February 23, 2012
By
Dick Baker
Downtown Toledo Skyline
Surprise! This Realtor thinks it’s a great time for you to buy. Really? Yes, really!
Some prospective homeowners who should be buying right now are simply nervous and indecisive, and that, more than calculated reasoning, leads to inaction. They hear about unemployment problems (even when their own jobs may be secure); they read in the newspaper that Toledo is “the 8th most miserable city” (even though we all know better); it’s February, and they’d be better off waiting until the spring market (Really? When more buyers come out of hibernation and compete for the same properties, thereby driving prices up); and what if the market hasn’t bottomed out yet? (People worried about the stock market as recently as 2010 when the Dow Jones Industrial average was around 10,000, but it is now nearing 13,000). “Affordability” is a measure of median housing prices relative to median incomes in an area, and these skeptics ignore the fact that Toledo consistently ranks in the top 5 most affordable cities in the nation, as recently reported by CNN: http://money.cnn.com/2012/02/15/real_estate/housing_affordability/index.htm?hpt=hp_t3.
The National Association of Realtors reported that affordability hit its highest point since they began tracking such figures nearly 20 years ago. They claim that 75.9% of all homes were affordable to families with the median income. But wait, there’s more! Those are national numbers, and we need to remember that “all real estate is local” and the NW Ohio/SE Michigan numbers are even more attractive.
So, buy now? That’s my enthusiastic recommendation to my own kids, especially at today’s mortgage rates. More house for the money; lower monthly payments; less interest paid over the life of the loan – that’s affordability.
May 12, 2011
By
Dick Baker
The media’s damage to confidence, psychology…
Has anyone been able to listen to an entire newscast lately without hearing that “One-fourth of homeowners are underwater!” Think about that term. “Underwater” conjures up an image in my head of someone going down for the last time, gasping their last breath. It almost implies that the mortgages of such families instantly become due and payable and they’re going to lose their homes. In fact, most of them are current on their payments and aren’t even trying to sell their homes. Is it a great surprise that in a declining market, so many people who bought their homes a few years ago with no downpayment or perhaps 3% down now owe more than their home is worth? Why does the media have such a negative bias about the real estate market? When stocks plunged a few years ago, I don’t recall hearing that “investors are underwater on their investments!”
It’s probably inappropriate to paint “The Media” with such a broad brush. Some are better than others in this respect. Consider these two headlines, printed within a day of each other. Our newspaper’s headline was “Toledo home prices fall at 3 times national rate in first quarter.” It was factual, median sale prices dropped 12.5% in the quarter, largely because of our unusual activity in lower end investor and foreclosure properties. That is not the same as saying that your home declined in value by 12.5% in the quarter, just that those particular units that sold in the first quarter compared with different units that sold in the first quarter of 2010 were lower priced. The statistics do not compare the same homes year-to-year! Therefore, perhaps market activity, not median prices, should be the focus. Example: with nearly the same quarterly decrease in prices (9%), the headline in Sarasota was “Southwest Florida home sales up 11% from 2010.” They somehow focused on the positive, a significant improvement in unit sales, while here we read about the negative number, which was actually better than many other Ohio cities . . .
Markets are markets, they go up and they go down. We have every expectation that like the stock market, the real estate market will recover, unless we allow the media to convince us that the sky has fallen on one of this country’s greatest foundations.
Epilogue: After posting this opinion came the inane cartoon in the Blade’s 5/12/11 Pages of Opinion which essentially suggested you are crazy to consider buying a house. What on earth can be the motivation for their campaign against home ownership?
October 6, 2010
By
Emily Yerkes
So, all that we have been hearing lately is how terrible the market has been doing and how foreclosures are rising. While it hasn’t gotten much publicity, the Federal Reserve’s latest “flow of funds” statistical report on the nation’s finances found that homeowners’ net equity holdings have increased by 17.1% from the first quarter of 2009 through the second quarter of 2010, ending last June 30.
How is this possible? Home prices may be up modestly in some parts of the country over that period of time – even double digits in a handful of the most volatile markets. However those percentage gains are being measured against the shell-shocked lows of late 2008 and early 2009. Statistically, even the slightest increase in depressed median prices can look impressive.
So why doesn’t it seem like our own personal equity holdings have done this well? The simple answer is the Fed’s rising equity finding is mainly good news for residential real estate; however the increase is not attributable solely to positive events. The Fed makes its’ basic calculation the same way homeowners would: You subtract your total mortgage debt from the estimated market value of your home; the remainder (if you have one) is your net equity. The Fed has access to information about mortgage debt holding of banks and non-bank lenders, and uses a variety of governmental and private real estate data sources to obtain their quarterly values across the country.
There is no dispute that a 17% increase is a move in the right direction at the very least. Values of homes are no longer on the downgrade nationwide and household debt loads are decreasing. None of this necessarily helps the people still stuck with homes that are underwater or those who have lost their homes to foreclosures. But for everyone else that cares about real estate, the latest Fed numbers suggest that the equity crash is over and a rebuilding with smarter credit habits is underway.
September 8, 2010
By
Emily Yerkes
It has been said over and over that in today’s market unless you have 20% down along with a 750 or better credit score, you cannot buy a home. This is absolutely untrue!!! In fact, you can buy a home with as little as 3.5% down and with a credit score of only 600.
Another common misconception when shopping for a loan is believing that the company with the lowest interest rate is the best deal. Although the interest rate is a large part of buying a home, another factor that you need to be aware of are the fee’s that the company is charging you for your loan. Just because the interest rate is low doesn’t mean that it is the best deal. Always find out what the closing costs are along with the interest rate on the type of loan that you are applying for, and then make the decision on which is the best deal for you.
September 2, 2010
By
Ann Newman
Are more Americans positioning themselves for home purchase? Although May’s data showed that home sales were down 26.8% as the home buyer tax credit concluded, a new survey conducted by Relocation.com suggests some families are opting for renting while they research—cash in hand—for deals on a new, more desirable home in their area.
Among the key findings of the survey: Of the 60% of individuals moving into rentals, 24% were previous homeowners who are renting temporarily while they look for a new home to purchase. Underscoring this finding is the fact that for many of these families, foreclosure was not the reason for moving—in fact, the number of consumers who moved due to foreclosure dropped by 70%.
Furthermore, many of these families stayed in the area (one in three made a short distance move of 100 miles or less), opting to remain in a location where they already know their schools, shopping districts and prime neighborhoods.
“While the housing market continues to flux from month to month, we’re seeing strong, continued interest as consumers looking to move start their research with us,” said Relocation.com Chairman and Founder Sharon Asher. “These findings suggest that more Americans may be poised to re-enter the housing market this year.”
The Relocation.com survey was conducted in early June 2010 and is a continuation of consumer surveys conducted since March 2009 to gauge moving and relocation attitudes and behaviors.
