Why are homes more affordable if prices are up?

Dallas homes are more affordable now despite the rising prices, low availability and increasing demand. How is that you ask?

It's the mortgage interest rates that are keeping home ownership within reach for many folks. Take look at this chart that shows what a $200,000 mortgage costs based on your interest rate. Rates have been inching up and that trend is predicted to continue.

 

The easy way to think of it is that a 1% difference in your interest rate roughly equals a 10% difference in the price of the home. If interest rates increase by 1%, then its about the same as paying 10% more for the property.

Take advantage of today's low mortgage rates or some day your kids may say "You mean you could have locked in a 30-year fixed rate mortgage under 5 percent and you didn't?"
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Is real estate still a good investment in 2014?

Is home ownership still a good investment these days? Some financial 'experts' think real estate is not where you should put your money. They advise young adults that the concept of buying a home and building a nest egg is antiquated and that they are better off renting. For a small percentage of the population this is true. However from an investment stand point, I disagree.

Regardless of what is happening in the market, what many financial advisers don't consider is that stock, bond and fund investors still have housing expenses. You have to spend money on shelter. You can't just take your money for shelter and buy other assets with it - unless you plan to live rent-free with a relative forever.

Because mortgage interest rates are still low, you can currently get a 4.5% rate and lock it in for 30 years. That locks in most of your housing expense for 30 years. Renting is like having an adjustable rate loan that can change every year. Which way do you think rents will go in the next 30 years?

Unlike rental payments that are gone as soon as you write the check, your mortgage payment is like forced savings. While you have to maintain your property and often put additional funds to keep it updated, you're also able to build equity and you decrease your income tax liability.

And it provides stability that other investments don't. You can't live in a Wall Street stock or raise your children in a bond investment. A home is where you can establish roots and raise a family. While I don't think every American needs to be a homeowner, I believe that home ownership is still the best long-term investment.
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More Dallas Homeowners becoming Landlords

 Apartment vacancy rates are about 5% right now in Dallas. That's really low.

A growing number of Dallas homeowners reportedly are holding onto their former homes and opting to become landlords. This explains one of the reasons for our low inventory of homes for sale. Every home that becomes a rental property is one less home for sale.

One of the reasons for becoming an unplanned landlord is the low interest rates many homeowners have on their mortgages reports CNNMoney. Few folks want to give up rates under 4% and are finding it easy to help fill the demand for rental properties in Dallas.

While becoming a landlord can work for many homeowners, there are challenges to leasing your property. The monthly rent needs to cover:

• the mortgage, 
• taxes, 
• insurance, 
• any HOA dues 
• with about 10-15% extra for repairs. You might be able to tolerate a tricky garbage disposal or gate that refuses to latch, but your tenant won't.

In addition to repairs, novice landlords need to plan for covering:

• expenses when the property sits vacant, 
• the cost of leasing the property, 
• running background checks, 
• collecting rent, 
• changing locks, 
• cleaning and touch ups between tenants, 
• following all landlord laws and legal requirements, 
• dealing with demanding tenants.

If you don't want to deal with some of those issues, you can always hire a property manager for about 10% of the monthly rent. A property manager will typically collect rent, deal with any tenant calls and help keep you legal. You still pay for all repairs, cleaning, lock changes, etc.

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Your property is for sale - but not selling?

The busy summer home selling season is over, and your house is still on the market? Maybe it's time to make some changes and shift your marketing efforts into another gear.

Homes that have been on the market a long time compared with the neighborhood’s average are a challenge. Often it indicates that the seller’s expectations are unrealistic. And it always indicates that the buyers have spoken and what they're saying is that the property is overpriced for either the area, condition or some other factor.

So what do you as the homeowner do about it?

First determine if you have given the market enough time to respond to your offer to sell. Often a property that lags on the market starts to smack of either desperation or difficulties. But sometimes sellers panic unnecessarily during those initial weeks on the market. Find out from your agent the average time it takes for a home to go under contract in your neighborhood. Higher price ranges and unique properties typically take a little longer to sell. If it has been enough time, then maybe it's time to ....

Switch to Plan B. Determine what needs to change to get your property sold. If your agent has advised you correctly, marketed it well and the online photos are excellent, then it's probably not your agent who is the problem. It's you. Reconsider changes does your agent recommends.

What is the feedback from the other agents and potential buyers who have seen the property? Is there are recurring theme in the feedback? Does something need updating or is it just the price?

Work with your agent as a team with the shared goal of selling the property. Experienced agents know that the number one reason for a lagging listing is overpricing. But be willing to consider everything. Take another look at the home's presentation, price, accessibility and marketing.

The market will always let you know if the price makes sense for that location and condition.  [where: 75230]

North Dallas Home Sale Comparisions

Seems that everyone has read the headlines announcing what a hot real estate market we are experiencing in Dallas this year. And it's true. Here is a closer look at the numbers that show how North Dallas prices and sales have compared to this time last year.

For most areas, the number of sales are down, but the prices are up. In some areas, the higher priced homes are now selling well and that has driven the average sales price even higher. Here are the statistics for:

North Dallas between Northwest Hwy & LBJ, from Midway to Central

University Park

Highland Park

Northeast Dallas - east of Central Expwy and south of LBJ

Northwest Dallas - west of Midway and south of LBJ

Thanks to the nice folks at Chicago Title for putting these stats together.  [where: 75230]

6 Home Staging Tips for selling in Autumn

When selling your home, it helps to set the stage for buyers based on the season. In the summer, a couple of floats in the pool set a fun tone.
But here we are in September, and I've got a few tips for selling in the fall.

• Continue to water your landscape. It still needs it and we want to keep some color for as long as possible.
• Trim trees and bushes, rake falling leaves and keep the yard tidy.
• Put logs in the fireplace and set a cozy scene with a throw and a book on a chair.
• If it's cool enough, light a fire in the fireplace. Just don't make it too toasty inside.
• Add a few colorful Halloween or Thanksgiving touches - just a few.
• Most folks love the smell of pumpkin. It's a great scent to lightly use this time of year.

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North Dallas Real Estate Update September 2014

While the real estate market hasn't completely stabilized in North Dallas, we're seeing a gradual return to normal. The frenzied seller's market of the past few months is slowing and inventory of available homes is up just a little.

Let's take a quick look at the annual and year to date stats for all of North Dallas ( from Uptown to LBJ and I-35 to Central Expressway).

Keeping in mind that a balanced market is a 6 month supply of homes for sale, we currently have a 5 month supply of inventory. So it's still a seller's market, but not by much. The statistics vary dramatically from neighborhood to neighborhood and in different price ranges. Give me a call if you want to know your particular neighborhood.

And I really just have to share this graph with you because, in Texas, we don't normally see months where the median sales price is higher than the median asking price. But it happened in July this year in North Dallas. Multiple offers on homes were commonplace. To say it was a wild summer for buyers and their agents is an understatement.

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3 Homeowner mistakes that Decrease Value

A customized, modernized home may sound wonderful when it's modified to your own needs and taste. But when it comes to selling your house and attracting a buyer, some 'improvements' can actually lower the value of your property.

No seller wants put money into a property that they won't see a return on. Or even worse, that will discourage potential buyers.

Three typical investments that can actual decrease your home's value are:

1. Too much personalization. When it comes to selling a property, unique is usually not good. You want your house to have a broad appeal and be similar to others in the area. Skip the extravagant tiles, custom carpeting and bold wall colors. Just keep the design neutral. Too taste specific is not only harder to sell, but typically takes longer.
2. Getting rid of a room or garage. Don't even think about converting a garage space without adding on a new garage. Take my word for it- almost every home buyer wants a garage more than they want whatever you are creating in its place. And typically, the more rooms a home has, the higher the value. Unless your house has a lot more rooms than most of those in your neighborhood, don't tear down walls to combine them.
3. Changing the function of a space. Specialty rooms are great for lots of folks, but not for everyone. Think twice before converting a generic room or bedroom in to a gym, sewing room, studio, library, ... The typical buyer for your neighborhood may not want it. And most folks can't envision a room dramatically different than what they see in front of them. If you're going to use the room differently than its intended function, stay away from built-ins and elaborate changes. Even putting in a swimming pool at the expense of a grass yard can be a negative. Broad based buyer appeal and consumer demand should be your guide.  

If you're not selling your house, then current value isn't important. Customize any way you want. However, if you're considering selling your property, then please don't make these mistakes. Your individualized wants, needs and taste may not appeal to everyone. They can not only reduce your sales price but increase the time it takes to sell your home.
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