Don’t wait too long to buy a house. It may cost you more than money.

Don’t wait too long to buy a house. It may cost you more than money.

One of the most common questions Realtors deal with is related to “how much house” a buyer can afford. The first place to start when you want to buy a house, is the lender’s office. A lender is a great resource in the home buying process because the lender can determine what buying power a home buyer is capable of. Then, with that information in hand, a buyer knows what price he/she should be shopping in. It would be terribly frustrating to shop for a $400000 house if a buyer’s buying power is $232000.

Don’t wait too long to buy a house: The cost of waiting.

There is second issue buyers should also consider when they start the process to buy a house. That is time and interest. Time and interest rates can work for you, or they can work against you. A buyer may start the process qualified to buy a $232000 house at 4.5%Don't wait too long to buy a house. You may find that you can't afford what you could before., but what happens if he lingers for 6 months and interest rates inch up over that time? Let’s say rates climb to 6%. That $232000 house will now be out of his buying range. Now, he can only afford to buy a $196147 priced home, but his house payment will be the same as the $232000 house.

Don’t wait too long to buy a house: Even small changes will hurt your purchase.

Even if the rate only went up 1% to 5.5%, the buyer’s buying power slips to $207119. No one wants to rush into buying a house, but being too causal in home buying process may cost you. In this scenario, the buyer lost nearly $25000 in buying power. If it went to 6%, he lost $35853 in buying power. It’s very likely that the $36K loss in buying power is not going to produce the house he envisioned when he started the search.

Don’t wait too long to buy a house: Time really is money. Your money.

Time really is money when the market is showing increases in housing prices and interest rates. Every increment up means less buying power. A buyer needs to be focused on finding the right house within his/her price range within a reasonable time. If not, he/she might be settling for less house at the same monthly costs.

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You can’t buy the first house you look at, can you?

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Oakdale Crossing, Raven Wing, Raven Point – 2017 Real Estate Review

Oakdale Crossing, Raven Wing, Raven Point – 2017 Real Estate Review

The Oakdale Crossing, Raven Wing and Raven Pointe neighborhoods had a good 2017 in real estate. All three neighborhoods show year over year improvement in sales numbers, distressed property sales and average sales price. They also show a drop in distressed properties (short sales and foreclosures). The five-year sales have increased over 32% from 2013, but the years between 2013 and 2017 were a roller coaster. In every area, these neighborhoods have been up and down.

Oakdale Crossing, Raven Wing, Raven Point: The ups and downs of the past 5 years.

In 2017, total sales for the three neighborhoods were 37. That was a 131% increaseOakdale Crossing, RavenWing, Raven Point - 2017 Real Estate Review over 2016. Ironically, 2016 saw a -40% drop in sales over 2015, but 2015 saw a 23% increase in sales over 2014. Finally, 2014 was down -21% over 2013, and 2013 was down -21% over 2012. The numbers could give you whiplash if you were a seller in these three neighborhoods.

In the current breakdown, Oakdale Crossing had 6 sales, Raven Wing had 17 sales and Raven Pointe had 14 sales. Raven Wing has consistently carried the most sales from 2013-2017. On average, Raven Wing has double-digit sales compared to its immediate neighbors. Raven Pointe rose to 14 in 2017, but it has been below 8 for the past five years. Oakdale Crossing is typically in single digits with 2017 being the highest in the past five years.

Oakdale Crossing, Raven Wing, Raven Point: What’s in a day

Oakdale Crossing, RavenWing, Raven Point - 2017 Real Estate ReviewAnother way to see how the market has improved over the past five years is to look at the days on the market. The average days on the market can be a very revealing number, or it can yield nothing of valuable to the understanding of a neighborhood’s health.

In these three neighborhoods, this is one number that tells the story of the roller coaster ride these neighborhoods have been on over the past five years. The market of 2013 was the first year where real change was noticeable after the down days of the 2008 recession. It was also the lowest days on the market of the past five years. The 2017 days on the market was the lowest since 2013. At 75 average days on the market, it was 15% below 2016, 13% below 2015, 61% below 2014, and 23% above 2013. Again, there was volatility, but these numbers show a market fighting to get back to a healthy norm.

Oakdale Crossing, Raven Wing, Raven Point: Price change

Price change, up or down, can also show a market’s health. The price change in these three neighborhoods has shown the same pattern as the numbers above. The 2013 average home sale was $377,721. That was 8.5% increase over 2012. In 2014, the average sale price was $404,864, but 2013 dropped to $391,483 and 2015 dropped even further at $377,517. The biggest price change happened in 2017. In 2017, the average home sale was $436,964. That is a 16% increase over 2013 and a 16% increase over 2016.

When the numbers are looked at from a distance, it truly has been a roller coaster ride for the past five years. The thing that separates 2017 from earlier years is that all numbers are up except days on the market. That one number is the least important because there are so many factors that can increase or decrease that number, and those factors may not be related to market health.

For instance, a home that is overpriced will take longer to sell. A home that is hard to show will take longer to sell. A home that is in poor condition will take longer and a home that is plain vanilla in a sea of banana splits may take longer to sell. There are so many factors that can lengthen days on the market that it becomes the lessor of the market health parameters.

When you’re ready to buy or sell in any of these three neighborhoods, give Mike Cooper at Cornerstone Business Group, Inc., a call. Mike and Cornerstone are your local real estate sales pros in Oakdale Crossing, Raven Wing and Raven Pointe.

You may also enjoy these previous reports on these neighborhoods and the local market. 

Oakdale Crossing is on the bright side of the economic recovery.

Winchester-Frederick Co., VA Real Estate Market in Review – 2017

Should I list my home in the Winter months?

Why do FSBOs often fail to sell? It’s really not a hard question to answer.

Why do FSBOs often fail to sell?

Why FSBOs often fail to sell?As a real estate professional, I’ve seen my share of FSBOs. Most of the time, they end up with a Realtor’s sign in the yard after months of languishing on the market with a “For Sale By Owner” sign. I just passed a former FSBO yesterday. As usual, it has a Realtor sign in the front yard.

Why do FSBOs often fail to sell?

Why do they fail at a higher rate than a professionally listed property?

  • Homeowners seldom really know the current market. That leads to an overpriced home that savvy buyers would never buy. I showed one last year that was 62% overpriced. I guess the seller assumes there is always a buyer with more money than brains out there. What you want, and what a home will sell for may be light years apart.
  • Showing a FSBO can be challenging. When an agent sets up a dozen showings in one day, scheduling becomes an art. Access is the key to making that day successful. If a FSBO can’t allow the house to be shown except on a limited schedule the odds are radically against it. That’s true of listed properties too. Access is critically important.

There’s more to selling homes than placing a sign in the yard.

 

  • Homeowners may not know how to negotiate an offer. There is usually some give and take in a real estate offer. If a FSBO is locked on a price and won’t budge, or won’t let a home inspection or repair request become a part of the deal, or is refusing a termite inspection, or is demanding of a closing date closer than a lender can accommodate, then a buyer can’t buy it. In a case like this, the house is basically an island with no way to visit it.
  • Homeowners may not disclose things, or they may disclose too much.
  • Homeowners may not understand legal contracts. I ended up re-writing a contract for a FSBO a few years ago because there were so many legal liabilities in it that could eventually come back to bite the seller. The seller had no idea, and the buyer, who wasn’t represented either, had no idea of the legal ramifications of a binding contract full of potholes. Contracts are a Realtor’s bread and butter. Most FSBOs never see one away from a Realtor initiated deal.
  • Listed homes sell for more than FSBOs, on average. On average, listed homes sell 10-13% more than FSBOs. A 2015 article by the National Association of Realtors showed that the average FSBO sold for $185000, and the average Realtor listing for a similar house, sold for $240000. That’s a 23% loss by going it alone. Is it worth it?

Why do FSBOs often fail to sell? – Make the best choice

This list could go on and on, but the reality is that a FSBO is almost always better off selling through a competent Realtor. As is the case in most real estate transactions, fees can be negotiated. If money is an issue, let the agent know that up front and he/she can work with you. Having a qualified agent on your side can reduce stress, and it will help you get across the finish line with a better deal.

Why do most FSBOs fail? For the same reason car mechanics don’t do brain surgery. It’s not their area of ability, and for the sake of the community, they’re better off leaving brain surgery to medical professional who do it everyday. The same is true of real estate. Those who do it everyday are your best resource for an excellent outcome.

When you’re ready to list your FSBO with a competent real estate firm, give Cornerstone Business Group, Inc., a call. We are your local real estate sales pros in this area.

Berkeley-Jefferson County, WV Real Estate Market Review – 2017

Berkeley-Jefferson County, WV Real Estate Market Review – 2017

The BerkeleyJefferson County, WV real estate market had a great 2017. Both markets saw increased numbers at all levels, and they outperformed their immediate southern neighbors of Winchester City, Frederick County, and Clarke County, VA by 31%.

Berkeley-Jefferson County, WV Real Estate Market Review: Positive Numbers

The Berkeley-Jefferson County, WV real estate market increased sales 7% over the same period in 2016. The markets have grown 19% over the past five years. Property values have also increased 4% year to year and 18% over the past five years.

More bang for the buck

The 2017 market saw an average sales price of $209,988 for a single family home with 3 bedrooms and 2.5 baths. Just across the border in Virginia, that same house would have cost a buyer $277,755.

The Berkeley-Jefferson County, WV real estate markets are geographically positioned Berkeley-Jefferson County, WV Real Estate Market Review - 2017to give commuters into the D.C. – Northern Virginia area more home for the money and an equal or better commute to work. The Amtrak Caperton Station in Martinsburg, WV adds value to living in the area.

Home values have increased steadily for the past five years. The 2016 average sales price was $201,341, with 2015 being $192,578, and 2014 and 2013 at $190,586 and $173,226 respectively. That 2013-2017 change in sales price is 19%. The steady increase in home values shows a market that has not only healed from the 2008 recession, but it one that is thriving.

Berkeley-Jefferson County, WV Real Estate Market Review: A Critical Indicator

One of the more critical indicators of market health is the volume of distressed property sales. This an area where the numbers show the biggest improvement. The number of distressed property sales in 2013 was 29% of the market.

Berkeley-Jefferson County, WV Real Estate Market Review - 2017Distressed properties are made up of short sales and foreclosures. Foreclosures dominated the market as the recession of 2008 became the dominate factor in home sales. By 2010, short sales entered the market in volume and created a second wave of bad news for local residents. The change from 2013 to 2017 has been dramatic. Current distressed property sales are down 24% since 2013. The local market has settled into a pre-recession norm of about 5.5% across both markets.

Another positive indicator of market health is days on the market. The days on the market have not changed a single digit in 5 years. Days on the market were 76 in 2017 and they were also 76 in 2013. The middles years drifted back and forth between 93 DOM in 2015 to 89 in 2016, but those changes are small. As long as inventory doesn’t become a challenge for the local market, the Berkeley-Jefferson County, WV real estate markets are set for a banner year in 2018.

When you’re ready to sell or buy a home in the Berkeley-Jefferson County, WV real estate market, give Cornerstone Business Group, Inc., a call. We are your local real estate sales pros.