Tag: Property

The real estate market has changed drastically over the last few years. The pandemic brought a surge in demand for houses, followed by a freeze in the market as inflation and interest rates rose. That begs the question, what should we expect from the following year?

Most experts believe 2023 will bring a new semblance of normalcy. That means the market will settle down and return to more normal levels. Inflation should reduce or at least balance out, while interest rates will slow down. Let’s take a closer look at what to expect this year.

Housing Prices

Experts are quick to weigh in with their opinion on housing prices and values. Unfortunately, not all experts agree on this. For example, Realtor.com believes that housing prices will increase by another 5.4%, while Zelman believes the value will decrease by 5.1%. Ideally, these two extreme estimates will land in the middle, providing us with a stable market.

In other words, if we balance out the expert opinions on prices, it indicates little change. This means we’ll see a flat or neutral appreciation in 2023. This is good for sellers and buyers, as the market will not change drastically.

Rate Lock-In Phenomenon

Mortgage rates hit a record low a couple of years ago, countering the current higher rates we’re seeing. This results in homeowners with a low rate (below 6% in most cases and below 4% in exceptional circumstances). That’s great for those homeowners, but they will unlikely consider selling their homes with an average mortgage above 6%.

Homeowners are unwilling to give up their low mortgage rate in exchange for a higher interest rate. Some homeowners will sell regardless, either because of need or desire. But a large percentage will stay at their current home to wait out this shift.

Ironically, this is going to affect another market. Homeowners that wait out this shift may choose to work on home improvement projects. This will ultimately encourage a stronger contract market and increase home values – if done carefully.

Reduction in Building

There will likely be a reduction in the number of homes built over the next year or two. Specifically, experts believe that builders will cut back on the number of new single-family homes they are constructing. Likewise, building permits will likely decline as homeowners settle in and wait for rates to change.

How Your Credit Score Affects Home Buying

By W Darrow Fiedler

On March 16, 2021

In Finance, Investing, New, News, Real Estate, Uncategorized, Welcome

Credit score has several impacts on people’s lives, among them being home buying. It is a measure of personal credit files that dictates the worthiness of an individual. Let’s look at some of the impacts that a credit score can sum up.

Lending and Payment

Apart from a rock-solid financial history, a credit score also matters a lot in approaching lenders. It has an impact on the amount of loan you qualify for to purchase a house. They look much into applicants who have a good record with other lenders, especially on payment duration. Thus, it is also an indication that the respective borrower will be accountable and meet the obligations.

A good credit score implies that the borrower will repay and in the speculated duration. This varies depending on your credit report’s information that brings together your history of borrowed money and payment habits.

Mortgage Rates and Credit

For you to acquire the best mortgage rates, your credit score should be high enough. Persons with a low credit score will end up paying more money during the term of their mortgage. This is attributed to the increased interest and monthly payments.

Generally, a credit score of 700 and above will place you in the best position for mortgages and with the best rates. However, there are still better options for credits below 700. Below is a summary of the scores and statuses.

800 or higher is an exceptional credit, 740 and higher has excellent credit, between 700 and 739 is good credit, and between 630 and 699 results in a fair credit. But for 629 and below results to poor credit.

Down payment Amount

When your credit score matches the desired range, you will be in for a reasonable down payment. Additionally, there will be favorable terms such as a lower original fee. Also, borrowers who bring in more cash on the table reciprocate their potential of delivering and fulfilling the agreement terms.

Borrowers with a low credit score will raise trust issues and will be an accomplice of higher requirements. Such conditions can be incorporating private mortgage insurance into their loans which is results in extra costs. This is pragmatic, especially for new home buyers who need to create a reputable note.

3 Tips for Buying an Investment Property

By W Darrow Fiedler

On March 4, 2016

In Investing

Often, when we discuss being a real estate professional, it’s within the framework of working as a licensed Salesperson or Broker who brings in a primary income by renting and selling properties for clients. What you may not realize, though, is that you can be involved in real estate outside of your primary source of income by investing in properties with the express intention of accruing a passive stream of income from them, in addition to the active income you bring home in the form of paychecks. As a consultant, I often work with clients who could benefit greatly from investing in real estate, but do not know how to make sure they’re investing in properties that will bring in revenue. The following are a few pieces of advice for first-time or inexperienced investors who are looking for some guidance about what makes a property a wise investment.

Figure out what your money will get you where: When beginning a search for a property to invest in, the first step is to determine how much money you can invest in the project and what that money will get you based on the location of your potential investment. Look into properties in your price range in different neighborhoods, and see what competing, similar properties are already on the market. Sometimes, it’s wiser to purchase a smaller property in a more upscale neighborhood, as clients are more likely to rent properties in areas that are on the up and up than in areas that cost less for a reason.
Find out how long the property has been on the market for: Generally speaking, the longer a property stays on the market, the less appealing it becomes to investors and clients alike. The common assumption is that a property that sits on the market tends to have something wrong with it – either the pricing is wrong, the property itself is flawed, or the person who is selling it is not managing the process well and may prove to be difficult to work with. You should always research the length of time that the property you’re considering buying has been on the market for, as well as the amount of time that similar properties in that neighborhood are staying vacant. Invest in neighborhoods where the turnaround time between listing and rental or sale is decreasing across the board, as this is generally a sign that if you buy a property in that neighborhood, you’ll be entering a hot market.
Understand the neighborhood’s amenities: There are some universal signs that indicate that a given neighborhood is improving. Take note of the retail options in the neighborhood, which food purveyors have chosen to set up shop there, and how happy residents are with the local schools and business opportunities. If you can buy a property in a promising market that is currently undergoing some form of gentrification but is still in your price range, you’ll be increasing your chances of bigger returns over time as the neighborhood becomes more established and you can charge more to rent or sell your investment property.

If you do your due diligence and research, you’ll be able to make more informed, strategic decisions about how and where to invest your money. After all, as Sir Francis Bacon famously said, knowledge is power.

Real Estate Made Simple

Tag: Property

What to Expect for the Real Estate Market in 2023

3 Tips for Buying an Investment Property