Real Estate Story

One year ago, my husband and I bought a house in the Cottonwood Heights neighborhood of Richardson. What an exciting and busy year — I’m a “nester,” so having a place that’s ours for keeps, as opposed to renting, feels more secure and comfortable. Plus I can finally paint whatever I want! 

As a real estate writer, I’m quite familiar with the concept of being “house poor,” and we wanted to avoid that at all costs. Being house poor describes a person who spends a big proportion of his or her total income on home ownership, including mortgage payments, property taxes, maintenance, utilities, and other expenses. We bought well below our max budget, which has allowed us to be able to afford the unplanned expenses of our first year. That is one of the smartest things we did. 

So what did our first year actually cost us? Read on to find out. 

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recession

Minorities were hit the hardest by the housing crisis, and show lower levels of homeownership today.

The economic recession of 2007-2009 affected most Americans in depressingly real and tangible ways. Two groups of Americans are disproportionately affected, still, by the downturn.

A new study by Apartment List shows that the economic downturn had the greatest impact on homeownership among minorities and young Americans aged 18-45, particularly those in the 35-44 age range.

Analysts at Apartment List, an apartment location website, looked at Census data and reported U.S. homeownership rates in general have fallen steadily, recently dropping to their lowest levels since 1965.

In Dallas, the homeownership rate fell from 60.9 percent to 58.7 percent from 2007-2016. The drops were biggest among African Americans, where homeownership fell by 6.1 percent.

“African Americans were highly affected [by the recession], said said Andrew Woo, director of data science and growth at Apartment List. “In Dallas, it is a large drop [in homeownership], larger than the nation average, which is 5.3 percent. What we notice is that it’s very much tied to employment and socioeconomic trends.”

During this same time period, rents increased by 4.2 percent in Dallas, even as owner costs (mortgage, maintenance, etc.) fell by 11.8 percent. So the people least able to afford it were paying more (in rent), less able to save toward a down payment, and therefore less likely to buy a home.

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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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GuardianDirect_2

With Memorial Day coming up on Monday, we wanted to take time to recognize some of the mortgage professionals at Guardian Mortgage that have served our nation. What you may not realize is that the values instilled by military service translate easily to mortgage lending. Integrity, service, and respect are characteristics instilled in all branches of our nation’s armed forces, and you can find them in the staff at Guardian Direct as well.

So thank you, Guardian Direct, for giving us a chance to shine a light on the former servicemembers on your staff. To find out more about these amazing men and women that make up this month’s Guardian Angels, read on for our Q&A with Jeff Guthrie, Vice President of Sales at Guardian Direct.

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