Zillow: Buyers over optimistic on home value appreciation

October 28, 2011 By Leave a Comment

More than 42% of prospective homebuyers polled by Zillow believe home values will appreciate by 7% annually in the years ahead.

“It’s troubling that we’re still in the midst of one of the worst housing recessions in history, and yet prospective buyers continue to have such high expectations for home value appreciation,” said Stan Humphries, chief economist at Zillow.

Many commented the Zestimates put out once a month by Zillow routinely show rosier-than-expected home values than other indices. Still, the findings in their survey were most troubling because even in a normal market, home prices only appreciate between 2% and 5% per year, according a 2005 study completed by Robert Schiller, founder of the Standard & Poor’s/Case-Shiller home price index.

Zillow polled 177 people who said they were planning to buy a home within the next three years.

The prospective buyers did show a knowledgeable grasp of the process. More than 65% of those surveyed answered questions correctly more than half of the time. There were still some areas of concern.

Roughly 41% of respondents believe purchasing private mortgage insurance is mandatory, no matter the down payment. Typically, lenders require PMI when less than 20% down is given.

And 56% of those polled said appraisals determine whether a home is in good condition, which is something an inspection does.

Nearly half of those surveyed said a prospective buyer  owns a home as soon as the contracts are signed, when in fact the purchase and sales agreements kicks off the closing phase, which can be lengthy.

“It’s great that buyers seem to have a fairly solid grasp of the home-buying process, but since this is one of the biggest financial decisions of most people’s lives, it’s even more important that they understand how that investment will appreciate after they sign the papers,” Humphries said. “Over-estimation of the appreciation potential will lead many to buy real estate when the time in which they plan to live in the house may make renting a better strategy.”

 

SOURCE: HousingWire

Filed Under: Buying, Consumer Behavior, Inspections, News

Why would you buy a new home?

September 26, 2011 By Leave a Comment

New-home sales reached a seasonally adjusted annualized rate of 298,000 in July, down from 323,000 last year, and a far cry from 2005, when 1.28 million new homes were sold, according to the Census Bureau and the Department of Housing and Urban Development.

Still, buying new does have benefits.[pullquote_left]“There’s also the advantage that if you buy a home today, that has energy features that will be worth more down the road, when the market recovers,” [/pullquote_left]

Despite a likely higher price tag, a home builder will say that you’re buying a better product when you buy new. For one, it’s a home designed for the way Americans live today, maximizing the usability of space and offering amenities that speak to modern needs, such as big closets. Plus, new homes are built to be more energy efficient.

“It’s appealing to people who are concerned about energy costs in the future and the longer-term efficiency of the home,” said John K. McIlwain, senior resident fellow for the Urban Land Institute, a research organization focused on land-use and real-estate issues.

“There’s also the advantage that if you buy a home today, that has energy features that will be worth more down the road, when the market recovers,” he said.

When buying new, there aren’t the questions of deferred maintenance that can come along with existing — and especially distressed — properties that have lingered on the market for a long time, said Stephen Melman, director of economic services for the National Association of Home Builders, a trade group for the home-building industry. “In general, anything that sits there has to be in worse shape,” he said.

And let’s face it: Some people covet new homes simply for their “newness.”

Buying new “has become a deep part of American culture,” McIlwain said. “We built an economy around having to replace everything every two to three years. Think of Apple: It is built on the basis that they have a new toy out for us every year or two.”

SOURCE: MarketWatch

Filed Under: Codes, Construction Related, Energy, Green, Inspections

View All Bank Owned REO Listings in the Greater Sun Valley Idaho Areas

August 27, 2011 By Leave a Comment

View all Bank Owned REO listings currently available for purchase listed in the Sun Valley Board of Realtors MLS database. These are not Short Sales subject to lenders approval, these are homes owned by various banks, Fannie Mae, Freddie Mac, etc., that are ready to purchase and close without extended negotiations with both the seller and lien holders. List includes REOs in Ketchum, Sun Valley, Elkhorn, Hailey, Bellevue, Carey, Stanley and beyond the Wood River Valley. Blane County REOs, Camas County REOs, Camas County REOs currently for sale are included in the list

Filed Under: Inspections, REOs, Selling

BUYER BEWARE: Just because a vacant home has been winterized doesn’t mean it’s OK

May 14, 2011 By Leave a Comment

This past month I have been involved in 2 sales that involved “Bank Owned REOs” that had been winterized prior to my involvement. When scheduling a professional inspection I requested the water service be activated so the plumbing portion of the home could be inspected and discovered both homes had busted water pipes.

Home inspections are worth their weight in gold!

A home inspection is a limited, non-invasive examination of the condition of a home, often in connection with the sale of that home. This is usually conducted by a home inspector who has the training and certifications to perform such inspections. The inspector prepares and delivers to the client a written report of findings. The client then uses the knowledge gained to make informed decisions about their pending real estate purchase. The home inspector describes the condition of the home at the time of inspection but does not guarantee future condition, efficiency, or life expectancy of systems or components.

An inspector will normally check the roof, basement, heating system, water heater, air-conditioning system, structure, plumbing, electrical, and many other aspects of buildings looking for improper building practices, those items that require extensive repairs, items that are general maintenance issues, as well as some fire and safety issues.

However, it should also be noted that a home inspection is not technically exhaustive and does not imply that every defect will be discovered. A general list of exclusions include but are not limited to: code or zoning violations, permit research, property measurements or surveys, boundaries, easements or right of way, conditions of title, proximity to environmental hazards, noise interference, soil or geological conditions, well water systems or water quality, underground sewer lines and/or waste disposal systems, buried piping, cisterns, underground water tanks and sprinkler systems to name a few.

 

 

Filed Under: Buying, Inspections Tagged With: , , , , ,
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