Are higher-priced new homes a bargain over time?

WASHINGTON – April 3, 2013 – Using data from the Census Bureau and Department of Housing and Urban Development’s 2011 American Housing Survey, the National Association of Home Builders (NAHB) found that buyers can pay more for a newly constructed home and save money over time, even if the new home costs more upfront.

Builders have faced rising costs for labor and supplies recently, and competition from relatively inexpensive existing home prices. To offset that difference, the study focuses on the new homeownership elements that save money.

“Home buyers need to look beyond the initial sales price when considering whether to buy new construction or an existing home,” NAHB Chairman Rick Judson said in a release. “They will find that with the higher costs of operating an older home, they can often afford to spend more to buy a new home and still have annual operating costs that fit their budget.”

NAHB’s study first looked at utility, maintenance, property tax and insurance costs, and analyzed how they vary depending on the age of a home. It found that homes built before 1960 have average maintenance costs of $564 a year, while a home built after 2008 averages $241.

Similarly, operating costs average nearly 5 percent of the home’s value for pre-1960 structures, while they average less than 3 percent when the home was built later than 2008.

The analysis then compared the first year after tax cost of owning a home by the year the house was built, taking into account the purchase price, mortgage payments, annual operating costs and income tax savings. Based on these savings, NAHB says a buyer can afford to pay 23 percent more for a new house than for one built before 1960 and still maintain the same amount of first year annual costs.

While mortgage payments will be greater with a higher-priced new home, its lower operating costs mean a home buyer’s annual costs would be roughly the same in a newly built home compared to an older home’s smaller mortgage payment but higher operating expenses.

“For a family working with a fixed annual budget, new-construction homes offer outstanding comfort, convenience and overall cost savings,” said Judson. “Put that together with today’s near-record low interest rates and competitive prices, and the time has never been better to buy a new home.”

© 2013 Florida Realtors®

Why You Should Work With an Orlando Florida REALTOR®

Not all real estate practitioners are REALTORS®. The term REALTOR® is a registered trademark that identifies a real estate professional who is a member of the NATIONAL ASSOCIATION of REALTORS® and subscribes to its strict Code of Ethics. Here are five reasons why it pays to work with a REALTOR®.

1. You’ll have an expert Orlando Florida REALTOR® to guide you through the process. Buying or selling a home usually requires disclosure forms, inspection reports, mortgage documents, insurance policies, deeds, and multi-page settlement statements. A knowledgeable expert will help you prepare the best deal, and avoid delays or costly mistakes.

2. Get objective information and opinions. Orlando Florida REALTOR® can provide local community information on utilities, zoning, schools, and more. They’ll also be able to provide objective information about each property. A professional will be able to help you answer these two important questions: Will the property provide the environment I want for a home or investment? Second, will the property have resale value when I am ready to sell?

3. Find the best property out there. Sometimes the property you are seeking is available but not actively advertised in the market, and it will take some investigation by your Orlando Florida REALTOR® to find all available properties.

4. Benefit from their negotiating experience. There are many negotiating factors, including but not limited to price, financing, terms, date of possession, and inclusion or exclusion of repairs, furnishings, or equipment. In addition, the purchase agreement should provide a period of time for you to complete appropriate inspections and investigations of the property before you are bound to complete the purchase. Your agent can advise you as to which investigations and inspections are recommended or required.

5.  Property marketing power. Real estate doesn’t sell due to advertising alone. In fact, a large share of real estate sales comes as the result of a practitioner’s contacts through previous clients, referrals, friends, and family. When a property is marketed with the help of a Orlando Florida REALTOR®, you do not have to allow strangers into your home. Your Orlando Florida REALTOR® will generally prescreen and accompany qualified prospects through your property.

6. Real estate has its own language. If you don’t know a CMA from a PUD, you can understand why it’s important to work with a professional who is immersed in the industry and knows the real estate language.

7. Orlando Florida REALTOR® have done it before. Most people buy and sell only a few homes in a lifetime, usually with quite a few years in between each purchase. And even if you’ve done it before, laws and regulations change. REALTORS®, on the other hand, handle hundreds of real estate transactions over the course of their career. Having an expert on your side is critical.

8. Buying and selling is emotional. A home often symbolizes family, rest, and security — it’s not just four walls and a roof. Because of this, home buying and selling can be an emotional undertaking. And for most people, a home is the biggest purchase they’ll ever make. Having a concerned, but objective, third party helps you stay focused on both the emotional and financial issues most important to you.

9. Ethical treatment. Every member of the NATIONAL ASSOCIATION of REALTORS® makes a commitment to adhere to a strict Code of Ethics, which is based on professionalism and protection of the public. As a customer of a Orlando Florida REALTOR®, you can expect honest and ethical treatment in all transaction-related matters. It is mandatory for Orlando Florida REALTOR® to take the Code of Ethics orientation and they are also required to complete a refresher course every four years.

That’s right. By far, the overwhelming majority of Homeowners in this country are NOT losing their homes. They either own their properties free and clear or are making their payments on time.

It’s hard for us to see this because we are in the business. If you are like me you live and breathe Real Estate. We talk to people all day long who are struggling and it’s very easy for us to forget that most Homeowners are living in and enjoying their homes.

I’ve mentioned many times over the last couple of years how more than 85% of the real estate closings in Poinciana Florida are distressed sales. But what I don’t mention is that there were only 1,654 sales for 2009 out of 20,700 properties. About 8%. So 92% of the folks in Poinciana stayed put. That’s right in line with the National average.

From what I could find online there are approximately ****129,400,000 homes in the US. Depending on where you look only 7-10 mil of these are in some stage of default. That’s roughly 7%.

Approximately 93% of the Homeowners in this country are doing OK. That makes me feel good. How about you?

****I spent about an hour this morning pulling stats and data and there really are no numbers that agree. So for the purpose of this post I just used averages. If you want more precise figures then feel free to do your own research.

Do NOT be foreclosed on! Avoid foreclosure. Short Sales DO close.

Want to find out more? www.CentralFloridaShortSales.com

***I am NOT an Attorney nor do I play one on TV. Click the button below for my Bio.

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