I asked Heather Myott a Mortgage Advisor with Coldwell Banker Mortgage, what would be the impact of waiting before purchasing a home. Waiting for what? Let’s say for home prices to come down. She gave me a great example to demonstrate that waiting could mean a decrease in purchasing power. Let’s take a look:
Example:
Purchase of $200,000 with 3.5% down payment at mortgage interest rate of 5.200% for a 30 year fixed rate loan = $1,078.33
Same scenario as above with an increase to the rate of 1% for a total mortgage interest rate of 6.200% = $1,202.75
Total increase in monthly payment of $124.42 or more than $40,000 over a 30 year loan.
To purchase at the same monthly payment as what you could with today’s rates in an economy with higher rates, you would be buying a home for around $179,000. That is a decrease in purchasing power of $21,000 or over 10% less of a home!
For more information contact:
Heather D. Myott,
Mortgage Advisor
Tel (802) 238-1704
Fax (856) 917-2188
Heather.Myott@mortgagefamily.com
Licensed in Vermont #6038
Showing posts with label burlington vt real estate. Show all posts
Showing posts with label burlington vt real estate. Show all posts
Tuesday, June 29, 2010
Friday, March 12, 2010
Extra Credit- Article from Seven Days
Here is an article from Seven Days where Chris talks about the First Time Homebuyer $8000 Tax Credit.
Josh Slocum looked for his first house for more than six months before he found the one. The 140-year-old Cape Cod in Winooski wasn’t huge — about 1000 square feet — but it was just what he wanted. Slocum, 35, organized his financing and put an offer on the house last January. Because it was a short sale — a sale whose proceeds are less than the balance owed on the property’s loan — the seller’s bank got involved, and it took a while for Slocum’s offer to be approved.
When he finally closed on the property in August, Slocum, the executive director of the South Burlington-based nonprofit Funeral Consumers Alliance, realized the closing costs and the costs of initial repairs were a little more than he could handle. But his status as a first-time homebuyer qualified him for the $8000 federal credit. Knowing that he’d have that money coming his way, Slocum felt comfortable borrowing from friends to cover the closing costs and those basic repairs.
Three months after he filed for his credit, Slocum received an $8000 check in the mail, signed by Uncle Sam. “It felt like the Publishers Clearinghouse,” he recalls. “But it wasn’t like it was play money.” That cash went straight to the friends who helped him out. What was left over went into a kitty for future home repairs.
Slocum says the credit was a huge incentive. It’s a common refrain among many first-time homebuyers who have taken advantage of the government’s effort to help spur the sluggish housing market. It’s difficult to measure the precise impact of the program, but local real estate agents and market watchers say it’s definitely having an effect.
When compared to the cost of a new, entry-level home in this market — somewhere in the neighborhood of $250,000 — eight grand doesn’t seem like very much. But when a new buyer has drained his or her savings for the down payment and is living lean after paying for inspections, repairs and the closing, the extra cash is a nice little boost. Slocum doubts that he could have bought his home without it.
In 2008, the Housing and Economic Recovery Act authorized a credit of $7500 for first-time homebuyers. A year later, the American Recovery and Reinvestment Act expanded that credit by $500. The credit does not apply to single people with incomes of $125,000 or more, or couples with a combined income of more than $225,000. In November, Congress extended the credit, but despite the expansion and extension, few in the industry expect the credit to be extended after it expires in July.
That means first-time homebuyers must have a house under contract by May 1, 2010, and must have closed on the property by July 1, 2010, in order to be eligible. Existing homeowners who are looking to move up are also eligible for a $6500 credit if they have owned their current property for five years or more.
Apparently, say Vermont real estate professionals, the money is working to bring people into the market. Statistically, says realtor Chris von Trapp of Coldwell Banker Hickok & Boardman Realty, the credit has “done its job.” New home sales are lagging, but existing homes in the low to middle price range are moving. Two years ago, 30 percent of von Trapp’s buyers indicated they were first-timers; this year, that figure has climbed to 53 percent. “It doesn’t get any better than this with low interest rates and the stimulus,” von Trapp says.
In October and November 2009, just before the credit was extended, area real estate agents saw a huge rush in the number of first-time homebuyers seriously looking to purchase property. People wanted to get the $8000 to which they were entitled. Bob Hill, vice president of the Vermont Association of Realtors, is seeing the same crazed house hunting now, as first-timers realize they have just 60 days to get a house under contract.
After a drop-off in sales in December and January — historically slow months for real estate — interest in the market from new homebuyers rose to fever pitch, Hill claims. “The point of the credit was to get people off the sidelines and get them to make a decision,” Hill says. “It’s definitely working. Houses under $250,000 are moving.”
While the Vermont Real Estate Information Network doesn’t have exact numbers of first-time homebuyer sales in the state, Kathy Sweeten, the organization’s executive vice president, confirms that sales activity in Vermont has shot up in the last couple of months. In 2008, 789 single-family homes were sold in Chittenden County. Last year, that number jumped to 889. She attributes the increase not only to the tax credit but to the fact that home prices have stabilized in the region and the housing inventory is good. “We definitely have a healthy market here,” Sweeten says.
Emma Mulvaney-Stanak knows that to be true. When she began looking to buy her first home last summer, entry-level housing was being snatched up as soon as it was put on the market. As the tax credit window began closing, it became harder to find an affordable property. When she finally landed on a house she could afford, she pounced on it. “I offered the asking price,” she says. “I just had to throw open the checkbook because I was worried it would get snatched up.”
The opportunity was so good she gave up her seat on the city council to take advantage of it; she had lived in Burlington’s Ward 2, but the new place was in Ward 3. When she moved, she was required to step down. Last Tuesday, her new neighbors voted her back on the council, representing Ward 3.
The 29-year-old closed on her two-bedroom house in Burlington’s Old North End right before Thanksgiving and says she is looking forward to getting her $8000 check. The credit, she says, will “accelerate the exciting part of home ownership.” She plans on using part of the money to redo her bathroom, which, she reasons, will help the local economy. “I’m putting money back into the community and someone else will benefit from the credit,” she says.
Meredith Haff, a first-timer from Stowe who works as the marketing director at Concept2, plans on using her credit to “replenish the reserve,” which was drained shortly after she purchased her condo. She spent the first six months painting her place and making it her own. The credit, which she hopes to get in a couple months, will go toward reimbursing herself.
Like Slocum and Mulvaney-Stanak, Haff, 31, was pushed to take the plunge in part because of the credit. It was the incentive she needed to make a move now rather than wait around. “Knowing some of that money might come back to me made it seem less of a scary deal,” Haff says. Not only does she have $8000 coming her way, but she also has the satisfaction of knowing she did her part to stimulate the economy. Like all home purchases, Haff’s had a modest trickle-down effect on the economy. But cumulative housing sales help keep realtors, real estate attorneys and mortgage brokers in business and inspire confidence in the market.
Increased activity due to the credit, and to historically low interest rates, has a downside, though — first-time homebuyers in the region may find it hard to locate a property in the low to middle price range. The average length of time a two-bedroom home sits on the market is just 60 days, von Trapp says, making it a true seller’s market.
Most houses under $300,000 are getting multiple offers, and many of them are selling for the asking price. That means first-timers have to get aggressive if they’re going to land in their dream house. Average buyers in that price range lose the first two properties they think about putting a bid on.
“If you walk into the one and it’s the one,” von Trapp advises, “you have to buy it today.”
Josh Slocum looked for his first house for more than six months before he found the one. The 140-year-old Cape Cod in Winooski wasn’t huge — about 1000 square feet — but it was just what he wanted. Slocum, 35, organized his financing and put an offer on the house last January. Because it was a short sale — a sale whose proceeds are less than the balance owed on the property’s loan — the seller’s bank got involved, and it took a while for Slocum’s offer to be approved.
When he finally closed on the property in August, Slocum, the executive director of the South Burlington-based nonprofit Funeral Consumers Alliance, realized the closing costs and the costs of initial repairs were a little more than he could handle. But his status as a first-time homebuyer qualified him for the $8000 federal credit. Knowing that he’d have that money coming his way, Slocum felt comfortable borrowing from friends to cover the closing costs and those basic repairs.
Three months after he filed for his credit, Slocum received an $8000 check in the mail, signed by Uncle Sam. “It felt like the Publishers Clearinghouse,” he recalls. “But it wasn’t like it was play money.” That cash went straight to the friends who helped him out. What was left over went into a kitty for future home repairs.
Slocum says the credit was a huge incentive. It’s a common refrain among many first-time homebuyers who have taken advantage of the government’s effort to help spur the sluggish housing market. It’s difficult to measure the precise impact of the program, but local real estate agents and market watchers say it’s definitely having an effect.
When compared to the cost of a new, entry-level home in this market — somewhere in the neighborhood of $250,000 — eight grand doesn’t seem like very much. But when a new buyer has drained his or her savings for the down payment and is living lean after paying for inspections, repairs and the closing, the extra cash is a nice little boost. Slocum doubts that he could have bought his home without it.
In 2008, the Housing and Economic Recovery Act authorized a credit of $7500 for first-time homebuyers. A year later, the American Recovery and Reinvestment Act expanded that credit by $500. The credit does not apply to single people with incomes of $125,000 or more, or couples with a combined income of more than $225,000. In November, Congress extended the credit, but despite the expansion and extension, few in the industry expect the credit to be extended after it expires in July.
That means first-time homebuyers must have a house under contract by May 1, 2010, and must have closed on the property by July 1, 2010, in order to be eligible. Existing homeowners who are looking to move up are also eligible for a $6500 credit if they have owned their current property for five years or more.
Apparently, say Vermont real estate professionals, the money is working to bring people into the market. Statistically, says realtor Chris von Trapp of Coldwell Banker Hickok & Boardman Realty, the credit has “done its job.” New home sales are lagging, but existing homes in the low to middle price range are moving. Two years ago, 30 percent of von Trapp’s buyers indicated they were first-timers; this year, that figure has climbed to 53 percent. “It doesn’t get any better than this with low interest rates and the stimulus,” von Trapp says.
In October and November 2009, just before the credit was extended, area real estate agents saw a huge rush in the number of first-time homebuyers seriously looking to purchase property. People wanted to get the $8000 to which they were entitled. Bob Hill, vice president of the Vermont Association of Realtors, is seeing the same crazed house hunting now, as first-timers realize they have just 60 days to get a house under contract.
After a drop-off in sales in December and January — historically slow months for real estate — interest in the market from new homebuyers rose to fever pitch, Hill claims. “The point of the credit was to get people off the sidelines and get them to make a decision,” Hill says. “It’s definitely working. Houses under $250,000 are moving.”
While the Vermont Real Estate Information Network doesn’t have exact numbers of first-time homebuyer sales in the state, Kathy Sweeten, the organization’s executive vice president, confirms that sales activity in Vermont has shot up in the last couple of months. In 2008, 789 single-family homes were sold in Chittenden County. Last year, that number jumped to 889. She attributes the increase not only to the tax credit but to the fact that home prices have stabilized in the region and the housing inventory is good. “We definitely have a healthy market here,” Sweeten says.
Emma Mulvaney-Stanak knows that to be true. When she began looking to buy her first home last summer, entry-level housing was being snatched up as soon as it was put on the market. As the tax credit window began closing, it became harder to find an affordable property. When she finally landed on a house she could afford, she pounced on it. “I offered the asking price,” she says. “I just had to throw open the checkbook because I was worried it would get snatched up.”
The opportunity was so good she gave up her seat on the city council to take advantage of it; she had lived in Burlington’s Ward 2, but the new place was in Ward 3. When she moved, she was required to step down. Last Tuesday, her new neighbors voted her back on the council, representing Ward 3.
The 29-year-old closed on her two-bedroom house in Burlington’s Old North End right before Thanksgiving and says she is looking forward to getting her $8000 check. The credit, she says, will “accelerate the exciting part of home ownership.” She plans on using part of the money to redo her bathroom, which, she reasons, will help the local economy. “I’m putting money back into the community and someone else will benefit from the credit,” she says.
Meredith Haff, a first-timer from Stowe who works as the marketing director at Concept2, plans on using her credit to “replenish the reserve,” which was drained shortly after she purchased her condo. She spent the first six months painting her place and making it her own. The credit, which she hopes to get in a couple months, will go toward reimbursing herself.
Like Slocum and Mulvaney-Stanak, Haff, 31, was pushed to take the plunge in part because of the credit. It was the incentive she needed to make a move now rather than wait around. “Knowing some of that money might come back to me made it seem less of a scary deal,” Haff says. Not only does she have $8000 coming her way, but she also has the satisfaction of knowing she did her part to stimulate the economy. Like all home purchases, Haff’s had a modest trickle-down effect on the economy. But cumulative housing sales help keep realtors, real estate attorneys and mortgage brokers in business and inspire confidence in the market.
Increased activity due to the credit, and to historically low interest rates, has a downside, though — first-time homebuyers in the region may find it hard to locate a property in the low to middle price range. The average length of time a two-bedroom home sits on the market is just 60 days, von Trapp says, making it a true seller’s market.
Most houses under $300,000 are getting multiple offers, and many of them are selling for the asking price. That means first-timers have to get aggressive if they’re going to land in their dream house. Average buyers in that price range lose the first two properties they think about putting a bid on.
“If you walk into the one and it’s the one,” von Trapp advises, “you have to buy it today.”
Thursday, February 18, 2010
Addison County Market Update
2009 proved to be a year of ups and downs. The Vermont real estate market struggled during the 1st half of the year, posting declines in sales of nearly 30%. With the passage in Congress of the Economic Stimulus Package in February 2009, qualifying first time buyers were provided an incentive to purchase and receive up to an $8000 tax credit, activity picked up and our local market began to turn around. Sales increased during the 2nd half of the year -
with first time buyers comprising nearly 50% of all real estate sales up from 35% in previous years. In spite of the surge in sales between August and November, total sales
in Addison County were down over 11% for the year by units sales with the average sale price dropping 12.5% across the board. In addition sluggishness in the market was reflected in an increase in days on the market of over 34%.
In November, Congress voted to extend and expand the tax credit in an effort to sustain the recovery of the housing market and therefore the economy. As a result of this extension, we expect an early and strong Spring Real Estate Market. Properties must be under contract by April 30th and meet a June 30th closing deadline. Now is the time for buyers to look for homes and for sellers to put their homes on the market. After April 30th - there may be fewer buyers motivated to purchase. In addition, economists are predicting a slight increase in mortgage rates for the second half of 2010. Those two conditions may exclude some buyers from the market as it will, at a minimum, reduce their buying power. The expansion of the tax credit to existing homeowners is an opportunity that many should take advantage of. If you have owned your primary residence for 5 consecutive years of the last 8 years - and you purchase a new primary residence by April 30th (with a closing date on or before June 30th) - you may qualify for up to a $6500 credit on your 2009 or 2010 tax return; individuals with incomes as high as $145,000 or couples with income as high as $245,000 may qualify.
Understanding the market and choosing a Real Estate Company and Agent with proven results in a difficult market is crucial. Coldwell Banker Hickok & Boardman Realty worked with more sellers and buyers in 2009 than any other real estate office in the entire state of Vermont, according to the Vermont Real Estate Information Network (VREIN). If you have any questions about this data or the tax credits - or would like to talk about your specific neighborhood - please don't hesitate to contact me - Chris
Monday, February 8, 2010
2009 Real Estate Market Summary
2009 proved to be a year of ups and downs. The Vermont real estate market struggled during the 1st half of the year, posting declines in sales of nearly 30%. With the passage in Congress of the Economic Stimulus Package in February 2009, qualifying first time buyers were provided an incentive to purchase and receive up to an $8000 tax credit, activity picked up and our local market began to turn around. Sales increased during the 2nd half of the year - with first time buyers comprising nearly 50% of all real estate sales up from 35% in previous years. Because of the surge in sales between August and November from buyers benefiting from the tax credit, the year ended with an increase of 7% in residential unit sales in Chittenden County. The average price declined by a modest 4%. This reflected first time buyer purchases and for the most part, very modest depreciation of property values. Click here to view a 5 year snapshot of the Real Estate Market in Northern Vermont.
In November, Congress voted to extend and expand the tax credit in an effort to sustain the recovery of the housing market and therefore the economy. As a result of this extension, we expect an early and strong Spring Real Estate Market. Properties must be under contract by April 30th and meet a June 30th closing deadline. Now is the time for buyers to look for homes and for sellers to put their homes on the market. After April 30th - there may be fewer buyers motivated to purchase. In addition, economists are predicting a slight increase in mortgage rates for the second half of 2010. Those two conditions may exclude some buyers from the market as it will, at a minimum, reduce their buying power.
The expansion of the tax credit to existing homeowners is an opportunity that many should take advantage of. If you have owned your primary residence for 5 consecutive years of the last 8 years - and you purchase a new primary residence by April 30th (with a closing date on or before June 30th) - you may qualify for up to a $6500 credit on your 2009 or 2010 tax return; individuals with incomes as high as $145,000 or couples with income as high as $245,000 may qualify.
Whether downsizing, purchasing a larger home, or a new home in a different location - don't miss out! For those existing homeowners considering selling their home this spring, while the average price of homes sold has declined slightly in the past two years, if you've owned your home since at least 2003 - you may realize an increase in value because of early, substantial appreciation.
Understanding the market and choosing a Real Estate Company and Agent with proven results in a difficult market is crucial. Coldwell Banker Hickok & Boardman Realty worked with more sellers and buyers in 2009 than any other real estate office in Chittenden County and the entire state of Vermont. If you have any questions about this data or the tax credits - or would like to talk about your specific neighborhood - please don't hesitate to contact me.
Vermont Public Radio recently interviewed Leslee MacKenzie, President/ Owner of Coldwell Banker Hickok & Boardman Realty, regarding the state of the Vermont real estate market. To listen to that interview visit: www.HickokandBoardman.com.
Tuesday, November 17, 2009
GREAT NEWS FOR FIRST TIME BUYERS & THOSE LOOKING TO MOVE UP!
The Worker, Homeownership, and Business Assistance Act of 2009 has extended the tax credit of up to $8,000 for qualified first-time home buyers purchasing a principal residence by April 30, 2010. It also authorized a tax credit of up to $6,500 for qualified repeat home buyers who have owned their primary residence for 5 of the last 8 consecutive years.
Click here for more details!
Click here for more details!
Monday, October 26, 2009
$8000 Credit May Be Extended !!
I had this article sent to me by my favorite mortagage originator . Check it out!!
Nelson Says Senate to Extend, Reduce Homebuyer Credit (Update1)
By Ryan J. Donmoyer and Dawn Kopecki \
Oct. 26 (Bloomberg) -- Senate leaders are negotiating to extend and gradually reduce an $8,000 tax credit for first-time homebuyers through 2010, Senator Bill Nelson of Florida said.
“We should be able to extend that later this week,” Nelson, a Democrat, told reporters traveling today with President Barack Obama on Air Force One to a speech in Jacksonville, Florida.
Senate Majority Leader Harry Reid of Nevada and Senate Finance Committee Chairman Max Baucus of Montana, both Democrats, may seek to add the homebuyers extension to legislation extending unemployment benefits that may be debated as early as this week, according to Regan Lachapelle, an aide to Reid.
Lawmakers are under pressure from real estate agents, mortgage brokers, and homebuilders to extend the $8,000 credit before it expires Nov. 30.
Baucus and Reid made a proposal last week to Senate Republicans that would extend the homebuyer credit through 2010, Lachapelle said. First-time homebuyers who close before April 1 would get the full $8,000, and the credit’s value would be reduced by $2,000 in each successive quarter until expiring at the end of the year.
The proposal was intended to counter one by Senate Banking Committee Chairman Christopher Dodd, a Connecticut Democrat, and Senator Johnny Isakson, a Georgia Republican and former realtor, to extend the full $8,000 credit through next June, and to expand it to all couples earning $300,000 or less. The Baucus- Reid proposal would continue limiting the benefit to first-time homebuyers, Lachapelle said.
Business Tax Break
Baucus and Reid also proposed an extension of a business tax break that allows companies with losses in 2008 and 2009 to amend tax returns for any of the previous four years to get a refund of taxes paid. Without the benefit, companies would have to wait years to apply those losses against future profits.
A version of the benefit was included in last February’s economic stimulus bill, though it was limited to companies with receipts under $15 million. A lobbying effort by business groups, including the Washington-based National Association of Manufacturers, to extend the benefit to all companies failed at the time; the Obama administration has since proposed a broader benefit in its budget.
The terms for extending the homebuyer tax credit are still being negotiated, Lachapelle said.
To contact the reporters on this story: Ryan J. Donmoyer in Washington at rdonmoyer@bloomberg.netDawn Kopecki in Washington at dkopecki@bloomberg.com Last Updated: October 26, 2009 13:33 EDT
Nelson Says Senate to Extend, Reduce Homebuyer Credit (Update1)
By Ryan J. Donmoyer and Dawn Kopecki \
Oct. 26 (Bloomberg) -- Senate leaders are negotiating to extend and gradually reduce an $8,000 tax credit for first-time homebuyers through 2010, Senator Bill Nelson of Florida said.
“We should be able to extend that later this week,” Nelson, a Democrat, told reporters traveling today with President Barack Obama on Air Force One to a speech in Jacksonville, Florida.
Senate Majority Leader Harry Reid of Nevada and Senate Finance Committee Chairman Max Baucus of Montana, both Democrats, may seek to add the homebuyers extension to legislation extending unemployment benefits that may be debated as early as this week, according to Regan Lachapelle, an aide to Reid.
Lawmakers are under pressure from real estate agents, mortgage brokers, and homebuilders to extend the $8,000 credit before it expires Nov. 30.
Baucus and Reid made a proposal last week to Senate Republicans that would extend the homebuyer credit through 2010, Lachapelle said. First-time homebuyers who close before April 1 would get the full $8,000, and the credit’s value would be reduced by $2,000 in each successive quarter until expiring at the end of the year.
The proposal was intended to counter one by Senate Banking Committee Chairman Christopher Dodd, a Connecticut Democrat, and Senator Johnny Isakson, a Georgia Republican and former realtor, to extend the full $8,000 credit through next June, and to expand it to all couples earning $300,000 or less. The Baucus- Reid proposal would continue limiting the benefit to first-time homebuyers, Lachapelle said.
Business Tax Break
Baucus and Reid also proposed an extension of a business tax break that allows companies with losses in 2008 and 2009 to amend tax returns for any of the previous four years to get a refund of taxes paid. Without the benefit, companies would have to wait years to apply those losses against future profits.
A version of the benefit was included in last February’s economic stimulus bill, though it was limited to companies with receipts under $15 million. A lobbying effort by business groups, including the Washington-based National Association of Manufacturers, to extend the benefit to all companies failed at the time; the Obama administration has since proposed a broader benefit in its budget.
The terms for extending the homebuyer tax credit are still being negotiated, Lachapelle said.
To contact the reporters on this story: Ryan J. Donmoyer in Washington at rdonmoyer@bloomberg.netDawn Kopecki in Washington at dkopecki@bloomberg.com Last Updated: October 26, 2009 13:33 EDT
Wednesday, September 23, 2009
Are you hoping to take advantage of the First Time Homebuyer Tax Credit?
In order to be eligible for the Tax Credit you must close by November 30,2009. In order to close by November 30, 2009, you will need to have you home under contract by October 15, 2009.
Call me today to help you being your home search!
If you have any questions about the tax credit or the real estate market, please give me a call.
Chris
Call me today to help you being your home search!
If you have any questions about the tax credit or the real estate market, please give me a call.
Chris
Monday, April 6, 2009
The Stimulus Package & Buying Up in a Down Market
So here you are, living in a home that no longer meets your needs and you want to know if it makes any sense to make a move “in this market.” If you have a home or condominium that is now too small for you and your family you should keep reading. Let’s set up the following scenario. Two years ago, when you did not want to sell, you might have gotten $250,000 for your home. Now, two years later, your house is not getting any bigger, and your home is worth $225,000. If you do sell, you are planning to stay in the area, or moving to an area that has had housing prices that have fallen far more dramatically than here in VT. In either case , you will be buying a bigger, more expensive home. Two years ago that home would have cost you $375,000 but now you see that homes of that size are now selling for $325,000. As an added bonus, the interest rate has dropped from 6% to 5% or less. Under these circumstances, assuming your employment situation has not changed, you have a better opportunity than ever to buy up for less total purchase price and at a lower interest rate.
The difference in your monthly mortgage payment will be far less than it would have been 2 years ago. In addition, that larger house that you just bought at a bargain price is now going to appreciate in value at a higher rate and out perform the appreciation of the home your currently in during the next up swing in the market. Although there is more inventory available in the 0-$250,000 price range, the rate of sales year to date actually results in a shorter market time for the house you will be selling than price range you will be buying into. With longer market times at the higher price ranges, you will have time to sell your home in order to buy the next one and the sellers may be more flexible on price. And this is where the stimulus package starts to work for you. As the deadline of December 1, 2009 approaches, more and more first time home buyers will recognize the opportunity and make their first home purchase driving the market for your home and others like it. As a result, we should actually see the market time for the first time home shorten as demand increases which will further improve your chances of you achieving your goal. In short, if you are looking to step up into a larger home, now may be the time to make the move.
The difference in your monthly mortgage payment will be far less than it would have been 2 years ago. In addition, that larger house that you just bought at a bargain price is now going to appreciate in value at a higher rate and out perform the appreciation of the home your currently in during the next up swing in the market. Although there is more inventory available in the 0-$250,000 price range, the rate of sales year to date actually results in a shorter market time for the house you will be selling than price range you will be buying into. With longer market times at the higher price ranges, you will have time to sell your home in order to buy the next one and the sellers may be more flexible on price. And this is where the stimulus package starts to work for you. As the deadline of December 1, 2009 approaches, more and more first time home buyers will recognize the opportunity and make their first home purchase driving the market for your home and others like it. As a result, we should actually see the market time for the first time home shorten as demand increases which will further improve your chances of you achieving your goal. In short, if you are looking to step up into a larger home, now may be the time to make the move.
Monday, February 23, 2009
Sleeping Burlington Vt Market Stirred by Stimulus
Here is a bit of good news for buyers and sellers alike. The Stimulus Package was just signed into law last week and seems to be having an immediate effect here in the Burlington VT area. This impression is not based on any sound scientific study or empirical data, so take it for what it is worth. It is based on a "boots on the ground" observation I made over this past weekend. Here is the story.
I am helping a family relocate here from out of state and they had a schedule that required us to be out seeing all we could see yesterday, Sunday. I had attempted to make an appointment at one particular property, along with several others, and we were asked if we could come by during the Open House from 1-2pm rather than disturb the occupants in the morning of the same day. With a little bit of re-schedule we were easily able to accommodate the request and agreed amongst ourselves to see it at 1:30pm.
I arrived a little early and thought I would pop in and get a quick preview as I had only seen the home on the Internet. As I approached the house I observed cars lining the street and one in the driveway that was not the Realtor's car who was holding the Open House. Car count was four at 1:30pm. I parked on the street and went in too take a look. As I was entering , two parties left. I dropped my shoes at the door and began to look around. In the next 15 minutes four more parties showed up and then the family I am working with. Counting my clients, there were eight showings of this one home in the first hour of the Open House.
This home was built in the late 1960's but has been well maintained with new paint and carpet and other improvements. It is not a foreclosure nor is it owned by a relocation company or being offered in a short sale. All of these issues might be the cause of a high traffic count but this was not the case in this situation. This house has been on the market since last August so it was also not new to the market. The REALTOR holding the Open House was overwhelmed since she had been holding Open Houses since the beginning of the year in similar homes and always brought other work to do as she as she sat there with no viewings.
Maybe this is an isolated case or the Denny's at the foot of the street was offering free Grand Slam Breakfasts for all attendees. What ever the case, the renewed interest in buying real estate by those viewing this house felt invigorated and fresh. So if you are selling your current home , take heart as there appears to be the beginning of a Spring real estate market taking shape.
If you are a buyer and you have been sitting on the sidelines waiting for all the stars to line up, this could be it. The pricing has adjusted, sellers are motivated and want to get on with their lives. The interest rates are hovering just below 6% and I have heard of some 5% quotes to buyers from some lenders, depending on credit scores. The inventory in and around Burlington that is affordable priced is low and once these looking buyers act, it will not last long. The good news is if the sellers who have been sitting on the sidelines, sense that they may get a fair price on their home this Spring , you will see more inventory enter the market and replace the homes that are purchased.
What this market needs is some active and motivated buyers who are well positioned to get off the fence and get this market moving again.
I am helping a family relocate here from out of state and they had a schedule that required us to be out seeing all we could see yesterday, Sunday. I had attempted to make an appointment at one particular property, along with several others, and we were asked if we could come by during the Open House from 1-2pm rather than disturb the occupants in the morning of the same day. With a little bit of re-schedule we were easily able to accommodate the request and agreed amongst ourselves to see it at 1:30pm.
I arrived a little early and thought I would pop in and get a quick preview as I had only seen the home on the Internet. As I approached the house I observed cars lining the street and one in the driveway that was not the Realtor's car who was holding the Open House. Car count was four at 1:30pm. I parked on the street and went in too take a look. As I was entering , two parties left. I dropped my shoes at the door and began to look around. In the next 15 minutes four more parties showed up and then the family I am working with. Counting my clients, there were eight showings of this one home in the first hour of the Open House.
This home was built in the late 1960's but has been well maintained with new paint and carpet and other improvements. It is not a foreclosure nor is it owned by a relocation company or being offered in a short sale. All of these issues might be the cause of a high traffic count but this was not the case in this situation. This house has been on the market since last August so it was also not new to the market. The REALTOR holding the Open House was overwhelmed since she had been holding Open Houses since the beginning of the year in similar homes and always brought other work to do as she as she sat there with no viewings.
Maybe this is an isolated case or the Denny's at the foot of the street was offering free Grand Slam Breakfasts for all attendees. What ever the case, the renewed interest in buying real estate by those viewing this house felt invigorated and fresh. So if you are selling your current home , take heart as there appears to be the beginning of a Spring real estate market taking shape.
If you are a buyer and you have been sitting on the sidelines waiting for all the stars to line up, this could be it. The pricing has adjusted, sellers are motivated and want to get on with their lives. The interest rates are hovering just below 6% and I have heard of some 5% quotes to buyers from some lenders, depending on credit scores. The inventory in and around Burlington that is affordable priced is low and once these looking buyers act, it will not last long. The good news is if the sellers who have been sitting on the sidelines, sense that they may get a fair price on their home this Spring , you will see more inventory enter the market and replace the homes that are purchased.
What this market needs is some active and motivated buyers who are well positioned to get off the fence and get this market moving again.
Thursday, January 22, 2009
2008 Real Estate Market Summary
Office Market Share- 2008 Chittenden County-Sides sold*
2008 proved to be a year of market adjustments; not only in the real estate market but for the nation's financial markets as well. As REALTORS® serving Chittenden County and the surrounding areas, the question we are often asked is "How is the real estate market - really?" There is no such thing as a national real estate market. It is critical to know that market conditions vary, not only from county to county, but also town by town.
Despite a slowing in appreciation of the average sales price of a home over the past 2-3 years, there has been a substantial increase since 2003. Unlike the financial markets, we have not see substantial drops in value. This drives home the point that real estate remains an excellent investment for the long term.
In 2008, the number of property sales declined as compared to 2007 and in most cases declined from the 6 year average number of home sales. However, in reviewing the 6 year snapshot, it mightbe concluded that 2008 was an exception to the relatively stable number of property sales throughout the years.
Increased inventories and decreased transactions add up to a strong buyer's market. Coupled with historically low mortgage interest rates, some buyers will be scrambling to purchase their first home or "move up" to a larger home in 2009. Sellers who have their homes well maintained and priced competitively can close in less than 90 days on average.
If you have any questions or would like to talk about your specific neighborhood -please don't hesitate to give me call.
(802) 846-9525
Chris@ChrisvonTrapp.com
*Soure: Vermont Real Estate Information Network (VREIN)
2008 proved to be a year of market adjustments; not only in the real estate market but for the nation's financial markets as well. As REALTORS® serving Chittenden County and the surrounding areas, the question we are often asked is "How is the real estate market - really?" There is no such thing as a national real estate market. It is critical to know that market conditions vary, not only from county to county, but also town by town.
Despite a slowing in appreciation of the average sales price of a home over the past 2-3 years, there has been a substantial increase since 2003. Unlike the financial markets, we have not see substantial drops in value. This drives home the point that real estate remains an excellent investment for the long term.
In 2008, the number of property sales declined as compared to 2007 and in most cases declined from the 6 year average number of home sales. However, in reviewing the 6 year snapshot, it mightbe concluded that 2008 was an exception to the relatively stable number of property sales throughout the years.
Increased inventories and decreased transactions add up to a strong buyer's market. Coupled with historically low mortgage interest rates, some buyers will be scrambling to purchase their first home or "move up" to a larger home in 2009. Sellers who have their homes well maintained and priced competitively can close in less than 90 days on average.
If you have any questions or would like to talk about your specific neighborhood -please don't hesitate to give me call.
(802) 846-9525
Chris@ChrisvonTrapp.com
*Soure: Vermont Real Estate Information Network (VREIN)
Wednesday, December 17, 2008
Foote Farm II : Just minutes from Middlebury College Campus.............................. but miles away .
Foote Farm II is a planned residential community of 22 homesites in the heart of the Champlain Valley of Vermont. Located in historic Cornwall, just three miles west of Middlebury College and mid-way between Burlington and Rutland, Foote Farm is situated on one of the most beautiful tracts of land in the Middebury area. Lake Champlain and the Adirondack Mountains are ten miles to the west; the Green Mountains five miles to the east.
The homesites and common areas of conserved land were part of a farm that had been in the Foote family for over 200 years. Foote Farm homeowners have common use and ownership of 112 acres of open farmland, a large protected wetland and deep hemlock forests, preserved in perpetuity through a partnership with the Middlebury Area Land Trust.
Each site is fully permitted and ready to build in the traditional style of New England. Underground utilities and a state-of-the-art community septic system are in place and stubbed to the entrance to each lot.
Twenty of the original 22 lots were recently acquired by an existing Foote Farm homeowner and are offered for sale at prices up to $50,000 below original listing prices — making this desirable community even more appealing and affordable.
22 secluded building lots in a pastoral setting
Off Route 125 - minutes from Middlebury College
Over 100 acres of common-use conserved land
Each building site unique; covenants in place
Wildlife corridor through dedicated natural areas
Enjoy the cultural, culinary, athletic and social opportunities of a "college town" community.
Questions? Would you like to schedule a visit to Foote Farm?
Contact Chris von Trapp. 802-846-9525 (o), 802-343-4591 (c). www.chrisvontrapp.com
Monday, December 1, 2008
Should I Take My Home Off the Market During the Holidays?
When you look at your November and December calendars you may find the months already overloaded with seasonal obligations -- shopping, entertaining, children's pageants, charity work, decorating the house, and so much more. If you are also trying to sell your home, you are under extra pressure to keep your home in "showtime" condition. And that could be the last thing you need before the holiday spirit is broken. It is understandable why you would be tempted to take your home off the market during the holidays. And the list of justifications is long. If you are too busy, buyers may be also, and you may find your efforts unrewarded by enough showings. And what if you do get an offer? You may be faced with the possibility of packing and moving during the busiest time of the year. Besides, you can give your house a rest, and it will have better momentum after the holidays. Better to just pack it in and start fresh in January, right? But wait! Most top Realtors agree that taking your home off the market during the Christmas season is a mistake. The house sure isn't going to sell off the market! What is the advantage of that? So you're busy. Let your Realtor do the work. You can leave in the morning, go to work, go shopping, and let your Realtor take care of things. The holidays are a wonderful selling period. Why? Because most people take off work sometime during the season. The husband and wife are both off and want to see houses. Most agents like the holidays because the buyers have more time, and they can look at homes together.
Before you take your home off the market, consider the following points:
Before you take your home off the market, consider the following points:
- Although buyer activity may appear to slow down, the buyers who are actively looking during the holidays are that much more serious. Agents believe the home market is no more affected at Christmas than during other "busy" periods. If that were so, the market would shut down throughout the year as families concentrate on spring weddings, June graduations, summer vacations, and autumn back-to-school activities.
- Many buyers deliberately choose to shop for a home after the busy spring and summer rush. They know that it will be easier to look, and that negotiations will be less stressful. They may not have children, or they may have grown children, so moving to accommodate the school year isn't a consideration. Finding the right home at the right price, however, is.
- Relocating families often don't have a choice when they can leave for their new destination. Although 68% of transferring families have children, many families have to transfer during the middle of the school year. These families are that much more motivated to get their families settled in before either the January semester begins, or to arrange for the move during spring break in March. If you sign a contract by New Year's Eve, the timing couldn't be more perfect.
- At Christmas time, our culture focuses on family and the home. Preparing for the indoor activities of winter is one of the most enjoyable periods of family life. Allowing buyers to view your home during this most hospitable of seasons lets them better picture their own family life in the attractive environment you have created.
- When is your home ever more beautiful and inviting? You have cleaned and decorated, and your home looks like a picture postcard. If the results are good enough for family and friends, they will surely be good enough to impress your buyers. Get the family team on board to do a five-minute blitz pick-up every morning to keep holiday messes to a minimum.
- With reduced inventories and motivated buyers, you will have all the members of the MLS on your team. You may find you have more showings than you would if you marketed your home during a busier time of the year.
- If you do get a contract, you can arrange the terms to suit your needs. If moving during the holidays isn't an option, you can put in the closing date of your choice. Most people can close 30 to 60 days after a contract is written, so there is plenty of time. Possession and closings are very negotiable.
Written by Blanche Evans - Realty Times
Wednesday, November 26, 2008
Safe Havens in Real Estate
Here is a great article that was passed onto me from a coworkers. It just helps to show that real estate in local and not national. Vermont is a great place to buy.
With foreclosures skyrocketing and home prices plummeting, real estate has had a tough year. But in certain pockets across the country the damage has been minimal -- if nonexistent.We found six cities with slow, steady growth, using data from Fiserv Lending Solutions, a home-price research company. These cities' local economies have kept unemployment and foreclosure rates below average. Plus, their affordability index -- a measure of home prices versus family income -- is low.
Burlington, VT
Population: 145,360
Median home price: $250,000
12-month change in home value: +1%
Affordability index: 4/10
Homes sold this year: 592
Home value vs. national average: +21%
Top employer: IBM
On the shores of Lake Champlain, Vermont's largest city focuses on retaining its high standard of living rather than growing its population. Strict zoning standards make homebuilding difficult and discourage speculators. Burlington's small-town mentality ensures that home lenders maintain personal relationships with their clients and help them stay within their spending means. Technology, health care, and education drive the local market.
By Louis Jones, Kiplinger.com
Nov 21st, 2008
Click on the link to read the entire article: http://realestate.yahoo.com/promo/safe-havens-in-real-estate.html
With foreclosures skyrocketing and home prices plummeting, real estate has had a tough year. But in certain pockets across the country the damage has been minimal -- if nonexistent.We found six cities with slow, steady growth, using data from Fiserv Lending Solutions, a home-price research company. These cities' local economies have kept unemployment and foreclosure rates below average. Plus, their affordability index -- a measure of home prices versus family income -- is low.
Burlington, VT
Population: 145,360
Median home price: $250,000
12-month change in home value: +1%
Affordability index: 4/10
Homes sold this year: 592
Home value vs. national average: +21%
Top employer: IBM
On the shores of Lake Champlain, Vermont's largest city focuses on retaining its high standard of living rather than growing its population. Strict zoning standards make homebuilding difficult and discourage speculators. Burlington's small-town mentality ensures that home lenders maintain personal relationships with their clients and help them stay within their spending means. Technology, health care, and education drive the local market.
By Louis Jones, Kiplinger.com
Nov 21st, 2008
Click on the link to read the entire article: http://realestate.yahoo.com/promo/safe-havens-in-real-estate.html
Monday, November 24, 2008
Buying an Old Vermont Home: Truth 4
Truth #4: Older homes take full advantage of their site. It occurred to me a number of years ago that one of the art forms that have really been lost over the years is the proper siting of a new home. With the dawn of the planned subdivision and the dreaded cul-de-sac, homes have become nothing more than playing pieces on a Monopoly board. You divide the land, create the lots, (all nice equal rectangles or squares) and you place the homes on them in the center of the lots facing the new streets. Gone are the days of walking the land, observing the sun patterns through the seasons, noting the prevailing fair weather wind and the gales that accompany any storms, observing the natural windbreaks and landscaping all before sighting your new home. The native Vermonters lived on and made their living from the land. The thoughtful sighting of their homes and farmstead was a matter of survival. It affected the heating of their homes, the productivity of the farms and in short the well being of their entire family. It was an extremely important part of the pre-construction preparation and was often done to perfection. This is one of the best reasons to explore older homes and is the one that is most often overlooked.
Thursday, November 20, 2008
Buying an Old Vermont Home: Truth 3
Truth#3: Not All Older homes are worth fixing up. I think there is a major misconception out there in the market place that all old homes are worth restoring. For the most part that is true. However I have found in my travels that there are two kinds of old farmhouses, those built by prosperous farmers with a good work ethic and pride in ownership and the other kind. Sometimes the actual historic period in which it was built will reflect in the original quality of the construction. Don’t assume that just because it was built back in “the day” by an old Vermont Farmer that the Old Vermont Farmer knew what he was doing , or was prosperous enough to be able to afford to do it right. Some of the best and the worst engineered homes that I have seen were old Vermont Farmhouses. You have to remember that “back in the day” you did not need a building permit to build; there was no building code and no building code enforcement. Having said that, there is no doubt that the finest examples of Architectural integrity and solid Vermont engineering can be found in these vintage homes and often times in parts of the house where you least expect it. So, do your research, learn about the construction methods of the day and start your search. With the right mix of persistence and knowledge, the perfect vintage home is out there just waiting for you and your family to enjoy.
Tuesday, November 18, 2008
Buying an Old Vermont Home: Truth 2
Truth #2: Older Homes Tend to be close to the road: It is rare to find an old vintage home that is not located within a close proximity to the edge of the road upon which it is located. The reason for this, if you think about it, is that back when many of these homes where built, let’s say 1850 or earlier, the fastest thing that was going to pass by was a horse at a full gallop. Cars, traffic, tractor trailer trucks and road noise had not been invented yet and neither had the snow plow. How convenient would it have been to build your brand new 1800th century farm house a mile and a half from the town road only to have to navigate your way to the road without the assistance of modern conveniences every time you had to leave the farm? There are occasions when you Can find older homes that are now “off the beaten path” due to historic changes in traffic patterns but on the average, if you want an older home be prepared before you pull up for the first visit to deal with it’s proximity the road. Often the perception is worse than the reality, especially in the case of older brick or stone homes. These structures seem to wear the road noise well and except in warm summer months with the windows open, can be remarkably quiet in spite of their location. Whatever you do , do not discount a home due to it’s perceived proximity to what you have decided is a busy road, go see it and spend some time there before passing judgment. Go at different times of the day and weekends as well as week days. It would be a shame to pass up a classic charmer only because of the road, without at least giving it some serious consideration.
Tuesday, November 11, 2008
10 Real Estate Myths Debunked
I found this on one of my favorite websites and thought it was worth sharing.
Enjoy!!!!
RISMEDIA, Oct. 29, 2008-With mortgage meltdowns, plummeting home prices and soaring foreclosure rates constantly in the news, it’s no wonder people are wary of the housing market these days. But contrary to popular belief, things are not as dismal as they seem, according to Lawrence Yun, chief economist of the National Association of Realtors. Yun debunks 10 commonly held beliefs about the current housing market, and http://www.frontdoor.com/ offers 10 related tips.
1. Peak-to-trough home price declines to date have been about 20%. Wrong. Measurements of home price declines can be skewed depending on which homes in which markets are being measured. For instance, the Case-Shiller Index, which indicates that home prices are down 20%, is heavily skewed towards homes with subprime loans and other distressed home sales. These troubled homes have experienced a steeper decline than home prices in general, says Yun, adding that both government data based on loans backed by Fannie Mae and Freddie Mac and data from the National Association of Realtors suggest much more modest price declines. TIP: If you’re selling your home, the best thing to do is price your home right.
2. The much smaller number of new homes now under construction indicates the dismal outlook for the housing market. Wrong. The inventory of homes on the market is very high, so the last thing we need now is more new homes being built. Home builders have cut back sharply on production, which will help lower inventories and stabilize prices. The builders have done exactly what market forces are dictating under current conditions, Yun says. TIP: With many new homes completed but not sold, you can find great opportunities.
3. Even when the housing market recovers, home price growth will be only 4 to 6% per year — much less than historical average returns for the stock market. Most buyers put less than 20% of their own money into a home purchase; this borrowing power can translate to a greater rate of return. This is how Yun explains it: Home price appreciation historically has been about 1 to 2 percentage points higher than consumer price inflation, which translates into about 4 to 6% per year. But this growth rate cannot be viewed as a rate of return like the stock market. The reason is that most people do not buy a home for all cash, instead making a cash down payment and borrowing the rest. The leverage this borrowing creates can magnify returns — and losses. If price growth returns to historic norm, the price growth of 4% can easily turn into 20 to 30% rate of return if the home buyer makes a down payment of 10 or 20%. TIP: Get the fundamentals right when investing in real estate.
4. Impending baby boomer retirements and moves to small homes will cause a glut of homes on the market. Wrong. The first edge of the baby boomers has reached 60 years of age and the massive bulk of that generation will soon go into retirement, but far from trading down, many of these older homeowners are keeping their homes or moving to ones of comparable size. And even if more boomers do sell their larger homes in the years ahead, Yun points out, the rapidly growing U.S. population should absorb the inventory of existing homes on the market. TIP: Active seniors can find a retirement community that caters to their needs and interests.
5. The federal government takeover of secondary mortgage companies Fannie Mae and Freddie Mac is a bailout that will cost taxpayers bundles. Too soon to tell, says Yun. It’s conceivable that taxpayers may have to cover some losses. It’s also possible that the government takeover will result in no loss of taxpayer dollars. Even if taxpayer funds are used, the bailout would be preferable to the global economic problems that would have occurred if Fannie and Freddie had gone belly up. TIP: Uncle Sam is “bailing out” homeowners facing foreclosure. Find out more about the Hope for Homeowners plan.
6. The Federal Reserve controls mortgage rates. Wrong. Yun explains: The Fed’s activities influence mortgage rates but don’t directly control them. What the Fed sets is a very short-term interest rate called the Federal Funds Rate. Mortgage rates are determined by global savings as well as credit spreads and inflationary pressures. Over the past two years, the Fed has raised the Fed Funds Rate to 5.5%, and then cut it deeply to around 2%. All the while, the 30-year mortgage rate has averaged in the 6 to 6.5% range. TIP: Today’s rates don’t look bad compared to the 10% we saw in the early ’90s and 17% in the ’80s.
7. It’s the wrong time to buy. Wrong. All real estate is local. For those who are financially and mentally ready to buy, there has never been a better time to be a buyer in many markets. An abundant selection of homes and historically low interest rates give buyers an edge over sellers. The recently passed $7,500 federal tax credit for first-time home buyers creates an added incentive. For someone with a long-time horizon, Yun says, there is very little worry about home values since homes have historically provided a solid foundation for wealth accumulation. TIP: Compare the pros and cons of renting vs. buying to see what makes sense for you.
8. It’s the right time for everyone to buy. No. All real estate is local, and everyone is unique. Someone who is not emotionally or financially ready should not be forced or induced to join the rank of homeowners, even when a market presents good buying opportunities. Potential homeowners clearly need to understand that the decision to move up to ownership requires sacrifices, like saving up for down payment and elevating their credit scores. Homeowners who lose their home to foreclosure serve no one’s interest, Yun adds. TIP: Take a good hard look at your financial status and create a homeowner’s budget to see if you’re ready to buy a home.
9. It’s a terrible time to sell. Wrong. In markets where home sales are picking up strongly, a seller can easily get an offer if the property is priced correctly. Also, Yun says, for those looking to trade-up, selling low on an existing home is more than offset by buying the new move-up home at a lower price. When the market recovers, home price appreciation on the traded-up home will bring bigger bang for the buck. TIP: Homebuyers want bargains in this market. If you price your home much lower than your competition, you might end up with a bidding war.
10. With the advent of the Internet, more and more homes are being sold by owners (FSBOs), and real estate practitioners are becoming obsolete. Nope. According to Yun, the share of home sellers who choose to go it alone when selling their home has actually decreased from about 20% in the late 1980s to about 12% today. Even after these sellers successfully complete a transaction, only 4 in 10 say they would sell their next home without the assistance of a real estate professional. TIP: You don’t have to sign a listing contract to talk to a Realtor. Ask family and friends for referrals and interview a few. You might even get some free advice.
Enjoy!!!!
RISMEDIA, Oct. 29, 2008-With mortgage meltdowns, plummeting home prices and soaring foreclosure rates constantly in the news, it’s no wonder people are wary of the housing market these days. But contrary to popular belief, things are not as dismal as they seem, according to Lawrence Yun, chief economist of the National Association of Realtors. Yun debunks 10 commonly held beliefs about the current housing market, and http://www.frontdoor.com/ offers 10 related tips.
1. Peak-to-trough home price declines to date have been about 20%. Wrong. Measurements of home price declines can be skewed depending on which homes in which markets are being measured. For instance, the Case-Shiller Index, which indicates that home prices are down 20%, is heavily skewed towards homes with subprime loans and other distressed home sales. These troubled homes have experienced a steeper decline than home prices in general, says Yun, adding that both government data based on loans backed by Fannie Mae and Freddie Mac and data from the National Association of Realtors suggest much more modest price declines. TIP: If you’re selling your home, the best thing to do is price your home right.
2. The much smaller number of new homes now under construction indicates the dismal outlook for the housing market. Wrong. The inventory of homes on the market is very high, so the last thing we need now is more new homes being built. Home builders have cut back sharply on production, which will help lower inventories and stabilize prices. The builders have done exactly what market forces are dictating under current conditions, Yun says. TIP: With many new homes completed but not sold, you can find great opportunities.
3. Even when the housing market recovers, home price growth will be only 4 to 6% per year — much less than historical average returns for the stock market. Most buyers put less than 20% of their own money into a home purchase; this borrowing power can translate to a greater rate of return. This is how Yun explains it: Home price appreciation historically has been about 1 to 2 percentage points higher than consumer price inflation, which translates into about 4 to 6% per year. But this growth rate cannot be viewed as a rate of return like the stock market. The reason is that most people do not buy a home for all cash, instead making a cash down payment and borrowing the rest. The leverage this borrowing creates can magnify returns — and losses. If price growth returns to historic norm, the price growth of 4% can easily turn into 20 to 30% rate of return if the home buyer makes a down payment of 10 or 20%. TIP: Get the fundamentals right when investing in real estate.
4. Impending baby boomer retirements and moves to small homes will cause a glut of homes on the market. Wrong. The first edge of the baby boomers has reached 60 years of age and the massive bulk of that generation will soon go into retirement, but far from trading down, many of these older homeowners are keeping their homes or moving to ones of comparable size. And even if more boomers do sell their larger homes in the years ahead, Yun points out, the rapidly growing U.S. population should absorb the inventory of existing homes on the market. TIP: Active seniors can find a retirement community that caters to their needs and interests.
5. The federal government takeover of secondary mortgage companies Fannie Mae and Freddie Mac is a bailout that will cost taxpayers bundles. Too soon to tell, says Yun. It’s conceivable that taxpayers may have to cover some losses. It’s also possible that the government takeover will result in no loss of taxpayer dollars. Even if taxpayer funds are used, the bailout would be preferable to the global economic problems that would have occurred if Fannie and Freddie had gone belly up. TIP: Uncle Sam is “bailing out” homeowners facing foreclosure. Find out more about the Hope for Homeowners plan.
6. The Federal Reserve controls mortgage rates. Wrong. Yun explains: The Fed’s activities influence mortgage rates but don’t directly control them. What the Fed sets is a very short-term interest rate called the Federal Funds Rate. Mortgage rates are determined by global savings as well as credit spreads and inflationary pressures. Over the past two years, the Fed has raised the Fed Funds Rate to 5.5%, and then cut it deeply to around 2%. All the while, the 30-year mortgage rate has averaged in the 6 to 6.5% range. TIP: Today’s rates don’t look bad compared to the 10% we saw in the early ’90s and 17% in the ’80s.
7. It’s the wrong time to buy. Wrong. All real estate is local. For those who are financially and mentally ready to buy, there has never been a better time to be a buyer in many markets. An abundant selection of homes and historically low interest rates give buyers an edge over sellers. The recently passed $7,500 federal tax credit for first-time home buyers creates an added incentive. For someone with a long-time horizon, Yun says, there is very little worry about home values since homes have historically provided a solid foundation for wealth accumulation. TIP: Compare the pros and cons of renting vs. buying to see what makes sense for you.
8. It’s the right time for everyone to buy. No. All real estate is local, and everyone is unique. Someone who is not emotionally or financially ready should not be forced or induced to join the rank of homeowners, even when a market presents good buying opportunities. Potential homeowners clearly need to understand that the decision to move up to ownership requires sacrifices, like saving up for down payment and elevating their credit scores. Homeowners who lose their home to foreclosure serve no one’s interest, Yun adds. TIP: Take a good hard look at your financial status and create a homeowner’s budget to see if you’re ready to buy a home.
9. It’s a terrible time to sell. Wrong. In markets where home sales are picking up strongly, a seller can easily get an offer if the property is priced correctly. Also, Yun says, for those looking to trade-up, selling low on an existing home is more than offset by buying the new move-up home at a lower price. When the market recovers, home price appreciation on the traded-up home will bring bigger bang for the buck. TIP: Homebuyers want bargains in this market. If you price your home much lower than your competition, you might end up with a bidding war.
10. With the advent of the Internet, more and more homes are being sold by owners (FSBOs), and real estate practitioners are becoming obsolete. Nope. According to Yun, the share of home sellers who choose to go it alone when selling their home has actually decreased from about 20% in the late 1980s to about 12% today. Even after these sellers successfully complete a transaction, only 4 in 10 say they would sell their next home without the assistance of a real estate professional. TIP: You don’t have to sign a listing contract to talk to a Realtor. Ask family and friends for referrals and interview a few. You might even get some free advice.
Friday, November 7, 2008
Buying an Old Home in Vermont: Truth #1
Vintage or Antique Homes are one of my personal weaknesses and one that I succumbed to in 1997 when I purchased my very own 1820 Center hall Colonial Farmhouse on two acres. I think I can blame my parents for this love affair with architecturally significant and historic homes as they bought there first home in 1948, a 1780 Center Hall Colonial, where my mother still lives to this day.
For those of you out there who share this passion, there are some basic truths that you have to embrace in order to purchase one of these homes with confidence. I will be posting these truths over the next couple of weeks and hope that you find them helpful in deciding whether or not you really are an old house buyer.
Truth #1: Lead Paint: Yes there is most likely some lead paint located on the painted surfaces in all old homes that you may encounter. Unless they have been gutted to the studs and all of the original wood work removed, a Cub Scout armed with a camping knife and 15 minutes of un-supervised exploration time will find lead paint. If you would prefer an older home that has been gutted and replaced with all new surfaces then I would suggest buying a reproduction or totally new home of the style that you prefer. In my opinion, most of the charm of an older home is the old woodwork, trim, flooring, ceiling etc and most buyers are willing to put up with the older plumbing, wiring and mechanicals that often accompany the charm, in order to have it. To buy an older home with the old plumbing, wiring and mechanicals and the new interior may not be a wise decision and a new home may be a better choice.
The danger posed by lead paint in the vintage home is most often a factor of the condition of the paint. If the paint is in poor condition and some family member decides to dine on the loose paint chips, or worse, takes to chewing the window sills as a form of entertainment, lead poisoning is the result. Neither of these activities is advisable and will result in elevated levels of lead in the blood stream. Sanding, scrapping or stripping older painted surfaces if done haphazardly can put lead dust into the air to be inhaled with the same result. In short, if buying an older home, know that lead paint is located somewhere in the home. Don’t eat the paint or remodel without taking the proper precautions and you should be relatively safe.
For those of you out there who share this passion, there are some basic truths that you have to embrace in order to purchase one of these homes with confidence. I will be posting these truths over the next couple of weeks and hope that you find them helpful in deciding whether or not you really are an old house buyer.
Truth #1: Lead Paint: Yes there is most likely some lead paint located on the painted surfaces in all old homes that you may encounter. Unless they have been gutted to the studs and all of the original wood work removed, a Cub Scout armed with a camping knife and 15 minutes of un-supervised exploration time will find lead paint. If you would prefer an older home that has been gutted and replaced with all new surfaces then I would suggest buying a reproduction or totally new home of the style that you prefer. In my opinion, most of the charm of an older home is the old woodwork, trim, flooring, ceiling etc and most buyers are willing to put up with the older plumbing, wiring and mechanicals that often accompany the charm, in order to have it. To buy an older home with the old plumbing, wiring and mechanicals and the new interior may not be a wise decision and a new home may be a better choice.
The danger posed by lead paint in the vintage home is most often a factor of the condition of the paint. If the paint is in poor condition and some family member decides to dine on the loose paint chips, or worse, takes to chewing the window sills as a form of entertainment, lead poisoning is the result. Neither of these activities is advisable and will result in elevated levels of lead in the blood stream. Sanding, scrapping or stripping older painted surfaces if done haphazardly can put lead dust into the air to be inhaled with the same result. In short, if buying an older home, know that lead paint is located somewhere in the home. Don’t eat the paint or remodel without taking the proper precautions and you should be relatively safe.
Wednesday, November 5, 2008
While Buyers Sit on the sidelines, Interest Rates Rise to Keep Them Out of the Market
Thought I would share this article with you all. Many buyers have been sitting on the sidelines hoping the price of their favorite home will drop before they make an offer. In the mean time, interest rates are volatile and on the rise, pushing many qualified buyers into lower and lower purchase price levels. The reality is, the effect of a 1 point rise in the mortgage rates will more negatively effect your future monthly mortgage payment than will paying a little too much for your dream home. It may actually knock you out of the buying arena completely without you even realizing it.
With sellers' motivation at an all time high and winter right around the corner, the best strategy is to get pre-approved, or better yet pre-qualified, with your favorite lender and start actively looking for the perfect home for you. Once you find it, don't sit on the sidelines. Double check with your lender to be sure of the amount you still qualify to borrow( it could be changing every week or by the day!!) , and make an offer based on a sound evaluation of the market. You will be surprised at the amount a motivated seller will agree to sell for even they have have been reluctant to lower their asking price.
Mortgage Rates on Roller coaster Ride; Rise Again after Coming Down in Late October
Posted By Paige On November 4, 2008 @ 4:31 pm In Finance and Economy Comments Disabled
RISMEDIA, Nov. 5, 2008-Mortgage rates rose last week, with rates for 30-year fixed mortgages increasing to 6.26%, up from 6.00% the week prior, according to the Zillow Mortgage Rate Monitor, compiled by leading real estate website Zillow.com(R). Rates for 15-year fixed mortgages rose to 6.01%, up from 5.64% and 5-1 adjustable rate mortgages rose to 5.81% from 5.64%.
Rates for 30-year fixed mortgages appeared to be up slightly on Monday evening with the average rate on Zillow Mortgage Marketplace at 6.33%.
At a state level, the 30-year fixed mortgage rate in Michigan saw the biggest increase, rising from 6.03% to 6.48%. Rates on 30-year fixed mortgages were lowest in the states of Oregon (6.12%) and Georgia (6.14%), while Michigan (6.48%) and Massachusetts (6.40%) had the highest rates.
The Zillow Mortgage Rate Monitor is compiled each week using thousands of mortgage rates quoted on Zillow Mortgage Marketplace (http://www.zillow.com/mortgage) by mortgage lenders to borrowers who have submitted loan requests. State-level data is gathered for the top 20 states with the highest quote volume on Zillow.
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With sellers' motivation at an all time high and winter right around the corner, the best strategy is to get pre-approved, or better yet pre-qualified, with your favorite lender and start actively looking for the perfect home for you. Once you find it, don't sit on the sidelines. Double check with your lender to be sure of the amount you still qualify to borrow( it could be changing every week or by the day!!) , and make an offer based on a sound evaluation of the market. You will be surprised at the amount a motivated seller will agree to sell for even they have have been reluctant to lower their asking price.
Mortgage Rates on Roller coaster Ride; Rise Again after Coming Down in Late October
Posted By Paige On November 4, 2008 @ 4:31 pm In Finance and Economy Comments Disabled
RISMEDIA, Nov. 5, 2008-Mortgage rates rose last week, with rates for 30-year fixed mortgages increasing to 6.26%, up from 6.00% the week prior, according to the Zillow Mortgage Rate Monitor, compiled by leading real estate website Zillow.com(R). Rates for 15-year fixed mortgages rose to 6.01%, up from 5.64% and 5-1 adjustable rate mortgages rose to 5.81% from 5.64%.
Rates for 30-year fixed mortgages appeared to be up slightly on Monday evening with the average rate on Zillow Mortgage Marketplace at 6.33%.
At a state level, the 30-year fixed mortgage rate in Michigan saw the biggest increase, rising from 6.03% to 6.48%. Rates on 30-year fixed mortgages were lowest in the states of Oregon (6.12%) and Georgia (6.14%), while Michigan (6.48%) and Massachusetts (6.40%) had the highest rates.
The Zillow Mortgage Rate Monitor is compiled each week using thousands of mortgage rates quoted on Zillow Mortgage Marketplace (http://www.zillow.com/mortgage) by mortgage lenders to borrowers who have submitted loan requests. State-level data is gathered for the top 20 states with the highest quote volume on Zillow.
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Tuesday, November 4, 2008
Restored Stone Farmhouse on 13 acres with Views
This 181oc. Farmhouse is one of my personal favorites and if I didn't already live in a restored farmhouse.......... well, you know. This property had not been inhabited for almost 20 years when the current owner purchased it from the estate of the last owner and went to work. She began by assembling a crew of local artisan tradesman schooled in every discipline, from masonry and slate work to electricians and plumbers. The crew than began a methodical peeling back of surfaces that could be restored and gutting others to the bare post and beam supports in preparation for a full restoration effort that resulted in this beautiful home. The thing one has to understand about this ," Old House" , is that the structure and all the finishes have been restored while the mechanicals, electrical, plumbing, heating and septic system where all installed new and in such a way as to not compromise the original finishes. In short, this home looks and feels like it is 200 years old but the next owner will not be inheriting any old or antiquated systems in the process.
In any event, this property is situated on 13 acres and is surrounded by hundreds of acres of conserved farmland that will never be developed. The views to the east are of the spine of the northern ridge of the Green Mountains. You can literally see the four highest peaks of Vt from the front yard, Mt. Mansfield, Camel's Hump, Mt. Ellen and Mt. Abe as you scan the horizon from north to south. The home has four levels of finished space within the stone portion of the structure as well as a two story 20'x40'unfinished post and beam Ell. The kitchen has a raised Panton Stone hearth and a 5' high firebox. There is an identical fireplace located in the walkout basemen level " office space" that could be easily transformed into an authentic keeping room style tavern. All of the original doors, floors, woodwork, and hardware are intact and functional throughout the entire house. The second floor has had the most extreme renovations done with the creation of a full sized master bedroom and bath as well as a shared 3/4 bath for the other two bedrooms on that floor. The entire house is a restored work of art and yet still retains the cozy inviting charm of a home you would love to really "live" in.
To top it all off , the property is located just 5 minutes drive from Vergennes which has fast become one of the most desirable and sought after Vermont towns in which to live. The main street business district has been totally revitalized over the past ten years with a number of restaurants, shops and services all within walking distance of the central core of the town. Historical Otter Creek cascades over the falls located above the basin and the creek flows 8 miles through the country side and out to Lake Champlain , passing within walking distance of this very property. Burlington Vt and the International Airport are a 35 minute drive away and offer all the amenities and conveniences you would expect from Vermont's largest city.
So don't let this one pass you by. You can see more pictures and a full virtual tour by clicking the photo above. You can also get all the data at my website, http://www.chrisvontrapp.com/
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