Turtle Creek Gardens’ peaceful pool

Homeownership is the most consistent way to build up the nest egg you’ll need in retirement. People who downsize their homes are cashing out equity built up over a lifetime (and telling the kids they’re on their own). Sure, there are many reports that claim folks who rent in some areas make out better. But they’re always predicated on the renter investing the difference between the rent and the mortgage/taxes – which almost no one does. Instead, flush renters eat out more, buy more shoes (or in my case, shirts) or wend their way around the world collecting selfies.

The increased incidence of renters is troubling in many countries. When I spoke to HGTV presenter Richard Blanco in London recently, he agreed it would have an impact on tenants later in life. While student loans are an issue here, the issue both countries shared was a desire by younger people to live a catered life (as they did with mom and dad) where they farmed out the reality of living.

For those smart enough to embrace property ownership, the down payment is often a stumbling block for younger buyers. So without living in your Star Wars-decorated childhood bedroom, how does a potential homebuyer save? Especially when Uptown digs can scrape $3 per square foot per month?

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Credit scores are these mythical rankings that, depending on where your credit score lands, can make or break your ability to get a home loan. Right? 

Well, yes and no, as our most-trusted mortgage adviser explains in the latest episode of BobMortgage Zone. Are you putting off purchasing a home until your credit score improves? Bob Johnson (AKA BobMortgage) the senior mortgage adviser at the nation’s oldest private lender, Wallick & Volk, explains why this strategy may be misguided in some cases. Find out more about what credit scores are acceptable and why buying a home now may be your best bet.

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Blue Home Oak Cliff

Once-affordable neighborhoods are seeing a lot of activity from investors and cash buyers, keeping some buyers out of the market. 

Eli’s coming..Eli’s coming…Well you better hide your heart, your loving heart…Eli’s a-coming and the cards say… a broken heart.

Yes, I am going to compare the Dallas-Fort Worth housing market to “Eli’s Coming” by Three Dog Night, a song about a womanizer on his way to breaking hearts. “Eli’s coming” also means that something evil or bad is on the way.  That “something” is the pending affordable housing crisis in the region.

There is an affordable housing crisis coming to the Metroplex (if not already here) and it has potential to drastically affect our cities, market, and economy in a bad way.

No this is not the crisis of 2007-2010 where loans were hard to get, prices dropped, foreclosures abounded, and inventory skyrocketed. It could be worse.

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mortgage

On Friday afternoon, just hours after swearing in, President Donald Trump suspended a Federal Housing Authority (FHA) mortgage premium rate cut issued by former President Barack Obama earlier in the month. The quarter-point cut would have taken effect on January 27.

An FHA loan, with its low down payment and less stringent credit score requirements, offers first-time and low-income homebuyers the opportunity to get a foot in the proverbial door. Aimed at countering rising interest rates following the November elections, the Obama administration’s mortgage insurance premium (MIP) cut would have made it possible for a greater number of buyers to be eligible for credit based on their debt-to-income ratios. For even more buyers, it may have made a monthly mortgage payment more affordable.

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The extra expenses beyond mortgage and insurance can add up, costing the average U.S. homeowner more than $9,000 per year.

The extra expenses beyond mortgage and insurance can add up, costing the average U.S. homeowner more than $9,000 per year.

At CandysDirt, we love real estate and we love homeownership! But with a house comes expenses beyond the mortgage and insurance. For the unprepared buyer, these can be a rude surprise. And nobody likes those.

We’ve seen it before: First-time homebuyers focusing solely on the list price of a house when deciding how much they can afford, and then being shocked by all of the other costs associated with homeownership (hello, water heater/new roof/foundation repairs!). These extra or hidden costs are often the most stressful part about owning a home.

“Those in-the-know are wise to set aside an emergency account, because regardless of age, price point, or quality of construction, issues are going to arise, whether it a 100-year-old house, or a 100-day-old house,” said Realtor Brian Davis of Dave Perry-Miller InTown. “When those issues happen, they’re not always inexpensive and you’re wise to have money saved up for that rainy day.”

We happened upon a new study by Zillow and Thumbtack that identifies a variety of common home expenses — both unavoidable and optional — that often get overlooked during initial budgeting. They calculated what homeowners could spend each year to cover these costs in their area. While these extra expenses might seem small individually, they add up quickly, to the tune of $9,477 for the average American homeowner.

“One thing I’ve stated doing this past year for new homebuyers is having them look at properties $10,000 less than what they’ve been approved for so they have some credit or buying power if they have to do repairs later,” said Elaine Copeland, an Ebby Halliday Realtor. “That also gives them some money for fixing it up—a lot of houses are sold ‘as is,’ and if buyers purchase $10,000 to $20,000 below [their max mortgage approval], they can better manage their budget in the long run. The best thing for a Realtor to do is advise them to do everything affordably.”

So just what are those extra or hidden expenses? Let’s take a look.

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One of the current listing on Airbnb in downtown Dallas offers this nighttime view. Photo: Airbnb

One of the current listing on Airbnb in downtown Dallas offers this view for $72 per night. All photos: Airbnb

“Try before you buy” is a hard concept to implement in the world of real estate. But a new partnership between Airbnb and realtor.com aims to do just that for potential homebuyers, letting them experience a specific neighborhood before purchasing there.

The partnership is particularly focused on millennials, who now represent the largest group of homebuyers in the U.S. at 32 percent, recently taking over from Generation X. This age cohort, born from the early 1980s to the early 2000s, is about 79 million strong, and their purchasing power is estimated to be $170 billion per year.

The Airbnb-realtor.com partnership aims to reduce some of the unknown factors associated with relocating to a new community. Here’s how it will work: Visitors to realtor.com will see an “Airbnb before buying” option for certain properties, and the choice will also appear on the homepage and on for-sale listing pages. Potential buyers will be able to book accommodations on Airbnb ranging from single-family homes to condos, lofts, and other properties located near their chosen neighborhood.

“As we offer a variety of unique accommodations in neighborhoods across the country, we’ll be able to allow potential home owners the special opportunity to experience those neighborhoods as if they already live there,” said Chip Conley, Airbnb head of global hospitality and strategy.

Millennials are extremely technology-driven in their home-buying efforts, according to the 2015 National Association of Realtors (NAR) Home Buyer and Seller Generational Trends study. This partnership plays perfectly into that, allowing them to make all arrangements online.

“I think it’s brilliant—this could give [millennials] a taste of a neighborhood and change them from renter to buyers,” said Jay Forrester, a Realtor with Ebby Halliday Preston Center.

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Case Shiller December 2014

 

Case-Shiller’s recent Dec.2014 report shows home prices inching even further skyward, with an increase of 7.5 percent year-over-year, topping the national average of 4.5 percent by a healthy margin. Shrinking inventory is to blame, but one must wonder if supply will ever catch up at this rate.

“As long as we have a tight sellers’ market, it’s going to be in that area,” said Dr. James Gaines, an economist at the Real Estate Center at Texas A&M University in this story by Steve Brown. “The good news is it’s not 12 or 15 percent.

“We can live with this for a while.”

But really, can we?

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The National Association of Realtors survey looked at multiple facets of the home buying process from mid 2013 to mid 2014. Location was a big factor, as expected.

The National Association of Realtors survey looked at multiple facets of the home buying process from mid 2013 to mid 2014. Location was a big factor, as expected.

First-time homebuyers are being squeezed out, and you gotta move fast to buy! And people are hanging on to their houses for the longest time on record, according to a new study by the National Association of Realtors.

Buyers are living in their homes for ten years, up from six years in 2008, and actually expect to live in their home for 12 years. Some of it is by choice, like hanging on to a fantastic rate after remortgaging, and some by necessity, like too much debt to move, as reported by the Dallas Morning News.

The study looked at the demographics of thousands of home purchases around the United States from July 2013 to June 2014, and its findings speak to many trends we’ve noticed in the market here at CandysDirt.

Take multigenerational homes, for example. We’ve seen more builders offering them, like almost every builder on our approved homebuilder list, from Park Cities to Preston Hollow and north. (I swear Mickey Munir at Sharif&Munir invented the jazzed-up mother-in-law suite.) Texas-based builder Darling Homes is selling multigenerational homes in Frisco’s Lawler Park and Houston area’s Lakes of Cypress Forest like hotcakes.

The survey says they’re right on trend: Since 1980, the number of multigenerational households around the country has doubled, with 13 percent of buyers purchasing one of these homes to accommodate aging parents and boomerang kids in a cost-saving way.

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