving to Sacramento were coming from within California.

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Summer Home Buying Tips

Trulia has some excellent tips if you’re looking to buy a home this summer. One caveat: some of these tips may not apply quite as much to the Bay Area, where real estate is … different.

  • Consider older listings: While it may seem that homes on the market go into agreement within minutes of being listed, that is not actually the case. Sometimes a house may be on the market because the buyer changed their mind or couldn’t the proper financing. Might be worth a look.
  • Consider a house that “needs work”: While the number of starter homes is decreasing, fixer-uppers have increased by over 8% in this category.
  • Strong offers often trump highest offers: Here, of course, strong means cash which may be out of reach for most. But it probably will get you that new home.
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