Realty Trac: Foreclosure Fears

Realty Trac: Upside of Foreclosures

Realty Trac: Is A Second Home For You?

A Second Home: Take it or Leave it?

For many, wanderlust is just a part of life. You buy a beautiful home somewhere, settle down, have a family, but there is always a part of you that’s itching to get away. Vacations are part of that wanderlust; the chance to get away someplace beautiful. And then you see it. The local newspaper at your vacation destination, and lo and behold, there is a real estate section right there. Dare you even look? You can’t afford it, can you? Two homes? Is dual home ownership for you?

A second home can work for you, but you have to go into the process knowing what to expect. If you’re looking to get rich quick, don’t count on it. According to recent data, the price of real estate in areas that are deemed “Vacation Markets” has risen twice as fast as real estate in other areas. So, not only is a second home in your destination of choice going to cost you a pretty penny, it’s no longer a well-kept secret anymore and the chances of you flipping it to make a quick buck are slim.

The best piece of advice a possible vacation home buyer can heed right now is to buy for love not for money. Recent sharp downturns in vacation markets like Naples, Florida, Lake Tahoe, Nevada and Cape Cod, Massachusetts, have shown that trying to turn a profit in a vacation market is close to impossible. But there is a bright side to all of this. With the housing bubble going poof all across the country, those that are looking to sell will be doing so at lower prices. Now could be a great time to buy a place that you’re planning on keeping for a long while.

But how do you know if you have your head on straight about the whole thing? Well, take some time and evaluate the pluses and minuses of buying another home. Once you’ve decided on a area, spend some time there to make sure you like it. If it’s going to be a vacation home, you’ll want the scenery to be relaxing (if that’s what you’re looking for) or exciting (if that’s what you go on vacation to experience). A final check should be the bottom-line cost. If the price of the two houses makes up more than one third of your total income, you’ve spent too much.

Buying property is a huge investment for everyone, even the rich. Take the time to properly evaluate the pros and cons before you decide to own a second home or you could find yourself on a permanent vacation.

Realty Trac: Are You House Poor?

HOMES FOR 1/2 PRICE
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Are You House Poor?

The great American Dream has always revolved around owning a home. Sure, having the 2.3 kids, the cushy corporate job and the stylish car to drive to work everyday are part of the myth, too, but nothing quite summed up Americana quite like the white picket fence. But if recent economic numbers are any clue, this dream is becoming a nightmare for many in the US.

According to date released by the United States Census Bureau, an increasing number of homeowners are spending a larger and larger amount of their incomes on housing than in previous years. People in 49 out of 50 states reported an increase. The only state that didn’t, Alaska, spent the same amount. The report showed that people are spending around 21 percent on their housing needs, up from 19 percent in 1999.

This is a huge problem for first-time buyers who may now be priced out of housing markets all across the country. Economists point to rises in home prices in the last 7 years, as well as higher interest rates, coupled with stagnant wages over the same period.

While everyone seems to be in agreement that the housing “bubble” is either bursting, or getting ready to burst depending on where you live, housing prices are still up a remarkable 32 percent since the beginning of the decade.

Household incomes, on the other hand, haven’t done a very good job of keeping up. The same Census report showed that income has actually dropped, not risen, over the past 7 years, down 2.8 percent.

Maybe the worst news in the report was the percent of people who allot more than 30% of their income for housing. The numbers are up almost 8%. National guidelines suggest that more than 30% of household income for housing is excessive and not financially healthy.

What does this mean in the long run?

Most experts agree that until income can catch up to housing, the real estate market will remain lifeless. And since real estate is one of the biggest drivers to the overall economy, a weak real estate market means a weak economy.

Things appear to be the worst in California. Not only do they have the most expensive real estate in the nation, 48 percent of California homeowners spend more than 30% of their income on housing related costs.

Until income can begin to grow as quickly as the real estate market, this trend shows no signs of slowing down. Which could mean that the upcoming real estate slump could last much longer than anyone predicted.

Realty Trac: Home Affordability--Myth or Reality?

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Home Affordability: Myth or Reality?

For many young couples, the idea of owning their own house just like their parents is an attractive idea, but it’s not very realistic. A recent poll conducted by the Associated Press and America On Line Real Estate showed that 80 percent of respondents believe that it is hard for first-time buyers to afford a home. A majority of those polled – 59 percent – also said that they believe it is harder to buy a home now than it was five years ago.

Taking a closer look at the poll reveals that young adults and those that classify themselves as minorities consider the affordability of homes a bigger problem now than five years ago, compared to those over the age of 50 and those that identify themselves as white.

Broken down by region, almost 70 percent of those living in the western United States and almost 65 percent of those living in the Northeastern US say that it’s harder to buy now than five years ago, compared to only 54 percent of those living in the South and 51 percent of those living in the Midwest.

The poll also found that almost half of those surveyed thought that the real estate market in their home area was overpriced.

A recent report by the census bureau seems to back up the findings of the AP/AOL survey. The census report found that approximately one third of all homeowners in the US that have mortgages spent at least 30 percent of their income on housing and housing related costs. It’s widely considered excessive if your housing costs make up more than one third of your income. The census took things like mortgage payments, insurance and utilities and taxes into account.

The biggest reason for this lack of faith in new home ownership can be directly attributed to the recent housing boom over the last five years. Also, a recent increase in mortgage rates has also dampened optimism. And while incomes are up, as well, most don’t even keep up with inflation.

Another recent trend that has kept optimism for first time home buyers down is the 32 percent jump in median home value from 2000 to the end of 2005. The current median price is around $167,500.
While buying your first home is never easy, things may be a bit harder now than they have ever been. But bargains so still exist, and if you’re patient, a first home can still be yours.