Home Sales to Pick Up in Second Half of 2014, Despite a Dearth of First-Timers

Home sales should pick up in the back half of 2014, but first-time home buyers are still underrepresented, the National Association of Realtors reported.
In May, first-time buyers were responsible for 27 percent of existing-home sales. That includes a relative “surge” of first-timers who bought in May so they could take advantage of an expiring tax credit program. 

“The flourishing stock market the last few years has propelled sales in the higher price brackets, while sales for homes under $250,000 are 10 percent behind last year’s pace,” said Lawrence Yun, the association’s chief economist. 

 “Meanwhile, apartment rents are expected to rise 8 percent cumulatively over the next two years because of tight availability. Solid income growth and a slight easing in underwriting standards are needed to encourage first-time buyer participation, especially as renting becomes less affordable.”
Overall, pending home sales were up “sharply” in May, and the effect was seen in every region. 

 “Sales should exceed an annual pace of 5 million homes in some of the upcoming months behind favorable mortgage rates, more inventory and improved job creation,” Yun said. “However, second-half sales growth won’t be enough to compensate for the sluggish first quarter and will likely fall below last year’s total.” 

Specifically, Yun is forecasting a 2.8 decrease in sales of existing homes. The median price, however, will grow by 5 to 6 percent.

This article was originally published on Community Investor. The Grace Frank Group claims no ownership of this information.

Brave New World: Real Estate Apps

From a recent Washington Post article about real estate apps:

The old-fashioned method of driving around to check out homes and neighborhoods hasn’t entirely disappeared, but it’s definitely received a 21st-century makeover with the introduction of mobile apps. 

A variety of apps are available to help potential buyers look for a home, check out the neighborhood and local schools and connect with a Realtor from their mobile devices. In addition, home buyers and homeowners who intend to upgrade their dwellings can rely on apps to help their renovation plans.

"Nothing online about raccoons or serial killers. This one might be it."

“What I like about this app is that it gives you all the nearby rentals [and nearby for-sale properties] based on your location,” says Sheena Price, 29, who uses an app created by Avery-Hess realty. Price and her husband, Frank, have been searching for properties to either rent or buy. 

“Once you click on nearby sales, you get a list of properties, photos and it tells you how much they are,” Price adds. 

According to “The Digital House Hunt: Consumer and Market Trends in Real Estate,” a 2013 study by the National Association of Realtors and Google, 89 percent of home buyers use a mobile search engine and 68 percent use a mobile app at the onset and throughout their home search. 

Click here to read the rest of the article, and check out the list of apps that they provide that have proved particularly helpful for prospective buyers and investors.

How To Buy A Rental Property

Investing in a rental property seems like one of the easiest (in theory) ways to make money in the real estate market. But as with anything in real estate, the act of actually purchasing the property can seem daunting, especially to first-time buyers or people unfamiliar with their local market. How do you select the right property, what steps do

you need to take, what do you need to do to get approved, etc.

Luckily, as with most topics, there's no shortage of help out there for beginners looking to break into a certain field or topic. Brandon Turner, a resident blogger for the online Real Estate magazine Bigger Pockets, lays out some of the steps in a simple, easy to read list. This list covers every step of the process at least in part, from getting pre-approved to actually selecting and closing on a property.

Click here to read the full list. And since now seems as good a time as ever for a personal plug, did you know that the Grace Frank Group has its own multifamily site? Click here to visit and view our list of multifamily properties, and feel free to contact us with any questions!

FREE Land from the City?

Back in December, the Chattanooga Times Free Press published an article discussing a proposal that Chattanooga Mayor Andy Berke had put forward to give away city-owned land in order to speed up the development of quality housing for lower-income families.

Though the article is a few months old, the initiative was first put forward by Berke last summer. The goal, as described by Times Free Press writer Joy Lukachick, is:

"...to have 30 low-income families in houses by the end of the fiscal year on June 30. That gives officials a little more than six months to finish vetting the properties and find developers to build the houses."

With over 1000 people in Chattanooga on the waitlist for federal housing vouchers, this approach has attracted both praise and criticism alike. Most of the criticism has been leveled at the potential cost and the forced breakup of communities to meet the demands of the initiative.

Click here to read the full article. Again, this article was initially published in the Chattanooga Times Free Press.

Rent or Buy: The Cost is Going Up

To rent or buy? The eternal question in real estate, particularly in younger years, when renting seems like the more viable option as opposed to buying while you're less financially stable.

But don't freak out; we've got information. The article below comes from Melinda Duncan, a Re/Max agent based in Kentucky (check out her website). The bad news? Costs are likely going up no matter what. The good news? It doesn't have to break the bank.

Whether you continue to rent or decide to buy a home, according to recent Zillow 2014 housing projections, the cost is going up. Zillow projects home prices to increase nationally by 3%, mortgages to rise to 5% interest rate by the end of the year and rents to go up by 2.5% on average.

If it will cost a person more whether they rent or buy, the conclusion can be made that one way or the other, they will pay for the house they occupy. The question will be whether they buy it for themselves or their landlord? Will they benefit from the equity build-up and the appreciation? 

The following analysis looks at a $200,000 home that can be purchased with a 30 year FHA mortgage at 4.3%. The assumption uses 3% appreciation and tenant currently paying $1,750 a month in rent. 

The house payment, principal, interest, taxes and insurance would be about $1,609 a month. However, once you consider the benefits of the principal reduction each month, the appreciation and the tax savings and the increased cost of maintenance, the net cost of housing is closer to $630 per month. 

Even if you ignored the tax savings, the net cost of housing would only be $919.06 per month. The tenant would pay considerably more to rent than to own the home. Over time, the decision to buy a home could result in a considerable financial asset that the tenant will not benefit from. 

To estimate your cost of housing, use the Rent vs. Own.

Our Most-Popular Homes of 2013

It's been a great year for house hunting. Let's take another look at the unique places you've loved the most on Pinterest, Facebook and Tumblr. http://www.frontdoor.com/photos/hgtv-frontdoors-50-most-pinned-of-2013?nl=FDN_122013_featimg&sni_mid=105265&sni_rid=105265.320.400625&c32=%7BB052C694-B5D9-4084-8258-02F53437D1A0%7D

2014 Strategies for buying your next home.

When it comes to the world of real estate, local Realtor Grace Frank says strategy is key for success.

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“I always say your strategy matters and your passion rules,” she said. “I have a real knack for strategy and a real passion for real estate.”

“Strategy” breaks down differently for buyers and sellers, but Frank stressed that it’s equally important for both sides.

“For sellers, preparation and flexibility are key,” she said. “For today’s market you must prepare your property to look its best, and you must be open minded when the offers come in, as buyers still feel it is a buyers’ market, though the trend is changing.”

Buyers, in turn, should “buy right and sell well,” she said. “You only make your money when you buy. If you buy right you can sell well,” Frank explained.

Preparation and organization are the two main concepts to keep at the forefront of any strategy, and for that, Frank has a dedicated and trusted staff behind her. Their main goal is to give clients the tools to make the right decisions and to be there as a solid sup- port system, said Frank.

More Information

To contact Grace Frank for a personal consultation, call 423-355-1538 or emailGrace@GraceFrankGroup.com.

“Systems are vital, and we have great systems that allow a client to review information, communicate concerns and execute strategy based on valid information,” she said. “I always analyze the personalities and then execute a plan that creates a win-win scenario. If a strategy is not a win-win, it is flawed.”

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Negotiations in real estate strategy can be a bit like playing cards, according to Frank. Those involved must know when to hold them and when to show them. Every situation is different and the strategy depends on the personality of the buyer and sellers.

“I recently had a buyer that was also a seller,” Frank said. “When selling their home we needed to drop the price in the middle of the negotiation to create urgency for the offer, and when we began negotiating the new home they fell in love with, they wanted to go in with a lower price below what I thought was the threshold of tolerance. They ended up going with my strategy and got their offer accepted and alleviated any multiple-offer situations and still got a great deal.”

For more of Frank’s tips and advice on strategy and negotiations for real estate, visit secretsforsellers.com for sellers and smartvaluebuyer.com for buyers. There, you’ll find many tools and articles that assist in making wise decisions pertaining to real estate.

“Information is powerful,” Frank said. “I believe when you edu- cate individuals they can truly make the best decisions.”