Buying Is Now 26.3% Cheaper Than Renting In The US

In the six years that Trulia has conducted this study, this is the first time that it was cheaper to rent than buy in any of the metropolitan areas.

This is great news for the Cape Cod Real Estate Market where rentals are virtually non-existent! 

Below is a map of the 100 metros that were studied. The darker the blue dot on the metro, the cheaper it is to buy there.

Buying Is Now 26.3% Cheaper Than Renting in the US | Keeping Current Matters

In order to calculate the true cost of renting vs. buying, Trulia includes all assumed renting costs, including one-time costs (like security deposits), and compares them to the monthly costs of owning a home (insurance, mortgage payments, taxes, and maintenance) including one-time costs (down payments, closing costs, sale proceeds). They also assume that households stay in their home for seven years, put down a 20% down payment, and take out a 30-year fixed rate mortgage. The full methodology is included with the study results here.

Below is a chart created with the data from the last six years of the study, showing the impact of the median home price, rental price, and 30-year fixed rate interest rate used to calculate the ‘cheaper to buy’ metric.

Buying Is Now 26.3% Cheaper Than Renting in the US | Keeping Current Matters

In 2016, when buying was 41.3% less expensive than renting, the average mortgage rate was the driving force behind the difference. Rates this year are the highest they have been in six years which has narrowed the gap, all while home price appreciation has also been driven up by a lack of homes for sale.

Cheryl Young, Trulia’s Chief Economist, had this to say,

“One point deserves emphasizing: The ultra-costly San Francisco Bay Area is not a harbinger for the nation as a whole. While renting may outweigh buying in San Jose and San Francisco, it is unlikely that renting will tip the scales nationally anytime soon.”

Bottom Line

Homeownership provides many benefits beyond the financial ones. If you are one of the many renters out there who would like to evaluate your ability to buy this year, meet with a local real estate professional who can help you find your dream home.

 


Posted on August 1, 2018 at 7:56 pm
Gene Petraglia | Posted in Uncategorized |

Study Shows May is the Best Month to Sell A Home

This Just In: Data Says May is the Best Month to Sell Your Home | MyKCM

According to a newly released study by ATTOM Data Solutions, selling your home in the month of May will net you an average of 5.9% above estimated market value for your home.

For the study, ATTOM performed an “analysis of 14.7 million home sales from 2011 to 2017” and found the average seller premium achieved for each month of the year. Below is a breakdown by month:

This Just In: Data Says May is the Best Month to Sell Your Home | MyKCM

May and June dominate as the top months to sell.  The second quarter of the year (April, May, June) is referred to as the Spring Buyers Season, when competition is fierce to find a dream home, which often leads to bidding wars.

One caveat to mention though, is that when broken down by metroATTOM noticed that while warmer climates share in the overall trend, it turns out that they have different top months for sales. The best month to get the highest price in Miami, FL, for instance, was January, and Phoenix, AZ came in with November leading the charge.

If you’re thinking of selling your home this year, the time in the Real Estate cycle to list is NOW! According to the National Association of Realtors, homes sold in an average of just 30 days last month! If you list now, you’ll have a really good chance to sell in May or June, setting yourself up for getting the best price!

Want to know more

Contact me to discuss the market conditions on Cape Cod and get you the most exposure to the buyers who are ready and willing to buy now!


Posted on May 6, 2018 at 5:45 pm
Gene Petraglia | Posted in Uncategorized |

2 Ways to Get the Most Money from The Sale of Your Home

Every homeowner wants to make sure they maximize their financial reward when selling their home. But how do you guarantee that you receive the maximum value for your house?

Here are two keys to ensure that you get the highest price possible.

1. Price it a LITTLE LOW
This may seem counterintuitive, but let’s look at this concept for a moment. Many homeowners think that pricing their homes a little OVER market value will leave them with room for negotiation. In actuality, this just dramatically lessens the demand for your house (see chart below).

 

Instead of the seller trying to ‘win’ the negotiation with one buyer, they should price it so that demand for the home is maximized. By doing this, the seller will not be fighting with a buyer over the price but will instead have multiple buyers fighting with each other over the house.

Realtor.com gives this advice:

“Aim to price your property at or just slightly below the going rate. Today’s buyers are highly informed, so if they sense they’re getting a deal, they’re likely to bid up a property that’s slightly underpriced, especially in areas with low inventory.”

2. Use a Real Estate Professional
This, too, may seem counterintuitive. The seller may think they would make more money if they didn’t have to pay a real estate commission. With this being said, studies have shown that homes typically sell for more money when handled by a real estate professional.

A study by Collateral Analytics, reveals that FSBOs don’t actually save any money, and in some cases may be costing themselves more, by not listing with an agent.

In the study, they analyzed home sales in a variety of markets in 2016 and the first half of 2017. The data showed that:

“FSBOs tend to sell for lower prices than comparable home sales, and in many cases below the average differential represented by the prevailing commission rate.”

The results of the study showed that the differential in selling prices for FSBOs when compared to MLS sales of similar properties is about 5.5%. Sales in 2017 suggest the average price was near 6% lower for FSBO sales of similar properties.

Bottom Line
Price your house at or slightly below the current market value and hire a professional. This will guarantee that you maximize the price you get for your house.


Posted on April 19, 2018 at 4:07 pm
Gene Petraglia | Posted in Uncategorized |

Dreaming of a Luxury Cape Cod Home? Now’s May be the Time!

If your planning on buying a luxury home, now is a great time to do so!

Recently, the Institute for Luxury Home Marketing released its Luxury Market Report which showed that in today’s premium home market, buyers are in control.

The inventory of homes for sale in the luxury market far exceeds the number of people searching to purchase these properties in many areas of the country, including on Cape Cod. This means that homes are often staying on the market longer or can be found at a discount.

 

A recent Bloomberg article gave some insight into what many millennials are choosing to do:

“A new generation of affluent homebuyers powered by a surge in inherited wealth is driving the luxury-home market, demanding larger spaces and fancier finishes, according to a report heralding ‘the rise of the new aristocracy.’”

Bottom Line
The best time to sell anything is when demand is high, and supply is low. If you are currently in a starter or trade-up house that no longer fits your needs and you are looking to step into a luxury home, now’s the time to list your house for sale and make your dreams come true.


Posted on March 21, 2018 at 4:24 pm
Gene Petraglia | Posted in Uncategorized |

Moving Up Is MORE Affordable Now Than Almost Any Other Time In 40 Years

If you are considering selling your current home, to either move up to a larger home or into a home in an area that better suits your current family needs, like say Cape Cod for example, it may be a while to find a better time than now!

According to a Trulia study published in March 2018, Last week,  examined home affordability over the last 40+ years (1975-2016). Their research:

“Nationally, homes are just about the most affordable they’ve been in the last 40 years… the median household could afford a home 1.5 times more expensive than the median home price. In 1980, the median household could only afford about 3/4 of the median home price.

Despite relatively stagnant incomes, affordability has grown due to the sharp drop in mortgage rates over the last 30 years – from a high of over 16% in the 1980s to under 4% by 2016.

Of the nation’s 100 largest metros, only Miami became unaffordable between 1990 and 2016. Meanwhile, 22 metros have flipped from being unaffordable to becoming affordable in that same time frame.”

The above graph is the Affordability Index compared to the 40-year average

It shows that housing affordability is better now than at any other time in the last forty years, except during the housing crash last decade.

(Remember that during the crash you could purchase distressed properties – foreclosures and short sales – at 20-50% discounts.)

There is no doubt that with home prices and mortgage rates on the rise, the affordability index will continue to fall. That is why if you are thinking of moving up, you probably shouldn’t wait.

Bottom Line

If you have held off on moving up or purchasing your deam home on Cape Cod  because you were hoping to time the market, that time has come. 

Contact me at 508-744-3853 or gpetraglia@kinlingrover.com to learn more.


Posted on March 19, 2018 at 2:16 pm
Gene Petraglia | Posted in Uncategorized |

2018 INVESTMENT AND VACATION HOME BUYERS OUTLOOK

Each year, the National Association of Realtors (NAR), publishes a survey on the second home market focused on vacation home sales and income home sales. The report  highlights some informative trends for second home buyers.

When buying a vacation home, the report identified several reasons that stood out for people. These are important lifestyle considerations all second home buyers need to think about in order to make the best decisions – decisions that will determine their satisfaction once all is said and done. Thirty-seven percent of vacation home buyers plan to use their property for vacations or as a family retreat. For this group, special focus on the type of activities and environments your family enjoys together will point you to locations that provide this for you. Another 16% plan to convert this second home into their primary residence in the future. This is a great way to have a two-step plan towards downsizing and retiring in a vacation or resort style community. Interestingly, another 13% made the decision to buy a second home based on market conditions. In other words, they found a great deal. Sometimes, it’s that hidden gem that enables you to make the jump to second home life and often it’s only through relationships with a good buyers’ agent that you are able to find and buy these homes.

If an income or investment home is of more interest to you, 42% of people in this category plan to use the home to generate income. If you want to do this, it cannot be understated how important it is to find a property that is cash-flow positive. Investment home ownership can be very tricky if you do not earn more than your monthly mortgage and primary expenses, like property tax, and generate an income each month, even if it is just a small amount. Another 16% purchased because they found a good deal or believed the prices were low and presented a unique opportunity. A further 14% bought investment homes based on the potential for price appreciation and the opportunity to gain equity. Buying a home in the right location can lead to building substantial equity and improve your overall net worth over time if you buy in the right place.

Rising home prices. Vacation home prices jumped substantially since 2014 and most economist predict second homes will continue to be a great investment.  Purchasing distressed properties,  can provide an opportunity to improve on a property and make it your own, while also delivering greater value for family, rental and equity purposes..

Gone to the beach! Not surprisingly, beach areas represent 40% of vacation home purchases proving Americans really do like long walks on the beach. The sunny vacation spots on the east coast, from Florida up through the Carolinas and all the way to Maine continue to be favorite locations. The gulf coast of Texas and the west coast from California to Washington. Coming in second with 19% of vacation home sales each, was the purchase of mountain homes and lake homes. Mountain homes typically leverage winter resort areas that continue to expand their attraction in summer months with a range of activities and events. And lake homes in Minnesota, Wisconsin and Michigan, to name just a few are also very popular. Think about how you plan to enjoy your vacation home before committing to one of these areas. How frequently will you use it? How long does it take to get there? Vacation homes are typically located 200 miles from a primary residence although there is a share worth mentioning that is located more than 1,000 miles away from a primary residence.

The sharing economy is trending and emerging businesses like Uber and AirBnB are likely great examples many of us are familiar with. Twenty four percent of vacation home buyers did or plan to rent out their home to guests for short term stays. Many vacation home owners utilize a property manager to help them generate income from their vacation home. Note that property managers can garner a substantial percentage of rental funds generated but they also take on all the marketing and administration of the process.

It may be time for you to consider second home life.  A full 80% of people surveyed report that now is a good time for people to purchase real estate. And lastly, vacation home buyers and income home buyers are often the same group of people. Approximately one fifth of vacation home buyers plan to buy an investment home in the next two years and the trend remains true in reverse.

No matter where you are today, this valuable information from NAR can help put your thoughts on second home life into greater context. And when you are ready to get into this market, I  can guide you to the best locations for you.

For more detailed information on if a second home is right for you contact me at gpetraglia@kinlingrover.com – call/text 508-744-3842, or visit my website www.genepetraglia.kinlingrover.com

 


Posted on March 8, 2018 at 11:27 am
Gene Petraglia | Posted in Uncategorized | Tagged

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