Get your free copy of the much anticipated Spring Buyers Guide for 2014.
Spring Home Buyers Guide 2014
Complete the form below and we will email you your free copy
[contact-form]What are home prices going to do next year? Do you think home prices will keep going up? These are common questions that most Realtors field quite often. The truth is that any answer is speculative because there are so many factors that affect home values. But, with that being said, let’s take a stab at answering where home values are going over the next few years.
About a week ago, I posted a graphic showing what home values did from last year to this year (see Real Estate Price Change Year over Year.) Virginia for instance, showed a 2.8% increase in value year over year. Some places within Virginia saw a LOT more than 2.8%, but that number reflects the state average.
So, lets see what the experts are saying about the coming years in home values….
A few weeks ago the new Home Price Expectation Survey came out. This polls a panel of 100 economists, real estate experts and investment strategists. So, what do these experts believe?
They all believe that 2014 is going to be a strong year. To begin with the study does a pre-bubble trend line. This shows what appreciation would normally have been without the bubble and without the bust, then by 2018 prices would be up 19.4%.
Then, if we look at projections… the blue column which averages out what everyone said about the coming years, it would indicate that they believe we are going back to normal trend lines of around 19.7%.
The top 25% (the bulls) who are most optimistic believe we will be up by 28.4% by 2018.
Perhaps the most exciting column however is the bears… the most negative in the market. Even they believe that prices will be up by double digits (10.9%) by 2018.
Click the graphic to see a larger version
Prepaid interest, sometimes called “points”, is generally tax deductible when a person pays them in connection with buying, building or improving their principal residence. When points are paid on a refinance, they are not a current deduction but have to be taken prorata over the life of the mortgage. 
For instance, if $3,000 in points were paid on refinancing a 30 year mortgage, a deduction of $100 per year is allowed. When the loan is paid off or replaced by refinancing again or the home is sold and the mortgage paid off from the proceeds, the balance of any un-deducted points may be taken in that tax year.
Your tax professional needs to be made aware of any of these situations so that he or she can accurately reflect the deductions in your return. Currently, the most common situation is homeowners may be refinancing their home for the second, third or even, fourth time. If there are points that have not been completely deducted, they need to be treated in the year of refinancing.
For more information, see points in IRS Publication 936; there is a section on Refinancing in this publication. For advice considering your specific situation, contact your tax professional.
When you’re buying or selling, the obvious source to get your real
estate question answered is your agent but where do you go the rest of the time? As a homeowner for many years to come, you’ll need reliable help and solid suggestions.
Our business goal is to have a select group of our friends and past customers who consider us their lifelong real estate professional. We want to earn that trusted position so they’ll enthusiastically refer their friends to us. Our plan to achieve this is simply to help these people with all of their real estate needs not just when they buy or sell but for all the years in between.
Throughout the year, we offer reminders and suggestions by email and social media that benefit your homeowner experience. When we find good articles to help you be a better homeowner, we’ll pass them along. You’ll discover new ways to maintain your property, minimize expenses and manage debt and risk.
We want to be your “Go-To” person for everything to do with real estate. If we don’t have the answer you need, we’ll point you in the right direction to find it.
We’re here for you and your friends…now and in the future. Please let us know how we can help you.
Click to see a larger version of the picture
Among the most important numbers to home owners and potential home buyers are home prices. What are prices doing? What are they expected to be doing?
This graphic shows at a state by state level price change year over year.
However, as always, I caution you that real estate is an extremely local commodity. Just because a number is reflected at the state level, it could be considerably different in your county, city, or subdivision.
In a couple of days I will post an article about what real estate price projections are over the next year or so.
Whether you continue to rent or decide to buy a home, according to recent Zillow 2014 housing projections, the cost is going up. Zillow projects home prices to increase nationally by 3%, mortgages to rise to 5% interest rate by the end of the year and rents to go up by 2.5% on average.
If it will cost a person more whether they rent or buy, the conclusion can be made that one way or the other, they will pay for the house they occupy. The question will be whether they buy it for themselves or their landlord? Will they benefit from the equity build-up and the appreciation?
The following analysis looks at a $200,000 home that can be purchased with a 30 year FHA mortgage at 4.3%. The assumption uses 3% appreciation and tenant currently paying $1,750 a month in rent.
The house payment, principal, interest, taxes and insurance would be about $1,609 a month. However, once you consider the benefits of the principal reduction each month, the appreciation and the tax savings and the increased cost of maintenance, the net cost of housing is closer to $630 per month.
Even if you ignored the tax savings, the net cost of housing would only be $919.06 per month. The tenant would pay considerably more to rent than to own the home. Over time, the decision to buy a home could result in a considerable financial asset that the tenant will not benefit from.
To estimate your cost of housing, use the Rent vs. Own calculator.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Coffee should be hot. Beer should be cold. Mexican food should be spicy. However, if these things are less than the standard that you expect, there are not any lasting consequences.
As the value of the object in question rises, either in price or gravity, the expectations usually increase and decisions become progressively more important. Marriage, children, health and careers are certainly a few of the more important items that bear careful consideration.
The sale of the largest asset that most people own, their home, also merits having reasonable expectations. A homeowner should expect to get the market value for their home in a reasonable period of time with as few inconveniences as possible.
According to the latest Home Buyers and Sellers Survey, more homeowners are entrusting the sale of their home to real estate professionals. Owners can increase the likelihood of a favorable outcome by sharing their expectations with agents prior to listing their home for sale.
Challenge your agent to explain what they intend to do to:
It is reasonable for a seller to expect the agent will work hard to sell the home; will tell the truth and represent the client’s interests to the best of their ability. Agents exemplify remarkable service when they exceed the seller’s expectations.
Want a quick estimate of how much income you need to afford the house you want? Check out this calculator.
