Home Buying Archives - Page 25 of 40

ACT SOON! Homes are a Bargain Compared to Historic Norms

January 17, 2019 By Troy Stavros

A loaf of bread used to be a nickel. A movie ticket was a dime. Not anymore. Houses were also much less expensive than they are now. Inflation raised the price of all three of those items, along with the price of almost every other item we purchase.

The reason we can still afford to consume is that our wages have also risen over time. The better measure of whether an item is more expensive than it was before is what percentage of our income it takes to purchase that item today compared to earlier. Let’s look at purchasing a home.

The COST of a home in Knoxville, Nashville, or anywhere for that matter, is determined by three major components: price, mortgage interest rate, and wages. The big question? Are we paying a greater percentage of our income toward our monthly mortgage payment today than previous generations? Surprisingly, the answer is no.

Historically, Americans have paid just over 21% of their income toward their monthly mortgage payment.

Though home prices are higher than before, wages have risen as well. And, the most important component in the cost equation – the mortgage rate – is dramatically lower than it was in the 1970s, 1980s, 1990s, and 2000s.

Today, according to the latest Home Affordability Index just released by the National Association of Realtors, Americans are paying 17.4% of their income toward their mortgage payment. That is much lower than the 21% average previous generations have paid.

Bottom Line

The cost of purchasing a home in Tennessee today, or nationally for that matter, is a bargain compared to previous generations when we look at it from a percentage of income basis. However, with mortgage rates expected to increase and home prices continuing to appreciate, that will not always be the case. Whether you are buying your first home or looking to move-up to a more expensive home, purchasing sooner rather than later probably makes sense. Contact Troy Stavros with CornerStone Realty Associates at 865-999-0925 to start formulating a plan and get you into your dream home!

3 Scams Targeting Homeowners, Home Sellers, and Home Buyers TODAY

January 11, 2019 By Troy Stavros

*IMPORTANT INFO ON 3 CURRENT SCAMS HAPPENING NATIONWIDE* I sat down with Linda Reitz-Hamm of Superior Title & Escrow to talk about 3 scams out there that homeowners, home sellers, and home buyers MUST be aware of. People are losing MASSIVE amounts of money (totaling in the BILLIONS), so you’ll want to educate yourself on these so you can see them coming, as they can look very legit. Have questions about this or anything else real estate related? Contact Troy Stavros with CornerStone Realty Associates at 888-388-DOOR xt.707.

House Hunting in Knoxville: What Should Seniors Know?

January 3, 2019 By Troy Stavros

Choosing Knoxville for your retirement plan is a wise choice. One study, evaluating key elements like cost of living, quality of life and employability, determined that Knoxville is the number one destination for people looking to retire early.

There are many considerations seniors need to take into account when buying a home – health, budget, the ability to access care, downsizing and ability to access needed services. With these factors to keep in mind, a Knoxville Real Estate Professional has the experience needed to help you through the entire process without missing a beat.

Here are a few things you should know and discuss with your real estate agent:

Your future budget matters as much as your present budget.

In Knoxville, the median home sold price is just over $201k, which is below the national average. Even though the city may be cost-effective, affording a house requires more than just scraping together money for a down payment. You will have to review your financial situation as a whole to determine if you will be able to manage the cost of buying and owning a new home.

One budgetary concern that many seniors face is old debt. As your age and moved to a fixed income situation, you may find that managing debt payments becomes more difficult. Additionally, as health needs grow, many seniors may be shocked by the cost of care. Some steps you can take to get a sense of your finances sooner rather than later include:

Evaluating your eligibility for Medicare or Medicaid for your health expenses
Checking in on your 401k or other retirement plans to calculate your expected monthly income after you’ve stopped working

Location, location, location.

You have already settled on Knoxville for your preferred destination, but keep in mind that even within Knoxville some locations may be better than others when it comes to your lifestyle. For example, when choosing a home, it is important to keep in mind how close you are to a hospital in case you experience a medical emergency.

Luckily, Knoxville as a city has different programs and services aimed to improve the quality of life for older people, including programs that help them remain in their own homes for as long as possible. They offer a broad spectrum of health and nutrition-related services, consumer and home-safety related services, in-home services, and educational, recreational, and even volunteer opportunities for seniors.

Beyond your high-level needs, you will want to know how close your new home is to everyday conveniences. Where is the nearest library? How far away is the grocery store? Are there any parks you can walk to just to get some air? These may seem like simple questions, but having these things nearby can definitely improve the quality of life.

Accessibility and health should be major factors in a home.

You need to keep your mobility limitations or future mobility limits in mind when buying a home.

The number one mobility issue affecting seniors is falling, which can cause serious and sometimes permanent injury. It may be wise to search for a ranch-style home instead of a multi-story home to avoid accidents. Other home amenities to look for that can help keep you safe include:

A shower and toilet with space for grab bars or another support device in case you need to install them now or in the future
If you choose a multi-story home, at least one bathroom on the main level – ideally with a full bath
Wide hallways and doorways to make sure you can navigate your home in a wheelchair if needed
Outlets and switches that can be reached from a wheelchair – around 2 to 4 feet from the ground
At least one entry to the home that doesn’t involve steps

If you have health, mobility or accessibility issues, you have many different housing options in the Knoxville area. There are 29 assisted living facilities in Knoxville and 10 others in the nearby area. These facilities are ideal for seniors who want to maintain their independence, but may need assistance with activities of daily living.

Bottom Line:

As a senior, knowing your options, as well as the circumstances that make buying a home in older age unique, will put you in a good position to make the right choice. Your dream home may already be within your reach. Have questions or want to get the process started? Contact me, Troy Stavros with CornerStone Realty Associates at 865-999-0925 to setup a time to talk.

Thinking About Buying A Home This Year? Here’s What To Keep An Eye On.

January 2, 2019 By Troy Stavros

Excited About Buying A Home This Year? Here's What to Watch | MyKCM

As we kick off the new year, many families have made resolutions to enter the housing market in 2019. Whether you are thinking of finally ditching your landlord and buying your first home or selling your starter house to move into your forever home, there are two pieces of the real estate puzzle you need to watch carefully: interest rates & inventory.

Interest Rates

Mortgage interest rates had been on the rise for much of 2018, but they made a welcome reversal at the end of the year. According to Freddie Mac’s latest Primary Mortgage Market Survey, rates climbed to 4.94% in November before falling to 4.62% for a 30-year fixed rate mortgage last week. Despite the recent drop, interest rates are projected to reach 5% in 2019.

The interest rate you secure when buying a home not only greatly impacts your monthly housing costs, but also impacts your purchasing power.

Purchasing power, simply put, is the amount of home you can afford to buy for the budget you have available to spend. As rates increase, the price of the house you can afford to buy will decrease if you plan to stay within a certain monthly housing budget.

The chart below shows the impact that rising interest rates would have if you planned to purchase a $400,000 home while keeping your principal and interest payments between $2,020-$2,050 a month.

With each quarter of a percent increase in interest rate, the value of the home you can afford decreases by 2.5% (in this example, $10,000).

Inventory

A ‘normal’ real estate market requires there to be a 6-month supply of homes for sale in order for prices to increase only with inflation. According to the National Association of Realtors (NAR), listing inventory is currently at a 3.9-month supply (still well below the 6-months needed), which has put upward pressure on home prices. Home prices have increased year-over-year for the last 81 straight months.

The inventory of homes for sale in the real estate market had been on a steady decline and experienced year-over-year drops for 36 straight months (from July 2015 to May 2018), but we are starting to see a shift in inventory over the last six months.

The chart below shows the change in housing supply over the last 12 months compared to the previous 12 months. As you can see, since June, inventory levels have started to increase as compared to the same time last year.

This is a trend to watch as we move further into the new year. If we continue to see an increase in homes for sale, we could start moving further away from a seller’s market and closer to a normal market.

Bottom Line

If you are planning to enter the housing market, either as a buyer or a seller, let’s get together to discuss the changes in mortgage interest rates and inventory and what they could mean for you.

What Makes A House A “Home” For You?

December 26, 2018 By Troy Stavros

We frequently talk about why it makes sense to buy a home financially, but more often than not the emotional reasons are the more powerful or compelling ones.

No matter what shape or size your living space is, the concept and feeling of a home can mean different things to different people. Whether it’s a certain scent or a favorite chair, the emotional reasons why we choose to buy our own homes are typically more important to us than the financial ones.

1. Owning your home offers stability to start and raise a family

From the best neighborhoods to the best school districts, even those without children at the time of purchase may have this in the back of their minds as a major reason for choosing the location of the home that they purchase.

2. There’s no place like home

Owning your own home offers you not only safety and security, but also a comfortable place that allows you to relax after a long day!

3. You have more space for you and your family

Whether your family is expanding, an older family member is moving in, or you need to have a large backyard for your pets, you can take all this into consideration when buying your dream home!

4. You have control over renovations, updates, and style

Looking to actually try one of those complicated wall treatments that you saw on Pinterest? Tired of paying an additional pet deposit for your apartment building? Or maybe you want to finally adopt that puppy or kitten you’ve seen online 100 times? Who’s to say that you can’t do all of these things in your own home?

Bottom Line

Whether you are a first-time homebuyer or a move-up buyer who wants to start a new chapter in your life, now is a great time to reflect on the intangible factors that make a house a home.

Renters! Don’t Get Caught in The Trap!

December 17, 2018 By Troy Stavros

Every year around this time, we take time to reflect and plan for next year. If you are renting your current home but have dreams of homeownership, your plan for the new year may include buying, and you wouldn’t be alone!

According to the 2018 Bank of America Homebuyer Insights Report, 74% of renters plan on buying in the next 5 years, with 38% planning to buy in the next 2 years!

When those same renters were asked why they disliked renting, 52% said that rising rental costs were their top reason, and 42% of renters believe that their rent will rise every year. The full results of the survey can be seen below:

It’s no wonder that rising rental costs came in as the top answer! The median asking rent price has risen steadily over the last 30 years, as you can see below!

There is a long-standing rule that a household should not spend more than 28% of its income on housing expenses. With nearly half of renters (48%) surveyed already spending more than that, and with their rents likely to rise again… why are they renting?

When asked why they haven’t purchased a home yet, not having enough saved for a down payment (44%) came in as the top response. The report went on to reveal that nearly half of all respondents believe that “a 20% down payment is required to buy a home.”

If the majority of those who believe they haven’t saved a large enough down payment believe that they need 20% down to buy, that means a large number of renters may be able to buy now!

Bottom Line

If you are one of the many renters who is fed up with rising rents but may be confused about what is required to buy in today’s market, let’s get together to help you on your path to homeownership.