WINDERMERE NEWS
JAN 2015
Guardsman Pass, Utah -Photo By Casey Halliday
Rent or Own...Either Way You’re Still Going to be Paying a Mortgage Note: It’s important that we give credit to a valuable resource who has provided us with our information. KeepingCurrentMatters.com (*KCM)
There are some people that have not purchased a home because they are
uncomfortable taking on the obligation of a mortgage. Everyone should realize that, unless you are living with your parents rent free, you are paying a mortgage - either your mortgage or your landlord’s. As a paper from the Joint Center for Housing Studies at Harvard University explains: “Households must consume housing whether they own or rent. Not even accounting for more favorable tax treatment of owning, homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord plus a rate of return. That’s yet another reason owning often does—as Americans intuit—end up making more financial sense than renting.” Also, if you purchase with a 30-year fixed rate mortgage, your ‘housing expense’ is locked in over the thirty years for the most part. If you rent, the one guarantee you will have is that your rent will increase over that same Article continued on following page thirty year time period.
UPDATE SALT LAKE COUNTY REAL ESTATE DECEMBER 2014 STATISTICS (12.1.14–12.31.14) 2,828 New Listings Median Listing Price 229,900 Median Sold Price $220,000 Median Days On Market: 55 *Provided by the Wasatch Front Multiple Listing Service
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Either Way, You’re Still Paying a Mortgage As an owner, the mortgage payment is a ‘forced savings’ which will allow you to have equity in your home you can tap into later in your life. As a renter, you guarantee the landlord is the person with that equity.
Bottom Line :
Whether you are looking for a primary residence for the first time or are considering a vacation home on the shore, owning might make more sense than renting since home values and interest rates are still at bargain prices.
3 Practical Reasons to List Your Property With inventory levels also still below historic numbers, you could be missing out on a great opportunity for your family.
1. There Is Less Competition Now Housing supply just dropped to 5.1 months, which is under the 6 months’ supply that is needed for a normal housing market. This means that in many areas, there are not enough homes for sale to satisfy the number of buyers in that market. This is good news for home prices. However, additional inventory is about to come to market. There is a pent-up desire for many homeowners to move, as they were unable to sell over the last few years because of a negative equity situation. Homeowners are now seeing a return to positive equity as real estate values have increased over the last two years. Many of these homes will be coming to the market in the near future. Also, new construction of single-family homes is again beginning to increase. A study by Harris Poll revealed that 41% of buyers would prefer to buy a new home while only 21% prefer an existing home (38% had no preference). The choices buyers have will continue to increase over the next few months. Don’t wait until all this other inventory of homes comes to market before you sell.
2. The Process Will Be Quicker One of the biggest challenges of the 2014 housing market has been the length of time it takes from contract to closing. Banks are requiring more and more paperwork before approving a mortgage. Any delay in the process is always prolonged during the winter holiday season. Getting your house sold and closed before those delays begin will lend itself to a smoother transaction.
3. There Will Never Be a Better Time to Move-Up If you are moving up to a larger, more expensive home, consider doing it now. Prices are projected to appreciate by over 23.5% from now to 2019. If you are moving to a higher priced home, it will wind-up costing you more in raw dollars (both in down payment and mortgage payment) if you wait. You can also lock-in your 30 year housing expense with an interest rate in the low 4’s right now. Rates are projected to be over 5% by this time next year.
DERICK DODGE Sales Professional 801-414-3965 Derick.Dodge@gmail.com
Windermere Real Estate - Utah 1240 East 2100 South Suite 600 Salt Lake City, UT 84106
Perhaps it truly is the best time to sell your
home while inventory is low and demand is so high, but in reality if you’re not ready to sell then it won’t matter what the market is doing. One of my goals as a REALTOR® is to make sure you’re ready when you want to be. I’m happy to help you get answers for any questions regarding the home buying or selling process. Whether you’re concerned about new windows, new schools or even new neighborhoods, I’m here to help. I hope you have had a great 2014 and begin the new year with positive momentum. Please Consider Recycling Our Newsletter.
Supply and Demand, Foot Traffic and Contracts The price of any item (including residential real estate) is determined by ‘supply and demand’. If the supply of an item is larger than the amount of people looking to purchase that item, the price will decrease.
According to the National Association of Realtors (NAR), historically there is a natural decline in buyers looking to purchase a home (also known as foot traffic) as the winter months approach. Shown in the graph below: NAR goes a step further to say that there is a direct correlation between “foot traffic” and “pending contracts/closed sales one to two months later”. The real estate market has done well to recover from the slow start we experienced due in part to the inclement weather at the beginning of 2014. But with those winter months right around the corner, now may be the best time to get the best price on your home.