Tag: 2014 real estate

4 Saving Solutions for Buyers on a Budget – had to share this article

Buying – rather saving to buy a home, especially on the San Francisco Peninsula take time and patience.  I too am in the same boat as my clients while I save for our next purchase.  That will explain why you don’t see me out to dinner as much!

I came across this article from Tara at Trulia and thought it easier to share than write my own.  Great points made to save and get a better picture of your monthly financials.  Enjoy and share your thoughts!

 

4 Saving Solutions for Buyers on a Budget

Most folks do all the math they can find online about how much house they can afford. Then they think about what they are currently paying in rent and how much they’d be comfortable going up from there, if any. Finally, they hit up the mortgage broker, have them run the numbers and get some final, definitive answer on what the bank will allow them to finance and spend.

Somewhere amongst all those numbers they pick a price that sits well in their heart, their mind and, hopefully, their monthly budget, as a maximum home purchase price – complete with its corresponding monthly expenses like taxes and insurance.

Unfortunately, there are a few critical line items that commonly slip through the cracks of one or more of these calculations. Our mortgage pros only know what they have in front of them, which is mostly based on expenses that show up on our credit reports or loan applications. Additionally, when it comes to our DIY budgets, we often create our household spending plans based on our ideal spending patterns, vs. our actual ones.

One critical exercise to do before you lock in a price range is to look back at your bank statements and spending breakdowns from the preceding few months to see how your actual spending measures up against what you think it should be. Find the places where you need to either adjust your spending or your budget to reflect reality before you buy a home. The other critical exercise is to understand what expense categories should be factored into your calculus on how much house you can afford, even though they are commonly viewed by budget software and banks as discretionary or even luxury line items.

Here are four of those overlooked expense buckets to make sure you consider:

1. Essential “Extras.” Sometimes what we say is important to us is slightly different than what is really important, but I believe you can tell what someone values by what they invest their time, energy, love and money in. So, it’s no surprise that there are lots of meaty expenses that some home buyers-to-be see as essential which a bank or even a financial planner might not have on their radar screen.

Just a few of those items include:

▪   Charitable giving and religious tithes, dues and offerings

▪   Expenses related to caring for an aging parent

▪   Non-western health cares and therapies that are not covered by your insurance, like acupuncture, massage and chiropractic.

I call these out in particular because they are categories which millions of Americans spend hundreds or thousand of dollars on every month – and because there might be no place to even enter such an expense on a loan application or budget software. If you invest a great deal of cash into these items and value them enough to keep doing so after you close escrow, make sure you factor them into your own decision making about what you can afford. It’s permissible – even advisable – for your personal price max to be a lot lower than what the bank deems your top dollar.

2. “Superfluous” Cushion Stuffing. Ding dong, the recession’s over, folks! And we made it through. But during those long, dark years, many people cut back on investing and saving for rainy days and retirement days alike. If that’s you, and your personal economy has recovered enough to support buying a home, congrats! Just make sure you circle back to those recession-era cutbacks and correct for them before you increasing your monthly housing spend. You might want or need to save more than traditional financial guidelines would suggest in order to reposition your retirement or to fluff your cash cushion back up to your personal comfort level.

Make sure you don’t overextend yourself on a home without accounting first for stuffing the cushion(s) you’ll need in the future.

3. Enriching Experiences. Buying a home is one of the single-most high ROI (return on investment) life enriching experiences a person can have, if it’s done smartly and sustainably. But lots of us also invest lots of dough into other enriching experiences, and want to avoid being so cash poor we can’t afford any of them after escrow closes.

Some of the big-ticket items that you might be expending cash on to engage in include:

  • Travel, vacations and family outings
  • Trainers, coaches and therapists
  • Yoga and mind-body wellness activities
  • Retreats and workshops
  • Schooling, conferences, basic and continuing education

If you decide you’re willing to cut back on these sorts of things or forego them entirely to redirect those funds into your home, that’s fine. Just make sure you go into that decision with eyes wide open, while you still have time to decide to spend less so you can continue to engage in these enriching activities.

4. Kid-related Cash Outlays. The honest-to-goodness truth about kidlets is as follows: they cost. Sure, the rewards of parenthood are well worth the cash expenses, but the costs are considerable and are often overlooked when it comes time to list out the line items relevant to how much you can afford to spend on housing. The big ones generally get on the list, like monthly child care for very young children and private school and college tuition for the older ones.

Lots of others get lost in translation of your ideal spending categories and allocations against where your money really goes on a monthly basis. Items that often get underestimated or flat-out omitted in this category include:

  • Extracurriculars – language lessons, music lessons, clubs and classes
  • Gear and equipment – all the gear they need to engage in the above, but also things like pricey school books and educational electronics
  • College Savings – Whether or not you have a formal 529 plan, if you have children you hope to help pay for higher education, you should be allocating some level of regular savings for this.

ALL: What sneaky expenses have you underestimated when trying to build out a budget or understand what you can really and truly afford to spend on housing?

I read this article at:  http://www.trulia.com/tips/2014/03/4-saving-solutions-for-buyers-on-a-budget/?ecampaign=cnews&eurl=tips.truliablog.com%2F2014%2F03%2F4-saving-solutions-for-buyers-on-a-budget%2F

Remember to follow our Blog at: https://therealestatebeat.wordpress.com/

Got Questions? – The Caton Team is here to help.  

Email Sabrina & Susan at:  Info@TheCatonTeam.com

Call us at: 650-568-5522  Office:  650-365-9200

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Please enjoy my personal journey through homeownership at:

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Thanks for reading – Sabrina

The Caton Team – Susan & Sabrina – A Family of Realtors

Sabrina BRE# 01413526 / Susan BRE #01238225 / Team BRE#70000218/ 01499008

 

10 Things Today’s Buyers Look for in a Home

I love sharing interesting articles I’ve read along the way.  As a full time Realtor, and almost a Millennial – I enjoyed learning what my clients are looking for and why.  Enjoy!

10 Things Today’s Buyers Look for in a Home

While David Letterman’s Top 10 lists generally culminate in a No. 1 ranking, the following list includes in no particular order 10 things that are important to buyers today, especially Millennials who represent a significant buyer niche in today’s market.

Quality of the neighborhood – The National Association of Realtor’s 2012 Profile of Buyers and Sellers revealed that neighborhoods are really important to buyers, but that neighborhood choice varies by household composition.

Convenience to job – Commuting is a necessary evil, but homes that are close to work enhance work-life balance, a growing priority for many Americans, especially Millennials.

Overall affordability of homes – With job markets tight and retirement funds depleted or eroded thanks to the Great Recession, it has never been more important to keep housing related costs as low as possible, ideally no more than one third of your pre-tax income.

Quality of schools – A recent survey by realtor.com revealed that nearly 45 percent of today’s buyers are willing to pay a premium for quality schools

Homes suited for the next 15 years – Just five years ago, buyers were looking to stay in their home about 10 years. Today, buyers expect to stay closer to 15, so it’s important to find a home that can support lifestyles as they evolve through that time period.

A mortgage – In today’s tight credit environment, getting a mortgage can be a challenge. Buyers should be willing to consider homes below what they may quality for in order to bump up the loan to value ratio.

Energy efficiency – The National Association of Homebuilders surveyed buyers to see what was most important to them in new home construction and energy efficiency topped the list. Four of the top most wanted features involve saving energy: 94 percent of home buyers want energy-star rated appliances, 91 percent want an energy-star rating for the whole home, 89 percent want energy-star rated windows, and 88 percent want ceiling fans.

Open floor plans – Spaces that are great for entertaining mean quality time with friends and family, something especially important to Gen Y.

High ceilings – Taller ceilings are not only aesthetically pleasing in that they impart a grandness to the home, they also promote greater air circulation and more natural light than lower ceilings.

Technology – Can you run your home from a cell phone? Then market to a Millennial, who prizes a homes’ technological amenities prized over curb appeal.

This post was originally published on the ERA Real Estate blog, Owning the Fence. 

I read this article at: http://rismedia.com/2013-10-15/10-things-todays-buyers-look-for-in-a-home/2/

Remember to follow our Blog at: https://therealestatebeat.wordpress.com/

Got Questions? – The Caton Team is here to help.  

Email Sabrina & Susan at:  Info@TheCatonTeam.com

Call us at: 650-568-5522  Office:  650-365-9200

Want Real Estate Info on the Go?  Download our FREE Real Estate App:  http://thecatonteam.com/mobileapp

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Connect with us professionally at LinkedIn:  http://www.linkedin.com/profile/view?id=6588013&trk=tab_pro

Please enjoy my personal journey through homeownership at:

http://ajourneythroughhomeownership.wordpress.com

Thanks for reading – Sabrina

The Caton Team – Susan & Sabrina – A Family of Realtors

Sabrina BRE# 01413526 / Susan BRE #01238225 / Team BRE#70000218/ 01499008

Ever had a Crush on a House?

Ever had a Crush on a House?

Realtor.com® Survey: Men, Women Dig on Digs Differently

So, you’ve got it bad for “the one” — you know, the one that keeps you awake at night fantasizing about the day when you can be together.

Wait a second. We aren’t talking about that one — we’re referring to a different kind of love affair: a “home crush.” If you’ve found yourself swooning over a house you just can’t get out of your head, you’re not alone.

In a new realtor.com® survey, 69 percent of the 1,000 people who responded said they have had a “home crush” – a home they liked so much that they were drawn back to looking at it more than once online or in person.

“We conducted the survey to see how searching for ‘the one’ in real estate correlates to searching for ‘the one’ in love, and we found that they are very similar,” said Barbara O’Connor, chief marketing officer at realtor.com®. “Buyers have to evaluate crushes based on turn-ons and turn-offs and whether the home is in their league, so they often find themselves spending a good amount of time checking out their crush online.”

But what do you do when you’re pining for that perfect dwelling? Just as in romance, men and women respond to their home crushes quite differently, the survey found. Women were more likely than men to have a crush on a home that was out of their league financially, while men moved from one home crush to another more frequently than women.

Men and women tend to fall for the same things when it comes to houses, though. Of those surveyed, 54 percent of women and 46 percent of men said they tended to fall in love with outdoor living spaces. Women also swooned for open floor plans and appliances and fixtures, while men’s hearts raced over a good garage and curb appeal.

“Whether it’s love or real estate, having a short list of deal breakers is critical for finding ‘the one’ to help buyers weed through the crushes to find the home of their dreams,” said Leslie Piper, consumer housing specialist at realtor.com®.

Majority of all surveyed consumers report having a home crush:

69 percent of those surveyed said they have had a house crush

31 percent said they have not had a crush on a house

Women are more likely to cultivate crushes on homes that are out of their league financially:

Of the women included in the survey…

41 percent revealed that their home crush is out of their price range

59 percent reported that their home crush is in their price range

 

Of the men included in the survey…

30 percent indicated their home crush is out of their price range

70 percent shared that their home crush is in their price range

 

I’ve had my share of home crushes – for myself and my client.  Have you?  Please share!

 

I read this article at: http://www.realtor.com/news/men-women-dig-on-digs-differently/?cid=EML301887&MID=2014_02_BoB_2013_ROLLOUT&RID=9851214#.Uvvp9Xl4wpE

Remember to follow our Blog at: https://therealestatebeat.wordpress.com/

Got Questions? – The Caton Team is here to help.  

Email Sabrina & Susan at:  Info@TheCatonTeam.com

Call us at: 650-568-5522  Office:  650-365-9200

Want Real Estate Info on the Go?  Download our FREE Real Estate App:  http://thecatonteam.com/mobileapp

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Visit us on Facebook:   http://www.facebook.com/pages/Sabrina-Susan-The-Caton-Team-Realtors/294970377834

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Connect with us professionally at LinkedIn:  http://www.linkedin.com/profile/view?id=6588013&trk=tab_pro

Please enjoy my personal journey through homeownership at:

http://ajourneythroughhomeownership.wordpress.com

Thanks for reading – Sabrina

The Caton Team – Susan & Sabrina – A Family of Realtors

Sabrina BRE# 01413526 / Susan BRE #01238225 / Team BRE#70000218/ 01499008

 

2014 – What will the Real Estate Market be like?

It’s on my mind – maybe it’s on your mind – but I enjoyed this article about the 2014 market forecast. Enjoy!

The housing recovery hit high gear in 2013 with bigger than expected price gains and solid home sales. This year isn’t likely to be as exciting. Rising mortgage interest rates will price out some potential buyers. Instead of double-digit price gains, look for single-digit ones, economists say, while existing home sales remain at last year’s level.
Sound boring? “You want boring in the housing market,” says Svenja Gudell, Zillow director of economic research.
Here’s what’s ahead for:
• Home prices. They were the highlight of the 2013 housing market, up 12.5% in October year over year, CoreLogic says. Prices are now 20% off their 2006 peaks after falling more than 30%, shows the Standard & Poor’s Case-Shiller index.
Economist John Burns looks for a 6% gain in 2014. Many others see smaller increases ahead. Zillow forecasts just a 3% rise.
Prices will likely rise more slowly as more homes come on the market, fewer investors bid for homes and higher ownership costs — including interest rates and home prices — take a bite out of housing affordability, housing experts say.
Still, U.S. housing remains 4% undervalued when compared with other economic fundamentals, such as consumer incomes and the cost to rent, says Jed Kolko, Trulia economist. At their 2006 peak, home prices were 39% overvalued based on the same metrics, Kolko says.
•Existing home sales. They’ve started to slow. In November, they were down year over year for the first time in 29 months, National Association of Realtor data show.
The dip was driven by higher interest rates and a tight supply of homes for sale. It doesn’t mean the housing recovery has come off the rails, because home prices and housing starts continue to improve, says Capital Economics economist Paul Ashworth.
Existing home sales, which came in at a 4.9 million seasonally adjusted pace in November, are expected to be about 10% higher in 2013 than 2012 and stay about the same at 5.1 million in 2014, NAR forecasts. That’s roughly back to 2007 levels but below the inflated levels preceding the housing crash.
New-home sales, which make up a smaller part of the market, have more room to grow. They hit an annual pace of 464,000 in November, up almost 17% from a year ago but still below the 700,000-a-year pace generally considered healthy.
The new year will be different for home buyers, though.
Look for fewer bidding wars and a less frantic market, says Glenn Kelman, CEO of brokerage Redfin. Its data show bidding wars recently falling to one of two offers handled by Redfin agents, down from three of four at the peak in March.
Homes are taking longer to sell, and more sellers are also reducing prices to win sales, Kelman says. At the same time, the supply of existing homes for sale edged up to 5.1 months from 4.9 months in October, NAR says. That’s still below the six-month supply that Realtors generally consider to be a balanced market for buyers and sellers.
Supply should get closer to that level in 2014, Kelman says.
Donaee and Jeff Reeve hope he’s right. The couple sold their Seattle-area home in just 10 days amid a hot June market. They’ve been renting as they search for a new home with a few acres. Meanwhile, prices have risen. The lack of suitable homes for sale is “discouraging,” says Donaee Reeve, 36, a dental hygienist.
• Housing construction. This part of the housing recovery has been a laggard.
November’s data showed an improvement, with housing starts topping 1 million on an annual basis, the Commerce Department says. That was up almost 30% from a year earlier, but it’s still far below the norm. Starts averaged 1.5 million a year before the mid-2000s housing boom.
Construction won’t return to normal this year, but it will strengthen enough to be the main driver of the housing recovery as home price gains shrink, says investment manager Goldman Sachs Asset Management.
It sees housing starts increasing 20% a year for the next several years as household formation picks up with the strengthening economy.
More home construction means more jobs for construction workers, plumbers, civil engineers and others in the building trades, as well as related industries such as furniture manufacturing, it says.
Construction alone will add 300,000 to 500,000 jobs a year to the nation’s job base for the next three years, GSAM predicts. That’s up from about 100,000 in 2013.
“The construction revival is primarily a matter of when, not if,” says Tom Teles, GSAM head of securitized and government investments.
• Mortgage rates. Sarah and Andrew Katz know home prices are going up, and mortgage interest rates, too. But they’re still convinced it’s a good time to buy a first home. They’ve set their sights on spring.
“We’re banking on interest rates staying under 5%, but they are what they are,” says Sarah, 29, who works in public relations in Manhattan.
“
We’re banking on interest rates staying under 5%,
”
— Sarah Katz
The couple better not wait too long, economists warn.
Average rates for a fixed 30-year mortgage will rise to 5.5% by the end of 2014, says Lawrence Yun, NAR chief economist. Rates have already risen about 1 percentage point in the past year as the economy has strengthened. They’ll be pushed up further as the Federal Reserve winds down its $85 billion monthly bond-buying program.
Each percentage point increase in mortgage rates makes homes about 10% more expensive in terms of higher housing payments.
Another factor could weigh on borrowers. Starting in January, lenders must make home loans that meet new federal qualified mortgage standards or face greater liability from borrower lawsuits, should the loans go sour.
At least 5% of mortgages extended in 2013 wouldn’t meet the new standard, Yun says. More than that will likely face additional scrutiny from lenders as they implement all parts of the new rule, says Brian Koss, executive vice president of lender Mortgage Network.
He says the higher rates and tighter rules will likely drive some home buyers out of the market or into lower-priced homes than they could have afforded last year.
“People have gotten spoiled,” Koss says. Higher rates and home prices will test the strength of the housing recovery in 2014, he says.

I read this article at: http://www.usatoday.com/story/money/business/2014/01/01/home-prices-2014-housing-starts/4181021/#!

Remember to follow our Blog at: https://therealestatebeat.wordpress.com/
Got Questions? – The Caton Team is here to help.
Email Sabrina & Susan at: Info@TheCatonTeam.com
Call us at: 650-568-5522 Office: 650-365-9200
Want Real Estate Info on the Go? Download our FREE Real Estate App: http://thecatonteam.com/mobileapp
Visit our Website at: http://thecatonteam.com/
Visit us on Facebook: http://www.facebook.com/pages/Sabrina-Susan-The-Caton-Team-Realtors/294970377834
Yelp us at: http://www.yelp.com/biz/the-caton-team-realtors-sabrina-caton-and-susan-caton-redwood-city
Or Yelp me: http://www.yelp.com/user_details_thanx?userid=gpbsls-_RLpPiE9bv3Zygw
Connect with us professionally at LinkedIn: http://www.linkedin.com/profile/view?id=6588013&trk=tab_pro
Please enjoy my personal journey through homeownership at:
http://ajourneythroughhomeownership.wordpress.com
Thanks for reading – Sabrina
The Caton Team – Susan & Sabrina – A Family of Realtors
Sabrina BRE# 01413526 / Susan BRE #01238225 / Team BRE#70000218/ 01499008