Happy Holidays from Frank Del Rio!

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As we approach the turn of another great year together, I wanted to wish you and your family on behalf of my team, our families and I – a wonderful holiday season.  As always, we are ever thankful for your presence in our lives and strive to continue our lasting relationship.  May you and yours enjoy good health and prosperity – now and always.  We’ll be back in 2012 with a whole new insight, plus lots of perspective and ideas on your real estate endeavors.  Happy Holidays from team Frank Del Rio!

Eight AWESOME Reasons Why You Should List Your Home During the Holidays

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Traditional school of thought dictates that selling a home during the holidays is a bad idea.  People are busy celebrating with their families and will hardly go shopping for a home, right?  Not so!  There are numerous advantages to listing a home during this season and below are ten great reasons to put a home on the market now. 

More serious buyers – Less time wasted

These are people who are interested in buying so there is a far greater chance of actually selling the property.  Nothing is more promising to a seller than a motivated and qualified buyer that knows what they want and is actively seeking to get it.

Fewer Homes On the Market

The less competition there is, the higher the chance there is for homes on the market to sell. Where during the peak season sellers might be dealing with some interest from buyers on their home, nonetheless there is more selection for buyers to choose from and they can stray to another property.

In January Inventory Increases – Chances of Selling Decreases

With so many homeowners assuming the holidays is a taboo time to sell there is a plethora of new listings in January, resulting in a diminished chance of your home selling.  Also, there is a risk that the price you may receive on the home can be less.

Decked Halls Look Great!

Homes are very appealing to prospective buyers when they are decorated for the holidays.  With all the festive décor, lights, greenery and added beauty of the season – the home shows very well and attracts buyers faster than if shown during other times of the year.

Tax Advantages That Benefit the Buyer

Some buyers need to buy a property before the year ends so that they are able to claim a particular credit or exemption on their tax return.

Show The Home With Flexibility

Sellers that have their home listed prior to the holidays have the added advantage to be able to “pause” the process so they can celebrate the holidays, essentially not showing the home during a period of time during the break.  When the festivities die down, things can pick up again and the seller has not only managed to save potentially lost time but can also jump right back into the market.

Enjoy Non-Contingent Buyer Freedom

With the home sold, sellers can enjoy non-contingent buyer status during the rest of the slow season and take advantage of the market when there is a flood of new listings upon the New Year. 

Fewer Foreclosures On the Market

Many banks will suspend foreclosure listing during this time of year, especially on properties where there are still families occupying the home.  As a result of this, some of the competition that arises for sellers from low-priced foreclosures can be avoided during the holidays.
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Keep in mind that the idea of your home’s value increasing significantly over the next several months is a myth.  The truth is that housing values likely only go up when consumer income rises.  Pay rates increase at a rate of three to five percent each year and that is about the maximum yearly increase we can expect to see in a home as well.  So if you are wondering whether or not to put your home on the selling market now, or to wait – one important factor is that waiting will not provide much benefit.

What Came Down WILL Eventually Go Up – Home Values Don’t Jump Up Overnight

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Remember that infamous “Mortgage Meltdown” of early 2007?  What homeowner doesn’t remember that awful time when the mortgage industry came crashing down in what was one of the worse declines in home value that we had seen in a long time? Now, as the nation continues to reel over the effects of lenders’ leniency during the real estate bubble of the years 2001 to 2006, we are struggling to bounce back.  Things are improving but it is not an easy feat when you consider that millions of Americans are dealing with foreclosures or the risk of foreclosure given our current economy.

What Happened To Cause the Mortgage Crisis of February 2007?

It seems like it was ages ago but not that long ago lenders were widely soliciting any type of buyer and home loans were easily available to most.  Limited checks were done on the documentation provided by prospective borrowers and yet they were awarded loans liberally.  People were making bad decisions, and since they could purchase with little or no money down they were buying homes that were based on the monthly payment amount rather than gauging whether they could actually afford the home overall.

In February of 2007, everything in the industry came crashing down when lenders realized homes were way overvalued.  Equity homeowners once had in their homes plummeted and people could no longer afford to make monthly payments on their property.  The result was a wave of foreclosures and short sales – that to this day are prevalent in the market.  In fact, in some markets, distressed sales have been the primary sale type until only just recently as we begin to see a slight rebound.

How Has the Mortgage Industry Changed Today?

As a result of the sheer magnitude of mortgages that have gone underwater during the mortgage meltdown and since – lenders have now done a 180 on the entire process.  There are extremely tight regulations in place.  Now no loans are done without a full-blown documentation process.  Each minute detail is checked and verified and then re-verified with expirations on some of the requirements, ending up in the need to reassess yet again.  Where once a borrower submitting his own copies of tax returns as enough, they are now most often run through the 4506-t IRS transcript process.  A detailed Verification of Employment (VOE) form is also requested of employers.

Here's a Closer Look at These Numbers 

5%/ year on 450,000= $22500 = $472500 in 2013
5%/year on 472,500 = $23625 = $496125 in 2014
5%/year on 496,125 = $24806 = $520,093 in 2015
5%/year on 520,093 = $26046 = $546,140 in 2016
5%/ year on 546,140 = $27,307 = $573,447 in 2017
5%/ year on 573,447 = $28,672 = $602,119 in 2018

How Long Before My House Values At Mid-2000’s Level Again?

Unfortunately for most homeowners during the time prior to the mortgage crisis, it is very difficult to endure not seeing the expected value of their home. As a result, they end up making the decision to wait to sell, hoping the values will come back up in a year or so.

Since housing values are directly tied to income levels and salary increases (which are typically a 3% to 5% rise each year), the probability of a home regaining its value from the mid-2000s, over the next 12 months is next to nothing.  The only way for prices to go up is for buyers to earn more money.

When you examine the standard rate of employment increase and apply it to a home valued at $450,000 where the homeowners are seeking to recover the value of $600,000 from just a few years ago – it will take no less than six years.  The steady salary increase translates to about the same growth on housing values.  Considering this increase, by the year 2013 the home will have increased in value to $472,500.  By 2015 it will likely reach $520,093 and by 2018 the home will be valued at $600,000.  Factor in the loan payment given that only partial payment actually works toward the principal and it seems clear that waiting to sell may not be the best decision.
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To learn whether sitting on it or selling your home is the better option – visit your Realtor for a customized consultation that examines your circumstances, performance in your market area and all other relevant factors that will help you decide your next steps.

Remember – the only way for home prices to increase in the foreseeable future is for wages to go up and until they do, housing values will only creep back upward. To see the appreciation for the last 40 years click here.