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With Inventory Low: Will Your Dream Home Need Some TLC?

With Inventory Low: Will Your Dream Home Need Some TLC? | MyKCM

According to a new survey from Move.com, the wave of first-time homebuyers hitting the market this summer has resulted in an interesting statistic. Nearly 60% of buyers searching for a home this spring are willing to consider buying a fixer-upper, with 95% believing that the projects needed will increase their new home’s value!

Realtor.com’s Chief Economist, Danielle Hale, pointed to low-inventory at the entry-level price range for the increase in willingness to renovate.

“The combination of rising home prices and limited entry-level homes for sale is prompting many home shoppers to consider homes that need renovating.

Replete with inspiration at their fingertips – like Pinterest, Instagram, and various home renovation TV shows – some home shoppers are comfortable tackling home renovation jobs to find a home that balances their needs with their budget.”

Just over half of all respondents who said they would be willing to buy a home in need of some TLC, would also spend more $20,000 to make the home fit their needs.

The most common ‘expected’ renovation is a kitchen remodel which can run anywhere from $22,000 for a minor remodel to $66,000 for a major remodel.

This isn’t a new trend by any means. According to the Joint Center for Housing Studies at Harvard University, home improvement project spending reached a new high in 2018.

“Americans spent $336.9 billion on remodeling projects, up 7.4% from the $313.6 billion a year earlier.”

Home renovation television shows have given many buyers hope that they could renovate a home they can afford into their dream home!

Bottom Line

If you are one of the many Americans considering buying a home this spring, let’s get together to help you find a house with the potential to be your dream home!

 

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Taking The Long View Of The Housing Market

When you’re in the middle of something, it can be hard to see things clearly. Only after you’ve gained some perspective and had time to reflect do things become clearer. Hindsight, after all, is 20/20. This is also true when it comes to the housing market. Each month, more data is released and compared to the previous month’s data. And, if you follow along, it’s easy to get the feeling that things are worse and/or better than they actually are. But taking a step back can help put things in context. Perhaps that’s why Lawrence Yun, the National Association of Realtors’ chief economist, recently said that he’s very optimistic about the housing market’s long-term outlook. When compared to historical data, conditions look pretty good. As an example, Yun says home sales are now around the same level they were in 2000 but a comparison of fundamentals shows we’re in much better shape now than we were then. “Mortgage rates are much lower today compared to earlier this century, when mortgage rates averaged 8 percent,” Yun said. “Additionally, there are more jobs today than there were two decades ago. So, while the long-term prospects look solid, we just have to get through this short-term period of uncertainty.” More here.

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How Student Loan Debt Impacts Home Buyers

Young Americans want to own a home. Research consistently shows large majorities who say they aspire to one day become homeowners. And yet, the number of first-time home buyers active in the market has been lower than what is historically normal for several years. So why aren’t more young Americans buying houses? Well there are a number of factors at play but, among them, student loan debt is a big one. According to one recent study, the average monthly student debt payment for current renters who say they’d like to buy a home in the next year is $388. Naturally, an extra $400 a month to devote to a mortgage payment could go a long way. In fact, with that money, a buyer could afford a house that cost almost $100,000 more. But though that may seem discouraging, the same report also found that prospective buyers with student loan debt can still afford 52.3 percent of homes currently listed for sale. And, in areas where there are more affordable homes available for sale, it’s even easier to find something in a price range that works. In St. Louis, for example, a buyer with student loan debt can still afford nearly 75 percent of currently listed homes. More here.

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Which Cities Have The Country’s Biggest Houses?

When looking for a house to buy, you aren’t necessarily always looking for the biggest house. After all, the size of the home you choose will be determined, in part, by things like the size of your family, storage needs, how many bathrooms and bedrooms, etc. Mostly, though, it’ll be determined by your budget. Because, when it comes down to it, we all would like a little more space. For that reason, a recent study looked at the largest 45 cities in the country and calculated the median home size and cost per square foot, in an effort to figure out which cities have the biggest homes and which give buyers the most space for the best price. The results show that the South has the biggest homes, with three of the top five cities located in Texas. In fact, Houston was the city with the largest median home size at 1,952 square feet, with Atlanta, Washington DC, Dallas, and Austin rounding out the top five. Southern cities also tend to have a lower price per square foot. For example, while Houston has the biggest homes, the median price per square foot was $100. By comparison, cities like San Francisco, Boston, and Denver have smaller homes but higher prices, mostly due to the fact that the housing stock in those areas is older. More here.

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Young Americans Choose The City Over Suburbs

When choosing where you’d like to live, there are a number of factors that you have to weigh. For example, some people may value privacy over convenience while others may prefer proximity to family and friends over entertainment and recreation options. In short, it’s a personal choice. And a lot of times it comes down to whether you’d like to live in a city setting or the suburbs. This is a common debate and one that typically falls along demographic lines. In other words, where you are in life will determine where you want to live. More proof of this is found in a recent report detailing the preferences of millennials. According to the results, young Americans overwhelming choose metropolitan areas known for their hip neighborhoods and closeness to job opportunities. In fact, a look at the top 10 zip codes with the largest population of millennials shows that areas like Chicago’s West Loop, Boston’s North End, and Manhattan’s Financial District are overwhelmingly popular with a younger demographic. Other city neighborhoods that make the list include Capitol Hill in Denver, Mission Bay in San Francisco, and Dallas’ Arts District. More here.

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Few Buyers Research Their Prospective Neighborhood

Choosing a house to buy is an important decision. After all, you’re committing a lot of money and several years of your life to a particular property. And so, home buyers tend to know what they want, whether it be a large kitchen, an appealing outdoor space, or an ample amount of storage. But surprisingly, large majorities of home buyers spend too little time paying attention to the neighborhood surrounding the home they’re considering. And, make no mistake, the neighborhood you move to will play an important role in how much you enjoy your new home. Surrounding amenities, schools, and safety are just a few of the factors that can lead to a case of buyer’s remorse. And, according to a recent survey, there are lot of buyers who’ve experienced just that. In fact, 36 percent of respondents said they’d have chosen a different neighborhood had they known more about the one they moved to. One reason this is so common is the number of buyers who do very little neighborhood research before buying. For example, less than half of recent home buyers searched photos of different parts of the neighborhood, visited hot spots, researched police reports, or took a trip to the area after dark. If you want to be certain you’re making a smart choice, do your homework and consider the area outside your potential new house just as much as you do the inside. More here.

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Credit Standards And What They Mean To You

There are many factors that play a role in determining whether you’re able to qualify for a mortgage. Credit standards are one of them. But unlike your income or debts, they aren’t as easy to keep up with. They are important, though, so here’s what you need to know. Credit standards refer to the requirements lenders use to determine whether or not you qualify for a loan. When credit standards are tight – as they were following the financial crisis and housing crash – potential buyers have to reach a higher financial standard in order to be deemed creditworthy. When they loosen, the opposite is true and buyers will have an easier time obtaining a mortgage. Because of the role they play in determining whether buyers are approved or not, Fannie Mae’s Lender Sentiment Survey takes the pulse of lenders across the country to determine whether standards have been loosening or tightening lately. Generally speaking, standards have eased since the financial crisis. The survey’s most recent results, though, show little movement from the previous quarter. More here.