Category: Buying

More first-time home shoppers say they want a house they can “grow into” not a home they can quickly grow out of.

With big housing bargains and low mortgage rates, some first-time buyers have decided to go big with their home purchase and sidestep the traditional smaller “starter house.”

A growing number of real estate professionals are reporting that childless, twentysomethings who have strong incomes are taking advantage of housing deals and looking for their dream house now, rather than wait until later.

A Minneapolis couple purchased a 3,000-square-foot-home as their first home. “The more starter homes we saw, the less impressed we became. … Since we knew we could easily afford to buy more than we were initially looking to spend, the choice was quite simple,” Joseph Simons told the Minneapolis Star-Tribune. “Why not buy a forever home with everything we want?”

Indeed, more buyers are purchasing a home with intentions to live in it longer than they once did. On average, buyers now expect to stay in their house 15 years compared with 10 years in 2010, says Walter Maloney, spokesman for the National Association of REALTORS®.

Steve Howe, a sales agent for RE/MAX Results in the Minneapolis area, says one big driver for first-time home buyers to to go big on their first home is low mortgage rates. Howe says first-time buyers worry that mortgage rates — the cost of borrowing for a home purchase — will never be this low again so they want to take advantage while they can.

“If they can lock in a $300,000 or $350,000 mortgage at 3.5 percent, that’s as good as gold,” Howe says.

Source: “First-time Buyers Skip the Starter Home,” Star Tribune (Minneapolis) (Sept. 29, 2012)

The fall housing market isn’t known for being as robust as the spring market, but there are different motivations that tend to attract consumers during this season, experts say.

“We’ve observed in seasonal household buyer patterns that there is a higher ratio of first-time buyers and childless couples in the fall,” says Walter Molony, economic issues media manager at the National Association of REALTORS®. “Families with children time their purchase based on school-year considerations, so they peak in the spring and summer.”

According to a recent ERA Real Estate survey, based on 30,000 of its broker and agents, about 20 percent of buyers are emotionally driven in the fall to purchase a house so that they can be in a new home by the holidays. Ten percent are motivated by tax benefits.

Sellers in the fall tend to be highly motivated too and face less competition with smaller inventories, says Shaun White, vice president for corporate communications for RE/MAX LLC in Denver, Colo.

“Some sellers will opt to lower their price in the fall because they’re afraid of missing the boat and being stuck trying to sell during the holidays,” says White. “Buyer traffic drops in the fall, too, so buyers may have less competition as well as better prices. You find motivated sellers and motivated buyers in the fall, especially as you get closer to the holidays.”

In some areas of the country, such as in Arizona and Florida, the prime selling season doesn’t even begin until the fall as snowbirds come in from the cooler climates looking for new homes, White says.

Source: “Homebuying: Fall Is the New Spring,” HSH.com (Sept. 26, 2012)

http://realtormag.realtor.org/daily-news/2012/09/28/let-fall-buying-selling-season-begin?om_rid=AACSxz&om_mid=_BQZb71B8uVaAPR&om_ntype=RMODaily

A new Trulia study shows that owning a home is more affordable than renting over a seven-year time frame in America’s 100 biggest cities.

Trulia collected data on homes for sale and for rent from its Web site between June 1, 2012 and August 31, 2012, and factored in such items as transaction costs, taxes, and opportunity costs. The study assumes that the home is sold after seven years and includes closing costs, maintenance, insurance, property taxes and other costs. The cost of renting includes security deposit and renters insurance.

Trulia found that nationally, owning is 45 percent cheaper than renting, with affordability highest in Detroit and lowest in Honolulu and San Francisco.

http://realtormag.realtor.org/daily-news/2012/09/18/in-buy-vs-rent-home-buying-wins-again?om_rid=AACSxz&om_mid=_BQWMTOB8uI5qqc&om_ntype=RMODaily