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.

2017 the Year of the Move-Up?

Is 2017 the year of the move-up? We are all itching to advance from things such as our careers, cars, personal life, and living situations? Let’s discuss this more. You may live in a home that was perfect for you and/or your family a few years ago. As time expands and sometimes income, it may be perfect to move-up to a home that fits you at this stage in your life.

If you are considering moving up to your dream home, it may be better to do it earlier in the year than later. The two components of your monthly mortgage payment (home prices and interest rates) are both projected to increase as the year moves forward, and interest rates may increase rather dramatically. Here are some predictions on where rates will be by the end of the year:

Freddie Mac

While full employment and rising inflation are signs of a strong economy, they also have the potential to push mortgage rates and house prices up. The higher rates and higher prices create significant affordability concerns, which may continue to characterize the housing market for the rest of 2017.”

Lynn Fisher, Vice President of Research & Economics for the Mortgage Bankers Association

By the time we get to the fourth quarter of this year, we will still be under 5 percent – we are thinking 4.7 percent…Something north of 5 percent by the time we get to 2018, and by the time we get to 2019, we show fourth-quarter rates hitting 5.5 percent.”

Mark Fleming, First American’s Chief Economist

Despite some regional disparities, title agents and real estate professionals do not expect increasing mortgage rates to have a significant impact on the housing market this spring. Continued good economic news, increasing Millennial demand and confidence that buyers will remain in the market even if rates exceed 5 percent bode well for 2017 real estate.

Len Kiefer, Deputy Chief Economist for Freddie Mac

We will probably see rates higher at the end of year, around 4.5%.”

Drea’s Two Cents

If you are feeling good about your family’s economic future and are considering making a move to your dream home, doing it sooner rather than later makes the most sense. Use the profit from your current home to put into your next home. Remember this: You are only taking funds from one investment and moving it to another.

Ready for the move-up? You can find your move-up home here: move-updallas.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.

New Communities in Dallas Suburbs

 

As a Realtor, I love finding new communities in Dallas suburbs before information is released publicly. It helps my clients beat the rush and get in on pre-sale prices. Now some communities may have an advertisement or two but not all model homes have been built in the community. Recently, I had a relocation buyer looking to build a home in the suburbs. She saw a community but wasn’t quite sure of it. We both went to visit it and discovered the three builders in the community.

From there, I went on to find more information and which builder fit her price range. We not only found one that did her price range but one that had their upgrades as standard options for her. We had pre-sale prices and even after she built the home out the way she wanted, we still didn’t reach her max budget. Can we say SCORE?!

If you follow me on Instagram, you will see that I absolutely love new construction. It is my thing for my clients. I like resale as well but I understand that some clients like the thrill of new. I understand. It is like the difference between new car sales and used car sales. The used car sales are great for your budget and timing. The new car sales come with a sticker price. It is somewhat equivalent to it. I love to help clients build their “perfect” home for now. I placed “perfect” in quotations because there is no such thing as a perfect home.

Below are a few communities that I have found while out on the search as well as some from my builder relationships. If you are interested in any of these communities, contact me. Seriously, I always get the question of whether you need an agent purchasing new construction. YES! The sales representative represents the builder. Who is representing you? It’s free representation for you so why not have someone represent you. Agents can help you negotiate the deal, understand what will help you in the resale process (if you are building), and explore your options. You don’t want to get caught up in the beauty of the model homes. Yes, they are staged well and you will be ready to hand over your whole checking account but an agent can help you weigh the pros and cons. So if you are interested in buying a built home in a community or building one, contact me to walk you through it.

Lakewood Hills – “New Carrollton” as they as describing it but it’s basically the Lewisville area outside of Castle Hills on Josey Lane and 121 Toll. As of now, I know Pulte Homes and Beazer Homes will be in this community.

Willow Wood – Located in McKinney. Builders in this community consist of First Texas Homes, Chesmar Homes, and Bloomfield Homes.

Winn Ridge – Dirt hasn’t even been built up yet for this community but it is coming soon. The only builder I can find so far is Centex Homes. Pre-sales start in summer 2017!

Windhaven Crossing – Townhome communty by DR Horton and Megatel Homes Pricing has yet to be revealed.

Melton Ridge – Located in the Stonebridge Ranch community in McKinney. New homes are being built by American Legend and Shaddock Homes.

Hollyhock Frisco

Merion at Midtown – Dallas

There will be more updates as I receive them about new communities in North Texas. To sign up to receive more information, head to my website at NewAvenueRealty.com.

Find out where I head on Wednesday with my #WOWWednesday posts.

 

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.

Is Now the Time to Buy A Home?

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Is now the time to buy a home? I won’t be Andrea if I am not completely honest with you about this question.  The answer to this is subjective. As a millenial myself, we get a lot of flack of not buying homes or buying homes BUT you don’t know what other people’s coinage look like. Every millenial is NOT in debt up to their neck nor do they need to go live with their parents to save for a down payment.

I will say the best answer is to do what’s best for you. Homeownership is not for everyone. In fact, even as a Realtor, I’ve told a few buyers that it may be best that they rent a little longer. This is normally the case when people’s expectations are higher than their budget especially after seeing what’s available in their budget.

For myself, I think of homeownership as a wealth builder. It’s an easy way to build your wealth and not think too hard about it. For instance, your home makes money as you sleep. It just happens to be the place that you raise your family, entertain family and friends, and sleep. It isn’t a liquid asset but an investment nonetheless. No matter the market, people will forever need somewhere to lay their heads. You can even use it to build your retirement plan as well with rentals. I met a guy last year who funded his whole retirement through rental properties. He decided to sell them all last year. The townhome he was selling was $170,000. Mind you he had 17 properties. Let’s do math here: If he had 17 properties and let’s just say all of them sold for $170,000, that’s 2.89 million dollars in gross profits.  Now think about the rent he collected throughout the years. Did I mention he still worked a 9-5 as well? Trust me….you don’t get to make true wealth by just working a 9-5. I am not a financial planner but I am sure they will tell you that you need your eggs in more than one basket.

Other misconceptions I commonly here is “such and such” ended up retiring in their 30s because they didn’t buy a home. That is so great. I want to retire by 45 myself but homeownership is included in my portfolio to do so. What those type of stories don’t tell you is that “such and such” probably had no student loan debt and a six-figure job.

Figure out what your financial picture and plan is. We are not our parents or grandparents generation. No one typically lives in their home for the whole 30 year mortgage life cycle. The average homeowner lives in their home for 4-7 years. My best advice to give is to buy a home that can easily be resold. In DFW, I would say a home that is at least 1500 square foot, 3 bedrooms, 2 bathrooms, and a 2 car garage. Don’t live for your now when buying. Think about your life for the next 5 years and the person who buys your home. Think about how long you plan on staying in the home as well. If you plan to leave your area in the next year or two, then homebuying may not be for you right now.

It’s okay but the biggest answer is it will be your choice and what you can afford. In my honest opinion, the best answer is to weigh your options and not what anyone else has to say to you. Is it cheaper to own than rent? In some areas yes. In DFW, the rent is just as high as the mortgage. The only difference is that you get tax breaks from the mortgage and the rent is just gone.

 

 

Take Your Emotion Out (The Home Buying Process)

Stress

Ready to purchase your first home? Here’s one of my most important rules: Take your emotion out of it.  You have to take your emotion out of the home buying process. If you make it all emotional, you’ll make decisions that may not always be best.

The thing to being successful in the home buying process is to realize that it is a financial investment. Home buying in a tough market such as DFW doesn’t equal getting exactly what you want. It can but do understand that it will come with a hefty price tag.

There are plenty of decisions to make during the process and in DFW, you have to be decisive. In most situations, there won’t be time to think about it overnight. I always ask my clients for their top 5 must-haves. Must haves are basic requirements to a home such as:

  • Do you need to move by a certain date?
  • Desire a certain school district?
  • Have space requirements? What would the space be used for?
  • Do you want a backyard? What would you want to do in your backyard?
  • How big of a kitchen (or closet for my ladies) are you looking for? Why is that so?

See how in that equation that a kitchen island or granite countertops weren’t mentioned? That’s because those are things that are nice to have but shouldn’t be must-haves. Why? You can easily add those things to your home as time progresses.

Know your must-haves. Know how much you can afford. Know how long you plan to live in the home. The goal is to maximize your investment return for the home as you live there. It’s a financial/business decision first and emotional tie dead last.

For my clients, I keep the list to those 5 and often remind you of it when you want to see an 1100 square foot home when you said the home has to be 1400 square foot or more.  When you know what is absolutely needed in your home, stay on track of that list. That will help narrow your choices down and help keep the emotion out of it. The focus should be functionality and practicality.

If you are decisive, you’ll save a lot of time and emotions. You’ll have a nice home that is affordable, provides a great return on the investment, and provides the sense of home that your family needs.

 

To begin your home journey in North Texas visit NewAvenueRealty.com.

Find Your Castle. Live Like Royalty.

Find your castle. Live like royalty.

That’s the mantra of #CrowningHomeowners. I learned early on in my career as a Realtor that clients wanted to feel special. It didn’t matter what size their new home was it was their domain. It was their sanctuary. Lastly, it was the one place where they ruled the throne.

That’s the feeling I love for my clients to have. It is never about me but about how they feel. To this day, it still amazes me when their face lights up at “the one” The one home that they will call their royal place in their life. It may be the first one or it may be the fifth one but it is a special place for them during this moment of their life.

Don’t believe me. Just watch.

You can you live the dream. You can start by signing up for the #CrowningHomeowners workshop next Saturday in Lewisville. #CrowningHomeowners Workshop Registration