Two BIG Reasons Why We Are NOT in a Housing Bubble

Homeownership has become a major element in achieving the American Dream. A recent report from the National Association of Realtors (NAR) finds that over 86% of buyers agree homeownership is still the American Dream.

Prior to the 1950s, less than half of the country owned their own home. However, since World War II, many returning veterans, including myself, have used the benefits afforded by the GI Bill to purchase a home. Since then, the percentage of homeowners throughout the country has increased to the current rate of 65.5%. That strong desire for homeownership has kept home values appreciating ever since. The graph below tracks home price appreciation since the end of World War II:

This graph shows the only time home values dropped significantly was during the housing boom and bust of 2006-2008. If you look at how prices spiked prior to 2006, it looks a bit like the current spike in prices over the past two years. That may lead some people to be concerned we’re about to see a similar fall in home values as we did when the bubble burst. To help alleviate those worries, let’s look at what happened last time and what’s happening today.

What Caused the Housing Crash 15 Years Ago?

Back in 2006, foreclosures flooded the market. That drove down home values dramatically. The two main reasons for the flood of foreclosures were:

1. Many home purchasers were not truly qualified for the mortgage they obtained, which led to more homes turning into foreclosures.
2. A number of homeowners cashed in the equity on their homes. When prices dropped, they found themselves in an underwater situation (where the home was worth less than the mortgage on the house). Many of these homeowners walked away from their homes, leading to more foreclosures. This lowered neighboring home values even more.

This cycle continued for years.

Why Today’s Real Estate Market Is Different

Here are two reasons today’s market is nothing like the one we experienced 15 years ago.

1. Today, Demand for Homeownership Is Real (Not Artificially Generated)

Running up to 2006, banks were creating artificial demand by lowering lending standards and making it easy for just about anyone to qualify for a home loan or to refinance their current home. Today, home buyers, and those refinancing a home face much higher standards from mortgage companies.

Data from the Urban Institute shows the amount of risk banks were willing to take on then as compared to now.

There’s always risk when a bank loans money. However, leading up to the housing crash 15 years ago, lending institutions took on much greater risks in both the person and the mortgage product offered. That led to mass defaults, foreclosures, and falling prices.

Today, the demand for homeownership is real. It’s generated by a re-evaluation of the importance of home due to a worldwide pandemic. Additionally, lending standards are much stricter in the current lending environment. Purchasers can afford the mortgage they’re taking on, so there’s little concern about possible defaults.

And if you’re worried about the number of people still in forbearance, you should know there’s no risk of that causing an upheaval in the housing market today. There won’t be a flood of foreclosures.

2. People Are Not Using Their Homes as ATMs Like They Did in the Early 2000s

As mentioned above, when prices were rapidly escalating in the early 2000s, many thought it would never end. They started to borrow against the equity in their homes to finance new cars, boats, and vacations. When prices started to fall, many of these home owners were underwater, leading some to abandon their homes. This increased the number of foreclosures.

Home owners didn’t forget the lessons of the crash as prices skyrocketed over the last few years. Black Knight reports that tappable equity (the amount of equity available for home owners to access before hitting a maximum 80% loan-to-value ratio, or LTV) has more than doubled compared to 2006 ($4.6 trillion to $9.9 trillion).

The latest Homeowner Equity Insights report from CoreLogic reveals that the average homeowner gained $55,300 in home equity over the past year alone. The Deputy Chief Economist at First American, reports:

“Homeowners in Q4 2021 had an average of $307,000 in equity - a historic high.”

ATTOM Data Services also reveals that 41.9% of all mortgaged homes have at least 50% equity. These homeowners will not face an underwater situation even if prices dip slightly. Today, homeowners are much more cautious.

Bottom Line

The major reason for the housing crash 15 years ago was a tsunami of foreclosures. With much stricter mortgage standards and a historic level of homeowner equity, the fear of massive foreclosures impacting today’s market is not realistic.

Is an Asking Price Offer Enough in Today’s Housing Market?

If you’re planning to buy a home this season, you’re probably thinking about what you’ll need to do to get your offer accepted. In previous years, it was common for buyers to try and determine how much less than the asking price they could offer to still get the home. The buyer and seller would then negotiate and typically agree on a revised price that was somewhere between the buyer’s bid and the home’s initial asking price.

In today’s real estate market, home buyers shouldn’t shop for a home with the same expectations.

Things Are Different Today

Today’s housing market is anything but normal. According to the National Association of Realtors (NAR), the average home that’s sold today:

• Receives 4.8 offers
• Sells in just 17 days

Homes selling quickly, and receiving multiple offers, shows how competitive the housing market is for buyers right now. This is because there are more buyers on the market than homes for sale. When the number of homes available can’t keep up with demand, homes often sell for more than the asking price.

How Does This Impact You When It’s Time To Submit an Offer?

Market conditions should help guide your decisions throughout the process. Today, the asking price of a home is often the floor of the negotiation rather than the ceiling. Knowing this is important when it’s time to submit an offer, but you should also use that information as you’re searching for homes too. After all, you don’t want to fall in love with a home that ultimately sells for a price higher than what you’ve budgeted for.

Braceland Homes can advise you, if you’re looking to purchase a home in a competitive market. You want to be realistic and set your budget and expectations before you begin your search, so you know how much you can afford to offer on a home.  This will make negotiations a lot easier, and help you to know when to walk away from a deal.

Of course, when you’ve found your dream home, you’ll want to do everything you can to submit your best offer up front and win a potential bidding war. Knowing the current market is key to crafting a winning offer. That’s where working with Braceland Homes becomes critical.

We'll draw from our experience and expert-level knowledge of today’s housing market throughout the process. We’ll also balance conditions in your area to make sure your offer stands out above the rest.

Bottom Line

Understanding how to approach the asking price of a home, and what’s happening in today’s real estate market, are critical for home buyers. Call 619-947-3560 to day for a FREE consultation so we can work together to create a winning plan for you.

Use Your Tax Refund to Finance Your Homeownership Goals

If you’re buying or selling a home this year, you’re likely saving up for a variety of expenses. For home buyers, that might include things like your down payment and closing costs. And for you home sellers, you’re probably working on a bit of spring cleaning and maintenance to spruce up your house before you list it.

Either way, any money you get back from your taxes can help you achieve your goals. Using a tax refund is a common tactic for buyers and sellers. SmartAsset estimates the average American will receive a $2,897 tax refund this year. The map below provides a more detailed estimate by state:

If you’re getting a refund this year, here are a few tips to help with your home purchase or sale this season.

How Buyers Can Use Their Tax Refund

According to American Financing, there are multiple ways your refund check can help you as a home buyer. A few include:

• Growing your down payment fund – If you haven’t started saving for your down payment, let your tax refund kick off the process. And if you have a fund already, the money you get back could put you closer to your goal.
• Paying for your home inspection – Your home inspection can save you a lot of headaches down the road by helping you determine the condition of the house. As a buyer, you’ll typically be responsible for paying for your inspection, and it’s definitely worth the investment.
• Saving for closing costs – Closing costs are additional expenses you’ll need to pay once it’s time to close. They average anywhere between 2-5% of the purchase price of your home.

This list is a great start, but it isn’t exhaustive of all the costs you may encounter as you set out on your home buying journey. The best way to prepare is to work with an experienced real estate professional at Braceland Homes to make sure you understand what’s to come in the process.

How Sellers Can Use Their Tax Refund

If you own a home and are planning to sell this spring, your tax refund can help you make sure your home is ready to list. Here are a few ways current home owners can put their tax refund to good use:

• Making small upgrades –  Tackling small projects or boosting your curb appeal is a smart way to help your home stand out.
• Making repairs – If there’s anything in your house that needs to be fixed, completing repairs is another great use of that money.
• Buying your next home – Whether you’re selling to move up or downsize, you can use your tax refund to help pay for any costs on the purchase of your next home.

Of course, it’s important to talk with our experienced agents at Braceland Homes before taking on any projects. They’ll make sure you can focus on areas that’ll help you receive the best possible price when you sell.

Bottom Line

Funding your home purchase or sale can feel like a daunting task, but it doesn’t have to be. Your tax refund can help you reach your goals. Give us a call at 619-947-3560 to discuss how to get started on your journey.

Why a Real Estate Professional Is Key When You Sell A House

With today’s real estate market moving as fast as it is, working with with experienced real estate professionals is more essential than ever. At Braceland Homes, we have the skills, experience, and expertise it takes to navigate the highly detailed and involved process of selling a home. That may be why the percentage of people who list their houses on their own, known as a FSBO or For Sale By Owner, has reached its lowest point since 1985 (see graph below):

Here are five reasons why selling with Braceland Homes makes more sense, even in today’s hot market:

1. We Know What Buyers Want To See

Before you decide which projects and repairs to take on, connect with a real estate professional at Braceland Homes. We have first-hand experience with today’s buyers, what they expect, and what you need to do to make sure your house shows well.

If you don’t lean on our expertise, you may spend your time and money on something that isn’t essential. That’s because, in today’s low-inventory market, buyers are willing to take on more of the renovation work themselves. A survey from Freddie Mac finds that:

“. . . nearly two-in-five potential homebuyers would consider purchasing a home requiring renovations.” 

We can help you decide what you need to tackle. It’s not just canned advice you could find anywhere online – I'm talking about recommendations specific to your house, and your area.

2. We Maximize Your Buyer Pool

Today, the average home is getting 4.8 offers per sale according to recent data from the National Association of Realtors (NAR), and that competition is pushing prices up. While that’s promising for you as a seller, it’s important to understand our role in bringing buyers in.

We have an assortment of tools at our disposal, such as social media followers, borkerage agency resources, and the Multiple Listing Service to ensure your house is viewed by the most buyers. According to realtor.com:

“Only licensed real estate agents can list homes on the MLS, which is a one-stop online shop of sorts for getting a house seen by thousands of agents and home buyers. . . . This is certainly one of many good reasons why the majority of home sellers decide to employ the services of a listing agent rather than going it alone.”

Without access to these tools, your buyer pool is limited. And you want more buyers to view your house since buyer competition can drive your final sales price higher.

3. We Understand the Fine Print

Today, more disclosures and regulations are mandatory when selling a house. That means the number of legal documents you’ll need to juggle is growing. That’s why Investopedia says:

“One of the biggest risks of being a FSBO is not having the experience or expertise to navigate all of the legal and regulatory requirements that come with selling a home.”

At Braceland Homes, we know exactly what needs to happen, what all the paperwork means, and how to work through it efficiently. We’ll help you review the documents and avoid any costly missteps that could occur if you try to handle them on your own.

4. We’re Trained Negotiators

If you sell your home on your own, you’ll also be solely responsible for all the negotiations. That means you’ll have to coordinate with:

• The buyer, who wants the best deal possible
• The buyer’s agent, who will use their expertise to advocate for the buyer
• The inspection company, which works for the buyer and will almost always find concerns with the house
• The appraiser, who assesses the property’s value to protect the lender

Instead of going toe-to-toe with all these parties alone, lean on us. We’ll know what levers to pull, how to address everyone’s concerns, and when you may want to get a second opinion.

5. We Know How To Set the Right Price for Your House

If you sell your house on your own, you may over, or undershoot the right asking price. That could mean you’ll leave money on the table because you priced it too low or your house will sit on the market because you priced it too high. Pricing a house requires expertise. Investopedia explains it like this:

“. . . There is no easy or universal way to determine market value for real estate.”

We know the ins and outs of how to price your house accurately and competitively. To do so, we compare your house to recently sold, and unsold homes in your area and factor in the current condition of your house. These factors are key to making sure it’s priced to move quickly while still getting you the highest possible final sale price.

Bottom Line

There's a lot that goes into selling your house. Instead of tackling it alone, give us a call at Braceland Homes 619-947-3560, so you have an expert on your side throughout the entire process.

Housing Market Update | April 2022 with Erik Braceland

Will mortgage rates continue to rise?  Will home prices ever fall?  The answers to these questions and more, right here, right now.

Welcome back to another real estate market update!  I’m Erik Braceland with Braceland Homes here in sunny San Diego, California, where we guarantee the sale and/or purchase of your home.  Here on the Braceland Homes Blog I share the latest news related to buying and selling residential real estate.

COVID finally caught up to me over the weekend, so I'm battling back to productivity with this post.  Had my fill of being idol.  Watched a lot of Romcoms and sitcoms.  You know, cause laughter IS the best medicine.

I’m going to start right off the bat with the impact of rising mortgage rates on the housing market. Unless you've been in hibernation, you're fully aware that interest rates have been steadily on the rise all around us.  And you can see here that mortgage rates, on an average 30-year fixed home loan, have shot up from 3.11%, at the end of last year, all the way to 4.76% last week!  That's 1.68% in just three months!  

Freddie Mac is telling us “Mortgage rates are likely to continue to move higher throughout the balance of 2022.  Although the pace of rate increases is likely to moderate, much of the increase in rates in early 2022 is in anticipation of what will happen later this year, especially with Federal Reserve interest rate policy.” 

So, there it is.  More price hikes on the way for the money you borrow for your next home purchase, but now they should come at a more moderate pace. And that’s because the Fed has risen their rate, and mortgage rates tend to follow that. I realize this is something on all our minds, but how are mortgage rates effecting the overall housing market?  

Mike Simonsen from Altos Research, said it best when he said,  “We keep watching for it, but there are absolutely no signs of market slowdown anywhere in the data. If anything, we’re seeing the market continue to heat up.” And it's true, we’re in a very, very busy housing market. We've been in one for the last couple of years, all through the time we've been messing with COVID. All through last year and certainly coming into this year. Perhaps you were thinking, or hoping, the market’s starting to moderate, but we’re still seeing a very, very busy market right now.

If we start to break that down by traffic maps, the National Association of Realtors just came out with the most recent buyer and seller traffic maps. Let’s start here with the buyer traffic map. You see all over the country, with few exceptions, Strong traffic from buyers. The rise in mortgage rates is not slowing down buyer traffic across the country. We can certainly say that. So, as we head into this spring housing market, very, very strong buyer demand. And the rise in interest rates is not slowing buyers down across the country.  If you are enjoying this content...please let me know...in the comments below!

You know, if we look at the other side of this coin, seller traffic, very, very weak to very weak seller traffic across the country. Matter of fact, there's hardly anything for sale at all in places like New England and the northern Midwest states.  But across the country, very, very few sellers. And so, what happens? Any time we’re in that type of market and we have strong buyer demand, the lack of sellers keeps that upward pressure on home prices. And I’m going to talk about that in just a minute. 

If there’s any sort of good news relative to sellers and listings, it was last month, where you can see here, active listings increased in this country for the first time in six months. If you go back to the fall of last year, around September, we started to kind of fall down in active listings. Any homes that come to the housing market were quickly consumed by the buyers in the market. And we’re starting to see that tick up. A very little bit, but nonetheless a tick rise in active home listings.  We definitely need more still, because if you go back to March of last year, and compare it to now, you see we are about 100,000 active listings short, this March as compared to last year. So, we need more listings to make things better for you home buyers out there.

For those of you testing the temperature of the water before you jump in to the housing market ocean, things are still very competitive for home buyers, and home sellers are still very much in control.  Whichever side of the fence you find yourself, it's essential you align yourself with an Awesome real estate professional, agent, realtor or whatever you prefer to call them, to get the most from your home sale...or to get you the home you want.  

I think it’s articulated well here by Fortune Magazine. They say "Now, more industry insiders are throwing out their previous forecasts and replacing them with more bullish short-term outlooks. Indeed, some experts say the 2022 spring housing market might go down as one of the most competitive on record."

Here's more evidence of that.  These are numbers of home showings, over the last five Februarys, with this year having the highest numbers yet. And we already looked at the dismal lack of housing inventory, and the rising mortgage rates.  So now we have less houses than ever.  More buyer demand than ever.  A higher cost of money than we've seen in several years, that continues to rise. Any more stellar news for us in the housing market Erik?

I do want to show you how all of this, is keeping that upward pressure on home prices. This is the latest look from CoreLogic on home price acceleration.  As we came through last year we said okay, prices seem to have peaked, if not, you know, plateaued. We were hovering at about 18% home price appreciation for four months.  Then through November, December, January numbers ratcheting up slightly in the amount of appreciation year over year, and it seems that upward trend is continuing. 

So really just a very, very competitive housing market right now. But don't stress about it.  If you and your family are ready for a move, just jump in.  Like I always say, if there's a will, there's a way!  I currently have availability for one more new client this month, and I'm accepting a limited number of new clients, for the month of May, that I'll personally work with, one on one, to help sell and/or buy a home.  Please call or text 619-947-3560 if you are interested in working together.  I hope to hear from you.  If you're a regular reader, or you're following my videos, we'll probably get along famously, and have a great time together reaching your real estate goals!

If you've enjoyed this content or found it helpful, please hit that like button, and let me know in the comments below.  And please share this content with someone you think might benefit from it.

 

That's all for now.  I'm Erik Braceland, and thanks once again for reading.  Check back regularly for insightful, new content!

Where Are Mortgage Rates Headed?

There’s never been a truer statement regarding forecasting mortgage rates than the one offered last year by Mark Fleming, Chief Economist at First American:

“You know, the fallacy of economic forecasting is: Don't ever try and forecast interest rates and or, more specifically, if you're a real estate economist mortgage rates, because you will always invariably be wrong.”

Coming into this year, most experts projected mortgage rates would gradually increase and end 2022 in the high three-percent range. It’s only April, and rates have already blown past those numbers. Freddie Mac announced last week that the 30-year fixed-rate mortgage is already at 4.72%.

Danielle Hale, Chief Economist at realtor.com, tweeted on March 31:

“Continuing on the recent trajectory, would have mortgage rates hitting 5% within a matter of weeks. . . .”

Just five days later, on April 5, the Mortgage News Daily quoted a rate of 5.02%.

No one knows how swiftly mortgage rates will rise moving forward. However, at least to this point, they haven’t significantly impacted purchaser demand. Ali Wolf, Chief Economist at Zonda, explains:

“Mortgage rates jumped much quicker and much higher than even the most aggressive forecasts called for at the end of last year, and yet housing demand appears to be holding steady.”

Through February, home prices, the number of showings, and the number of homes receiving multiple offers all saw a substantial increase. However, much of the spike in mortgage rates occurred in March. We will not know the true impact of the increase in mortgage rates until the March housing numbers become available in early May.

Rick Sharga, EVP of Market Intelligence at ATTOM Data, recently put rising rates into context:

“Historically low mortgage rates and higher wages helped offset rising home prices over the past few years, but as home prices continue to soar and interest rates approach five percent on a 30-year fixed rate loan, more consumers are going to struggle to find a property they can comfortably afford.”

While no one knows exactly where rates are headed, experts do think they’ll continue to rise in the months ahead. In the meantime, if you’re looking to buy a home, know that rising rates do have an impact. As rates rise, it’ll cost you more when you purchase a house. If you’re ready to buy, it may make sense to do so sooner rather than later.

Bottom Line

Mark Fleming got it right. Forecasting mortgage rates is an impossible task. However, it’s probably safe to assume the days of attaining a 3% mortgage rate are over. The question is whether that will soon be true for 4% rates as well. Give us a call at Braceland Homes 619-947-3560 if you're ready to make a move.

The Best Week of 2022 to List Your Home

Are you thinking about selling your house? If so, you may want to make it a priority to start the process soon. According to realtor.com, the sweet spot for sellers is just around the corner. In a recent study, experts analyzed housing market trends by looking at data from the past several years.  They did exclude 2020, since it was an atypical year.  But from this analysis, experts did determine the ideal week to list a house this year. 

The research says:

“Home sellers on the fence waiting for that perfect moment to sell should start preparations, because the best time to list a home in 2022 is approaching quickly. The week of April 10-16 is expected to have the ideal balance of housing market conditions that favor home sellers, more so than any other week in the year.”

If you’ve been putting your move on the back burner, waiting for the ideal time to sell, you should know your golden window of opportunity is coming up. If you’re able to get your house ready quickly, here are three things that you can expect from that week:

1. You Should See More Buyer Activity

2. Your House Is Expected To Sell Quickly

3. Your House Will Be in the Spotlight

Let's take a closer look at these:  

You Should See More Buyer Activity.

The article expects higher buyer demand based on what’s happened in previous years. This could result in increased competition among buyers and ultimately a bidding war over your house. And since mortgage rates recently ticked up over 4%, chances are good that analysis is right. When mortgage rates rise, experts say buyers often hurry to make their purchase before rates climb higher.  And we are expecting several more interest rate hikes this year.  As the Senior Economist and Director of Forecasting at the National Association of Realtors (NAR), says:

“. . . Buyers are rushing to lock in lower rates as the outlook is for even higher mortgage rates in the following months.”

Your House Is Expected To Sell Quickly

Additionally, the realtor.com analysis shows houses sell even faster during this week of the year, likely due to that heightened buyer demand we just mentioned. If you work with a trusted real estate professional to price your house right, it should sell quickly. And when homes are already selling in just 18 days, according to the National Association of Realtors, that could set you up for a big win.

Your House Will Be in the Spotlight

Since the beginning of the year, the number of homes available for sale has been at or near record lows. According to the realtor.com study, the typical trend for this week of the year, is that there will be even fewer sellers on the market. If you list your home when inventory is low, your house will be the center of attention for eager buyers craving options.

If you’re really ready to move fast, you may want to shoot for this week as your target goal. To help with that, I can send you one of our deluxe 2022 calendar magnets, just like the one featured in the thumbnail for this video.  It's super helpful for checking the date without even pulling out your phone.  Throw it on you frig, locker, toolbox or whatever metal item you like...and scheduling is a breeze!  Just text your name and mailing address to 619-947-3560.  And remember, even if you’re not ready to list within the next couple of weeks, rest assured this is still a hot hot sellers’ market. If you list later this month, or even next month, you’ll still be in the driver’s seat.

If you are Ready to get the ball rolling, let me know so we can schedule a time to go over your next steps. In the meantime, make a checklist, like this one here:

of things you need to tackle to get your house ready. When we talk, we can prioritize your to-do list and get you on the road to selling your house.

Top 3 Budget Items When Buying a Home

When it comes to buying a home, it can feel a bit intimidating to know how much you need to save and where to find that information. But you should know, you’re not expected to have all the answers yourself. There are many trusted professionals who can help you understand your finances and what you’ll need to budget for throughout the process.

To get you started, here are a few things you should plan for along the way.

1. Down Payment

As you set your savings goal for your purchase, your down payment is likely already top of mind. And, like many other people, you may believe you need to set aside 20% of the home’s purchase price for that down payment – but that’s not always the case. The National Association of Realtors (NAR) says:

“One of the biggest misconceptions among housing consumers is what the typical down payment is and what amount is needed to enter homeownership. Having this knowledge is critical to know what to save . . .”

The good news is, you may be able to put as little as 3.5% (or even 0%) down in some situations. To fully understand your options, call us at Braceland Homes (619-947-3560) so we can go over the various loan types, down payment assistance programs, and what each one requires.

2. Earnest Money Deposit

Another item you'll want to plan for is an earnest money deposit. While it isn’t required, it’s common in today’s highly competitive market because it can help your offer stand out in a bidding war.

So, what is it? It’s money you pay as a show of good faith when you make an offer on a house. This deposit works like a credit. You’re using some of the money you already saved for your purchase to show the seller you’re committed and serious about their house. It’s not an added expense, it’s just paying some of that up front. First American explains what it is and how it works:

“The deposit made from the buyer to the seller when submitting an offer. This deposit is typically held in trust by a third party and is intended to show the seller you are serious about purchasing their home. Upon closing the money will generally be applied to your down payment or closing costs.”

In other words, an earnest money deposit will likely be the very first check you’ll write toward your purchase. The amount varies by state and situation. Realtor.com elaborates:

“The amount you’ll deposit as earnest money will depend on factors such as policies and limitations in your state, the current market, what your real estate agent recommends, and what the seller requires. On average, however, you can expect to hand over 1% to 2% of the total home purchase price.”

We'll help you understand any specific requirements of your individual situation, and share what we’ve successfully recommended for other recent home buyers. It's something you'll have to be prepared for even when using a VA loan in San Diego.

3. Closing Costs

The next thing to plan for is your closing costs. The Federal Trade Commission (FTC) defines closing costs as:

“The upfront fees charged in connection with a mortgage loan transaction. …generally including, but not limited to a loan origination fee, title examination and insurance, survey, attorney’s fee, and prepaid items, such as escrow deposits for taxes and insurance.”

Basically, your closing costs cover the fees for various people and services, in addition to your real estate agent, involved in your transaction. NAR has this to say about how much to budget for:

“A home costs more than just the sale price. For example, closing costs—which make up about 2% to 5% of the home’s purchase price—are a major added expense…Lenders provide a Closing Disclosure at least three business days prior to closing on a mortgage. But buyers will need to budget for these added costs ahead of time to avoid sticker shock days before closing.”

The key takeaway is savvy buyers plan ahead for these expenses so they can come into the process prepared. Freddie Mac sums it up like this:

“If you're in the market to buy a home, your down payment is probably top of mind. And rightly so - it's likely the biggest cost of home buying. However, it is not the only cost and it's critical you understand all your expenses before diving in. The more prepared you are for your down payment, closing and other costs, the smoother your home buying journey will be.”

Bottom Line

Knowing what to budget for in the home buying process is essential. To make sure you understand these and any other expenses that may come up, call Braceland Homes at 619-947-3560 so you have reliable expertise on what to expect when you buy a home.

Several Great Reasons To Consider Buying a Condo Today

If you’re a first-time buyer looking to break into the housing market but struggling to find a home to buy, condominiums (or condos) could be a great alternative for you.

Here are a few reasons condos may be something you’ll want to consider.

Exploring Condos Could Add Options That Fit Your Budget

Supply challenges are a reality across the board in today’s housing market. Broadening your home search to include condos could increase your overall pool of options. Just keep in mind, condos generally differ from single-family homes in average space and floorplans.

In a recent article, Bankrate covers some of these differences:

“Condos are generally more affordable because they come with less space — you likely won’t have your own backyard, for example, and the interior tends to be smaller than the square footage of a single-family home.”

But if the size of a condominium meets your needs, they could match your budget as well. Data from the National Association of Realtors (NAR) shows the difference in the median price for both housing types. For single-family homes, the median price is $363,800. And for condominiums, the median price is lower at $305,400.  Before you get to excited, those prices are the national median home prices.  If you are here with me in San Diego, or in other high-demand metro areas, you'll basically need to double those figures to buy a home.

Still, if budget is top of mind for you, a condominium could be a great fit within your target price range.

Not to mention, buying a condo is a great way to break into the market and start building equity that can help power a future move up. The condo you purchase today may not be your forever home, but it can be a great stepping stone that can help you buy your dream home later on.

Find Out if Condo Living Is Right for You 

In addition, owning and living in a condo is also a lifestyle choice. While it’s true they may be smaller than single-family homes, the amenities condos provide could be a draw for many buyers. Less space in your home might mean minimal upkeep, lower maintenance, and more time for you to spend doing the things you enjoy, especially in a city like San Diego, where there is so much to see and do!

To understand if condo life is for you, Bankrate recommends asking yourself a few simple questions:

“Hate to mow the lawn and trim the hedges? What about pressure washing your driveway? Are your finances such that having to lay out $5,000 or more for a new roof will be a burden? . . . Condos tend to work best for those comfortable with most of the aspects of apartment living, minus the built-in maintenance.”

Ultimately, speaking to an Expert at Braceland Homes is the best first step to determining if condo living might work for you.

Bottom Line

Condominiums are a great option for many buyers, especially those looking to buy their first home. If you’re willing to consider condos in your search, you could find something that’s in line with your target numbers and your needs. To learn more, give us a call at Braceland Homes 619-947-3560 so you have an expert in the condo-buying process on your side.