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By Kevin M
 If you’re thinking of buying a new home in the near future, there’s something you need to think about first. Before you even sign a purchase offer to buy a new home, you first need to sell the one you have now.
During the brighter days of the real estate market—the 1980s, 1990s and even the early 2000s—people got very accustomed to the high degree of liquidity in the market. It was possible, and even common, for a buyer to schedule “back-to-back closings”—the closing on the new home and the closing on the old home, one right after the other. Often, both closings would happen in the same office. It doesn’t get any better than that right?
I saw a lot of this during my many years in the mortgage business; people often confidently bragged of their ability to sell their old homes in between the time of the contract signing and closing on the new one.
But a few things have changed since the good-old days. Engineering a simultaneous close in this market is an entirely different undertaking.
Continue reading Sell Your House BEFORE Buying a New One →
By Kevin M
 One of the activities that I like to engage in is writing about topics from outside the box. That’s one of the things that makes bogging really fun—being able to look at the conventions of life from a completely different angle, and hopefully in a way that challenges the reader to think differently as well (or at least to generate some lively debate!). Big picture, I think that’s really what blogging is all about, advancing unconventional views. If we want conventional all we have to do is tune into the mainstream media and we can have as much of that as we want.
But this is a blog so let me toss the hand grenade of the day…
Do you ever REALLY own your home? My intention isn’t to question the wisdom of homeownership in light of the housing meltdown of the past few years. That situation is gradually correcting itself as property values fall to levels that are consistent with the underlying economy.
What I want to discuss is the modern version of homeownership as compared to traditional factors that caused people to buy homes in the past. On that front, much has changed in the past 30-40 years, so much so that the entire purpose for owning a home might be unrecognizable to homeowners and would-be homeowners of previous generations. It might not even look like ownership to them at all!
Continue reading Do You Ever REALLY Own Your Home? →
Guest Post by Josie Fixler
Six years ago, my husband and I decided to take a leap, leave the rat race of New York City, invest in Florida Real Estate, and raise our daughter in tropical South Florida. Our friends and family thought we were insane, leaving behind everything we knew to search for a new life in the Florida Sunshine. But, we were determined.
Florida isn’t just one market—find the one that fits your lifestyle
Our search for our new home began in Fort Lauderdale. It became immediately clear to us that Fort Lauderdale Real Estate is notorious for its pristine sandy beaches, high end boutiques, and upscale restaurants. Fort Lauderdale is recognized as the Venice of America. It has a population of nearly 180,000 people and is the seventh largest city in Florida. Fort Lauderdale is filled with stunning ocean front condominiums and oversized custom built waterfront estates but we just weren’t sure it was the right fit for our family.
Continue reading Florida Real Estate: Tropical Paradise is Now on Sale →
By Kevin M
 Ominous question, isn’t it? There are all kinds of implications that go with that possibility, and none of them fit neatly within the economic progression of the past 30-40 years when it seemed the entire economy was running largely on the back of the real estate industry. But whether we like it or not, new trends in housing are beginning to emerge, pointing to a future that will likely see more renters—maybe far more—than in the recent past.
Though new construction of residential real estate has been showing definite signs of an upswing in the past few months, the encouraging statistics are far more important for what they hide.
An article last week, Rent Party! Apartments Drive Strong Housing Starts Data (Yahoo!Finance) reports a good news/bad news scenario on new residential construction. The good news: November housing starts are up 9.3% from October, and 24.3% over October, 2010. That’s an impressive turn-around.
But now the not-so-good news: though overall housing starts are up impressively, the stats for 1-4 family homes is actually down, dropping 1.5% from October, 2011.
So if home building is down from last year, what accounts for the increase in new construction? Apartments! Apartment construction (buildings with five or more housing units) are booming while construction of primarily owner occupied single- and small mutli-family homes are stuck at a recession level pace.
Continue reading Is America Becoming a Nation of Renters? →
By Kevin M
 I’ve written a good deal about real estate as an investment on this site, but the emphasis has been on residential property, generally in the 1-4 family category. But there’s an entirely different sector in the real estate world involving commercial and larger multi-family property that has the potential to offer both greater rewards and higher risks. Sometimes referred to simply as investment properties, this type of investment is for sophisticated investors who are knowledgeable about the particular risks that investing in such property carries.
To the seasoned real estate investment professional however, there are ways to play this market that both lower those risks and increase returns. At a time of microscopic returns on interest bearing investments and high volatility in the equity markets, an investigation into alternatives begins to become more attractive.
Continue reading Has the Time Come for Commercial Investment Property? →
By Kevin M
 For generations the conventional wisdom on housing was always to buy the most (or more) house that you can afford. The rationale—which worked for decades—was that a house was the closest thing to a guaranteed investment, and by buying the most expensive property you could afford you were insuring the greatest possible payoff over the long run.
That thinking caused many households to go deep into debt in order to make it happen, which created a vicious circle of greater debt feeding higher property prices.
What a difference a few years can make?
The entire conundrum went full circle, with property prices rising consistent with higher mortgage levels, until the borrowing party stopped. Suddenly John and Jane Q. Homeowner could afford to borrow no more, and the whole property construct has gone into the ditch.
Will we get out of that ditch anytime soon? Maybe…but maybe not, at least not for a long time.
Rather than speculating as to when the long awaited turnaround will occur, it might be better to plant our feet firmly in the ground that is now, accept our new reality and make adjustments in our housing expectations that are consistent with that reality.
Now is the time to reverse the psychology that drove both property prices and debt to dizzying levels and adopt a new strategy: buy LESS house than you can afford! Why?
Continue reading 5 Reasons to Buy LESS House Than You Can Afford →
By Kevin M
 As of this week I’ve been officially welcomed into the ranks of the staff writers over at Lending Tree! With Lending Tree’s focus on lending and real estate, and my background in mortgages, the arrangement is a natural fit.
For my first two posts, there’s a two part debate on the advantages of buying either a brand new home, or an existing one. It’s an interesting debate because there are tangible benefits going with either.
Check out these two posts, and weigh in with your thoughts:
6 Reasons to Buy a (Brand New) Home
6 Reasons to Buy a (Not So Brand New) Home
Thanks!
( Photo from Flickr by rossgram )
By Kevin M
 Housing prices are lower than they have been in years. Mortgage rates are near all time lows. Housing stats are starting to pick up. The bottom on the housing market is in. Joe Smith around the corner sold his house in three days, and he had four offers (or was it four days with three offers?). Time to buy—and buy quickly! Prices will never be this low—rates will never be this low—the real estate agent said so. Buy, buy, buy!
We’re starting to hear this kind of buzz. If you’re looking to buy a home are you starting to feel the pressure to make your move during this rare “window of opportunity”? Well, ignore the hype. The window will likely be open for a good while, so realize that time is your friend and play it for all it’s worth.
For one thing, housing sales continue to be weak. The statistical improvement we’re seeing in most markets is mostly upward bumps off a very low bottom.
More important, the profile of the typical buyer is deeply impaired. Three factors are combining that will keep a lid on the size of the potential buyer market for home for the next several years.
Continue reading Why Time is Your Friend When Buying a House →
By Kevin M
By all accounts, 2010 was a terrible year in the housing market. How terrible? An article this week on Yahoo! Finance sums it all up in the headline: New-home sales in 2010 fall to lowest level in 47 years.
That’s almost half a century and longer than most Americans have been alive. But even that doesn’t quite capture the gravity of the situation. Apparently records tracking new home sales only go back to 1963! Or put another way, 2010 new home sales were the lowest on record! In reality, no one really has any idea how far back we’d have to look to find sales figures that low.
Another article on the same subject, released last week from Bloomberg gives some telling statistics: 1.28 million new homes were sold in 2005 (peak) versus 321,000 sold in 2010—that’s a 75% reduction in the number of new homes sold in a space of five years. In addition, we’ve experienced a 30% drop in house prices since the price peak in July of 2006.
Continue reading 2010 Was the Worst Year in Housing Ever—So Is Now the Time to Buy? →
By Jennifer Barry
A couple of weeks ago, Kevin wrote Has the Time Come Again to Invest in Real Estate? and made the case for and against investing in this area, making some excellent points. However, I think the majority of people who jump into real estate right now will be kicking themselves in a few years when their investment continues to lose value.
Kevin is right that prices have dropped a lot since the peak – down more than 50% in some cases. Unfortunately, this doesn’t make housing cheap or even affordable.
Americans are spending too much on housing still. For over two decades, the ratio between the median home price and median household income was 2.8. Based on the latest government figures, the ratio is 4.3. The situation is getting worse as income is falling faster than prices, as unemployment remains stubbornly high.
Continue reading Housing: To Buy Or Not To Buy? →
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General: Any information in regard to money, credit, personal finance, or in regard to any other monetary topic, provided or shared on OutOfYourRut.com is presented for information and entertainment purposes only and does not constitute financial advice. It is intended to provide general information only and does not constitute personal financial advice in regard to your specific circumstances...MORE-->
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