Home Values Will Decrease, Making It More Affordable for Buyers

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Home values are decreasing, making it an ideal time for buyers to invest in real estate. This article explores the reasons behind the decline in home values and what it means for buyers.

Introduction

The real estate market has seen a significant decline in home values over the past few years. This trend is a result of several factors, including the pandemic, economic downturn, and changing demographics. The decline in home values is good news for buyers as it makes homes more affordable, and they can now get more value for their money. In this article, we will explore the reasons behind the decrease in home values and what it means for potential buyers.

Why Are Home Values Decreasing?

Several factors have contributed to the decline in home values. Here are some of the most significant ones:

Economic Downturn

The economic downturn caused by the pandemic has had a severe impact on the real estate market. The job losses and business closures have resulted in a decrease in demand for homes, which has led to a decline in prices.

Changing Demographics

Changing demographics have also played a significant role in the decrease in home values. Millennials, who make up a significant portion of the home-buying population, are delaying homeownership due to financial constraints. Additionally, baby boomers, who make up a significant portion of homeowners, are downsizing and selling their homes.

Oversupply of Homes

Another factor contributing to the decrease in home values is the oversupply of homes. Home builders have been constructing more homes than the demand, leading to a surplus of inventory. This has given buyers more options and bargaining power, which has resulted in lower prices.

What Does It Mean for Buyers?

The decrease in home values is excellent news for buyers as it makes homeownership more accessible and affordable. Here are some ways in which it benefits potential buyers:

More Value for Money

Lower home values mean that buyers can get more value for their money. They can purchase a more significant property for the same price or buy a property in a more desirable location that was previously out of reach.

More Options

The oversupply of homes has given buyers more options to choose from. They can now take their time and select the home that meets their requirements without feeling rushed.

Bargaining Power

Buyers now have more bargaining power as there is less competition for homes. They can negotiate a better price or ask for additional concessions such as repairs, closing costs, or upgrades.

The Pros and Cons of Buying During a Market Downturn

While there are several advantages to buying during a market downturn, there are also some disadvantages to consider. Here are some of the pros and cons of buying during a market downturn:

Pros

  • Lower home prices
  • More value for money
  • More bargaining power
  • More options to choose from

Cons

  • Potentially lower quality homes
  • Potentially higher repair costs
  • Limited financing options
  • Uncertainty about the future of the market

 

FAQs

Q1. How long will the decrease in home values last?

A1. It is challenging to predict the length of the market downturn. Still, experts believe that the decrease in home values may continue for a few more years until the market stabilizes.

Q2. Should I wait for home values to decrease further before buying?

A2. It is challenging to time the market, and waiting for further decreases in home values may not be worth the risk. You should consider your financial situation, long-term goals, and personal preferences before making a decision.

Q3. Will I get a good return on investment if I buy a home now?

A3. The answer to this question depends on several factors, including the current state of the real estate market in your area, the condition and location of the property you're considering, and your long-term plans. In general, if you buy a home in an area with a strong real estate market, and the property is in good condition and a desirable location, you may see a good return on your investment over time. However, it's essential to consider your long-term plans and the costs associated with owning a home before making a decision.

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5 Easy Home Design Ideas to Make Over a Room

  • 02, September 2023

What goes on in your head when moving into a new home? Foremost, how do I turn this empty shell of a house into an inviting home that reflects my own personal style? You don't want a bland and boring house. Your new house offers a new start. You can eliminate the junk and put in new digs; you can buy that bed you've always dreamed about; or beef up the kitchen and dining area for maximum comfort and entertainment. The great thing about home decoration is that you have the chance to improve your home's appearance without spending much money. Let's look at some home design ideas for giving each room in your house a makeover.

 

When giving a home a facelift, sometimes simple solutions can have a big impact. Here are some inexpensive home design ideas to give rooms a new lease of life.

 

1. Don't rush. You need to take a little time before starting major decor projects in your new home. Take some time to let in the feel and observe what the home needs before buying major stuff. HGTV recommends staying in the house for two months before making significant purchases. You might be spending money on the wrong areas. For example, instead of spending $5,000 on revamping and putting new features in your bathrooms, you might find out that you could spend half the price to get your bathroom in great shape.

 

2. Add color to walls. For people who get out early, a light shade will do while a deep tone will make the house more homely for those who spend more time indoors. You can also make a statement with a feature wall. Adding a lick of paint to your walls is an inexpensive way to give your room an instant lift. Whether you decorate your entire room in an intense shade or opt for a stylish two-toned plan, fresh color on your walls guarantee oodles of glamor.

 

3. Pare down. Now it's time to reassess and evaluate what works and what doesn't. Don't pack everything from your old home over. You don't really need everything you've accumulated. They will only make rooms stuffy. Having a new house gives you chance to try out a fresh approach. This means you can pare down on tired pieces that will only clutter up your space. You can sell these items off on eBay or drop them off at a charity shop.

 

4. Use right lighting. Transform the mood of rooms at a cheap price with the right lighting. You can also invest in dimmers to switch from bright to low lighting. When decorating bathrooms, try out stylish lights. For bedrooms, buy a fresh shade for lamps. You can give your room a cohesive style with stylish lighting.

 

5. Update roller blinds. Whether you go for a subtle floral pattern or statement stripes, roller blinds for your windows are great low-cost, high impact options for designing rooms. They can transform your dull windows and complement other designs in your room.

Less is often more when decorating and less is also eco-friendly. No matter how small your space, you can always let your creativity shine through.

 

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Tips To Get Mortgage for Your Overseas Property Purchase

  • 26, July 2023

Your overseas property purchase doesn’t need to be stopped by financing. You can apply for a mortgage. However, getting mortgage for foreign property isn’t like getting a mortgage at home. This article considers some ways to tip the balance in your favor.

Why bank financing isn't always available for overseas property

When it is available and comes with no string attached, bank financing is the best option to buy foreign real estate. But alas, it’s not usually available. In many markets, it's hard to get loans as a foreign buyer. In Colombia for example, banks don't care if you're a legal resident, as long as you're a foreign buyer, you're not getting mortgage. It's easy to see why this is so. A foreign buyer isn't tied to the country; he can up and leave at any time, taking the bank's money with him. Banks wouldn't want to take this risk. Hence the hassles of getting mortgage for foreign property. This is one of the things stopping passionate investors from traversing foreign lands.

Resident and non-resident bank financing

So, let's say bank financing is available; it most likely would come in one of the following categorizations:

Ø  Resident financing: Except for countries like Colombia, most local banks would treat your loan application as they would treat that of a citizen if you're a legal resident. You'll have to prove credit worthiness just like any citizen and may not have to go through any other process or requirements. This is called resident financing.

Ø  Non-resident financing on the other hand is difficult to secure. Wherever it is available (countries like France, US, Mexico, Panama, The Dominican Republic, Portugal and New Zealand), it comes with a number of restrictions and requirements. Also, the rate you get may not be favorable, except in France, where it's possible for a non-resident with good credit to access a 20-year mortgage at a rate of just 2.25 percent.

Tips To Get Mortgage When Buying Foreign Property

So, here are some tips to help you secure mortgage when buying foreign real estate

1. Don't go it alone.

Even professional property investors get professional assistance when buying foreign property; this could be through experienced local agents or friends. They understand that investing overseas is a much different ball game. If you're in the UK, you can seek the help of an agent selling property overseas through the following bodies:

  1. The Association of International Property Professionals (AIPP) and
  2. The National Association of Estate Agents International

2. Find a bank that has a presence in your country and the country in which you want to buy a property.

According to Glenn Carter, a Canadian investor who works for Condo Capital "The problem is a foreign credit score does not count for anything, it's just like having no credit score”. This means the interest rates you’ll be quoted will be that of someone with no credit. But a bank with presence in your home country will offer favorable rates. "The interest rate I was quoted from a US Bank was 9%, versus the 3% we got from a Canadian bank with branches in the US.” Carter says.

3. Get an Agreement in Principle

Before signing any contracts or paying deposit, get an Agreement in Principle. Learn more about Agreements in Principle. If you're planning on getting finance on the house, make sure this is explained in the contract, and seek an 'opt-out clause' if the loan is not agreed. This will ensure any first deposit paid is refunded.

 

 

 

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3 Steps to Determine the Fair Market Value of Foreign Real Estate

  • 01, August 2023

You don’t want to pay excess on a property. So, it’s important to know what a home really costs on the equity scale

Real estate whether home or abroad is a substantial, long-term investment. It is therefore imperative that you research various countries and neighborhoods before choosing one to invest in because economists agree that there is an opportunity cost to investing in a particular property.

Your research should include the existence of changing political and economic scenarios, as these would have profound impact on the housing market, especially influencing central bank rates and lending policies.

Factors Affecting Market Value of Foreign Real Estate

Location is critical. Apart from the real estate conditions existent in the country, you don't want a place with high crime rate and bad transport system. But looking ahead, you have to examine the profitability of your investment. Home appraisers looking at homes consider features like property age, lot size, internal square footage, number of bedrooms and bathrooms, amenities and overall condition. Hence the first step in determining your home's market value is taking an appraiser’s glasses and looking at the home objectively, writing down the principal features of your home.

How to Determine Market Value of Foreign Real Estate

Valuing a home is not an exact science but here are some things you can do to make a ‘scientific’ guess on the fair market value of a property abroad.

1. Check out comps.

Find four or five comparable homes in the area that have sold within the past six months. A local agent should be able to help you with that data. Your research on comparable homes (comps) will give you a good indication of what your intended property might be worth. Comparable homes should be roughly the same size, construction, age and style with the same number of rooms, layout and other features. You want to identify the prices at which these properties sold and how fast they left the market.

2. Calculate the rate per square foot.

For each of your comps, divide the selling price by the square footage of the property. This gives you a price per square foot or PPSF. Find the average value of these homes by adding the PPSF figures and dividing by the number of comps you are using. For example, suppose it has the following compositions:

Property A is 2,000 square feet and sells for $ 420,000. The PPSF is $ 210.

Property B is 2,200 square feet and sells for $ 480,000. The PPSF is $ 218.

Property C is 1,900 square feet and sells for $ 390,000. The PPSF is $ 205.

Property D is 2,000 square feet and sells for $ 475,000. The PPSF is $ 237.

The average price per square foot is $ 217. Multiply this figure by the number of square feet of your home to get a rough idea of ??the market value of your home.

3. Consider the special qualities of your home.

While the PPSF gives a benchmark, it does not take into account the unique features that could raise or lower the value of your home. Improvements like a new bathroom, kitchen or siding tend to add value; On the contrary, it is likely that a home in poor condition will have a lower value than a well-maintained property. There is usually a wide variety of prices per square foot based on these factors. Ultimately, you have to decide if your home is worth more or less than the average PPSF in your neighborhood.

 

 

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