Five Reasons to Buy a Home Now
Based on prices, mortgage rates and soaring rents, there may have never been a better time in real estate history to purchase a home than right now. Here are five major reasons purchasers should consider buying.
1. Competition is about to Increase
Every spring a surge of prospective purchasers enter the housing market. Like you, they will want the best home available in the best location at the best price. They will be competing with you for the ‘steals’ in the market. Don’t miss the opportunity to get that ‘once-in-a-lifetime’ buy available today that may no longer be available as the market heats up..
2. Price Increases Are on the Horizon
Nationally, home prices are projected to appreciate by 4.5% in 2014 and by over 19% from now until 2018. First home buyers will probably pay more both in price and interest rate if they wait until the spring. Even if you are a move-up buyer, it will wind-up costing you more in net dollars as the home you will buy will appreciate at approximately the same rate as the house you are in now.
3. Owning a Home Helps Create Family Wealth
Whether you rent or you own the home you are living in, you are paying a mortgage. Either you are paying your mortgage or your landlord’s. The Federal Reserve, in a recent study, revealed that the net worth of the average homeowner is 30 times greater than that of a renter.
4. Interest Rates Are Projected to Rise
The Mortgage Bankers Association, the National Association of Realtors, Freddie Mac and Fannie Mae have all projected that the 30-year mortgage interest rate will be over 5% by the spring of 2015. That is an increase of almost 3/4 of a point over current rates.
5. Buy Low, Sell High
Most would all agree that, when investing, we want to buy at the lowest price possible and hope to sell at the highest price. Housing can create family wealth as long as we follow this simple principle. Today, real estate is selling ‘low’ compared to where it will be next year. It’s time to buy.
Buying a Home Less Expensive than Renting – by 38%!
Trulia released their Rent vs. Buy Report (link to the report) last week. The report explained that homeownership remains cheaper than renting in all of the 100 largest metro areas by an average of 38%!
The other interesting findings in the report include:
From Realtor.org as seen on 3/11/2014
On March 6, 2014, in Did You Know, by Jessica Lautz, Survey Research Manager
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Discovered from the Minneapolis Star Tribune website 3/11/2014:
Such demolitions have been a controversial issue in the southwestern part of the city and in neighboring suburbs, particularly Edina.
Minneapolis City Council Member Linea Palmisano proposed the one-year moratorium Friday on single- and two-family home demolition and construction, and it took effect immediately on an interim basis. The move is intended to allow the city to more carefully examine its communication with residents and zoning for the areas in question.
The council voted unanimously to allow the moratorium, but could still vote it down after considering it in the committee process in the coming weeks. The plan will get an initial public hearing at City Hall on March 20.
Neighbors have complained of a lack of communication as builders rapidly tear down existing houses and replace them with much larger ones. Palmisano said they also have had problems with builders not complying with city rules during construction, which her office has been struggling to enforce.
“They have started tearing down houses and putting up new ones quickly, and they don’t at all look like the neighborhood,” said Jim Tincher, president of the Fulton Neighborhood Association. As part of its crusade, the neighborhood hands out the so-called “B.L.E.N.D.” awards to new projects that conform to the existing character of an area.
The redevelopments frequently fly under the radar, since many do not need variances and therefore don’t rise to the level of discussion in a public hearing. A demolition permit on a door is sometimes the only notice to neighbors that a building near their home is being demolished.
But data kept by the city show so-called “teardowns” are becoming exponentially more common in southwest Minneapolis, where the number of single-family homebuilding permits is three times that of other parts of the city. Palmisano said that in the first week she took office, there were 20 applications pending for her ward in different stages of demolition and rebuilding projects.
“The intent is to be able to give us some time to pause on just responding to fire after fire, while being able to study and get really good due process improvements,” Palmisano said. “Right now our ability to enforce even our existing laws [is] disjointed.”
The moratorium applies to Linden Hills, Fulton, Armatage, Kenny and Lynnhurst neighborhoods.
A ‘way to ruin … lives’
Gabriel Keller, a principal with Peterssen/Keller Architecture, said Friday that he has spent six months working with a downtown Minneapolis couple who recently purchased a house in Linden Hills. They had hoped to demolish it this spring and build their dream home on the lot.
“I don’t know what I’m going to say to them,” Keller said Friday of the moratorium. He said many architects are not building the kinds of “McMansions” that have drawn the fiercest criticism.
Keller added that changes in the area reflect investment occurring in new construction across the city.
“It means we’re doing something right,” he said, referring to the city. “But it also means we need to manage this carefully. Shutting things down for a year to me is not the way to do that. That’s the way to really ruin a lot of people’s lives.”
In a letter to neighbors, Palmisano said the city also wants builders to comply with regulations addressing noise, dumpsters, idling, shoveling and parking. “And we need to bring greater environmental sensitivity to these projects,” she wrote.
Heading off teardowns was a key issue in the campaign for Palmisano’s seat, as well as a priority for her council predecessor --Betsy Hodges, now Minneapolis’ mayor. Hodges spearheaded ordinance changes in her first term that limited the height and mass of new homes.
In Edina, fewer complaints
In Edina, the number of housing teardown permits set another record in 2013, but the addition of a redevelopment point person and some new policies seem to have blunted anger over noise and construction mess.
The number of issued teardown permits increased slightly last year, to a record 105 from 101 in 2012. But after years of taking flak from angry residents, city officials say they’re not getting as much heat over construction as they once did, probably because such comments now go to Cindy Larson, the city’s new redevelopment coordinator. A new requirement that builders hold a neighborhood meeting with people who live within 300 feet of a pending teardown has helped, too.
Last year, Edina tightened requirements for height and setbacks for new homes depending on lot size. But the new code did not take effect until Jan. 1. Some of the permit rush the city saw at year’s end — 125 new home permits were applied for, another record — was from developers who had designed homes that would not fit the new code. Construction on those homes could stretch out for many months to come, Edina officials say.
Staff writer Mary Jane Smetanka contributed to this report. Eric Roper • 612-673-1732
Today, many real estate conversations center on housing prices and where they may be headed. That is why we like the Home Price Expectation Survey.
Every quarter, Pulsenomics surveys a nationwide panel of over one hundred economists, real estate experts and investment & market strategists about where prices are headed over the next five years. They then average the projections of all 100+ experts into a single number.
The results of their latest survey
The latest survey was released last week. Here are the results:
Liz Lewis Sandwick grew up in Duluth, is married to her husband Robb, has three kids: Caroline (5) Cooper (3), and Max (1) and would love to help you find your next home!