With this year bringing record lows to home prices, many renters out there are wondering if this is the right time for them to buy. Afterall, the appeal is certainly there. The idea of owning something brings a sense of pride that only home ownership can and you have the possibility of earning equity in the future. This can help fund future retirement, pay for college tuitions and much more.

Today, the dream of home ownership is accessible to more people than it typically has been in the past. However, not everyone is ready for home ownership. There are a lot of things to conisder before taking that first stip towards home ownership. Buying a home can be a great experience, but it is always a large responsibility, so you really need to stop and consider whether or not it’s a responsibility that you’re willing to take on right now.

As you contemplate the many decisions ahead, here are some simple and basic questions to ask yourself as you begin to think about being a home owner:

Am I Ready and Able to Settle Down?

The term “settle down” doesn’t need to imply that you’re ready to be married, have kids, buy a puppy and plant petunias in the yard! It’s is perfectly acceptable to buy a home, live there for a couple years and sell. However, you do need to decide if your lifestyle is condusive to home ownership. Do you travel frequently for work? If so, you might not be home enough to a) enjoy your home and b) keep up on the general maintenance it requires. Speaking of maintenance, are you savvy when it comes to fixing things? As a renter, any problems noticed are investigated and resolved by the landlord. As a home owner, you have to know WHAT to fix, before you can make arrangements to GET it fixed.

Can I Afford a Home of My Own?

Let’s be frank, with today’s prices, it is possible to arrange a mortgage payment that is less than what some people are currently paying in rent. BUT the consequences for failing to make a mortgage payment are much greater than being late on your rent check. You’re credit is on the line. You also have to consider that in most rentals - some portion of utilities are being paid. As a home owner, this will fall on you. Water, sewer, trash collection, gas, electric, etc. etc. In addition to these, see above. Don’t forget about the cost of maintaining your home. What would you do if a seemingly perfectly good water heater breaks? Can you afford to fix this?

The recession and the housing crises have been difficult on everyone. If you’re one of the many people struggling to make ends meet - you should probably hold off for a while. Now, I certainly don’t want to scare anyone away from pursuing their dream of home ownership, but rather make it will be an enjoyable and profitable experience.

If you think you are ready to own a home, GREAT! Do some research. Find a great Realtor and a lender that will work for you. Make sure that you educate yourself on the numerous options out there and what will work best for your situation.

You know it’s election season when the yard signs start to pop up on every street corner, sometimes multiplied two, three, even four times for the same person. Some people pay attention to local elections and campaigns, others do not. But it may be wise to review some of the candidate’s history, especially if you’ve noticed a slight dip in your current home value.

The process of housing development approval falls upon these soon-to-be-elected city officials, but is rarely dependent upon factors such as supply and demand. As the supply of homes rise, it must be met by correlating demand. If not house values fall. It seems like an obvious concept, but judging by the nations current market - many were oblivious to this notion.

During one of the fastest appreciating real estate markets in history, local governments justified their seemingly endless approval of residential development projects by citing the increase in city revenues and the jobs that were created. Unfortunately, these affects didn’t last long and were soon eradicated by the concept of supply and demand. Once buyers’ demand could not keep up with escalating home prices, numerous builders began to reduce the prices of their homes in order to compete with one another. This caused housing prices to begin falling.

Home values began to drop so rapidly that foreclosures became the only viable option for many borrowers as selling or refinancing became impossible since all the equity in their homes had been wiped out by this excessive competition. Soon foreclosures began to flood the market driving supply up even further. Home builders were then forced to reduce their prices even further to now compete with banks that were offering their foreclosed homes for much lower prices. All the while the values of homes caught in the cross-fire were diminished to astonishingly low levels and the fear of continuous declines in housing prices kept buyers on the sidelines and the demand at historical lows.

Much of this could have been prevented by simply assessing the local statistics (population growth, income levels and current supply) before handing out the rubber-stamp approvals. In doing so they might have learned that supply was quickly outpacing demand.

On the brighter side, not all major cities have fully succumbed to the devastating market crash. Those cities that have traditionally regulated housing supply by more intensely scrutinizing proposed developments have managed to lessen the blow.

Still those candidates seeking office are now adopting smarter principals for their campaigns’ when it comes to residential development. It will then be our job to ensure that they maintain their pledge as lead the way to a once again thriving economy.

Top Five Best Housing Markets for 2008-2009

And the winner is….

1) Boulder, Colorado

Share of Homes with Increased Value: 59.39% Median Home Value: $347,200

This great city is home to successful employers and the University of Colorado. In addition to steady jobs, this area is limited in the number of homes because of the Rocky Mountains which outline the skirts of the city and the vast amount of protected natural areas.

2) Spartanburg, SC

Share of Homes with Increased Value: 56.81%  Median Home Value: $106,900
A mere 75 miles west of Charlotte, this bounding city is the first and only city in South Carolina to be named as a Bicycle-Friendly community by the League of American Bicyclists. It is home to three major colleges and universities as well as a few major corporation headquarters including Denny’s and Extended Stay Hotels. Still it maintains the ’small town feel’ featuring historic buildings and bridges that lend great history to this small town.

3) New Orleans, Louisiana

Share of Homes with Increased Value: $53.62% Median Home Value: $148,000
It’s no surprise here that this cities market value is growing. With the impact of hurricane Katrina in 2005, the construction business has been booming. Building houses from the ground up. In addition to more jobs being created daily, this famous parish also receives federal incentives, insurance money and private investments to help restore it to it’s former glory!

4) Binghamton, New York

Share of Homes with Increased Value: 53.61% Median Home Value: $112,300

There’s a reason this city, located in upstate New York, made it to the number three spot in the nation and that is that it remained fairly dormant during the housing bubble where elsewhere prices sky-rocketed. So when bubble finally burst and most other areas saw huge pitfalls in home value, Binghamton stayed pretty level. Another big factor is the town’s University - one of the nations highest ranked public universities.

5) Fayetteville, North Carolina

Share of Homes with Increased Value: 53.23% Median Home Value: $119,800

Fayetteville is right next door to Pope Air Force Base and Fort Bragg and so it heavily relies on military families. But the town also features three colleges and universities, several museums and a historic downtown popular with tourists. Are we starting to notice a trend though with housing markets and universities…? It sounds like if you’re looking for a sure bet in today’s market… you might be best off moving to your nearest college town!

Other honorable mentions go to Pittsburgh, PA with an increased value of 48.80%, median home value of $108,700 and to Little Rock, Arkansas, increased value of 46.96%, median home value of $121,200.

Refinancing a home mortgage is only worth the effort if the resulting refinanced loan helps you avoid foreclosure, if it is sustainable AND if it reduces you total home loan costs.

During the market boom, the main reason people sought to refinance their loan was to take advantage of any home equity. Homeowners refinanced loans to get a higher principal and use the extra money for things like debt consolidation, buying a new car, paying their child’s tuition, or preparing for retirement.

Today, however, with the downturn of the economy and the bust of of the housing bubble, refinancing has now become a means to avoid foreclosure - ever since the Obama administration’s Making Home Affordable program for those whose mortgages are currently owned by Freddie Mac or Fannie Mae.

Under this program, your mortgage lender gives you a loan refinancing estimate. This shows your new monthly payment, new mortgage rate and the total amount you’re going to pay over the number of years specified in your contract.

Keep in mind that many people, after reviewing the payment and terms of the refinanced loan, find that it is NOT an improvement over the original. This is because you can’t simply compare monthly payments to monthly payments, especially if your original loan is an adjustable rate mortgage or ARM. In ARM refinancing, your monthly loan payment will always increase if you convert to a fixed higher rate. It may seem that the new rate is higher because you were given the option to only pay the interest of the loan, but ultimately the fixed higher rate would enable you to sustain the loan.

Therefore, refinancing for an ARM can be good if it’s expected to reset to a much higher rate in the next few years. It will help you sustain payments in the long run and will also help cut interests costs because of the record drop in rates right now.

So, if you’re currently at a fixed rate and you’ve been making payments for several years, look carefully at the full terms and conditions of any new loan. You just might be increasing your total loan cost, rather than lowering it.

I was recently browsing the Internet and searching for various topics when I came across an image of an article – so I started scan it up and down and low and behold – it was about the new changes in the housing market! Thus my interest was intriuged and I began to read on. What I liked about this article was that it has a different take on some of the changes that will or have taken place. It wasn’t about the financial mess that we’re in and I thought it provided an interesting view point on the new face of real estate.

“Housing the NeXt Generation”

No author’s name was given, but the article featured Generation X or the “lost generation” and the affect they’re going to have as the now mid-20 to early-30s group starts the housing hunt! It compares this generation to that of the baby boomers (essentially, their parents) who once wanted large suburban homes, to Generation X’s more contemporary and urban lifestyle.

The unnamed author believes that the “Xers” will, over time, dramatically change the housing culture by requesting differing styles from builders than that of their parents. According to this post, it will be things like ‘Homes with cozy and intimate rooms’ siting that Xers generally want smaller families than that of baby boomers and will require less spacious and more practical rooms.

They will also request homes that are ‘pre-wired for computer and video transmissions.’ As the new tech-savvy generation grows up along side laptops, faxes and Internet, having appropriate access ports in each room will be very important. They also list features such as low-maintenance, high quality, and have a greater taste for fine details and classical architecture in addition to green designs.

In short, we will eventually see less new homes in the suburbs, of which the supply is plentiful, and more new high rise condos and renovated warehouses popping up in the metropolitan!

You can read the full article at Medina Count Home Builder’s Association.

This just in: It takes longer to sell your home now than it did two years ago! Just kidding! If that’s news to anyone, you better go back a few blog posts and start reading!  The truth is we know the minute we even start to THINK about selling our home that it’s most likely going to be a long process. The reason for this is simply supply and demand. With the credit crunch and housing hold - some people are waiting several months before they even get a nibble! Then there are others who can put it on the market and have it sold within a month! So what’s the difference? Surely if you’re selling your home in today’s market, it is most likely out of necessity, such as to avoid foreclosure, job relocation, or you really need to upgrade or downgrade. Whatever it is, if you’re home has been on the market longer than you thought it would, consider trying something new!

Reduce, Remodel, or Rent?

One of the biggest reasons homes today don’t sell is because the seller is under the illusion that they’re house is worth more than what the market says it should be. In other words, ignoring their home’s market value. You may have a beautiful cap code home in a pristine neighborhood, with great schools and you’ve heard (at some point) that a home like yours could sell for half a million dollars. Well, that was probably two to three years ago. Today however, the average market value of a home has seen a 17% decrease since those days. Because there are so many other houses on the market, your home, in order to sell quickly, needs to reflect the market changes and even be more competitive!

• SELLING TIP: Sellers whose homes aren’t selling should analyze their asking price and compare it to the market value. Ask your real estate agent for help. You can also look at similar homes to see what they were asking compared to how quickly they sold.

If that doesn’t work, try remodeling. Whatever you can afford. One coat of fresh paint can go along way in increasing your home’s appeal both inside and out. (By the way, for great repainting tips, we highly recommend getting an online paint color consultation from PaintYourSpace.com). From changing fixtures to full room remodels. If you’re home isn’t selling, take it off the market temporarily and do some work to it. Then when you’re ready to start again, give the listing a whole new look! This keeps it fresh in the eye of potential buyers!

• SELLING TIP: Keep in mind that you don’t have to do a huge remodel to get the most value out of your home. Look online for simple projects and crafts and staging ideas that are sure to add appeal and even value ($$$) to your home.

Finally, have you considered searching for a tenant rather than a buyer? It might be a good option for some of you - especially if you’re less flexible with adjusting the selling price. By renting your home, you can have help making the mortgage payments, and can hold off actually selling until the market improves. However, this can also be a risky move. Before going down this winding road… talk to a tax adviser. The tax laws affecting single-family residences differ from those of income-producing properties. In addition to the tax laws, you’ll also want to become well-versed on landlord vs. tenant laws and regulations. Do your research and know what you’re getting into before asking someone to live in a home you plan to sell in the near future.

• SELLING TIP: One tax benefit of owning your home is that you’re entitled to $250,000+ tax-free gain when you sell, but restrictions apply. In most cases, you’ll need to have owned AND occupied your home for two out of the last five years. If you’re looking to move out of the area while renting your property, this could pose a problem when you do decide to sell.

Whatever the reasons you have for selling today, be sure that you’re well informed of your choices you have. If you were to ask a financial adviser for your best options, they might tell you now is not the time to sell, but it is certainly better than it was six months ago. My point is there are ups and downs to every road and the best thing you can do is to know what the right choice is for you.

It’s been quite an interesting week for your friendly, neighborhood blogger. This weekend, I came home to find that someone had picked the lock on my back door and let themselves in. Luckily, we were not home at the time, and nothing was taken. We locked up and made the house secure once again, only to find the same exact thing the very next morning - door was open, but nothing had been touched! So what does this have to do with your home value? Good question. You see we’ve concluded that we either pranking poltergeist or an indecisiveve intruder! I’m leaning towards the latter. The fact that nothing was taken, leads me to believe that they’ll be back and this time with a plan to probably take a lot of our valuables! Well, we weren’t too happy about the idea so we’ve decided to purchase a simple home security system. It will monitor our home around the clock and immediately sound the alarm when something’s not right.

We have multiple reasons to be happy with our decision and I thought that’s what I’d share with you today! In addition to the peace of mind and responsible citizen aspect of home security, there are actually a lot of financial benefits as well!

Save On Homeowners Insurance

The first is that you’d be amazed at what you save in your home owner’s insurance. Items like dead bolts and alarm systems are fairly inexpensive and easy to install. Some companies will offer you 15-30% savings if you have the appropriate security coverage for your home.

Increase Your Resale Value

You can also add value to your home when you’re ready to sell, but the amounts will vary based on the size and scope of the individual features you have. For example if you put a $20,000 security monitoring system in a 1500sq ft bungalow, you’re not going to recoup the cost of the system, and would more than likely detract from the home itself, therefore loosing it’s appeal to the majority of potential buyers. In other words you’d actually loose value. However, if you have an appropriate amount of security, something that doesn’t scare buyers away, you could see an increase of thousands of dollars at selling time!

So to sum up, please excuse the self-narrative nature of this particular blog post, but I thought it would be especially important to mention in light of the number of burglaries going on right now. Many people are finding themselves in tough times due to the economy and resorting to desperate measures. This compromises the safety of your home and your family. Therefore, anything you can do to protect them, and your home with the added bonus of earning a little bit of money on the side will prove to be extremely beneficial in years to come.

When trying to determine the current value of your home, there are a lot of similar sounding terms that are thrown around to help you do that. One of the most commonly confused terms is “home value assessment”. The reason for this is that it’s easily interchangeable with the term “home value appraisal”, but you might be surprised to find that there is actually a significant difference between the two.

A home appraisal is an optional service in which you pay a third party Apprasier to evaluate your home and determine the current home value. This is generally done by people looking to sell their home, get a home equity loan or those wanting to refinance their current mortgage.

A home value assessment on the other hand, is generally used to describe the process in which a local county official will assess the current condition of your home in order to determine the amount of property taxes you should pay. Therefore, it traditionally is associated with less appeal than an appraisal.

A home assessment represents a typical, or average value for a property in relation to other property values within a specific period of time. Depending on where you live, this time frame can vary from six months to two years! It is not usually associated with the current trends in the real estate market because the value of a particular property will depend on the sales of the other homes nearby . Assessments are NOT based on larger sales activity trends which you might see county-wide or within a zip code area.

Instead your assessment value will be based on typical values within your neighborhood. While the sale of a property will affect a home’s assessment, the effect will be diluted by the mass appraisal methods and results usually from within the past year. Consequently, this time lag means that the assessments of properties that have sold very recently may differ from the sale price which is generally based on appraised value and real estate market trends.

It’s also important to note that transitory elements such as neighbors who don’t mow their lawns, or are  consistantly noisy, will not affect your assessment. Whereas things like house construction, neighborhood boundaries and lot size remain relatively constant and therefore will likely play a factor in your home’s assessment.

Quick Facts

• An assessment is when the local government assesses your home value in order to determine how much property tax you should pay.

• Most government agencies do home assessments every 2-4 years, but can vary based on location.

• Home assessments are based on smaller, local areas such as your neighborhood versus larger trend tracking boundaries like counties and zip codes.

• An appraisal can be can be done by an actual Apprasier for a fee of  or by your local Realtor, usually free of charge!

• If you feel you’ve received an unfair assessment of your home, you can contact your local tax officials and contest any findings.

In the end, it’s good to know the major difference between home value assessments and home appraisals. And while there’s not a whole lot you can do to affect your home assessment, it is important to be prepared for any changes that may take place. Taxes: Just one of the many joys and responsibilities of home ownership!

In either case, it is always best to contact your local real estate agent. In addition to being a go-to resource for any questions about your home, you can also request a comparative market analysis or CMA. A CMA will list the sales activity in your neighborhood for up to one year. Here you can determine the percentage of homes actually sold out of all those listed and you can see the average amount of time it took for those homes to sell. If you compare your homes attributes to the similar homes on the CMA, you’ll be able to have an idea of where your home’s value will fall so long as you can avoid the emotional bias that eliminates the  objective judgment needed for your home. This, again, is where having a Realtor comes in handy.

If you’re looking to increase the resale value of your home, there are plenty of tips out there that can add value, but you want to be sure you get the best bang for your buck! Here is a list of popular renovations and their rate of return.

• Roof Replacement:

Avg. Cost = $14,000 - Rate of Return = 74% - Value at Sale = $10,360

• Bathroom Remodel:

Avg. Cost = $30,000 - Rate of Return = 75% - Value at Sale = $22,500

• Basement Remodel:

Avg. Cost = $55,000 - Rate of Return = 79% - Value at Sale = $43,450

• Major Kitchen Remodel:

Avg. Cost = $55,000 - Rate of Return = 83% - Value at Sale = $45,650

• 2nd Story Addition:
  

Avg. Cost = $110,000 - Rate of Return = 83% - Value at Sale = $91,300

• Window Replacement (Vinyl):

Avg. Cost = $10,000 - Rate of Return = 84% - Value at Sale = $8,400

• Window Replacement (Wood):

Avg. Cost = $11,000 - Rate of Return = 85% - Value at Sale = $9,350
(get more helpful information on custom window replacement from these Maryland replacement windows experts)

• Minor Kitchen Remodel:

Avg. Cost = $18,000 - Rate of Return = 86% - Value at Sale = $15,480

• Siding Replacement:

Avg. Cost = $9,500 - Rate of Return = 87% - Value at Sale - $8,265

Keep in mind these are averages and will be different based on the materials used and the styles incorporated. If you’re going for maximum return, keep your designs fairly neutral. You can add your personal style or flair by using accessories, pillows, art, etc, but you’ll want your over all design to appeal to as many buyers as possible to increase the resale value.

Research the median home value for your area. There is no cookie cutter formula out there that says a three bedroom, two bath home with 2,000 sq ft is worth $300,000. Instead you have to get online and check out local real estate. Go to local open houses to find homes that have similar features such as square footage, bedrooms, bathrooms, basements etc and see what the asking price is. Be sure to view homes that you believe are valued a little above AND below yours.This will give you more comparisons by a specific feature (i.e. pool vs. no pool)

The houses that are on the market have usually had some kind of professional appraisal from an actual Realtor or Appraiser who knows the current market trends and thus most home prices are pretty accurate. Once you have this information, you can begin to assess and compare your own home.

Factors That Determine Home Value

• Square Footage: The more the merrier!
• Bedrooms: Usually having 3-4 bedrooms increases your buying pool. Just don’t sacrifice a garage or dining room to do it.
• Bathrooms: Most buyers prefer anything over one.
• Lot Size: Land will always be in high demand so the more you have the better!
• Location: Homes with a view or in historic locations tend to yield more value, whereas the opposite is true if you’re next to noisy train tracks or a land fill!
• Extras: Crown Molding, basements, pools, updates in kitchens and baths, and new flooring all raise home value and can set your home apart from your neighbor.
• Rule of Thumb: If there are less homes available in your area, the value of your home goes up! Conversely, if you have many comparable homes in your neighborhood, you can actually lose value.

Tools to Help Determine Home Value

There are a ton of online tools to help you find your home’s value, but none are considered 100% accurate. While we recommend consulting a local real estate agent, you can also try the website of your local county appraiser. They usually have great tips and an FAQ section to help answer any questions.

Keep in mind that if you’re planning on buying, selling or accessing equity in your home, you will almost always need a professional appraisal. In this case, look for agents who are licensed and have good references to help avoid headaches down the road.

Know matter how you do it, determining home value is never a sure thing, but by staying on top of your home value and the current market trends, you can be sure to get top dollar amounts when it’s time to cash in!