Real Estate - Best Long Term Investment

The Gallup organization just released their April Economy and Personal Finances Poll which asked Americans to choose the best option for long term investment. It was no surprise to us that real estate returned to the top position over other investment categories (gold, stocks/mutual funds, savings accounts/CDs and bonds).

Back in 2011, gold was the most popular long-term investment among Americans. However, with the housing market improving across the U.S. and home prices rising, more Americans now consider real estate the best option for long-term investments.

Visit www.brandyfarris.com for thousands of homes in your area!
 

Current Mortgage Rates Won't Last Forever..

According to FreddieMac, the interest rate for a 30 year fixed rate mortgage at the beginning of April was 4.4%. However, FreddieMac predicts that mortgage rates will steadily climb over the next six quarters.

Let’s assume you want to purchase a home for $500,000 with a 20% down payment ($100,000). That would leave you with a $400,000 mortgage. What happens if you wait to buy this dream house?

Prices are projected to increase over the next year and a half. However, for this example, let’s assume prices remain the same. Your mortgage payment will still increase as mortgage rates climb to more historically normal levels.

This table shows how a principal and interest payment is impacted by a rise in interest rates:

Want to Sell Your House? Price it Right!

The housing market is recovering nicely. Prices have increased nationally by double digits over the last twelve months. Competition from the shadow inventory of lower priced distressed properties (foreclosures and short sales) is diminishing rapidly. Now may be the perfect time to sell your home and move to the dream house or beautiful location your family has always talked about.

The one suggestion we would definitely offer: DON’T OVERPRICE IT!!
Even though prices have increased by more than 10% over the last year, the acceleration of appreciation has slowed dramatically over the last few months. As an example, in their April Home Price Index Report, CoreLogic revealed that home prices actually depreciated by .08% this month as compared to last month’s report. What concerns us is that Trulia just reported that asking prices are still continuing to increase.

Because investor purchases are declining and there are more listings coming onto the market, we believe that sellers should be very cautious when they price their house. The alternative might be that you could lose money by overpricing your home at the start as explained in a research study on the matter.

Bottom Line
Though it is a great time to sell your house, pricing it right is crucial. Get guidance from a real estate professional in your marketplace to ensure you get the best deal possible.

Homeownership's Impact on Net Worth

Over the last six years, homeownership has lost some of its allure as a financial investment. As homeowners suffered through the housing bust, more and more began to question whether owning a home was truly a good way to build wealth. A study by the Federal Reserve formally answered this question.

Some of the findings revealed in their report:

• The average American family has a net worth of $77,300
• Of that net worth, 61.4% ($47,500) of it is in home equity
• A homeowner’s net worth is over thirty times greater than that of a renter
• The average homeowner has a net worth of $174,500 while the average net worth of a renter is $5,100

Bottom Line

The Fed study found that homeownership is still a great way for a family to build wealth in America.

www.christiefarris.com 

New homes in Baton Rouge means the economy is improving

BATON ROUGE, LA (WAFB) -
Homeowners are seeing their homes sell quickly in Baton Rouge.  Realtors say there are only a certain amount of homes on the market, now developers are cashing in by building new options.
One of those new neighborhoods, Magnolia Lakes, off Burbank Drive is where workers are hammering, sawing and framing homes.

"You're probably looking close to $225,000 to $250,000 for a newer house," even at that amount, you may only be looking at a little square footage. Buyers are likely to find more space in older, updated homes.  But there are some who prefer new builds.  In general, homes are on the market for about five months. That means what's available is dwindling.

"So somewhere we've got to get more inventory.  That's where new construction comes in.  That's where you're seeing so much new construction." With a stronger economy, there are now more people working and they are in a position to buy.  That has developers looking for land to clear, to build on.  For example, there are 80 acres off the Millerville exit where trees have been cleared for apartments and office space.

The Baton Rouge Area Chamber has predicted more jobs for the parish this year.  That job growth, is what real estate agents say builders are banking on, to move their product.  As far as how the new stock will affect market pricing, Wattam says Baton Rouge is experiencing what's called a level market. "Buyers are going to get a good value.  Sellers are going to get what they want for their house.  Those days of coming in $60,000 under, those days are gone." Agents say they are hearing interest rates are going up later this year.

Money Magazine: Buy Now not Later

We have often suggested that potential home buyers consider rising interest rates when thinking about the true cost of a home. Remember, cost is not determined by price alone but by price and mortgage rate. The longer a buyer waits, the higher the mortgage payment will be if rates continue to increase (as is projected by Fannie Mae, Freddie Mac, the National Association of Realtors and the Mortgage Bankers Association).

Money Magazine, in its latest issue, agreed with our analysis as they also warned their readership of the same ramification if they waited to buy a home.
Here is what they said:

"BE MINDFUL OF RATES. The average interest rate on a 30-year fixed loan is predicted to climb from the current 4.4% to 5.3% by the 2015 spring buying season, according to Freddie Mac. For a $250,000 loan, that means that a borrower who waits would pay $136 more per month and an additional $49,090 in interest over the life of the loan. Will you need a big loan? Better to act soon before rates tick up."
And the monthly increase Money mentioned did not take into consideration that prices are also projected to increase over the next year. Here is what the additional cost would be if prices rise by the 4.5% projected by the latest Home Price Expectation Survey and interest rates go to 5.3%.

Where are Prices Headed Over the Next 5 Years??

Today, many real estate conversations center on housing prices and where they may be headed. That is why we like the Home Price Expectation Survey. Every quarter, Pulsenomics surveys a nationwide panel of over one hundred economists, real estate experts and investment & market strategists about where prices are headed over the next five years. They then average the projections of all 100+ experts into a single number.

The results of their latest survey

The latest survey was released last week. Here are the results:

• Home values will appreciate by 4.5% in 2014.
• The average annual appreciation will be 3.94% over the next 5 years
• The cumulative appreciation will be 19.7% by 2018.
• Even the experts making up the most bearish quartile of the survey still are projecting a cumulative appreciation of almost 11% by 2018.

Individual opinions make headlines. We believe the survey is a fairer depiction of future values.

B.R. ranked No. 2 among U.S. mid-size metros for 2013 business expansions

Baton Rouge and Louisiana have each received a top three ranking in the nation for the high number of business expansions announced on the metro and state level in 2013. In its annual economic development rankings, trade publication Site Selection magazine places Baton Rouge tied for second among all U.S. metros with a population between 200,000 and 1 million for the number of new major projects or expansions announced last year.

Baton Rouge's 46 projects tied it with the Allentown, Pa.-Bethlehem, Pa. metro area, and placed it just two projects behind the No. 1 metro area on the list: Omaha, Neb.-Council Bluffs, Iowa. This year marks the fourth in a row that Baton Rouge has ranked in the top 10 on the list. Last year, the 34 new or expanded projects in the Baton Rouge area was good enough for a No. 4 ranking nationwide.

"Being included on this list four years in a row is a testament to the strength of our region and the momentum underway," says BRAC President and CEO Adam Knapp in a press release.

Site Selection counts projects in its ranking only if they include a capital investment of at least $1 million, create at least 50 jobs, or add at least 20,000 square feet of floor space. Retail, government projects, schools and hospitals are not counted. BRAC says it worked with 15 companies last year that ultimately announced expansions or relocations in the region.

"These projects will result in the creation of over 2,167 new jobs, $112 million in new payroll, and $4.4 billion in capital investment," reads the release from BRAC, which notes the payroll and capital investment figures are both local records.

Site Selection also ranks Louisiana No. 3 among all states for the number of projects it announced last year, per capita. The 180 projects per capita recorded in Louisiana trailed only Ohio and Nebraska. Texas, meanwhile, was awarded the magazine's Governor's Cup for total business developments and expansions in 2013.

Should you Buy or Rent?

Here is one simple chart that explains why buying a home makes more sense than renting one.

Call me today for a free first time home buyer guide.

Cut the Cost of Maintaining your Home

Upgrade to lower costs

 

 

Homeowners once had to make a choice: the beauty of genuine wood and stone, or the easy maintenance of a man-made alternative. Installing vinyl siding over wood shingles, for example, meant you'd never have to repaint again, but also required sacrificing architectural charm -- and possibly getting kicked off your neighbor's dinner party guest list. Now, though, you can have it all. A new breed of manufactured products available at home centers and specialty shops looks realistic enough to preserve or even boost your home's appearance.

While some of these modern materials are pricier than the natural versions, they will save you money and effort over the long term. Plus, "it's a compelling one-two punch for selling," says Lake Forest, Ill., realtor Carol Russ. "The traditional looks draw buyers in, and then I tell them that they're actually seeing new, super-durable materials." Here are six imitations that might be better than the real deal.

1.  FIBER-CEMENT SIDING
2. CELLULAR PVC TRIM
3. QUARTZ COUNTERTOPS
4. SOLID VINYL FENCING
5. FIBERGLASS ENTRY DOORS
6. CLAD WINDOWS

5 Reasons you Shouldn't For Sale By Owner

Some homeowners consider trying to sell their home on their own, known in the industry as a For Sale by Owner (FSBO). We think there are several reasons this might not be a good idea for the vast majority of sellers.

Here are five reasons:

 

1. There Are Too Many People to Negotiate With

Here is a list of some of the people with whom you must be prepared to negotiate if you decide to FSBO.

• The buyer who wants the best deal possible
• The buyer’s agent who solely represents the best interest of the buyer
• The buyer’s attorney (in some parts of the country)
• The home inspection companies which work for the buyer and will almost always find some problems with the house
• The appraiser if there is a question of value
• Your bank in the case of a short sale                                                        

 

2. Exposure to Perspective Purchasers

Recent studies have shown that 92% of buyers search online for a home. That is in comparison to only 28% looking at print newspaper ads. Most real estate agents have an internet strategy to promote the sale of your home. Do you?

 

3.  Results Come from the Internet

Where do buyers find the home they actually purchased?

• 43% on the internet
• 9% from a yard sign
• 1% from newspapers

The days of selling your house by just putting up a sign and putting it in the paper are long gone. Having a strong internet strategy is crucial.

 

4. FSBOing has Become More and More Difficult

The paperwork involved in selling and buying a home has increased dramatically as industry disclosures and regulations have become mandatory. This is one of the reasons that the percentage of people FSBOing has dropped from 19% to 9% over the last 20+ years.

 

5. You Net More Money when Using an Agent

Many homeowners believe that they will save the real estate commission by selling on their own. Realize that the main reason buyers look at FSBOs is because they also believe they can save the real commission. The seller and buyer can’t both save the commission.
Studies have shown that the typical house sold by the homeowner sells for $184,000 while the typical house sold by an agent sells for $230,000.   This doesn’t mean that an agent can get $46,000 more for your home as studies have shown that people are more likely to FSBO in markets with lower price points. However, it does show that selling on your own might not make sense.

 

Bottom Line

Before you decide to take on the challenges of selling your house on your own, sit with a real estate professional in your marketplace and see what they have to offer.

5 Reasons to Buy Now Instead of Spring

Based on prices, mortgage rates and soaring rents, there may have never been a better time in real estate history to purchase a home than right now. Here are five reasons purchasers should consider buying before the spring market arrives:

Supply Is Shrinking

With inventory declining in many regions, finding a home of your dreams may become more difficult going forward. There are buyers in more and more markets surprised that there is no longer a large assortment of houses to choose from. The best homes in the best locations sell first. Don’t miss the opportunity to get that ‘once-in-a-lifetime’ buy.

Price Increases Are on the Horizon

Prices are projected to appreciate by over 25% from now to 2018. First home buyers will probably pay more both in price and interest rate if they wait until the spring. Even if you are a move-up buyer, it will wind-up costing you more in net dollars as the home you will buy will appreciate at approximately the same rate as the house you are in now.

Owning a Home Helps Create Family Wealth

Whether you are rent or you own the home you are living in, you are paying a mortgage. Either you are paying your mortgage or your landlord’s. The Fed, in a recent study, revealed that the net worth of the average homeowner is 30 times greater than that of a renter.

Interest Rates Are Projected to Rise

The Mortgage Bankers Association, the National Association of Realtors, Freddie Mac and Fannie Mae have all projected that the 30-year mortgage interest rate will be over 5% by the this time next year. That is an increase of almost one full point over current rates.

Buy Low, Sell High

We would all agree that, when investing, we want to buy at the lowest price possible and hope to sell at the highest price. Housing can create family wealth as long as we follow this simple principle. Today, real estate is selling ‘low’ compared to where it will be next year. It’s time to buy.

Are Mom & Dad Helping or Impeding Your Home Purchase?

Homebuyers, especially First Time Home Buyers,often get advice from family, friends and colleagues. Some of it is spot on, some of it may be well-intentioned but out of sync with the market the buyers are facing, versus what another's own experience was at some past point in time.

I find that many young buyers get help from family members either financially or practically. When family has a vested interest, it’s important to consider the part they play in the transaction. Most of my clients do want the ultimate approval of their parents, but also want to play a lead role in the home selection.  Here are some scenarios that have arisen, and ideas for keeping all parties feeling good about the process.

Collaboration: Being a protective Mom myself, I can understand a parent’s desire to be watchful, making sure their kids are getting sound advice and not getting themselves in over their head.  With permission from my buyer client, I offer to engage the parents in an initial meeting, either on a conference call or in person. One buyer did elect to have his mother on speakerphone while preparing his first written offer. After that, both Mom and son were confident moving forward.

Calming: Fear is evident in many of my First Time Buyer purchases, but typically it is more prominent in the parents than the kids. Past missteps and worry can let anxieties run high. Inviting parents to home inspections or including them on report findings often allows them to feel more comfortable with the home’s condition, or the ability to ask questions. Lots of times, parents offer to help with those smaller repair or maintenance items as they can see the excitement mounting in their offspring’s eyes.

Grounding: One Mom was very instrumental in keeping her daughter realistic about the gap between her dream home and her budget - the classic “champagne taste on a beer budget” scenario.  But daughter was determined to buy a home of her own, even if that meant a fixer. Dad got cold feet when he saw the condition of homes in his daughter’s price range and did not want her to make a purchase at all. Once Mom saw what her daughter would actually get for her money, Mom & Dad decided to help out, allowing daughter to get a safer, and better-built option.

Educating: Another parent was helping financially and wanted his son to ‘get the best deal.’ In a low inventory, multiple-offer market, that wasn’t a realistic expectation. After their son lost out on several properties listening to purchase advice from his parents, Mom & Dad were copied on comp information for future purchases in order to help them understand why lower than asking price offers were costing money in the long run as prices increased on the next round of homes for sale.

I would never discourage anyone from including a family member whose advice is appreciated, especially if that person will be putting sweat equity or money into the equation. Bring all parties together early on can keep everyone feeling good about the outcome.

Exisiting Home Sales Report January 31, 2014

Biggest Home Seller Mistakes

Two Things you Don't Need to hear from your Listing Agent

You’ve decided to sell your house. You begin to interview potential real estate agents to help you through the process. You need someone you trust enough to:

1. Set the market value on possibly the largest asset your family owns (your home)
2. Set the time schedule for the successful liquidation of that asset
3. Set the fee for the services required to liquidate that asset

An agent must be concerned first and foremost about you and your family in order to garner that degree of trust.  Make sure this is the case.
Be careful if the agent you are interviewing begins the interview by:

• Bragging about their success
• Bragging about their company’s success

An agent’s success and the success of their company can be important considerations when deciding on the right real estate professional to represent you in the sale of the house. However, you first need to know they care about what you need and what you expect from the sale. If the agent is not interested in first establishing your needs, how successful they may seem is much less important.
Look for someone with the ‘heart of a teacher’ who comes in prepared well enough to explain the current real estate market and patient enough to take the time to show how it may impact the sale of your home. Not someone only interested in trying to sell you on how great they are.

You have many agents from which to choose. Pick someone who truly cares.

Don’t Wait! Move Up to the Home You Always Wanted!

Now that the housing market has stabilized, more and more homeowners are considering moving up to the home they have always dreamed of. Prices are still below those of a few years ago and interest rates are still below 5%.

However, sellers should realize that waiting to make the move while mortgage rates are increasing probably doesn’t make sense. As rates increase, the price of the house you can buy will decrease. Here is a chart detailing this point:

Home Sales Reach 7 Year High

There are many naysayers declaring that the housing market is still challenged.
Young adults are burdened with too much student debt. Interest rate increases are killing demand. Homeownership is no longer seen as part of the American Dream.

We just want to let these naysayers know three things: 13,945 houses sold yesterday, 13,945 will sell today and 13,945 will sell tomorrow. 13,945!

That is the average number of homes that sell each and every day in this country according to the National Association of Realtors’ (NAR) latest Existing Home Sales Report. According to the report, there were 5.09 million homes sold in 2013. Divide that number by 365 (days in a year) and we can see that, on average, almost 14,000 homes sell every day.

NAR revealed that sales had increased 9.1% as compared to 2012 and that it was the market’s strongest performance since 2006.

We realize that these numbers are below the record for homes sold during the boom. We also know that we may not see those numbers again for a long time (and that is probably a good thing). But to say that the current real estate market is challenged is totally inaccurate. We have about 14,000 pieces of evidence to prove that.

   

Home Sales in 2013 Rise to Strongest Level in 7 Years

Daily Real Estate News | Friday, January 24, 2014

The housing market has been experiencing a “healthy recovery” over the past two years, with home sales last year rising to the highest level since 2006, according to the National Association of REALTORS®' latest housing report.
“Existing-home sales have risen nearly 20 percent since 2011, with job growth, record low mortgage interest rates, and a large pent-up demand driving the market,” says Lawrence Yun, NAR’s chief economist. “We lost some momentum toward the end of 2013 from disappointing job growth and limited inventory, but we ended with a year that was close to normal given the size of our population.”
Existing-home sales rose 1 percent in December 2013 compared to November and reached a seasonally adjusted annual rate of 4.87 million.
Existing-home sales for all of 2013 reached 5.02 million sales, 9.1 percent higher than 2012, and the largest rise since 2006 when sales were at 6.48 million at the close of the housing boom, NAR reports.
Home prices were also on the rise in 2013, up 11.5 percent over 2012, with a median existing-home price of $197,100 last year compared to $176,800 in 2012. It was the strongest gain in home prices in a year since 2005, when home prices rose 12.4 percent, NAR reports.
NAR President Steve Brown says that with job growth expected this year, home sales should hold despite rising home prices and higher mortgage rates.
“The only factors holding us back from a stronger recovery are the ongoing issues of restrictive mortgage credit and constrained inventory,” Brown says. “With strict new mortgage rules in place, we will be monitoring the lending environment to ensure that financially qualified buyers can access the credit they need to purchase a home.”
Housing Recovery Regional Snapshot
Here’s a look at how existing-home sales fared in December and for the year across the country:

• Northeast: Existing-home sales fell 1.5 percent in December but remain 3.2 percent higher than December 2012. Median price: $239,300, up 3.6 percent from year ago levels
• Midwest: Existing-home sales dropped 4.3 percent in December and are 0.9 percent below year ago levels. Median price: $150,700, 7 percent higher than December 2012.
• South: Existing-home sales rose 3 percent in December and are 4.6 percent higher than December 2012. Median price: $173,200, up 8.9 percent from a year ago.
• West: Existing-home sales increased 4.8 percent, but are 10.7 percent below a year ago. Median price: $285,000, up 16.0 percent from December 2012.

By REALTOR® Magazine Daily News

Baton Rouge's Most Expensive Home Sales of 2013

http://businessreport.com/1212014/Baton_Rouge_s_most_expensive_home_sales_of_2013