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Great old school advice, Hank.
hey Kira - what's up? What are you thinking so far in 2013 when thinking about "easily priced" homes under $75000?
The common threads in any rent to own home are that the price is typically inflated; you're often in areas with high rental percentages, you have to put down a nonrefundable deposit and a very small percentage actually close which means the buyer ends up in a worse position.
Here's some old school advice; if you can't find a solid buy then rent and prepare yourself to buy when you can. It won't kill you to rent, it can hurt a long time if you buy ill prepared and ill informed.
Every area has it's price point and prices vary from different type of homes to town homes or condos.
There are too many factors to take into consideration when buying a home.
Your first step for buying a home is to talk to a lender who will determine the amount of loan you can get and when then talk to a Real-Estate Consultant to help you determine the area to fit best for your everyday commute.
If your loan approval cannot be obtained at this point, a lease-purchase (rent-to-own) is another option for you in order to avoid rent.
I will be glad to help you with referrals to mortgage companies and with your home purchase plans.
Atlanta has a difficult commute. This should be considered when looking for a home. Many buyers base their home selection on schools, so a good school system should be a concern even if you do not have or plan to have children. Most good buys sell very quickly it would be very unlikely that a home you liked 90 days prior to moving will be available 30 days prior to moving. At this point deciding what parts of the city are geographically convenient and acceptable then what locations within that area are best in your price range is the decision strategy.
One of the realtors that is on this forum sent me some statistics from the Atlanta area and it looks like a minor recovery has taken place since November 2011 and the home inventories have dropped a little.
I am a future buyer for the Atlanta North East, outside of 285.
I see myself buying a home for myself and a few investment buy and hold townhouses in the Fall 2013.
My company is transfering me early October 2013, and I have been saving for my move so multiple 20% downpayments won't be a problem, but I am not looking at anything over $135,000 for a house or $50,000 for a townhouse.
You have inspired a very lively debate in the earlier posts here. In answer to your questions I would make the following points:
1. Real estate is cyclical. The time between peeks and valley can be more than a decade. Are we at the bottom of a cycle? Perhaps so, perhaps not, but we are near.
2. All real estate is local - that is property values depend on location. Prices can vary dramatically from street to street, neighborhood to neighborhood, zip code to zip code, etc. Therefore it is impossible to generalize about Atlanta and the outskirts.
3. The average price for a 3br/2ba home in metro Atlanta is about $200k, The further you get from that average, the more volatile prices become. 75K is pretty far from that average.
If you need to wait 2 years to buy, there will be plenty of places to buy, and with a little hard work and discipline, you will have saved for a larger down payment (better terms), and have a higher income.
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I don't recall a situation where money being thrown at a problem solved it. I'm well aware of Wall Street's mavens snatching up REOs as the next best thing - I think there was something involving Wall Street a few years ago as well. You'll see them toss that REO idea in a second once it's bled out and they can't generate money, just like the mortgage scams. The government is tossing money at this economy in the form of artifically low rates, buying mortgage backed securities like a crack addict and printing money to cover unrestrained spending. The missing ingredient is fundametial job creation - and with Obama care now we're see hours being further cut to keep employers from dealing with that.
As far as public data, Case Shiller and many others call Atlanta one 22 county block, you know that's crazy so there's no point in going there. You also need to look at comparable data for each subset examined - none of that is done. Seriously, who in this business couldn't see the issues coming like a cruise missle during the boom? The idea that everyone had a right to own a home was idiotic - and we're seeing it again with FHA lending and REO purchases. The fundamentals are not in place for a genuine recovery, this economy is not healthy and there are people that shouldn't own homes.
Again, I'm not saying not to buy a home - I'm saying only buy if you understand the rules, understand the market and have reasonable expectations for both the positive and negative aspects. Ownership in many parts of the Atlanta market is a good thing to explore, we know the areas as they have a history of generally stable or even modest appreciation. The other sub 100K areas....nope.
There is publicly available data that makes my position clear. Just as a few were able to determine that the relationship between incomes and value were able to determine there was a bubble, the relationship between replacement cost and today's value coupled with local job growth present clear picture for the Atlanta market. Hundreds of millions of dollars have been committed to the Atlanta market by Wall Street which has raised 8 billion to buy single family homes nationally. Whether this is smart money or not, it will absolutely move the market up 10 to 20 percent this year in the under 100K price point.
The fundamentals are quite flawed in almost all of GAs sub $100K markets.
Bruce has multi-property buyer clients who have a large dominance in buying right now, but Hank's point on the coming FHA foreclosure flood should enable a swelling inventory for Kira in 2015.
Kira - do you know if you might qualify for HUD's Good Neighbor Next Door program?
Bruce, how can you broadly make that type of statement? Do you consider this economy strong? What is that based upon? We don't even know in which areas Kira is looking - other than outskirts, areas probably house bombed during the boom and probably tract built. I think areas like Lithonia, very West and SW Cobb, north Cherokee, Pickens, Hall, Grayson, East Gwinnett, Henry, Clayton, SFulton....you're confident in those areas? I'm in them appraising foreclosures regularly - busy busy busy and so are the others I know.
Here's what I see: bulk purchases of REO units, novice investors not doing their homework; shadow inventory remaining, continued distressed ownership, smothering inventory and an economy propped up by Washington as they spend like drunken sailors. Oh yeah - and an FHA time bomb waiting to send us into the next housing pit.
Let's keep things in perspective in Atlanta, areas are recovering - slowly - and stable is good. The outlying areas will recover - but let's define recover. If that 100K home in the boom is foreclosed for 25K and multiple offers get to 30K then that's the new floor. So if you want to say we might see 34-35K over the next year, OK I might dance to that tune. However, please don't try to convince me that a trend like that will continue - I'll just go back to the historical data.
You have two bombs ticking - the FHA one and the investor one.....at those are right in that sub 100K wheelhouse. http://hankmillerteam.com/2012/12/26/fha-sowing-the-seeds-fo
Anyone working the edges should proceed with caution.
I am not certain you need to wait 2 full years. Check with a qualified lender. I study the market very closely and am a consultant for national hedge fund and private equity advisors. While my predictions for them are more conservative, there has been a 10-20% average 15% increase in many markets for the under 75K price range, my prediction for this year is another 10-20% increase in that price point. My last offer for a client, 10K above list had 51 competing offer at the 80K price point. 2 years from now expect to be paying substantially more.
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"Recovery" is a loaded word and the forecasts I began reading in 2001 and in years since (the next great bubble boom, the Great Depression ahead, Elliot Wave theory, Stratfor's the next 100 years) call for immense upheaval through the next decade.
Prices have flattened in many submarkets - a rate few show prices rising back to pre-boom levels.
Hire a Realtor now, study the Listingbook data that the Realtor sends you over the next two years and you'll be prepared when the time comes!
Home-listing prices were up 5.1% nationally in December on a year-over-year basis, according to data released Thursday by real-estate listings and data company Trulia. Out of the 100 major metro markets covered by the report, 82 of them saw year-over-year gains. At the end of 2011, asking prices had fallen 4.3%, and only 12 markets had posted positive price changes.
â€œPrices are going into 2013 with strong tailwinds,â€ said Jed Kolko, chief economist for Trulia. He cites a general strengthening of the job market, which in turn means more families able to cover a sizeable down payment. An increase in household formation, which is also the product of improving job prospects, and home construction could further bolster demand.
Mr. Kolko notes that the sharpest tightening of inventory is taking place in Western states. Four of the top 10 cities to see the largest asking price recovery were in California, including Oakland, San Jose, Sacramento and Fresno.
Las Vegas, which was hit hard after the bubble burst, came in at the top of the list with a 16.3% year-over-year listing price increase. In the same period in 2011, prices dropped 11.2%.
To be sure, even among the markets with major gains, some are better positioned for a sustained housing recovery than others.
While Las Vegas may have seen the largest asking price turnaround, it remains far below pre-bust levels. The problem, Mr. Kolko says, is that the market remains unstable, with high vacancy rates, lingering foreclosures and subpar job growth.
On the other hand, metros like Seattle, which came in second on the list of cities with the highest asking-price recovery, are on a smoother path to growth because of their strong economic fundamentals, he said.
Meanwhile, rents rose nationally 5.2% in the same period. In 17 of the 25 biggest rental markets, home prices are rising faster than rents, according to Trulia. Whereas ownership was typically more affordable than renting in most markets in recent years, as sales demand rises, that edge is becoming less apparent, Mr. Kolko said.
Kira no one has a crystal ball to predict the future. It is all speculation. So far things are improving in the economy and in the real estate market, prices are increasing due to high demand and low inventory. If you don't have to wait two more years, I would strongly advise to jump in with both feet now while prices and interest rates are still very affordable.