FEBRUARY 2017
PAGE 17 What to Expect This Year in Real Estate By Dan Marconi
How do you choose the right lender? What is title insurance and why do I need it? What is the Natural Hazards Disclosure and should I be concerned? What information is provided to you as a buyer (seller disclosures,inspections, reports) and where do I go if I have questions about that information? And if you are the seller, how do I best prepare my home for sale? Do I
complete repairs or contemplated upgrades or sell 'as is'? Should I stage my home or make any changes to the decor? When is the right time to sell? Most importantly, what is the right price? How do I find buyers and assess their in- terest in my home and their ability to complete the purchase? What do I dis- close about my home and it's condition and what does the law require? Should I hold open houses? Should I be there when potential buyers visit? Is a buyer's purchase contingent upon the successful sale of their current home and if so, should I accept their offer? What are the costs of the sale? What are my net proceeds? How can I position my home to receive multiple offers and how do I manage multiple offers to insure I receive the highest price from the most qualified buyer? How do I respond to requests for repair? What re- pairs are mandated by the state? How do I know when to start packing? How do I find my next home? As investor, many of the same questions apply on both sides of the equa-
One more year behind us and a brand New Year ahead! It seems we all
enjoy the opportunity this time of year affords us to speculate on how the world will unfold in the weeks and months ahead! This may include an interest in the changes and new developments in real estate and how that may impact our life! We may ask: what can we expect for values in the local real estate market? Where will interest rates go? And if you are in the market to buy, sell or invest in real estate, what can and should you expect from the real es- tate professional you choose to represent you? Often, the key to understanding what may happen in the future is hidden
in what has occurred in the past. Consider the volume of home sales in Temecula over the past 5 years. With the exception of 2013, in which there 1672 homes sold (interest rates averaged 4% thru the year) the total # of an- nual home sales in our community has consistently been around 2000 per year. This consistency reflects a stable market of available homes and a rel- atively stable level of demand. What has changed however during this period is the average sales price, increasing 35-40% during this 5 year period, with the bulk of that gain occurring in 2013-2014. With interest rates beginning a steady, gradual rise, it is reasonable to suggest prices will NOT increase sig- nificantly beyond the historical average of 3-4% annually. There will be excep- tions for homes w notable upgrades or amenities, as well as those in preferred locations and neighborhoods. Did I just answer the question of where interest rates will go? We closed
the year with an almost 1% increase in the national average for home mort- gage rates and the Fed has indicated it will increase the prime rate at least 2 and possibly 3 more times in 2017, in response to inflationary pressure (i.e. rising consumer prices). This increase in rates and consequent increase in the monthly cost of home ownership will restrict upward pressure on values as homebuyers must carefully allocate their income to the various costs of liv- ing such as transportation, food, insurance, personal goods and health care. Some industry experts suggest we may see 30 year fixed rates up to 5% be- fore the end of 2017! For a $400,000 home, this amounts to approximately $200 a month in payments more than the monthly payment based on a 4% rate.
Sounds simple then, right? Home prices will not see a significant bump
as interest rates slowly rise! But what does that mean to you if you are thinking of buying, selling or investing in local real estate? This is where the value of an experienced professional can make the difference! Do you have the financial strength and means to buy now or does it make
more sense to continue to save for a larger downpayment and smaller loan amount? Where can you find the right value for you based on your resources and your needs, both now and in the future? And once you found the right home, what is a fair and reasonable price? What do you need to look out for as you assess the home’s condition and potential maintenance costs in the future? What repairs may be needed now and will the seller pay for them?
tion but from a buyer’s standpoint, it simply boils down to, will the net return of income (rent rec’d – minus costs) provide the rate of return on my invest- ment that suits my needs and goals. If you know all the answers to these questions, then maybe you don't need
a real estate professional. If you don't know all the answers and you want to insure you make the best decision for yourself, your family and your financial future, then you are well served to take the time to research local real estate agents and find the right one for you! Ask your friends who they may know or who they have worked with and what that experience was like. Interview mul- tiple agents and ask questions about their activities, sales results and training to insure you find a professional who has the knowledge, experience and a proven track record with clients who are emphatic about their service and re- sults! Consider the brokerage they work with, its reputation and the depth of experience that brand brings to the table! Don't
settle...real estate agents are NOT the same! If a real estate transaction is in your future, a professional real estate consultant should be to! Here's to you and a healthy and prosper- ous 2017! For more information or answers to some of these questions contact Dan Marconi at
dan@marsoniregroup.com.
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