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Real Estate: A Look Five Years Into the Future

Posted on June 14, 2014

After the historic bursting of the proverbial real estate bubble brought the U.S. economy crumbling, the U.S. housing market has been on the rebound in recent years. Several factors come into play when forecasting the real estate market’s growth and change in the next five years

Home Values and Appreciation

In a survey done by Pulsenomics, the annual appreciation will be 3.94% over the next 5 years and the cumulative appreciation will be 19.7% by 2018. The survey also found that home values will appreciate by 4.5% in 2014.

Home Prices

Studies show that in some select markets, such as San Francisco, home prices may rise as much as 3% over the next 5 years. However, due to investors selling off their inventory, prices overall are forecasted to drop slightly over the same time period.

Mortgage Rates

According to CBS’s MoneyWatch, mortgage rates may be likely to rise, however a mortgage will be easier to secure for an average homebuyer. The rising rates will force lenders to loosen their lending standards. There was also a new federal rule that came into play in early January affecting mortgage standards.

What will real estate be like in five years?

The National Association of Realtors classified 2013 as a low inventory year, however it is projected that available home numbers have rebounded, allowing buyers a better selection and opportunity. This is only going to improve over the next five years according to current rising trends.

Fading Foreclosures

The increase in inventory will give way to a decrease in foreclosures. Between November 2011 and November 2012, when inventory was at a high point, mortgage delinquency rates fell from 7.83% to 7.12%. It is projected that in the next five years those rates will continue to decline.

Why Buying is Cheaper Than Renting

Posted on May 31, 2014

In a report released by Trulia earlier this year, it was found that it is still cheaper to pay a mortgage versus paying rent. Over 100 of the largest metropolitan areas were surveyed, and renting was nearly 40% more expensive than purchasing and making payments on a home.

Even with home prices on the rise, low mortgage rates have made payments manageable, and in most cases less than a monthly mortgage payment for the same space. In fact, mortgage rates would need to rise by over 10% in order for renting to be cheaper than buying, and rates haven’t been that high in over 18 years.

It is also important to keep in mind that purchasing a home is an investment, rather than simply a monthly housing cost. Although home price fluctuations have widely varied in the past decade or so, forecasts look good for the housing market overall in the coming years.

Five Tips For Selecting The Best Contractor

Posted on March 10, 2014

What are you looking for in a Contractor? — Selecting a Contractor

Home improvement projects aren’t cheap. They are even more costly if you choose a bad contractor. These tips will help you discern the quality of the work your prospective contractor provides and protect your interests during the project.

Ask your friends for referrals

Skip the phone book and go right to the friends you trust for their opinions. Even if they tell you about a bad experience or give you the names of contractors to avoid, this is great information to have.

Make a list of the work you need done

You don’t want a contractor that is great at building decks to be doing your major kitchen remodel. Determine the scope of the work you need done, so as you interview prospective contractors, you can line up their expertise with your needs.

Look at the contractor’s past jobs

Every reputable contractor should provide you with a list of references you can call, or even visit, to see the quality of the work done. Take advantage of the opportunity to see the work for yourself.

Get it in writing

Once you’ve selected your contractor, get a contract written up and thoroughly review it with your contractor before signing the agreement for work.

Be money smart

Be weary of a contractor who asks for more than 10% down. If your contractor can’t start work for several weeks, never give more than a $1,000 deposit.

Once work begins, pay your contractor in increments of 10% as project goals are met. Arrange for the final payment 30 days after completion of the job.