865 Real Estate

East Tennessee Real Estate & Neighborhood Source

Why Buying a Home in East Tennessee Is a Sound Decision

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If you’re thinking about buying a home, you want to know the decision will be a good one. And for many, that means thinking about what home prices are projected to do in the coming years and how that could impact your investment.

 

This year, nationally, we aren’t seeing home prices fall dramatically. Locally, here in East Tennessee, they are actually rising, not falling. As the year goes on, markets may go up in value while others may lose value. That’s why it’s helpful to keep the long-term view in mind. Nationally, experts project a return to a steadier rate of price appreciation in the years that follow.

 

Over 100 economists, investment strategists, and housing market analysts were polled by Pulsenomics in their latest quarterly Home Price Expectation Survey (HPES). The report indicates what they believe will happen with home prices nationally over the next five years. They believe after mild depreciation this year, home prices will return to more normal levels of appreciation through 2027.

 

The big takeaway is experts aren’t forecasting a drastic fall in home prices nationally, even though some markets will see home price appreciation (like us!) while others may depreciate. And when they look further out, they see steady price appreciation in the long run. That’s a great example of why homeownership wins over time.

 

What Does This Mean for You? Once you buy a home, price appreciation raises your home’s value, and that grows your household wealth. Here’s how a typical home’s value could change over the next few years, just using the expert price appreciation projections from the survey mentioned above.

 

In this example, if you bought a $400,000 home at the beginning of this year and factor in the forecast from the HPES, you could accumulate over $54,000 in household wealth over the next five years. So, if you’re wondering if buying a home is a sound decision, keep in mind what a strong wealth-building tool it is long term.

 

What’s the bottom line? According to the experts, while some areas may see slight depreciation this year, home prices are expected to grow over the next five years. And we know we are already seeing that appreciation here in East Tennessee. If you’re ready to become a homeowner, know that buying today can set you up for long-term success as home values (and your own net worth) are projected to grow. Let’s connect to begin the homebuying process today.

 

Contact the Troy Stavros TEAM with CornerStone Realty Associates today at 865-999-0925 with any questions or to discuss your goals of buying or selling a home in East Tennessee. We look forward to serving you!

Where you livin’? Renting Vs. Owning

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Rent Vs. Own [INFOGRAPHIC] | MyKCM

Some Highlights:

  • Owning your own home vs. renting may lead to some great options, such as locking in your monthly payments and having the freedom to customize your living space.
  • Whether you rent or own, you have to cover someone’s mortgage costs. You may as well be doing so to build your own wealth, rather than that of your landlord.
  • Renting and owning both have up-front fees when you sign your lease or close, respectively. Think about putting that money to work for you!

5 Powerful Reasons to Own Your Home Instead of Renting

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5 Powerful Reasons to Own Instead of Rent | MyKCM

Owning a home has great financial benefits.

In a recent research paper, Homeownership and the American Dream, Laurie S. Goodman and Christopher Mayer of the Urban Land Institute explained:

“Homeownership appears to help borrowers accumulate housing and nonhousing wealth in a variety of ways, with tax advantages, greater financial flexibility due to secured borrowing, built-in ‘default’ savings with mortgage amortization and nominally fixed payments, and the potential to lower home maintenance costs through sweat equity.”

Let’s breakdown 5 major financial benefits of homeownership:

1. Housing is typically the one leveraged investment available

Homeownership allows households to amplify any appreciation on the value of their homes by a leverage factor. A 20% down payment results in a leverage factor of five, meaning every percentage point rise in the value of your home is a 5% return on your equity. If you put down 10%, your leverage factor is 10.

Example: Let’s assume you purchased a $300,000 home and put down $60,000 (20%). If the house appreciates by $30,000, that is only a 10% increase in value but a 50% increase in equity.

2. You’re paying for housing whether you own or rent

Some argue that renting eliminates the cost of property taxes and home repairs. Every potential renter must realize that all the expenses the landlord incurs (property taxes, repairs, insurance, etc.) are baked into the rent payment already – along with a profit margin!!

3. Owning is usually a form of “forced savings”

Studies have shown that homeowners have a net worth that is 44X greater than that of a renter. As a matter of fact, it was recently estimated that a family buying an average priced home this past January could build more than $42,000 in family wealth over the next five years.

4. Owning is a hedge against inflation

House values and rents in Knoxville tend to go up at or higher than the rate of inflation. When you own, your home’s value will protect you from that inflation.

5. There are still substantial tax benefits to owning

We know that the new tax reform bill puts limits on some deductions on certain homes. However, in the research paper referenced above, the authors explain:

“…the mortgage interest deduction is not the main source of these gains; even if it were removed, homeowners would continue to benefit from a lack of taxation of imputed rent and capital gains.”

Bottom Line

From a financial standpoint, owning a home in Knoxville has always been and will always be better than renting. Have questions or want to game plan on how you can buy a home? Contact me, Troy Stavros with CornerStone Realty Associates at 865-999-0925 today!

Top 5 Reasons Why Millennials Choose To Buy a Home [INFOGRAPHIC]

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More and more Millennials in Knoxville are choosing homeownership. In fact, they have quickly become the #1 generation for purchasing homes, as far as volume. The following infographic explains why homeownership is so important to them:

5 Reasons Why Millennials Buy a Home [INFOGRAPHIC] | MyKCM

Ready to start the process of getting into your own home or ready to move to something different? Call me, Troy Stavros with CornerStone Realty Associates today at 865-999-0925 and let’s start formulating a plan.

What Makes A House A “Home” For You?

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What Makes a House a Home For You? | MyKCM

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.