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Starting To Look For A Home? Know What You Want vs. What You Need

Home in MassachusettsIn this day and age of being able to shop for anything anywhere, it is very important to know what you’re looking for when you start your home search.

If you’ve been thinking about buying a home of your own for some time now, you’ve probably come up with a list of things that you’d LOVE to have in your new home. Many new homebuyers fantasize about the amenities that they see on television or Pinterest, and start looking at the countless homes listed for sale with rose-colored glasses.

Do you really need that farmhouse sink in the kitchen in order to be happy with your home choice? Would a two-car garage be a convenience or a necessity? Could the man cave of your dreams be a future renovation project instead of a make or break now?

The first step in your home buying process should be pre-approval for your mortgage. This allows you to know your budget before you fall in love with a home that is way outside of it.

The next step is to list all the features of a home that you would like, and to qualify them as follows:

  • ‘Must-Haves’ – if this property does not have these items, then it shouldn’t even be considered. (ex: distance from work or family, number of bedrooms/bathrooms)
  • ‘Should-Haves’ – if the property hits all of the 'must-haves' and some of the 'should-haves,' it stays in contention but does not need to have all of these features.
  • ‘Absolute-Wish List’ – if we find a property in our budget that has all of the ‘must-haves,’ most of the ‘should-haves,’ and ANY of these, it’s the winner! Bottom Line Having this list fleshed out before starting your search will save you time and frustration, while also letting your agent know what features are most important to you before he or she begins to show you houses in your desired area.

Bottom Line

Having this list fleshed out before starting your search will save you time and frustration, while also letting your agent know what features are most important to you before he or she begins to show you houses in your desired area.

If you have any questions about buying a home in the suburbs north of Boston, contact the Ternullo Real Estate Team today at 781-517-4224.

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    Where are Home Values Headed over the Next Few Years?

    There are many questions about where home prices will be next year as well as where they may be headed over the next several years to come. We have gathered the most reliable sources to help answer these questions:

    The Home Price Expectation Survey – A survey of over 100 market analysts, real estate experts, and economists conducted by Pulsenomics each quarter.

    Zelman & Associates – The firm leverages unparalleled housing market expertise, extensive surveys of industry executives, and rigorous financial analysis to deliver proprietary research and advice to leading global institutional investors and senior-level company executives.

    Mortgage Bankers Association (MBA) – As the leading advocate for the real estate finance industry, the MBA enables members to successfully deliver fair, sustainable, and responsible real estate financing within ever-changing business environments.

    Freddie Mac – An organization whose mission is to provide liquidity, stability, and affordability to the U.S. housing market in all economic conditions extending to all communities from coast to coast.

    The National Association of Realtors (NAR) – The largest association of real estate professionals in the world.

    Fannie Mae – A leading source of financing for mortgage lenders, providing access to affordable mortgage financing in all markets always.

    Here are their projections of prices going forward:

    Projected Home Price % Appreciation 2018-2022

    Bottom Line

    Every source sees home prices continuing to appreciate – just at lower percentages as we move through the next several years.

    If you have any questions about the real estate market in the north Boston suburbs, call the Ternullo Real Estate Team today at 781-517-4224.

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      The Net Worth of a Homeowner is 44x Greater Than A Renter!

      Homeowners Net WorthEvery three years, the Federal Reserve conducts their Survey of Consumer Finances in which they collect data across all economic and social groups. Their latest survey data, covering 2013-2016 was recently released.

      The study revealed that the median net worth of a homeowner was $231,400 – a 15% increase since 2013. At the same time, the median net worth of renters decreased by 5% ($5,200 today compared to $5,500 in 2013).

      These numbers reveal that the net worth of a homeowner is over 44 times greater than that of a renter.

      Owning a home is a great way to build family wealth

      As we’ve said before, simply put, homeownership is a form of ‘forced savings.’ Every time you pay your mortgage, you are contributing to your net worth by increasing the equity in your home.

      That is why, for the fifth year in a row, Gallup reported that Americans picked real estate as the best long-term investment. This year’s results showed that 34% of Americans chose real estate, followed by stocks at 26% and then gold, savings accounts/CDs, or bonds.

      Greater equity in your home gives you options

      If you want to find out how you can use the increased equity in your home to move to a home that better fits your current lifestyle, let’s get together to discuss the process. Contact us today!

       

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        Massachusetts Real Estate: August 2018 Market Overview

        "With prices continuing to creep up, buyers are taking a stand and refusing to over pay for their largest investment." reports Linda O'Koniewski, CEO of Leading Edge Real Estate. "Sellers who are on the fence or who are waiting until the Fall to list their homes should consider listing now to avoid the influx of inventory expected after Labor Day and to ensure the highest possible sale price. With news that interest rates will stay steady in the next term, buyers are eager to get into the market before they pop."

         

        Massachusetts Real Estate July 2018


        Thinking of selling your home? Contact The Ternullo Real Estate Team today and learn how we can help!

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          Buying Is Now 26.3% Cheaper Than Renting in the US

          Happy Home BuyersThe results of the latest Rent vs. Buy Report from Trulia show that homeownership remains cheaper than renting, with a traditional 30-year fixed rate mortgage, in 98 of the 100 largest metro areas in the United States.

          In the six years that Trulia has conducted this study, this is the first time that it was cheaper to rent than buy in any of the metropolitan areas.

          It’s no surprise, however, that those two metros are San Jose and San Francisco, CA, where median home prices have jumped to over $1 million dollars this year. Home values in San Jose have risen 29% in the last year, while rents have remained relatively unchanged.

          For the 98 metros where homeownership wins out, 97 of them show a double-digit advantage when buying. The range is an average of 2.0% less expensive in Honolulu (HI), all the way up to 48.9% in Detroit (MI), and 26.3% nationwide!

          Below is a map of the 100 metros that were studied. The darker the blue dot on the metro, the cheaper it is to buy there.

          The Cost of Renting versus Owning a Home

          In order to calculate the true cost of renting vs. buying, Trulia includes all assumed renting costs, including one-time costs (like security deposits), and compares them to the monthly costs of owning a home (insurance, mortgage payments, taxes, and maintenance) including one-time costs (down payments, closing costs, sale proceeds). They also assume that households stay in their home for seven years, put down a 20% down payment, and take out a 30-year fixed rate mortgage. The full methodology is included with the study results here.

          Below is a chart created with the data from the last six years of the study, showing the impact of the median home price, rental price, and 30-year fixed rate interest rate used to calculate the ‘cheaper to buy’ metric.

          Buying Remains Cheaper than Renting in the US

          In 2016, when buying was 41.3% less expensive than renting, the average mortgage rate was the driving force behind the difference. Rates this year are the highest they have been in six years which has narrowed the gap, all while home price appreciation has also been driven up by a lack of homes for sale.

          Cheryl Young, Trulia’s Chief Economist, had this to say, “One point deserves emphasizing: The ultra-costly San Francisco Bay Area is not a harbinger for the nation as a whole. While renting may outweigh buying in San Jose and San Francisco, it is unlikely that renting will tip the scales nationally anytime soon.”

          Bottom Line

          Homeownership provides many benefits beyond the financial ones. If you are one of the many renters out there who would like to evaluate your ability to buy this year, contact the Ternullo Real Estate team today and let’s get together to find your dream home.

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          Parents Say Kids' Opinions Matter Big When Buying a Home

          A recent survey conducted by Harris Poll and released by SunTrust Mortgage found that “55% of homeowners with a child under the age of 18 at the time when they purchased their home said that the opinion of their offspring played a major role in their home buying decision.”

          When the results were broken down by the parent’s age, millennials (those 18-36) led the way with 74% of homeowners saying that their child’s opinion was a factor in choosing which home to buy. Eighty-three percent of renters believe that their child’s opinion would be a deciding factor when looking to purchase a home.

          So what features in a home are most important to kids?

          Parents Say Kids Opinions Matter Big When Buying a Home | MyKCM

          Coming in at 57%, it should come as no surprise that gaining their own bedrooms was the top most-desirable feature of any home for kids, followed by a large back yard to play in at 34%.

          Todd Chamberlain, Head of Mortgage Banking at SunTrustexplained the reasoning behind the survey,

          “As a parent of two kids, I know from experience that including children in the home buying process is not only fun for the whole family, but also educational for our homebuyers of tomorrow.” 

          Bottom Line

          If you’re thinking about selling your home this year, make sure to highlight all the kid-friendly features your home has to offer so that you can sway the real decision makers.

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          Millennials Are Skipping Starter Homes for Their Dream Homes

          Millennials Are Skipping Starter Homes for Their Dream Homes

          A new trend has begun to emerge. With home prices skyrocketing in the starter home category, many first-time homebuyers are skipping the traditional starter homes and moving right into their dream homes.

          What’s a Starter Home?

          According to the National Association of Realtors (NAR), simply put, a starter home is a one or two-bedroom home (sometimes even a small, three bedroom). “Prices vary widely by market but starters on average cost $150,000 to $250,000 while trade-up and premium homes cost upwards of $300,000.”

          Finding Their Forever Homes Now

          A recent CNBC article revealed that there are many factors that delayed older millennials (ages 25-35) from buying a home earlier in their lives. The aftereffects of the Great Recession teaming up with larger education costs forced many to either remain living in their parent’s homes or to rent.

          With the economy continuing to improve, many millennials have been able to break into better-paying jobs which has helped spur down payment savings. As the dream of homeownership comes closer to reality, many millennials are saving for their forever homes.

          According to the latest statistics from NAR, 30% of millennials bought homes for $300,000 or more this year (up from 14% in 2013). Diane Swonk, Chief Economist at Grant Thornton weighed in saying, “They rented for longer. Now they’re going to where they want to stay.”

          More and more millennials are settling down, getting married, and starting families, which is a huge factor driving them to look for larger homes.

          Increased competition in the starter home market has also been a driving force in waiting to afford their dream homes. Inventory in the starter home market is down 14.2% from last year, according to research from Trulia. This has driven prices up and has led to bidding wars.

          Many first-time buyers who were originally looking for starter homes are realizing that for just a little bit more of an investment, they could afford trade-up or premium homes instead.

          Bottom Line

          If you plan on purchasing your first home this year, let’s get together to determine how much house you can afford. You may be pleasantly surprised.

          Will Home Prices Fall as Mortgage Rates Rise?

          Mortgage interest rates have increased by more than half of a point since the beginning of the year. They are projected to increase by an additional half of a point by year’s end. Because of this increase in rates, some are guessing that home prices will depreciate.

          However, some prominent experts in the housing industry doubt that home values will be negatively impacted by the rise in rates.

          Mark Fleming, First American’s Chief Economist: 

          “Understanding the resiliency of the housing market in a rising mortgage rate environment puts the likely rise in mortgage rates into perspective – they are unlikely to materially impact the housing market… 

          The driving force behind the increase are healthy economic conditions…The healthy economy encourages more homeownership demand and spurs household income growth, which increases consumer house-buying power. Mortgage rates are on the rise because of a stronger economy and our housing market is well positioned to adapt.”

          Terry Loebs, Founder of Pulsenomics:

          “Constrained home supply, persistent demand, very low unemployment, and steady economic growth have given a jolt to the near-term outlook for U.S. home prices. These conditions are overshadowing concerns that mortgage rate increases expected this year might quash the appetite of prospective home buyers.”

          Laurie Goodman, Codirector of the Housing Finance Policy Center at the Urban Institute:

          “Higher interest rates are generally positive for home prices, despite decreasing affordability…There were only three periods of prolonged higher rates in 1994, 2000, and the ‘taper tantrum’ in 2013. In each period, home price appreciation was robust.”

          Industry reports are also calling for substantial home price appreciation this year. Here are three examples:

          • The Home Price Expectation Survey says that prices will appreciate by 5.8% this year.
          • The Freddie Mac Outlook Report is looking for home prices to appreciate by around 7% in 2018.
          • The CoreLogic HPI Forecast indicates that home prices will increase by 5.2% on a year-over-year basis.

          Bottom Line

          As Freddie Mac reported earlier this year in their Insights Report“Nowhere to go but up? How increasing mortgage rates could affect housing,”

          “As mortgage rates increase, the demand for home purchases will likely remain strong relative to the constrained supply and continue to put upward pressure on home prices.”