Rent is Increasing! Why You Should Look Into Homeownership.

Recently, WFAA released an newcast stating that the rent rates in DFW are increasing month-to-month.  All across DFW, you will see development happening. The developments are for new businesses, new apartments, and/or new homes. There isn’t too many places where you don’t see that in DFW. Currently, Dallas is the land of opportunity.

The newly published April 2017 Dallas Rent Report shows prices across the city remain above the national media. On average, one-bedroom apartments were leasing for $1,260. Two-bedroom units were renting at $1,760.

There are thousands of people relocating here monthly (so yes, people are coming here and they need a place to live). As a Realtor, I have people coming from everywhere. It isn’t a specific place that people aren’t migrating from. They come from the East and West Coasts, other Southern states, and the Midwest.

My biggest motto from a financial standpoint is that if you are paying $1000+, you should consider purchasing a home. Why? The benefits of being a homeowner outweighs being a renter. Let’s take this example.

Let’s say your monthly rent is $1200/month. For a whole year, you’ve paid $14,400 in rent. However, if you had a home that was $1200/month for your mortgage, you could have tax benefits from property taxes, mortgage insurance, mortgage interest. The $14,400 you spent with a mortgage with a tax benefit of $3,600 means that you technically have paid $10,800 for a whole year. That’s basically $900/month. What’s even better? You are build equity while buying and equity = wealth. With an apartment, you are making the developer/builder wealthy.

Homeownership is an investment. Yes, you can invest in stocks and bonds but homeownership provides you a tangible asset. Homeowners in DFW have seen an increase in their asset of 8.5%. That’s extra money that you have made and all you did was live in a home. Can you say the same about your apartment? I live with the financial sense of wanting to make money while I sleep. That is EXACTLY what a home does. Check out the graph below on the status of DFW homes from 2014 to now.

The market has went from homes having a median sales price of $162,000 to $255,000 in June 2017. That’s a $93,000 increase in 3 years. Listen to me, that’s $93,000 increase in THREE years. Imagine what you could do with $93,000 if you had a home to sell. That’s 20% down for a move-up home and some left over to decorate and pay Navient (Sallie Mae’s wicked sister) a nice chunk of change.

Bottom Line: You could look into purchasing a home instead of renewing your lease. Homeownership can be a condo, townhome, or a house. The first two really depends on a person’s lifestyle and what they prefer. All three can be considered a home that you’ve purchased. I think condos/townhomes are great for turning into easy rental properties whether short term (Heard of Airbnb or Homeaway?) or in the long-term. You have to weigh your options and what works best for you. The easiest way to get to the McMansion is to purchase your first home and build yourself and your wealth from there.

For more detailed information for your personal situation, contact me at 972-813-9788 or atfowler@NewAvenueRealty.com.

 

 

When to Get Excited About the Housing Market

Real estate professionals get that consumers, by and large, ignore housing statistics and the market until they become involved in the purchase or sale of a home. It’s only natural then that what impacts the market is a bit of a mystery to many. What determines a buyers’ or sellers’ market? What factors influence home prices?

Of course the answers to these questions and more may be multi-faceted, but it’s important to pay attention to them if you hope to keep more of your money when it’s time to buy or sell real estate.

Believe it or not, even in what seems like the gloomiest of real estate markets, there will be a glimmer of light for some.

Pay Attention to Interest Rates

It certainly is no secret that obtaining a lower interest rate for a mortgage typically allows for a lower payment. Naturally then, low interest rates make home-buying an attractive venture—and, even whispers of a rate hike can spur folks to get out into the market.

For instance, by the end of 2015, the U.S. saw 5.26 million home sales, which was the most robust housing market since 2006. Lawrence Yun, chief economist for the National Association of REALTORS® (NAR), attributed the robust market, in part, to the mere “prospect of higher mortgage rates in coming months.”

And, rise they did, throughout the following year. In fact, late in 2016, mortgage interest rates rose eight times in nine weeks, according to bankrate.com. Sounds rather gloomy until one recognizes that, post-hike, rates were still at historic lows.

The bottom line is that if you’re in the market for a home and interest rates decrease or remain attractively low, it’s time to get excited about the housing market.

The Economy

The current economy is a key factor affecting the real estate market. “Broadly speaking, when the economy is sluggish, so is real estate,” claims Joseph Nguyen at Investopedia. Rather than look at the glass half-full, however, we choose to take the opposite tack—when the economy is humming along, the housing market is at its most attractive.

When job growth is robust, consumer confidence rises and we’re more apt to spend money on high-ticket items, such as cars, appliances, vacations and, yes, homes.

Exciting Markets for Sellers

There’s an old saying in the real estate industry that counsels homeowners that the best time to sell a home is when you need to sell your home. Yes, we understand that isn’t very helpful. If you’re one of the fortunate who has no compelling reason to sell (such as a job offer in a different town or divorce), you have the luxury of choosing when to put the home on the market.

Get excited if real estate professionals mention the words “sellers’ market.” This is a period in which there are few homes for sale but buyer demand is high. During sellers’ markets prices typically increase rapidly and homes sell at or above list price.

One of the biggest mistakes we see in sellers’ markets is the homeowner who feels that the market itself will bring top dollar for the home, regardless of condition. Be aware that it’s the homes in good condition that sell the quickest and for the most amount of money. Regardless if market conditions favor sellers, if your home isn’t in move-in condition, it may be passed over by home buyers.

Buying a Home This Year?

A buyers’ market—when there is a large selection of homes for sale and few other buyers in the market—is a great time to purchase a home. Unlike a sellers’ market, prices aren’t rapidly escalating and you won’t be competing against a slew of other buyers. These markets are more relaxed so homebuyers can take their time deciding.

In a sellers’ market, however, it’s more important than ever to have all your ducks in a row before making an offer on a property. Ensure you know exactly how much you can spend and that you’ve obtained a preapproval letter from your lender. Make your offer stand out from others by keeping it lean and mean, with the shortest time periods for contingencies as possible. Finally, come in with your highest and best offer. A sellers’ market moves too quickly to assume the homeowner will negotiate over price.

While the type of market may determine when to jump in, as mentioned earlier, interest rates can also cause excitement in the housing market. Low rates and relaxed lending guidelines, such as we saw in 2015 and 2016, presented a prime opportunity for many would-be buyers who previously couldn’t afford to purchase.

Lower mortgage rates mean a lower monthly payment, which means you have more purchasing power, and that additional power can “mean the difference between buying a 2-bedroom home versus a 3-bedroom one; between buying a home with large closets versus small closets; and, between buying an upgraded home versus a dated one,” according to Dan Green at The Mortgage Reports.

Regardless of the media’s perception of the housing market, there is always a mix of good and bad news, depending on whether you are in the market to buy or to sell. Arm yourself with a professional real estate agent who can supply you with current and local market information (too often what you read in the news is stale and based on nationwide statistics), follow his or her advice and buying or selling a home in any market will be an exciting process.

 

Ready to talk to a Dallas real estate professional? Book an appointment with me at atfowlerrealtor.appointy.com.

Buying a Home? Do Your Research

One thing that I do with all new and potential clients is to schedule a consultation. The consultation helps each party set expectations but most importantly, it helps to properly educate a buyer or seller.

I never want to sell my clients just anything or any service. I want to be the one who helps you make the best educated decision in life’s biggest financial transaction. I value the relationship I have with my clients so I treat everyone as if they are a dear friend that I want the best for.

However, with so many things available at our fingertips, it is hard to not have knowledge on some things.

The market in Ohio may be a totally different market in Texas. The market in Dallas is a totally different market than Houston. You cannot take what person A in New Mexico said compared to where you are buying in let’s say Georgia. Markets differ. One market may have an abundance of foreclosures and another one not so much.

For consultations, I like to break down all myths and help a client know what’s happening in Dallas/Fort Worth. An example would be the southern suburbs and the northern suburbs of Dallas. The same home in Lancaster may cost $100K less than the same home in Little Elm. Dallas has one of the hottest real estate markets in the country and foreclosures are rare at the moment. What may have been available in 2009 may not be available in 2017. I get it. I miss the cheap housing of DFW too. Imagine the days where you can get a home in The Colony, Little Elm, or even McKinney for $150K? I was helping people find them in 2014. That’s the last time I’ve seen homes in those prices in the northern suburbs.

So you’re interested in buying a home and want to know where to start?  I like some tips on the best way to start researching your market below. 

Here’s the best way to start your research in the market.

  • A. Find areas that you like (Do 3-5 areas).
  • B. Look up homes in those areas. What do they cost? What do you like about them? We all have areas we desire but in today’s time that area may not fit our budgets. If you barely find a home available under $200K or even under $150K in these areas, the market is higher. If that may not be your budget, find other areas that fit your price range.
  • C. Know your OWN coin. Look at your gross or net income for the month. Subtract the expenses you have from bills (excluding rent). What is left over? That may be the amount you have realistically to pay for a home. Rule of thumb is to spend no more than 30% on mortgage/rent. Lenders generally include this as well. This is called debt to income ratio. They include housing expenses (mortgage) and debt expenses to help you know what you can afford. This also may be the time to find what you can eliminate to afford a home that you want.
  • D. Get Pre-Approved. It’s one thing to dream of the lovely $450K home but it is more responsible on knowing if you can afford it or not.
  • E. After getting pre-approved, go back to A and see if you are able to realistically do A. This becomes a one-on-one conversation with yourself to realize what you can and cannot do. Look at other areas that have more availability in your price range. Venture out to visit the areas and see if it is something that you can do. People are generally surprised what other areas offer.
  • F. Get a Realtor. Online research can only go so far. Find a knowledgeable Realtor that you can connect with.

The key to homeownership is to start. Your first home is not your forever home. YOUR FIRST HOME IS NOT YOUR FOREVER HOME. It is your first home. You second home may be that dream home you’ve always wanted. It may be your third or fourth. If you ever want to sit down and have a discussion with me about the DFW housing market, contact me today via phone or email at 972-183-9788 or atfowler@NewAvenueRealty.com. Book an Appointment here to schedule a consultation.

Buying this Spring? Be Prepared for Bidding Wars

Traditionally, spring is the busiest season for real estate. Buyers come out in force and homeowners list their houses for sale hoping to capitalize on buyer activity. This year will be no different!

Buyers have already been out in force looking for their dream homes and more are on their way, but the challenge is that the inventory of homes for sale has not kept up with demand, which has lead to A LOT of competition for the homes that are available.

A recent Bloomberg article touched on the current market conditions:

“It’s the 2017 U.S. spring home-selling season, and listings are scarcer than they’ve ever been. Bidding wars common in perennially hot markets like the San Francisco Bay area, Denver and Boston are now also prevalent in the once slow-and-steady heartland, sending prices higher and sparking desperation among buyers across the country.”

Sam Khater, Deputy Chief Economist at CoreLogic went on to explain why buyers are flocking to the market in big numbers:

“In today’s market, many buyers think the trough in [interest] rates is over. If you don’t get in now, it’s just going to be worse later. Rates will be higher, prices will be higher, and maybe inventory selection will be lower.”

In Dallas, homes are staying on the market for almost 16 days with the homes selling at 98.4% of the listing price.  Homes under $200,000 sell in 6 days and sell for 100% of list price in North Texas.

Bottom Line

In today’s competitive atmosphere, you need a professional on your side who knows your exact market conditions and can help you take the steps you need to be able to secure your new home! Schedule a buyer’s consultation with New Avenue Realty at atfowlerrealtor.appointy.com.

Millionaire to Millenials: Buy a Home

Last week, CNBC ran an article quoting self-made millionaire David Bach explaining that not purchasing a home is “the single biggest mistake millennials are making”because buying real estate is “an escalator to wealth.”

Bach went on to explain:

“If millennials don’t buy a home, their chances of actually having any wealth in this country are little to none. The average homeowner to this day is 38 times wealthier than a renter.”

In his bestselling book, “The Automatic Millionaire,” Bach does the math:

“As a renter, you can easily spend half a million dollars or more on rent over the years ($1,500 a month for 30 years comes to $540,000), and in the end wind up just where you started — owning nothing. Or you can buy a house and spend the same amount paying down a mortgage, and in the end wind up owning your own home free and clear!”

Who is David Bach?

Bach is a self-made millionaire who has written nine consecutive New York Timesbestsellers. His book, “The Automatic Millionaire,” spent 31 weeks on the New York Times bestseller list. He is one of the only business authors in history to have four books simultaneously on the New York Times, Wall Street Journal, BusinessWeek and USA Today bestseller lists.

He has been a contributor to NBC’s Today Show appearing more than 100 times, has been a regular on ABC, CBS, Fox, CNBC, CNN, Yahoo, The View, and PBS, and has been profiled in many major publications, including The New York Times, BusinessWeek, USA Today, People, Reader’s Digest, Time, Financial Times, The Washington Post, The Wall Street Journal, Working Woman, Glamour, Family Circle, Redbook, Huffington Post, Business Insider, Investors’ Business Daily, and Forbes.

Bottom Line

Whenever a well-respected millionaire gives investment advice, people usually clamor to hear it. This millionaire gave simple advice – if you don’t yet live in your own home, go buy one.

As a fellow millenial, I have the same sentiments. It’s another staple to your portfolio that happens to be the place you spend a lot of time at. Buying a home doesn’t mean a single-family in the suburbs. It can be a condo or a townhome as well.

How’s the Market?

Everytime someone asks me what I do, I get asked this question every single time. The answer is simple. It depends on whether you are a buyer or a seller. Why does that matter?

That question matters because the answer will be tailored based on which side of the coin you are on. If you are a buyer, you’ll need to understand how competitive the market can be. If you are a seller, you’ll need to know that you have an advantage but only under certain circumstances.

Let’s look at July 2016 numbers and evaluate the market.

July 2016

This chart shows that sales in DFW for single-family homes and condos/townhomes are down by 2% to 10,011 homes sold in July. The average sales price in DFW is up by 5% at $277,966.

Let’s get specific and look at the numbers in Denton County.

Denton County Stats July 2016 - Edited

New listings on the market in Denton went down to 1,818 in July 2016 compared to 2015. Sales went down to 1,368 in July 2016 as well. As popular as Denton County is becoming, it increases the sales prices as well. The average sales price in Denton County rose to $323,637. The days on the market increased to 33 days but the months of inventory still stayed the same at 2.5 months. The inventory level indicates that Denton County is still a seller’s market.

How Do These Stats Weigh for A Seller? 

The stats prove that the number of homes on the market are low. Your home could sell in this market if it has been maintained and most importantly, priced right. On average, homes are selling within a month’s time and the purchase price of the homes are up. That means you’re able to gain your equity in the sale of your home.

How Do These Stats Weigh for a Buyer? 

The stats prove that the market is still competitive with a rise on prices. Sellers are getting an average of 98.9% of the asking price for their home. Example: If the home is $100,000, then most sellers are getting $98,900 for the sale of their home. Make your offer competitive enough to get the home in this area.

 

Can I Buy a Home and Sell My Current One at the Same Time?

Question of the day right. The simple answer to this question is “yes”. You are able to sell your current home and purchase your next one at the same time. One of the main reasons of moving up is the equity that may be in your home. The chart below notes what homeowners think is their equity value compared to what is their equity value. February2016-29

So are you wondering what you need to do to buy your next home and sell your current home? Well I have you covered in this week’s Tuesday Tip.

 

 

Your new avenue awaits you……Let’s Find it!

Find your new home at NewAvenueRealty.com or move-updallas.com.

 

 

Do’s and Don’ts…..Do YOU know?

do and dont

Today I am combining my blog post with my Tuesday tip because these tips needed to be in one place. The topic for today is the “do’s and don’ts” of home buying.

Every one has heard that you can do this and you can do that but before you do something in particular, talk to the lender. There are so many interesting stories that I can tell you about when it comes to real estate and why things happen. Here are a few do’s:

DO pay your bills on time. You are asking a lender to loan you thousands of dollars guaranteeing that you will pay them back. They only thing that is attesting to your payment history is your credit report. 

DO know where you stand financially. Do you know you budget and how much you can really afford? Yes your total income may be $100K but when you include all debts, is it financially reasonably to purchase the home with a $2500 mortgage. Better yet, does your credit help those claims? Home buying is there for you to struggle to make the payment just to have an asset. Lenders look at the overall credit picture and you must look at your whole financial picture too. Do you have bills that you pay that doesn’t show on the credit report like cell phone bill, daycare costs, tithes, charitable contributions, etc? 

Now on to the don’ts.

DON’T QUIT YOUR JOB. I know you really dislike Susie and the rest of the staff. Which one do you want more? The house or a new job? Just put a time limit on how long you can deal with Susie and the rest of the staff until you make your home purchase. 

DON’T DEPOSIT YOUR MATTRESS MONEY. Yes, Grandma Jane still hides her savings under the mattress so you developed that habit. Now you have maybe $1,000 or 2 under the mattress. You need it for your down payment or closing costs. When purchasing a home, you need a paper trail. You won’t be able to be use these funds because there is no paper trail on where it came from. I’ve actually had a client do this. Thankfully we were able to get the seller to pay the closing costs he needed. But that’s an FYI. Start “seasoning” your money into an account months before purchasing your home. Plus, it may be safe to have it in an account instead of your home. That’s just my opinion though. 

One of my trusted lender partners do a great job discussing the do’s and don’ts of buying a home. Check out the video below from Mortgage Express.

 

Now that you know what to do to get started, you can contact the lender to get started and be crowned a homeowner in your new home!

 

 

Your new avenue awaits you….let’s find it here. #CrowningHomeowners

Guess Where Residential Rents are Heading?

Guess Where Residential Rents are Heading? | Keeping Current Matters
Each month, many people are faced with the decision of renewing their rental lease for another year or purchasing their first home. One of the questions that must be answered before they make a decision is – “Where are rents headed?”
The Wall Street Journal recently wrote an article on this issue. Their conclusion:
“Apartment rental increases slowed in the first quarter from a year earlier, but the move is more likely a temporary blip than the beginning of a long-term respite for renters.”
The article goes on to quote Ryan Severino, a senior economist at Reis:
“I wish I had a better story to tell renters these days, but I think they’re in for some rent increases for the foreseeable future.”
Probably the most interesting part of the article came in the Comment Section where a proud landlord proclaimed:
“As a landlord I can tell you I don’t pay property tax. I don’t pay for repairs. The tenant pays. I get my money off the top.”
Here is a chart showing rent increases over the last 25+ years:
Median Asking Rent Since 1988 | Keeping Current Matters

Is Getting a Mortgage Getting Easier?

Is Getting a Mortgage Getting Easier? | Keeping Current Matters
There has been a lot of discussion about how difficult it is to get a home mortgage in this market. There is no doubt that the process is not as easy as it was eight to ten years ago and that’s probably good news. However, it does appear that availability to mortgage money is increasing with each passing day.
The Mortgage Bankers’ Association publishes the Mortgage Credit Availability Index(MCAI). According to their site the index is “a summary measure which indicates the availability of mortgage credit at a point in time”. As we can see from the graph below, mortgage availability has been increasing dramatically over the last six months.
Mortgage Availability | Keeping Current Matters
Accompanying the latest index was this comment from Mike Fratantoni, MBA’s Chief Economist:
“A number of factors contributed to a loosening of credit in March: Freddie Mac’s introduction of their 97 LTV program (Fannie Mae’s was implemented in December) [and the] additional loosening of parameters on jumbo loan programs… Although credit remains tight by historical standards, this increase in availability, coupled with low rates and job market strength, should lead to stronger home purchase activity this spring.”

Bottom Line

If you have remained on the sidelines regarding homeownership because you were concerned about your ability to qualify for a mortgage, it may be time to get into the game.
“Is Getting a Mortgage Getting Easier?” Keeping Current Matters. N.p., 09 Apr. 2015. Web. 09 Apr. 2015.