Listing Courtesy of LONG AND FOSTER-BETHANY
If you are one of those Frankford homeowners who has been gladdened to see property values continuing to rebound, you have also been pleased at the steady decline in the wave of foreclosures that were part of the global financial crisis. When the subprime mortgage crisis triggered widespread financial dislocation, many homeowners felt the repercussions. Every Frankford foreclosure that resulted weighed on neighborhood property values, which reflect the dollar amounts paid when nearby homes change hands.
Even most people whose livelihoods were unaffected—who kept their jobs or businesses and continued to make their mortgage payments without difficulty—could have suffered as a result. When the apparent equity of a home dwindled, so too was the amount lenders were willing to lend for refinancing. The comfort provided by fat home equity lines of credit (the HELOCs) suddenly melted when their maximums were cut, or even withdrawn altogether. HELOCs, after all, were a major component in the foreclosure phenomenon. The whole atmosphere caused confidence to be shaken.
But ‘buy low, sell high’ is a proven investment strategy—and ‘buying low’ is an opportunity that typically arises when fear is in the air. Many large institutional investment outfits looked at the situation and apparently asked themselves, what’s more “real” than real estate? They dived into the panic, buying up distressed residences in droves, paying rock-bottom foreclosure prices.
For many homeowners, though, the real effect was psychological. After all, when your major asset is your home, any Frankford foreclosure can be seen as having the effect of bringing your apparent net worth down.
RealtyTrac is the national scorekeeper for foreclosures and REOs (Real Estate Owned, or bank repossessions); and last month they continued to provide comforting news. Although there are ups and downs in the month-to-month stats, the overall trend continues to decline from the high in September 2013. In fact, there was a small uptick in REOs in April, which might seem like bad news; but REOs are actually completed foreclosures—at the same time, foreclosure starts continued their long slide downward.
Daren Blomquist of RealtyTrac was quoted with more good news, confirming that “the overall increase in foreclosure activity in April is a continuation of the clean-up phase” of the housing crisis. But even better was this: “Foreclosure starts nationwide are now running consistently below pre-crisis levels.”
It does seem as if this season is a choice time for sellers to enter the revived market. If you would like to explore the possibilities for your own property, or are ready to start the search for a Frankford home of your own, please do give me a Call/Text me Russell Stucki at (302) 228-7871, email me at email@example.com, visit more listings at www.beachrealestatemarket.com.
Delaware first-time home buyers in 2014 are faced with a question that hasn’t changed for generations: is it more practical to buy right now, or to continue to rent?
Over the past few years, buying has been the easy choice. Nationally, in 2013 it cost 35% less to own a home than to rent according to that year’s study by real estate website Trulia. That despite rising house prices and mortgage rates. But that was last year, and the experts have been pretty unanimous in predicting that interest rates will continue to rise—ending up somewhere near 5.5% by 2014’s end (per the National Association of REALTORS®).
In the face of higher interest rates and house price tags, will 2014 be the year when renting becomes more affordable than buying?
While first-time home buyers in Delaware are faced with increasing house prices and mortgage rates, renters also find another national trend: higher rents. Rents have been on the rise for the past few years, with continued increases expected throughout 2014. According to Axiometrics, the folks with the latest data, apartment rents are on course to rise by 3.04% in 2014. Research firm Reis puts the expected rise at 3.15%— and both say the causes are the potent combination of tight supply and rising demand. Whenever the economy improves, each incremental gain puts even more pressure on rents—which acts as an offset to any financial benefits of renting versus owning.
Where does that leave our typical Delaware first-time home buyers? Most recently, national averages show it is still about 21% cheaper to own rather than rent. According to the Trulia study, by fall of last year, the earliest tipping point at which it would have become more expensive to own rather than rent would have been expected to occur if interest rates hit 5.2%—but only in San Jose, California—and only if rents had remained fixed (which didn’t happen, even in San Jose). Nationally, out here in the real world, Tulia admitted “mortgage rates will not tip the housing market in favor of renting over buying until rates hit 10.5%...”
Delaware first-time home buyers can be a bit more confident as they take in one more piece of information from the real world of April 2014 (no matter what the experts predicted): over the past few weeks, national mortgage interest rates have been edging down instead of rising! That may well change direction again (probably will), but for now at least, I have to say that it’s a pretty clear call in the spring of 2014: time to get pre-qualified!
That’s the first-time home buyers’ Step One…it also happens to be an ideal time to give me a call!