August 2007 Archives

FREE- Columbus Home Buying Workshop

Posted by Mike Parsons
August 29, 2007 at 08:09 PM

9/15/07-We will be hosting a FREE Home Buying Seminar for first time buyers. We thought we would do this class to help first time buyers feel more comfortable going through the home buying process. Often, buyers haven't done the necessary research and aren't prepared for their home purchase. This course is designed for those that hope to buy within the next year, but maybe not tomorrow. It is intended to give home buyers the basics so that everything isn't thrown at them all at once when the time comes to buy. This discussion is intended to disregard the hype and talk about the real issues that are important first time buyers. Subjects that we will talk about are:

1. Typical Steps in a Real Estate Purchase including financing, home search, making and negotiating an offer, to inspections, insurance for your home, and closing on your home.
2. How do I apply for a mortgage loan? What things do I need to be aware of when applying for a mortgage?
3. The biggest mistakes first time homebuyers make in Columbus, OH.

We will have an open forum for any questions big and small after the presentation.

The Free Homebuying Seminar will be held at Park National Bank located 7140 N. High St. Worthington, OH 43085 (Just South of 270 on the corner of Wilson Bridge and High). It will begin at 10am and will go unitl approx. noon depending upon the amount of questions. Light refreshments will be provided. Please call or email to register your seat. 614-523-6818. RSVP is required.
9/15/2007 at 10AM Park National Bank Worthington, OH 43085 614-523-6818 or email mike@parsonsrealestategroup.com to register now!

Columbus Real Estate Market Update 8/17/2007

Posted by Mike Parsons
August 17, 2007 at 06:32 PM

Anyone read the Columbus Dispatch lately? If you are like most of us, the constant barrage of doom and gloom concerning the real estate market can wear on your brain, especially if you have a home for sale. What is the real story with the market you ask? Without writing a novel here are the issues that are affecting the Columbus Real Estate market in a negative way.

Factors that are contributing to the Columbus Real Estate Market slowdown are the following:
1. Tightening of credit and income requirements from banks. Approx. 15% of the homebuyers over the last few years had shaky credit. They no longer can get a similar loan with the tightened standards. With fewer buyers there is less demand and prices come down to meet demand.
2. Over supply of recently new constructed homes. Many buyers were lured into buying new construction with low buy down rates. These buyers were basically buying into the "low-temporary payment" and not the $200,000 mortgage that it was. If it wasn't for the buy down rates and introductory low payments many of those homes wouldn't have sold for the premium prices that they did.
3. Many adjustable rate mortgages that have adjusted to a much higher variable rate thus thus leaving struggling homeowners to try to pay their mortgage payments. Most ARM loans are fixed for 2 or 3 years, then adjust to a higher floating variable rate. The bulk of the ARM's issued were inked between 2003-2005. Most are hitting that 2-3 as we speak and more will realize increases over the next year or so. This is creating many home sellers and more inventory. These borrowers have to weather the very high new payment or sell.
4. The overuse of buy-down mortgages by banks and home builders. Example-A builder would qualify a home buyer on their ability to make the first year mortgage payment of $1000, but each year the payment would rise $200. Most first time homebuyers understood this at the time of purchase, but figured they would either be making more money 3 years from that point or would just sell the home. By the 4th year, we are seeing a flood of new homes on the market because homeowners can't afford their $1600 payment. When every third house goes up for sale on a street supply goes way up, demand and market value goes way down (price drop).

If I am a buyer is it a bad time to buy right now?
No, Between now and the next year and a half will be a great time for buyers to buy at the bottom of the market. Markets are efficient. Meaning Supply and Demand will sort itself out and prices will stabilize in 1.5-2 years or so. Buy at the bottom.

I have a home to sell. Should I sell now?
If you don't have to sell now I would probably hold out for a couple years to maximize your return. If you do need to sell, the good news is that even though you might have to sell for a little bit less than you thought, you will be buying an excellent value on the buyside.

Where are the problem locations and areas I should avoid when buying a home?
Rather than tell you where not to buy, I would tell you that homes with the following qualities are much less affected by market issues than others.
Location,Location,Location. Try to be inside the outerbelt 270. Pick cities that have top ranked school districts. Pick neighborhoods that have parks/schools in them. Pick a neighborhood that is established, meaning a track record of sales in a reasonable amount of time. If you are looking at a neighborhood where literally half of the homes are for sale, that is not an established area. Pick a neighborhood with good proximity to Downtown Columbus. Pick a home that has character. If the home you are looking at has 10 other homes just like it on the same street, you will be facing alot of direct competition when you sell. Your older established areas with great schoold districts are the safest bets. new build condos in the outlying suburbs are facing alot of competition and should be avoided. Unless you are buying a foreclosure or under market these new developments should be avoided. It is tough to sell a condo when there are 100 others of the exact same model for sale down the street. Don't buy a newer home in an area where you will have to compete with builders when reselling your home, the builders will win. If it is must that you buy and brand new home, buy it from a quality builder, not one that maximizes the square footage for the dollar with bad floorplans, lesser components, and shotty materials. If you would like me to tell you who they are feel free to give me a call. Many of these lesser builder's homes sold in 2006 for $250,000. You couldn't get $190,000 now for many of those homes. Don't be that guy!
I hope this blog has helped in some way. If you would like to talk any further about the real estate market I am only an email or phone call away. Mike P