Image by: Alexander Stein
By Dexter Lunde
Selling your home in 2014 may seem scary but let me put some of your fears at rest. The statistics for 2013 were surprisingly good. If 2014 goes as well as 2013 did, foreclosure activity is expected to slow down considerably and mortgage rates are expected to rise. The buyer’s market is long gone. Prices are now aimed to please sellers.
The millennials (the current generation) are growing up and moving out. However, they’re not buying homes. Instead they are renting homes. Why aren’t they buying? Because the real estate market still hinges on job growth and employment. As of March, the Bureau of Labor Statistics released the current numbers for unemployment, which has held steady at 6.7%. But millennials aren’t getting jobs that allow them enough money to pay mortgages.
If you are looking to sell your home or if you’re looking to jump into the “turn and burn”, home development investment market, check out these latest real estate trends for 2014.
#1) The “Smile Investing” Philosophy
Andrew Warren, director of PwC (a research and advising firm) says that real estate developers and investors are interested (again) in the “smile investment philosophy”. What is that?
It is when developers and investors begin to look into cities in the Northeast, move along the Sun belt (that would be Florida, Alabama, Texas, and Arizona), and then work their way up to the Pacific Northwest: California, Oregon, and Washington State. This means that more activity will be in these areas rather than the central United States and the Midwest.
#2) Start Planning Now
If you’re thinking about selling your home, begin preparations now. There is a lot of prep work in making your home “sale ready”. The process always takes longer than you expect so if you’re planning on being able to leave on a certain date, it is best to start sooner rather than later.
Get your home inspected first to see if there are unexpected repairs that need to get done before you start the second step, which is “the deep clean”. Remember when your wife wanted you to scrub those walls and get the back yard looking nice? Yeah, this is one of those times where she might shove that in your face.
De-clutter and clean out those closets and your attic. Get a storage unit if you have to. Some will have you sign a contract similar to a lease, which states that you will pay on the unit for a certain amount of time. However, some will let you go month by month.
#3) Vet Your Real Estate Agent
While it is true that everyone had to start somewhere, a real estate agent that has a good record (and has worked in the market for a few years) is the most appealing. Talk with your friends and family to see if they recommend someone in particular.
Check out their working environment (not their office). Most real estate agents don’t often work at their desks. Open houses are great places to meet real estate agents (even if you’re not looking to buy). Talk with a few agents to get a feel of what they are like. Also, be wary of agents that hand you off to their assistant. If they don’t have time to talk to a potential seller, then who says they’ll have time for you when they are working for you.
Image by: OpenClips
With millennials moving out (but not becoming homeowners), it may be a good time to consider renting out your home if you’ve already got a line on a new one. In fact summertime, is the perfect time to start renting your home. You’ve got college aged kids that are moving on from their college experiences and others that are looking for a new off-campus home.
Calculate how much it will cost to keep your home going. Include your mortgage payment as well as your utilities and occasional maintenance. Decide if you’re going to rent it out furnished or unfurnished. Keep in mind that whatever furniture you decide to leave behind will probably get damaged. Rowdy college kids…
Keeping all of those numbers in mind, calculate what your rent price will be and then compare it to other rentals in the area. If you have a small home, look at the price of townhouses and apartments in the area. Check out Craigslist.org as well.
There are three major areas that you should watch while you’re going through this process: screening your possible tenants, the landlord-tenant laws in your state (they vary depending on what state you are in), and property maintenance (are you going to do it yourself?).
The screening process is important but keep in mind that everyone has credit problems these days and don’t forget to check criminal records. Write up a solid application form (with the help of a fair-housing attorney).
Landlord-tenant laws vary and depending on your state, you may be in a state that leans more toward your rights or more toward your tenant’s rights.
Property maintenance will work best and be fairly easy if you establish a great working relationship with a plumber, electrician, and carpenter in the area.
#5) Top Sellers’ Markets
Enrepreneur.com states that the top seller’s markets right now are in San Jose, San Francisco, San Antonio, Los Angeles, Seattle, Riverside, Denver, Washington D.C., Sacramento, and Dallas-Fort Worth. If you’re looking to jump into real estate investments in the near future, scout out homes in these locations.