San Diego Real Estate - Harbaugh Homes: September 2013

Thursday, September 26, 2013

35% Cheaper to Buy Than Rent Your Home

35% Cheaper to Buy Than Rent Your Home.

During the Summer of 2013, Trulia, an online real estate site, reported the results of its study of whether it is cheaper to buy or rent your home.

This study included 101 of the largest real estate markets in America and compared the cost of buying versus renting for June 1st to August 31, 2013.

In San Diego, it would be 20% cheaper to Buy a Home than to Rent.
For a savings of over $300 per month. - Source: Trulia

To Buy or Rent - That is the Question.

With the uptick this Summer in interest rates and home prices, buyers have cooled down heading into Fall to re-evaluate whether their plan to buy a home, instead of continuing to pay rent, is still a good idea.

In short, the answer is yes.

Buying is still cheaper than renting; not to mention buying a home is a great way to grow wealth in the long term and potentially save on your income taxes. The result is financial security and financial freedom.

According to Trulia's Buy vs. Rent Study, on average, it is 35% cheaper to buy a home than to rent. This figure is down from 45% last year.

8 out of 10 People own their home or plan to buy.

Even with the Recent Uptick in Interest Rates

and the Increase in Home Prices?

Yes, the author of the results reported, “Recent mortgage rate and home price increases have made buying significantly more expensive than last year, but not enough to tip the math in favor of renting. This is because rates remain well below historical norms, and prices are still slightly undervalued, too.”

What Questions Do I Ask?

Trulia has a pretty nifty interactive tool to help calculate whether buying is cheaper than renting for your particular situation. You must consider the following factors:

What is your target monthly rent?
What is your target home price if buying?
How long would you live in your home?
What is your income tax rate?
What is your mortgage interest rate?

San Diego: The Results for Buying versus Renting.

So, I tried Trulia's calculator for renting versus buying in San Diego because recently a property, which I manage, was available for rent.

I had well over 50 emails, texts, and phone calls from prospective renters willing to pay $1,600 per month for this 2 bedroom, 2 bath condo, which would sell for about $300,000!

For those who appeared to be perfect candidates for buying, instead of helping the landlord pay off his mortgage and his investment property, I would ask them,

**"Why don't you buy a home?"**

Using this example, in San Diego, if you were considering paying $1,600 monthly rent or buying a $300,000 home, it would be 20% cheaper to buy than to commit to that lease, according to Trulia's calculator. You would save approximately $300 per month buying your home over renting! See the graphic above.

Don't Rent from me - Let's Go Buy a Home!

5 Top Reasons People Buy their Home rather than Rent.

Some would-be buyers asked, "What if I don't know if I will live in the home for 5 or 7 years?"

You could hold it as a rental property or sell it and take the profit as your down payment on your next home.

The tenants would pay off your investment, rather than you paying off your landlord's property.

Contact me to See Whether You Qualify to Buy

And How Much You Could be Saving

Call, text or email me to get pre-qualified for a loan and see if

now is a good time for you to buy a home.

For the details and how this is calculated, click the link and try The Interactive Calculator yourself.

Click the link to read Trulia's article on renting vs buying:
News Room - Trulia.com - Press Releases

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Mark Harbaugh, J.D. has been a licensed REALTOR® in California since 1998. He is a real estate Broker, holds a Bachelors Degree and a Law Degree.

Since 1998, Mark has been providing expert representation to buyers and sellers of homes, condos, multi-unit properties and multi-million dollar estates.

His clients include friends - old and new - colleagues, professional football and basketball players, original founders of Fortune 500 companies and other high-profile personalities, who value their privacy and anonymity. Mark has also consulted Nationally and Internationally with many interested in buying and selling real estate.

Mark can be reached at 619-246-2860.

Email: markonthemark@gmail.com

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Home Sales - Summer Home Sales "Cool Down" for the Fall Season - Buyer's Opportunity?

Home Sales - Summer Sales "Cool Down" for the Fall Season

Is this the Opportunity Buyers have been Waiting for?

While new-home sales were up after taking a previous dip, other home sales cooled off just in time for Fall. Is this the time to go shopping for a home while the competition has also cooled down?

Make you plan to achieve your real estate goals
- Plan on buying a home or investment property?

What Has Changed?

First, this is typical if one looks to a chart comparing home sales in the Spring and Summer with home sales in the Fall and Winter. Kids are back in school and parents are traditionally less likely to move after school starts.

Also mortgage rates jumped up over 1%, which many buyers are going to have to sit back and digest that the price range they have been researching just got more expensive with higher monthly payments because of the higher rates.

Some are saying that prices have increased too quickly and need to cool off. Real estate is different for every area. Some areas of the nation have only begun to experience a rebound in prices. Others have and will likely continue to increase in price.

Talk of a Real Estate Bubble.

Experts have noted that if the media reports an increase in prices, people respond with rumors of a bubble. But if prices moderate or experience one month of a decrease, some fear the end of the rebound.

These rumors of a bubble, coupled with the apparent long-term upward trend of rates and prices are what continues to motivate sellers to sell and buyers to get back into the real estate market.

Bottom Line.

In summary, some of the reasons we are noting for slowing of the home sales and price appreciation in some cities, as the Fall season returns, are:

The end of the Spring and Summer selling season,
The low number of homes on the market is contributing to a reduction of sales in most desirable areas,
The recent increase in mortgage interest rates, and
The increase of home prices have caused some buyers to pause and adjust to the upward trend of prices and rates

Interest Rates Increased
from their record low in Nov. 2012
to approx. 4.5%

The reasons, on the other hand, for expecting prices to continue rising include:

The historically low interest rates, despite the upward tick,
The low inventory of homes for sale because sellers are waiting to achieve more equity before selling, and
The pent-up buying energy of those who have been waiting on the fence for some 5+ years to buy a home.

Less Competition and Sellers Willing to Negotiate.

When home sales cool down, so does the competition from other buyers. With competition, comes aggressive price increases by sellers and aggressive price bidding by buyers.

A cooler market sometimes results in price reductions and sellers more willing to negotiate with buyers who continue to make offers. Could this be the window of opportunity some hoping to buy are waiting for?

See the related article from the National Association of Realtors - New-Home Sales Up, Pending Sales Lag

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Saturday, September 7, 2013

Buyers Cool Down Heading into Fall Because of Rising Mortgage Rates.

Buyers Cool Down Heading into Fall Because of Rising Mortgage Rates.

Mortgage interest rates have increased nearly 1.5% since spring. That rate spike increases your monthly payments considerably, sometimes making home ownership only a dream and perhaps you will have to say goodbye to your dream home. Or does it?

A recently published article in the REALTOR® MAG, the official magazine of the National Association of Realtors®, discusses the problems this causes for potential buyers. Buyers Say Rising Rates are Painful

Mortgage Interest Rates for 2013

Mortgage Interest Rates - 2009 to 2013

So, what should you do? Should you hurry up and buy before interest rates and home prices go up even further, wait to see if the slow-down causes interest rates to come down or stop looking and continue renting?

I would suggest, continue looking for the home (or investment property) you would love to buy, so you can keep yourself informed and be ready when opportunity presents itself. That way, when the right one comes along, you will know it and be positioned to act on your desire to buy.

Ready, willing and able buyers are eventually presented with the right opportunities. One thing never changes, and that is, everything changes.

Another change, and thus the good news here is that the competition for properties has diminished. So, your chances for getting your offer accepted have just increased while others return to sitting on the sidelines.

So, if you find the home that you have been looking for, one option would be to go ahead and buy it if it makes sense to do so. Consider the monthly payment - is it within your budget? Can you afford to buy it?

Also consider the savings on your income taxes - will your net cost be the same or less than renting? But remember, you must still be able to afford to make those higher payments each month.

If rates, in fact, do come down again, you could then refinance to the lower interest rate. And you can bet that, if rates do come down a bit before they increase further, as many experts predict will happen, buyers and investors will be back out competing for the already limited inventory of homes to purchase.

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Thursday, September 5, 2013

Real Estate Update: Local (San Diego) and National Year over Year.

Real Estate Update: Local (San Diego) and National Year over Year - as of July 2013.

The real estate market, both locally here in San Diego, California, and nationally, is mixed. But, as the summer comes to an end, more and more home owners, buyers and investors are wondering where is the real estate market going following the recent run up in prices for many markets? Especially considering the end of the Spring and Summer selling periods.

Some markets are up while others have decreased year over year, as of July 2013. More specifically, all real estate markets are very localized - meaning they are highly dependent upon which area of the U.S. one is discussing, which city and even which area of any given city one is considering.

Most leading experts would agree that the housing market rebound is well underway because, overall, equity sales are up and distressed sales, including foreclosures and short sales, are down.

This point is more thoroughly analyzed in my recent blog, "California Real Estate Prices Soar - What's Next? What's Next for San Diego?" - that article highlights the point being made here.

It is important to know that, while the news has been inundated with stories of an exuberant and somewhat surprising recovery to some consumers and experts alike, not all real estate markets are on the rise. Either they have not yet began the rebound process (due to a backlog of foreclosures and short sales), they have increased in price and have leveled out, or some areas have increased and have begun to dip in price - at least temporarily.

In their RECOVERY WATCH MAP, one business real estate Website has launched an interactive map where home owners, buyers and investors can compare some of the largest U.S. real estate markets (including San Diego). This map indicates the latest stats on home sales, prices and housing inventory - 3 important factors on which many are keeping a close eye.

This helpful and interesting map can be viewed at the following link:
http://www.cnbc.com/id/100424686

Some conclude the mixed reports are due to the early nature of the long housing recovery. I speculate, as I have said and will continue to hold, that housing markets are cyclical and localized.

So, what goes up inevitably comes down, and further, what has come down will likely go up - referring to property values. To this I would add, LOCATION, LOCATION, LOCATION is always a prominent contributing factor when analyzing any real estate market, as I discuss in more detail in "California Real Estate Prices Soar - What's Next? What's Next for San Diego?"

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Water is One of the Biggest Enemies to Your Home - Prevent Water Damage.

Water is One of the Biggest Enemies to Your Home - Prevent Water Damage.

There are easy ways to protect your home from one of the most damaging enemies to your home. The National Association of Realtors has provided a checklist to follow.

Of course, there are other preventative measures you can take to keep your home safe and protect it from damaging causes, but water will almost certainly cause great harm to your home, particularly when unattended to over time.

Following are a few easy things you should remember when protecting your home from the damaging affects water can have on your home:

Make sure you drain water away from your home.
If you have a sump pump, make sure it is working.
Make sure you notice leaks, dripping and water stains immediately.
Inspect your home for old caulking or worn out roofing.

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Thursday, September 26, 2013

35% Cheaper to Buy Than Rent Your Home

35% Cheaper to Buy Than Rent Your Home.

To Buy or Rent - That is the Question.

Even with the Recent Uptick in Interest Rates

and the Increase in Home Prices?

What Questions Do I Ask?

San Diego: The Results for Buying versus Renting.

**"Why don't you buy a home?"**

Don't Rent from me - Let's Go Buy a Home!

Contact me to See Whether You Qualify to Buy

And How Much You Could be Saving

Home Sales - Summer Home Sales "Cool Down" for the Fall Season - Buyer's Opportunity?

Saturday, September 7, 2013

Buyers Cool Down Heading into Fall Because of Rising Mortgage Rates.

Thursday, September 5, 2013

Real Estate Update: Local (San Diego) and National Year over Year.

Water is One of the Biggest Enemies to Your Home - Prevent Water Damage.