New Home Sales Up; Prices Down

The Commerce Department reports that home sales jumped 16% in April while median prices fell at a record pace. New home sales were actually down in the Midwest by 4%. Read the New York Times article published this morning to learn more about what these mixed signals may indicate.

New Wave of Foreclosures with Lower Price Tags

An article published today on MSN entitled Foreclosures: Will Banks cut their losses? sheds light on how the foreclosure market works and how it has been affected by the current economic indicators. The article states that in the Chicago area for example, lenders are beginning to offer foreclosure properties at below the judgement amount. On the flip side of this scenario is the fact that profitable foreclosure deals for real estate investors have become increasingly hard to come by. Chicagoland banks however, are starting to consider pre-foreclosure deals called "short sales" where a buyer negotiates with a lender to purchase for less than the property is worth before it goes into foreclosure.

Heldt Realty's exclusive On-Call Consulting Program enables real estate investors to pursue their own endeavors while also providing them a professional “on-call" real estate services. Please contact me through my office should you have any questions.

Remodeling Returns

Resale-minded homeowners can increase their property values by investing in rehab projects and upgrades. They do however, need to be cautious about over-improving and thus "out-pricing" other homes in the market.

Sid Davis, author of Home Makeovers That Sell, writes that your neighborhood determines what your home is worth. He advises to work within those parameters and don't try to make your house into something it isn't.

What is the percentage rate of return on a kitchen, bathroom, or basement remodel? Let's take a quick look.

Minor kitchen remodels net 98.5 percent in average returns while total high-end kitchen remodels will actually net less in return. An average bathroom fix-up has an investment return of an impressive 102 percent! Downstairs, the average return on a basement remodel is 90 percent since the project can double a home's living space.

Finally, media rooms, which are increasing in popularity are an attractive upgrade for some folks but, experts advise against creating high-end media rooms (for return on investment) unless of course, this is popular in your real estate market.

The Best Time To Buy A Home

As with most things in life, timing is everything. This certainly applies to buying a new home as well.

In her book, Starting Out, The Complete Home Buyers Guide, author, Dian Hymer writes that the ideal home time to purchase a home is when home prices are stable or increasing, and when interest rates are low. Conversely, waiting for the best time to buy can result in a missed opportunity.

It's impossible to know in advance how the real estate market will behave in the future. Ms. Hymer offers these guidelines to help you make wise decision about the best time to buy:

If there are more sellers than buyers it's called a buyer's market. Buying in this market has some advantages. Buyers have more inventory to choose from and prices are usually lower in this type of market. Lower prices mean lower closing costs too. A disadvantage when the market is slow is that the value of your home may actually drop before it rises again. Plan to live in this home for five years or more.

Buying a home in a seller's market may cost more, but there is a good chance that the property will be worth even more within the next few months.

As a real estate professional, I will be happy to arm you with the best information you'll need to time your home purchase correctly. Contact me at Heldt Realty and we can discuss your unique situation.