3 Questions You Need To Ask Before Buying Your Next Home
b"With Terry Story, 28-year veteran Real Estate Agent with Coldwell Banker in Boca Raton, FL
Housing Prices Approaching A Top?
The housing market continued to gain strength in 2017, with the final quarter delivering the fastest sales pace all year.\\xa0 Home prices are still appreciating, notching their 58th consecutive month of year-over-year gains.\\xa0 That said, Terry notes that many buyers are expressing a tinge of trepidation about and resistance to current prices. The fiery stock market in recent months appears\\u2014paradoxically, at least, on one level\\u2014to be contributing to the modest increase in conservative sentiment, a raising of antennas that markets may be overbought. To some extent, this resistance to current home prices can be explained as a vestigial reaction dating back to the massive meltdowns in the housing and stock markets in 2008.\\xa0 Even though low housing inventory is playing into sellers' hands and adding pressure on buyers to make offers higher than they want to, prices are rising much more slowly than before. Steve avers that he sees only a very small risk of a systemic crisis on that magnitude. He also states that he thinks that a certain amount of skepticism about prices is a sign of a healthy market. It's natural and perhaps even helpful to a self-correcting market for prospective buyers to take an extra breath and say \\u201cI'm not comfortable at these price levels\\u201d.\\xa0 Healthy, rational markets should fluctuate and adjust to accommodate these kinds of dynamics.
Questions Before\\xa0Buying A Home
Addressing the buyer side of the market equation in more detail, Steve asks Terry to walk listeners through a brief survey of the three questions that prospective buyers should ask themselves before searching for a home. The first question is \\u201cWhy do you want to own a home?\\u201d Casting aside the common answer that a home is a good investment (it may or may not be), Terry presses her clients to be specific: Is it because you want a great place to raise your kids?\\xa0 A safe place for your family? Do you want a larger place? Do you want more control over your space than you have at a rental?\\xa0 The next question is \\u201cwhere\\u201d\\u2014not only in terms of location but as in \\u201cwhere are prices headed?\\u201d\\xa0 While acknowledging that mortgage rates are expected to rise moderately this year and that prices will probably rise somewhat as well, Steve believes that other factors like location deserve to be weighted more, and neither of these variables changes how much you can afford to pay for a home. Terry agrees, adding that spending less than you can afford is often a smart play, especially if that means owning a home that will also be more affordable for other buyers in the event that you decide to sell it.
Another key element in determining the criteria of your house search is how long you expect to live in the home. For people getting serious about a home purchase, that should ideally be between 5 and 10 years.\\xa0 Five years is typically the \\u201cbreak-even\\u201d point in a normal market where you can sell without losing much capital. If you expect to move again in less than 10 years, you should reconsider buying a home and seek out objective professional advice. Steve notes that this is similar to the advice he'd give to someone about to make a significant investment in the stock market: If your timeline is less that 10 years, the risk you're taking on will invariably be much higher.
Condo Association \\u201cSleepover\\u201d Rules
Steve wraps up today's segment with another letter sent to the Sun Sentinel's Gary Singer, this time about a condo owner whose housing association has asked her to fill out a tenant application for her boyfriend who frequently overnights. The writer feels like it's \\u201cjuvenile\\u201d for the HOA to ask this of her for her boyfriend's sleepovers. Terry says the only real resolution can be had by reading the HOA's govern..."