by Lilly Miller | Jan 16, 2020 | CRESTICO
Real Estate seems to be one of those investment classes that is always viable to investors, simply due to the versatility of the asset and the numerous ways you can build a positive ROI. Whether you are selling or leasing, or if you’re buying during an economic shift for an affordable price with the intention to wait until the property prices rise again, there are numerous ways you can capitalize on your real estate investment. For example, in 2019 in the US alone, median home prices went all the way up to $316,000, making it one of the best years for real estate agents and experienced investors.
Now that 2020 is well under way, it’s time to prepare for the new emerging trends and adjust your strategy for the new year, whether you are a buyer or a seller. Let’s take a look at some of the top trends you need to get ready for and act on sooner rather than later.
Home prices continue to rise
The growth trend for home prices in the US that has been persevering through 2018 and 2019 seems to the waning, and experts even predict that, while it will continue to rise, the average home price in 2020 will grow by only 2.8%. This means that investors and homebuyers, in general, will be able to take their time selecting the best properties for their needs, without fear of losing out on a good deal and having to overinvest. If you are a seller, you can expect fewer homebuyers to come your way simply because the elevated prices are squeezing them out of the market, however, that also means that affluent buyers will stay in the game.
On the other side, if you are a buyer, you will have to tend to some meticulous financial planning, forecasting, and property research. It’s important that you figure out the monthly mortgage payment according to your budget, and then make sure you stay within that amount. Search for properties that are low on the price list that you can fix up over time and as you build up your financial capabilities.
Accommodating seniors and Gen Z-ers
While the majority of homebuyers are still millennials, it’s important to note that other demographics are jumping into the fray and that real estate professionals need to optimize their offers and portfolios for other types of customers. Namely, 2020 will see a rise in senior buyers as well as Gen Z buyers. With millions of people entering their silver years and millions of young people entering their home-buying years, it’s important to adapt and stage every home according to the unique needs of these generations.
This is the only way to appeal to the modern buyer irrespective of age, as both generations will have very different lifestyle preferences and requirements. When you’re showing a home, you have to appeal to their current and future needs, which means thinking strategically about what seniors need vs what young people might be looking for. Remember to emphasize indoor safety for the senior buyers, and high-tech features for the tech-savvy Gen Z-ers.
The rise of display homes
Now that buyers are taking a more careful and calculated approach to property acquisition, it’s important to note that their decision-making process is evolving as a result. Whether they are looking to buy into a property development project that in its early stages, or if they are looking into plots of land to build their own homes, people are becoming very particular about the architects and builders they work with. In countries where property prices are sky-high, such as Australia, this has already become a major trend.
This is also why the popularity of luxury display homes in Sydney has skyrocketed in recent years, and why it will continue to rise in 2020, as Australian buyers want and need to examine the builder’s capabilities in real life rather than looking at online portfolios, pictures, and case studies. Display homes will become more popular in all high-priced regions of the world, so be sure to prepare for this trend whether you are an investor, an architect, or a buyer.
The neighborhood is not a deciding factor
Surprisingly, the neighborhood where the property resides doesn’t seem to be a deciding factor anymore. Yes, buyers will still research the neighborhood thoroughly, but they will be more inclined to give less-than-ideal neighborhoods a pass if the property is more affordable, or if there are other valuable features that the home can provide. For sellers, this is an opportunity to sell a home in a less popular neighborhood, and for buyers who are working with a limited budget, this is an opportunity to find a new home without breaking the bank.
Technology will fuel market research
Finally, all investors and real estate experts need to invest in technology in order to capitalize on industry trends and market insights this year, and in the years to come. With more and more valuable data flowing around the digital realm, it becomes impossible to conduct predictive analytics manually anymore, which is why you need to integrate AI-driven data analysis into your operation to organize all of that data into actionable reports and create accurate forecasts that will drive your business strategy forward.
Wrapping up
In 2020, many trends that have been persisting in the past will stay relevant, but some will bring significant change to the industry that all parties should be aware of. With these insights in mind, go ahead and optimize your processes for the new year and pave the road to success.
by David Glenn | Mar 22, 2018 | CRESTICO
There are many costs associated with owning a home, and first-time homebuyers often do not fully understand or budget for these costs. A home is likely the most expensive thing you will ever own, and repairs can be astronomically expensive. Even small maintenance items add up over time and can strain your budget. This guide will focus on four hidden costs to homeownership that homeowners need to budget for.
Closing Costs
When buying a home for the first time, many people forget about closing costs. Fortunately, as the buyer, you are not responsible for paying a commission to your Real Estate agent. However, there are fees associated with closing, and they can be substantial and varied. These fees include title fees, taxes, real estate attorney fees, inspections and survey fees, among others. There may also be additional documentation required, such as when your home is part of a homeowners association. This is all in addition to the purchase price of the home and any modifications or updates you want to have done. You can generally expect to pay two to five percent of the home’s purchase price in closing costs and will need to budget for this expense.
Property Taxes
Property taxes vary widely based on where you live. They are usually assessed by a local municipality, such as a county, and some areas have much higher property tax rates than others. It is also possible for a property to be taxed by multiple jurisdictions, such as when your property straddles the border between two counties. Before you buy a home anywhere, it is important to calculate what your property tax burden will be. Factor this number into the amount of home you can afford when looking to buy. Always stay updated on changes to legislation, which can strongly impact property taxes. Also remember that because the property tax amount is based on the value of your home, it can and does vary from year to year. In most cases, property taxes are due once a year, the date on which varies from state to state.
Insurance
Homeowner’s insurance is much more expensive than renter’s insurance and much more complicated. For example, buying an older home might actually increase your insurance costs because of older systems such as plumbing and heating which are more likely to catastrophically malfunction. You also need to consider special coverage if you live in an area that is prone to natural disasters not covered by normal homeowner’s insurance policies, such as a flood zone or an area prone to earthquakes. This isn’t insurance you can go without because the risks of getting caught without it are far too high.
Updates
Updates can increase the value of your home as well as additional features you want and will use. Updates can be as simple as painting or as complex as major renovations. It is important to come up with a plan for how you want your house to look and what costs will be associated with these updates. Look at average prices, such as swimming pool prices, to determine how much you might need to budget for each update and the associated maintenance and installation costs. To save money, you can do multiple updates over a length of time rather than all at once. You can also wait for good deals to come around so the updates will cost less overall. For example, decks, sunrooms, and patios are not as popular in the winter, so contractors often offer discounts to encourage people to buy. This benefits contractors because it means they don’t have to lay off workers in the offseason.
Homeownership is often an expensive undertaking and a major financial investment. Homeowners and homebuyers need to ask questions and fully understand all fees, taxes and maintenance costs they might be responsible for once they purchase a property. If you properly budget for these costs, however, they will not catch you unaware.
by CRESTICO | Nov 5, 2009 | CRESTICO
Recent Developments Regarding Conforming Loans
Media outlets are constantly reporting on the state of the economy, the housing crisis and mortgage defaults and delinquencies. Amidst these reports is the constant use of many terms the average American (homeowner or not) may not be too familiar with or even have a complete understanding of their definitions. One of these terms is "conforming loan." Now, we all know what a loan is; generally a borrowed sum of money that is to be repaid with interest to a lender. A conforming loan however, is a specific type of loan. Loans are classified as meeting and not-meeting GSE guidelines. GSEs, Government Sponsored Entities, are financial services corporations that have been formed by congress, the most popular of which are Fannie Mae and Freddie Mac. These GSEs set guidelines for the types of Loan Programs that are available to homeowners. Conforming loans meet these guidelines and, as a result, are part of the uniform mortgage documents and national standards that have been set for loans.
On October 30, 2009 President Obama signed a congressional resolution regarding conforming loans. This resolution basically allows the loan limit of $729,750 (the limit for high-cost areas, such as Southern California) to be extended into next year. This means that there is now a longer time period available for potential buyers to seek and gain approval for government loans to purchase their homes. Government loans offer advantages such as Lower Interest Rates, government guarantees and lower down payment requirements to homebuyers which make the purchase of a home a bit easier and more widely accessible. This extension is the result of a move by the government in 2008 Housing and Economic Recovery Act which was originally intended to be temporary. Homes are becoming increasingly affordable in the Southern California area, and this is one more step in that direction.
If you are considering buying a home or simply have questions regarding the process, a knowledgeable and qualified Real Estate agent is the best resource you can have to guide you in making your decisions. Real estate agents are on the cutting edge of breaking news and in the best position to explain your options and most beneficial decisions to you.
by CRESTICO | Jan 31, 2009 | CRESTICO
At Crestico Realty, we believe an informed client is a happy client, so we do our best to make sure you are informed, every step of the way! The first step we take in doing this, is to inform you before you become our client and give you a taste of our excellent customer service. Below, is information that many first time homebuyers seek from us every day.
You’ve decided to buy a home. It seems like the right and best thing to do, but why. Many first time home buyers ask us why it is better to own a home than to rent one. Renters face many challenges that homeowners do not. Primarily, if you get the right loan (which we can help you with), your mortgage should stay affordable every year and you will not be faced with one of renters’ biggest problems: rent increases. Next, why not let the place you live give you some tax benefits? Renters do not get to enjoy the same tax benefits that are associated with owning your home. If you have a family, or are thinking about having one; wouldn’t it be nice to have your kids born and raised in the same place? We all have fond memories of our childhood and our childhood homes. Kids love backyards and swimming pools and treehouses and slumber parties. These are things that may not be as accessible and as private as you would prefer them to be if you rent an apartment.
Also, when you rent, you are not making an investment, you are merely spending money. Money you spend on repairs, upgrades, decorations, renovations and rent loses its value once it leaves your checking account. But when you own a home, the money you spend on everything from landscaping to decorations becomes an investment, and you will see a return on that investment. You might say that everyone is talking about losing value and losing equity, but that’s only applicable to today’s market. If you look at the Real Estate market, over time, you will see that it is a cycle and any money you spend today will eventually regain its value tomorrow. And finally, above all owning a home means you OWN it and can do anything you like with it. You can decorate it and express yourself in a way you would not be as free to, if you were renting someone else’s property.
Next, first time home buyers find themselves faces with the question of location. We’ve all heard the saying “location, location, location!” That should give you a clue that location is very important. You will need to consider your lifestyle and your needs when determining a location for your home. Do you have children? Is the quality of the schools in the area an issue? Are you looking to join a community? Your Crestico agent can help you determine your needs and find the perfect location for you.
The next thing to consider is the money. The amount of money you will need to buy a home depends on many things including the cost of the home and the mortgage you get. Your Crestico agent will go over each and every step with you and introduce you to our preferred lender, American Guardian Home Loans and together they will explain the entire process to you. Generally, when you are purchasing a home, you will need to have cash on hand to pay a deposit when you submit your offer so that the seller will take your offer seriously. Also, you will need cash for the down payment and the closing costs (to cover the processing of the paperwork involved).
Most people purchasing a home do not do it entirely with cash. Most buyers needs loans. Choosing a first time home buyers loan can be a daunting task. It may seem overwhelming because there are so many different types of loans with different names and options associated with them. Not to worry, Crestico Realty has a dedicated representative at American Guardian Home Loans who is there only for our clients.
Finally, one more thing a first time home buyer should be aware of is insurance. Having the right homeowner’s insurance policy is an important part of being a homeowner. Homeowner’s insurance differs from renter's insurance in that it protects your home and its valuable contents from occurrences like theft, fire, floods and earthquakes (depending on your location and type of policy). There are other kinds of insurance, such as Private Mortgage Insurance (also known as PMI) which may be required, depending on your loan and mortgage terms. Your Crestico agent will work with you to get you the best value in insurance policies because Crestico Realty is your one stop shop for all your home buying needs. We are part of a network of professionals and have extensive relationships in the industry that we use every day to make sure you are getting the best the industry has to offer.
