Surprising – and Not so Surprising – Residential Real Estate Trends
Spring has shown up on our doorstep, and so too have the home shoppers. Rising consumer confidence paired with warmer weather is the perfect recipe for home buying.
"The weather is a great factor," said John Horton, Vice President and Senior Residential Lending Manager for Associated Bank in Chicago. "You're not going to go to an open house if it's muddy and slushy. If the sun's out it, it really makes a big difference on the home sales."
A lingering misconception surrounds the home-buying process: the myth that you have to be married to be a home buyer.
More unmarried people are making home purchases than ever before. According to recent real estate reports, more young, unmarried couples and more single people are purchasing homes.
"There's a lot of young, single people that are out there that are taking advantage of the market," Horton said.
According to Zillow, about 15 percent of home-buyers are unmarried couples. This is up from 11 percent in 2005. And, according to the same report, 25 percent of 24- to 35-year-old homebuyers are single.
Whether you're married, single or in between, be sure to look at the local school system for resale value.
"It's a great buying point," Horton said. "And you always say when you buy a house, you should think about selling it – even though you may never sell it. But when you sell it if you're in a poor school system, it's going to be on that market even longer."
Do some research on the schools in the area you're looking to buy, and make sure people will want to be moving into that school system for the foreseeable future.
The average time a house is on the market is less than two months
"Right now the average market time for a house is right around 50 days," Horton said. "If it's priced right and in a good area, 50 days is outstanding – absolutely outstanding."
With limited inventory in the market right now, people are snatching up desirable homes quickly these days. Good news for those looking to sell!
Many people worry a mortgage payment will be more than a rent payment.
Horton recommends calling a lender, talking through your financial situation and see what a mortgage payment might net out to be.
"If you're looking at the average rent in the city of Chicago, (which) is $1,800 to $2,300 – again depending on the area but right around that price point – if you boil that down to what your mortgage payment would be, (we can) give you a rough idea," Horton said.
Depending on the type of mortgage and the interest rate attached to it, it's possible your monthly payment would be substantially less than that average rent price. Often seeing those estimates of what a mortgage payment might look like can be surprising – and reassuring – for those hoping to buy.
What can people be doing to get the ball rolling? Get referrals.
"Being prepared and being educated, just like anything else," Horton said. "Having a relationship with a lender. Find(ing) a quality realtor. Finding a quality real estate attorney. ... Call your realtor, call your attorney, call your lender, and just ask them who they deal with, it's the best way to do it."
Help your credit situation by keeping credit card balances low.
Horton notes that keeping balances that are too high can hurt your credit. Be careful to keep those balances low, he advises.
"Don't exceed your credit utilization by more than 30 percent," Horton said. "If you have a $1,000 credit card (limit), if you exceed that, the most you want to charge on that is 333 bucks. Because what that does, it starts to affect your score, it's not going to kill it, but you want to keep it about a third of credit utilization."
Loan products are offered by Associated Bank, N.A. Loan products are subject to credit approval and involve interest and other costs. Please ask about details on fees and terms and conditions of these products. Property insurance and flood insurance, if applicable, will be required on collateral. Member FDIC. Equal Housing Lender.