It’s buying time again — big time
The following was taken from the May edition of The Real Estate Guide and written by Broderick Perkins:
If you’ve got the income. If you’ve got plenty of tenure on the job. If your credit is solid. If you can otherwise pass muster at the mortgage loan desk. If it’s cheaper for you to buy than it is to rent. Yes, there are lots of “ifs,” but it’s one of the best times in America to buy a home. And it won’t last forever.
Distressed homes – foreclosures and short sales sold at deep discounts – accounted for 34 percent of February sales, according to the National Association of Realtors (NAR). The bargain basement is open for business.
Investors know a party when they see one. They snatched up 64.5 percent more homes in 2011 than in 2010 and now account for nearly one in every four homes sold, NAR reported.
The second home market is back with a vengeance. Both investors and playhouse buyers are jumping on this bandwagon. They pushed vacation/second home sales up 7.0 percent in 2011.
Meanwhile, owner-occupied purchases fell 15.5 percent last year.
Numbers talk: locally there are 136 “pending” (in escrow) transactions in West Maui. Again in West Maui, there are 128 homes for sale and 457 condominiums; both of these active or for sale inventories have been reducing steadily since the last quarter of last year.
Lately, we are seeing a small percentage of our inventory with multiple offers, and once an offer is accepted, “back up offers.” This is something we have not really experienced in several years (numbers as of 5/11/2012, Realtors Association of Maui).
“Housing market forecasts for a recovery remain mixed, but it’s about when, not if. If this isn’t the Year of the Dragon for the housing market, it could begin to breathe fire next year. But consider that many of those forecasts are based on lagging information. One study by John Burns Consulting says many are lagging by a full quarter, and prices have been rising in many markets for a full quarter. And then there are those record low interest rates. Don’t get behind the curve and wait until a line forms and multiple offers are the norm, rather than the exception. Mortgage rates are near record lows, and home prices may be within reach of many consumers who want to buy in today’s market,” said NeighborWorks America Director of Homeownership and Lending Marietta Rodriguez.
“But there are more things to consider than low mortgage rates and home prices when your plan is to be a successful long-term homeowner,” Rodriguez added.
Be mortgage ready – If you haven’t already, check your credit reports from the only federally-sanctioned source of free reports, AnnualCreditReport.com, to make sure your credit is mortgage-worthy. Don’t get taken by sound-alike websites that offer you “free” credit reports that are only “free” after you buy a credit monitoring service.
Know all your costs – More than just a mortgage payment, homeownership comes with insurance, tax, utility, maintenance and transportation costs, among others. Include them in your budget to determine what is truly affordable.
Know your mortgage – Fixed-rate mortgages (FRMs) offer payment certainty, while adjustable rate mortgages (ARMs) frequently provide lower initial monthly payments… but those low rates could rise considerably over time. Work with a trained homeownership advisor to help get the right mortgage loan.
Hire good help – Get a licensed real estate agent who knows the market. It’s easy to go digital and browse for housing. Actually going through the process and closing on a home without professional assistance is something else.
Take your time – There may be some pressure to get in the market at today’s affordable prices and low interest rates, but if you move too quickly, it could be a mistake. Take the time to obtain a home inspection, learn the neighborhood, investigate the school district. Buy only what you can truly afford, not a home based on the largest loan the lender will lend.”