Owning vs. Renting: Still Not Even Close

 

U.S. house prices "likely would have to fall considerably" to return to a normal relationship with rents, says a study by one former and two current Federal Reserve economists.

 

The study, which doesn't necessarily reflect the views of Fed policy makers, suggests prices would have to fall 15% over five years, assuming rents rose 4% a year.  House prices would have to fall further if the adjustment took place more quickly.

 

The study tracks rents and home prices back to 1960 and found annual rents fluctuated at around 5% to 5.25% of home prices until 1995.  At the end of that year, the average monthly rent was about $553 (or about $6,600 a year) and the average home price was about $134,000.

 

But starting in 1996, home prices started to grow much more rapidly than rents.  By the end of 2006, they had more than doubled to an average of $282,000, while the average rent had risen 48% to $818.  That drove the annual rent/price ratio down to 3.48%.

 

That means the rent/price ratio is about a third below its long-term average.  To return to normal would require some combination of falling prices and rising rents.  The paper suggests house prices would need to fall about 3% a year, if rents grew in line with their 4% average annual growth this decade.

 

If you're renting now and wonder whether it would be smarter to buy now than rent, contact us for a complete analysis of your individual situation.

 

 

 

When is the Right Time to Buy Myrtle Beach Real Estate?

 

The right time to buy Myrtle Beach Real Estate is when you are completely ready to do so . This will not be same for every person, so it is to make your own mind up. But fortunately, there are a few things which you have to consider if you are thinking about buying a home.

 

One important thing to remember is:   If you have no money, then it is not the right time to buy a home.

 

These days many people think of buying a home and they get very excited about it, but they forget about the costs which are related to buying a home.

 

Eventually, some things you may be able to handle, but if you don't have the money to cover bills related to owning a home now, you should not even think about buying a home.

 

If you really want to buy the perfect home for you, you have to take your time searching for the right one.

 

Buying a home without doing your homework could mean you choose a home which does not suit your needs.

 

The right time to buy a home is when you are completely ready financially.  This will not be same for each buyer, so make sure you take your time and do your homework.  Talk to your accountant or a qualified financial planner to see if you are financially ready to buy a home.

 

 

 

House or Condo: Which is the Better Investment?

 

Although houses historically appreciate better than condos, occasionally the reverse happens.  It's really a case of supply and demand, driven by demographics.

 

Typically, condos appeal most to the youngest and oldest segments of the population.

 

But keep in mind, one of the downsides of condo ownership is that you have limited control over the expenses you'll pay in common with other owners through homeowner association fees and assessments.  You have no control over insurance costs, and special assessments an association management company may impose to replace a roof or upgrade landscaping, and with a single-family home, you control these things.

 

As the owner of a single family home, you definitely have more control over your expenses, at the very least, giving you an opportunity to shop around for the best prices on things relative to your investment.

 

To determine whether a house or condo is best for you, talk to us.  We'll help you decide what's right for your particular situation.

 

 

 

No Time Like Now for Buying Myrtle Beach Real Estate

 

Despite what you've heard and read and despite what others are telling you, now is one of the best times in history to be in the market for a home, especially if you're interested in moving on up, or getting a more expensive home.  The other two purchase scenarios offering the best buys in recent history are for first-time home buyers and investment buyers.

 

Let's start with first-time home buyers.

First-time home buyers are in the best possible situation because they don't have to worry about selling a house in a down market.  They just need to buy one, which is a very good thing.

 

With prices down, deals are available that would have seemed impossible just a few year ago.  Really good deals, including substantially reduced prices and a bevy of incentives being offered by sellers and builders alike.

 

It's pretty obvious to understand how those moving to a more expensive home can take advantage of today's market.  Some simple math can show how, even if you take a loss on selling your home, you can actually make a net gain in equity if you buy a more expensive home.

 

Suppose you have a $100,000 house in an area that has, on average, lost 15% of value.  Your house is now worth about $85,000.  Now, suppose you are interested in a home that was worth $300,000 and now priced around $255,000 (assuming it's also depreciated the same 15%).  On paper, you may lose $15,000 on your home when you sell, but you make $45,000 on the home you buy, so you actually net $30,000 in equity.  Not a bad deal!

 

Finally, real estate investors are in a good place today to spend less and get more than anytime in recent history.  If you have the cash reserves or resources to invest, now is the time to consider doing it.  Lower prices mean more property for the buck and those that can buy now and have renters to help them weather the storm until the market improves can do very well.  If you're considering investing, do your homework on the area you're interested in and you'll have a good chance to get a great return on your investment dollars.

 

Opportunities to do well in today's real estate market abound, especially for many purchase scenarios.  If you are a first-time home buyer, thinking about moving to a more expensive home, or interested in real estate investments, as the idiom goes "there is no time like the present."  Contact us to see how well you might fare in the Myrtle Beach real estate market right now.

 

 

 

Opportunities Abound to Profit in 2008

 

Tumbling home values.  Soaring energy prices.  A topsy-turvy stock market and a gazillion other financial worries, not the least of which is whether we'll spend the coming year mired in recession.

 

Considering all the black clouds hanging over the economy, you probably think there's no way you can really expect to prosper in 2008.  It will be all you can do just to hang in there, right?  WRONG!

 

We firmly believe there will be plenty of opportunities to make money this year - yes, even in real estate - as well as ways to insulate your finances from the most serious economic challenges ahead.

 

The real estate slump isn't going away soon, so whether you're buying, selling or staying put, deal with it.

 

For sellers:

Forget what the ugly house next door sold for last year or even what comparable homes are listed for today.  Instead, use the going price of houses that have recently sold as a guide - then price your home even lower so it looks like a great deal.

Best case: Your aggressive pricing attracts more than one bid, pitting buyers against one another and ultimately lifting the final sale price.

 

For buyers:

If ever there was a time to drive a hard bargain, this is it.  Don't be distracted by small stuff like whether the current owners will leave behind their appliances and window treatments.

 

Focus instead on what's really important: getting the lowest price.  Do a little homework and find out what comparable houses have sold for lately.  Then start the bidding at 10% to 15% below that recent sale price.

 

Note: This strategy works best if there are several homes on the market in your area around the same price.

 

There are many other tips throughout this weblog for buyers and sellers.  We encourage you to spend a few minutes and look through them.  It could be worth a minor fortune if you pick up a tip here or there that could add dollars to your home buying or home selling strategy.