Posts Tagged ‘home buyers’
Published: March 15, 2010
Positive signs on employment and national economic growth should start being felt in the housing market in the coming several months, say top economists.
The Labor Department reports that there were 2.7 million job openings last month — 200,000 more than in the same survey the month before.
Meanwhile, the consensus forecast among private and government economists for the main barometer of the U.S. economy’s health, gross domestic product or GDP, is for a very solid 3 percent during the first quarter.
Alan Levenson, chief economist for T.Rowe Price Associates, said the latest reports are “indicative of a labor market and economy that is in the midst of recovery.”
That’s hugely important for real estate because expanding employment created by a rowing national economy are the essential fuels to power housing demand and sales.
Even though harsh weather conditions knocked the wind out of pending home sales and real estate shopping in many areas during January and February, analysts say the spring and summer market should be strong.
Lawrence Yun, chief economist for the National Association of Realtors, says the $8,000 and $6,500 federal home purchase tax credits that expire at the end of April for signed contracts — and the end of June for closed deals — should squeeze a lot of sales volume into the spring and early summer months.
Assuming slow but steady improvement in the jobs picture, Yun forecasts a solid second half of the year as well.
On the home pricing front, evidence continues to mount that in most parts of the country, home values have either bottomed out or have turned positive.
The most recent Case- Shiller index numbers on the top 20 metropolitan markets bear that out — and last week’s Zillow home value report found values essentially flat on a national average basis. They were down by just three tenths of a percent, but up in some major markets of note.
For example, Boston’s home values are up nearly two percent year-over-year, according to Zillow, and Los Angeles, San Diego, Denver and Philadelphia have registered gains after long periods of negative numbers.
Two other statistical hints that conditions are improving: The difference between listed prices and selling prices of home nationwide is now smaller than it’s been in a year, according to real estate research site Trulia.com.
And Realty Trac fond that foreclosures, which are clearly still a massive drag on the market — dropped by two percent last month — the second straight month of decline.
In a tough market, I guess we should appreciate even the smallest of improvements.
Keep your eye on these big-ticket items when shopping for a home
If you’re shopping for a home and can afford to buy one, you couldn’t be in a better position right now. In many parts of the country, housing inventory is high and both home prices and interest rates are low and as a buyer, you can take advantage of that.
With so many properties on the market, you can probably take a more leisurely approach to house hunting without getting into a fast-paced bidding war. There is a caveat, however. The best homes priced properly for the market conditions will always be in higher demand.
As you begin your search for the right home for you, it pays to keep in mind things you need to check carefully so that they don’t cost you big bucks in the long run.
Kitchen
If kitchens matter to you, you might want to be fairly selective about them when looking for a new home. The2009 average price for a minor kitchen remodel for a midrange home is more than $21,000 and the cost for a major remodel is more than $57,000 and the costs are substantially more for higher-end homes.
Look carefully at the appliances, cabinetry, counters and floor. Those are the elements that cost more to replace. If possible, you want newer appliances to save money on repairs and energy costs; solid-wood cabinets; and solid-surface counters, such as granite, stainless steel, butcher block or engineered stone. Your floor choices include wood, cork, laminates and tile and it’s a matter of what’s comfortable and durable for your lifestyle.
Bathrooms
Following kitchens, bathrooms are also expensive rooms to remodel at a 2009 national average of more than $16,000 because of the fixtures and plumbing. Make sure you see no leaks or evidence of leaks in tubs, toilets and flooring. Sharing bathrooms can be one of those pain points for families so make sure you get what you need.
Roof
A roof is a big-ticket item with an average 2009 replacement cost of more than $19,000 although adding a second layer to a roof is not nearly as expensive as replacing the entire thing. Inside the house, you can check the attic, ceilings and skylights for signs of water damage, look for places where the roof deck is sagging, and see if you can detect any light coming through. If you do see light coming through, it is likely not a problem if the roof is made of shake shingles. Outside, inspect for cracked, ripped, curling or missing shingles and damaged flashing. Also look for rotting, buckling, blistering or algae growth, which could also be signs of trouble.
HVAC
An old heater can be hard to repair and eats up energy at a pace faster than newer units. Furnaces can start at about $5,000 to replace and if you buy a combined unit with the air conditioner, add on several thousand dollars. You may need to replace the heat pump or air conditioner if it’s older than 10 years and a furnace or boiler if it’s more than 15 years old.
Basement
The extra room you gain may be a huge headache if the basement floods. Look for water marks and find out if the house has a system for removing water.
Other areas of concern that might cost money down the line are the driveways and sidewalks, chimneys, insulation and windows.
If you find a house and your offer is accepted, you’ll be dealing with a home inspector who can fill in the gaps with a professional’s eye. The thing is, if you really want the home, you don’t have to let problems deter you. You are in position to negotiate a price reduction with the seller or insist repairs be made to the property before your offer is finalized.
If you can afford a house, you can afford the luxury of taking your time to find the right one for you.
