The PRICE Is the Same, But the COST Is Less November 16th, 2011
There is more and more research coming out showing that it makes great financial sense to purchase a home today . Whether it be rent vs. buy ratios, income-to-price ratios or income-to-mortgage payment ratios, purchasing a home right now is a bargain compared to historic norms. Now we want to look at the COST of a home today compared to pre-peak prices.
According to the most recent S&P Case Shiller price index, residential real estate values have returned to 2003 1Q PRICEs. That, in itself, says something. However, when you factor in mortgage rates, the case for buying a home today becomes even more compelling.
In 2003, 30 year mortgage rates stood at 5.88%. Today, they are 4%. How does that impact the actual COST of a home? On a home purchased for $250,000, here is the difference in monthly cost:
That means you save $285.30 a month, $3,423.60 a year and $102,708 over the life of a 30 year mortgage! You buy the home for the same PRICE but the COST is over $100,000 less.
Bottom Line
This is why so many financial advisors are saying that this may be one of the greatest times in history to purchase a home.
Posted by Woods Bros Realty
Local home sales down, but parts of market doing well September 30th, 2010
Local home sales have fallen behind last year’s pace, after being up for most of this year because of the homebuyer tax credit.
As of Aug. 31, there had been 2,490 home sales through the local Multiple Listing Service, which covers Lancaster and parts of surrounding counties. That’s down more than 5 percent from the same period last year.
Through the first two quarters of the year, home sales were up 13 percent over 2009, but sales have dropped off sharply in July and August, down more than 50 percent compared with the same months last year.
That’s largely because of the expiration of the federal tax credit of $8,000 for new homebuyers and $6,500 for repeat homebuyers. The credit expired at the end of April, and buyers had until the end of June to close those sales.
Despite the sharp drop-off, there are still many positive signs in the local real estate market.
Sales of new homes, which last year eked out their first year-over-year gain since 2003, are up about 6 percent so far this year.
And average sale prices for new and existing homes are up, leading to an overall price increase of more than 2 percent through August.
Realtors Association of Lincoln Executive Vice President Nicole Jensen said in an e-mail last week that those two developments are signs that the market is stable, despite the drop in sales of existing homes.
Another positive sign is the increase in luxury home sales.
HomeServices of Nebraska, which owns Home Real Estate and Woods Bros Realty in Lincoln, said in a news release Wednesday that sales of homes more than $500,000 are up 11 percent this year compared with last.
“Buyers in the upper price brackets are taking advantage of today’s low interest rates,” said Gene Brake, CEO of HomeServices of Nebraska. “They can get more house for less money than they could a couple years ago.”
Mortgage rates have been hovering at historical lows around 4 percent for several months.
Another reason for the jump in high-end home sales is the “move-up” effect.
As new homebuyers used the tax credit to buy lower-priced homes, it allowed the sellers of those homes to “move up” to bigger, more expensive ones.
In an effort to capitalize on the strong demand for higher-end homes, Woods Bros and Home are planning an open house tour of 22 of the more than 60 houses over $500,000 currently on the market.
The tour is scheduled from 5:30 to 8 p.m. Thursday.
Home Real Estate agent Nelda Hunt said the tour gives people a “nonthreatening, fun opportunity” to see some of the luxury homes available.
“Our inventory of luxury homes really cleared out the end of last year and the beginning of 2010,” Hunt said. “Now we have a new influx of homes on the market that are great values, and we want people to come out and take a look.”
Reach Matt Olberding at 473-2647 or molberding@journalstar.com.
Copyright Lincoln Journal Star. Read original article here.
Posted by Woods Bros Realty
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Who’s up for another homebuyer tax credit? September 3rd, 2010
I could scarcely believe my eyes when I read that headline this past Monday morning. Yet that’s exactly what HUD secretary Shaun Donovan suggested in an interview with CNN on Sunday.
The idea is so bad it’s hard to know where to begin. Another tax credit is not going to revive a slow housing market. Yes, we saw increased activity in March and April this year, mostly due to the tax credit, but those were buyers who had planned to buy this year anyway. As we saw when the June and July sales numbers came out, we simply cannibalized our summer buyers and moved them forward to spring. We didn’t stimulate anything, and we certainly didn’t create more demand for housing.
Gimmicks like the tax credit will simply delay the inevitable – the housing market isn’t going to recover until buyers are a lot more certain about the economy. I’d suggest with the current crop of suits in Washington, that won’t be anytime soon. We’re blessed with low unemployment here in Lincoln, but people are still scared about losing their jobs. Those people aren’t rushing into the market to buy a house anytime in the near future. Fear causes people to pull back, and buyers are clearly taking a ‘wait-and-see’ attitude. Even interest rates around 4% aren’t enough to get many to jump off the fence and take the plunge.
Our real estate market has been fortunate to avoid the real estate bubble … but if the feds continue trying to ‘help,’ we’re going to feel the impact a lot more than we already have. Another tax credit is a bad idea … which means we should probably expect the sequel sooner rather than later.
Interest rates are low, and buyers definitely have an advantage now. If you’re considering a move, I’d welcome the chance to visit with you!
Posted by Jon Rademacher
It’s a great time to buy a home! August 30th, 2010
Check out the following story from KLKN Channel 8 on today’s real estate market in Lincoln, Nebraska, featuring our own Miranda Watson.
Posted by Woods Bros Realty
By MATT OLBERDING / Lincoln Journal Star
The federal homebuyer tax credits helped propel local home sales in the first half of the year to their highest level in three years.
According to figures released last week from the Realtors Association of Lincoln, there had been 2,001 home sales through the local Multiple Listing System as of June 30.
That’s a more than 13 percent increase over the same period in 2009 and the most since there were more than 2,100 sales in the first half of 2007.
Sales of new homes, which have been a drag on the market for several years, were up even more.
For the year, sales of new homes are up more than 40 percent after increasing nearly 150 percent in June.
Despite the good news, most signs point to a slowdown in the second half of the year.
For the second straight month in June, pending sales – sales that are under contract but have not yet closed – were way down compared with last year.
“As expected, there was a reduction in the number of pending home sales in June, compared to those in June of 2009, due to the April 30 Homebuyer’s Tax Credit deadline,” said Nicole Jensen, executive vice president of the Realtors Association.
The tax credit, which offered $8,000 to new buyers and $6,500 to repeat buyers, expired at the end of April.
Despite continuing closings of sales related to the tax credits, sales of existing homes in June were actually down compared with June of last year – 370 to 396.
“We definitely foresee that the volume of home sales are going to curtail and are going to curtail pretty quickly,” said Kent Thompson, the elected president of the Realtors Association.
Still, Thompson stands by an earlier prediction he made that home sales will be up overall for the year.
“I think that Realtors, as a whole, will have a good year this year,” he said.
Mike Rezac, owner of Rezac Construction and president of the Homebuilders Association of Lincoln, is not as optimistic.
Despite the spike in sales of new homes, permits so far this year are down slightly compared with where they were at this time last year.
While that may not sound so bad, Rezac points out that last year was a 29-year low.
“I don’t see this being a terribly strong year,” he said. “We’re really holding out for next year.”
Not everybody is looking at the market with skpticism, though.
Rita Dinger, a real estate agent for Woods Bros. Realty, says she’s been plenty busy since the tax credits expired.
“I’m having one of the busiest Julys I’ve ever had,” she said.
Dinger said she thinks that all the incentives did was push people to buy a home earlier than they would have otherwise.
And she’s not convinced yet that the slowdown is anything more than typical late summer seasonal drop-off.
There are plenty of people still considering buying a home, Dinger said.
“They’re looking for all the reasons that people have always looked.”
Posted by Woods Bros Realty
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Limited time pricing specials from HomeServices Lending March 17th, 2010
Waiting to buy a home?
Our new purchase loan pricing special may get you off the fence
When you work with us, you may benefit from our limited time pricing specials with:
- Lower interest rates on fixed rate purchase mortgages
- Loan amounts up to $729,750(1) in qualified areas
- Varied amortization term options
- Relocation loans eligible
Why wait when you could be taking action?
From historically low interest rates to numerous homes for sale to tax credits for both move-up and first-time buyers(2), we have financing programs to help accommodate a number of budgets and goals.
Contact us for a PriorityBuyer® preapproval
- Pinpoint your home price range, and affirm your ability to get financing.(3)
- Find a HomeServices Lending Home Mortgage Consultant in each Lincoln Woods Bros Realty office, or call (402) 441-3200.
#162907 02/10 – 05/10
Posted by Woods Bros Realty
HomeServices of America CEO: Home Sales Improving February 3rd, 2010
HomeServices of America CEO Ron Peltier weighs in on the state of the housing market.
Posted by Woods Bros Realty
Cold weather, hot rates January 19th, 2010
It’s a new year and things are definitely picking up in Lincoln real estate. The cold, cold temps and record snowfalls in December caused a real downturn in home sales. I don’t know about you, but there are not many people who want to interupt their holiday plans and plod through 5-foot snow drifts to look at houses. In November, the Midlands MLS posted 323 homes sold. That number dropped to 162 in December. But things are looking up. Through January 18th, 2010, there were 43 homes sold and 113 “under contract”.
It’s also important to note that the current low interest rates might not last much longer. Right now it’s possible to get a 30-year-fixed rate at about 5%. However, barring any last minute change, the Federal Reserve Bank plans to stop buying mortgage backed securities on March 31, 2010. That could result in an increase of .5% to 1% to mortgage interest rates (or rates around 6%). Your loan officer can detail this further, but an increase from 5% to 6% on a $100,000 loan (for example) could mean you would be paying at least $50 more a month.
Posted by Joanne McCoy
Why buy now? October 26th, 2009
Aggressive pricing
Record low interest rates
Your buying power will never be greater
As a long-term investment, homeownership is one of the best investments for individual households. All markets including the housing market have their ups and downs. The homeownership market has a track record that is unmatched by any other purchase in terms of its benefits.
If you have good credit, a job and steady income, there are plenty of mortgage lenders willing to underwrite a mortgage loan at good rates. Here is an example of why, dollar for dollar, homeownership is a stepping stone for a future of financial security and the single largest creator of wealth of many Americans.
Over the long-term, real estate has been consistently appreciating, even through periodic adjustments in local markets in response to economic conditions.
Let’s look at purchasing a $200,000 home with 10% down for an investment of $20,000. Consider that you might appreciate 5% per year, and that $200,000 home would be worth $10,000 more the first year of ownership. Earning $10,000 on an investment of $20,000 is an extraordinary 50 percent annual return.
In contrast, putting that $20,000 down payment into the stock market and getting a 5% gain would only yield a $1,000 profit.
DON”T MISS OUT ON THE BENEFITS OF HOMEOWNERSHIP!
Posted by Ann E. Deck
It’s a Seller’s Market … really. May 5th, 2009
With all the talk about buyers, and the $8,000 tax credit, and the low interest rates, you might be surprised to learn that there’s truly a seller’s market in Lincoln today.
Consider this: the first-time buyers are indeed shopping, and they’re buying the homes that are ready to sell. What do those homes look like? They’re clean/updated/show-ready, and they’re priced correctly. Savvy sellers understand this, and they also understand the ‘back half’ of that equation. With their house now under contract to a first-time buyer, that seller now becomes a buyer, too. And while they can’t take advantage of the tax credit, their buying power is now increased with a low interest rate. And if they’re in a position to move up (buy something bigger/more expensive), they’ve got plenty of homes to choose from. And once again, the homes in those price ranges that are clean/updated/show-ready and priced right … are selling.
Sellers — would your current home be a good first house for a young buyer? If so, you’ve got an incredible opportunity. Will you take advantage of it?
Posted by Woods Bros Realty
It’s a Good Time to Buy April 17th, 2009
First-time home buyers are taking advantage of low interest rates and a big tax credit from the government.
This past february President Barack Obama signed an incentive in the form of an $8,000 tax credit for first time home buyers.
At this Lincoln Woods Bros Office, they’ve seen almost 100 people jump on this offer.
Chris Goforth and his girlfriend Stephanie recently purchased their home and said the credit was a main reason to go ahead with the purchase.
“At the time when we were looking it was the original stimulus package of $7500 but every little bit helps and that was defiantly something we were going to plan on using,” said Goforth.
There are some rules to follow if you want to receive the $8,000 credit. First, you must be a new home buyer or haven’t owned a home in past three years. Once you purchase the home, you must live there for three years and you can’t make more than $75,000 individually or $150,000 collectively.
“I think people need to know right now is a great time to be buying a home, especially for these first time home buyers, this is a great time to be getting into a home,” said Andrea Schneider, a Woods Bros Realtor. “There hasn’t been a better time probably in 40 years as far as opportunities go for first time home buyers.”
For the rest of the story from Channel 8 Eyewitness News, visit:
http://www.klkntv.com/Global/story.asp?S=10199698
Posted by Woods Bros Realty
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‘How’s business these days?’ April 8th, 2009
Usually, when someone finds out that I work as a real estate agent, the first question they ask is: “How’s business these days?”
My quick answer is always, “Great!” (whether I’m busy or not, it’s a good answer to give because I enjoy being a Realtor). However, when I’m asked that question these days, I answer “Great” because home sales are picking up again.
After a slow fall and long winter, things are coming to life at real estate offices and open houses across Lincoln. Much of that activity has to do with record low mortgage interest rates and the $8,000 tax credit being offered first-time homebuyers as part of the Obama administration’s economic stimulus plan.
According to figures from the Midlands Multiple Listing Service (MLS), 196 single family homes priced below $200,000 sold in Lancaster County last month (March, 2009). That’s compared to 144 sales of similarly-priced homes in February, 2009, or an increase of 27 percent. So far, April looks to bring even better numbers.
Posted by Woods Bros Realty
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Why NOW is a Great Time to Buy a Home March 27th, 2009
Excerpted from Strictly Business Magazine:
With all the talk about the economy these days, it’s easy to start assuming it’s only prudent to hunker down and ride out the storm, spending as little money as possible and making as few changes as possible. Many people have this knee-jerk reaction even if the supposed ‘bad economy’ isn’t affecting them personally. Even if their business is doing well, they have plenty of money in the bank and there is no trouble on the horizon, they assume things will get bad soon and so they alter their lifestyles. Unfortunately, this has been the case when it comes to the housing market. It seems that every time you turn on the television, you hear something about how bad the market is. This causes a general feeling of fear and people naturally start assuming they should not even consider buying or selling a home in this market. They often don’t even do any research or talk to professionals who can answer questions about the local market, they simply assume.
The truth is, the local housing market in Lincoln is not nearly as bad as the news would have you believe. In fact, it can be a very good market if you are in a position to buy. Consider the following information from the REALTORS Association of Lincoln:
What’s the NATIONAL weather for today?
Suppose you turned on the Weather Channel and were given only a national forecast for the day? You might find yourself dressing for Arizona instead of Nebraska!
Over the past year there has been some dreary news about the nation’s real estate market; yet, no single real estate market exists. Real estate is a local phenomenon, just like the weather.
Posted by Woods Bros Realty
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