Spring is in the air and real estate is responding with more sales. The National Association of Realtors’® Chief Economist, Lawrence Yun, says, “Since reaching a cyclical bottom last June, pending home sales have posted an overall gain of 24% and demonstrate the market is recovering on its own.” Yun sees near-term gains in home sales but suggests that these gains would be even stronger if mortgage lending standards returned to normal.
If you are considering buying, I highly suggest getting a loan approval in place before making an offer. If you are renting, now may be the time to buy.
In this month’s newsletter, I talk more about the trend to buy versus rent. I also talk about the importance of good school districts for both buyers and sellers. It is not a matter that only affects families with school age children. All homeowners should understand that quality schools increase the value of their properties.
As we head into the summer buying season, I believe buyers will be encouraged by improvements in the market and begin to feel optimistic again about their investments. If you want evaluate your options, give me a call.
Q : Is it better to buy or rent?
A: A new study released by Trulia shows that, in most major US cities, it’s preferable to buy a home. The index, based on total cost of homeownership versus total cost of renting, concludes that buying is preferable in 80% of major American cities. And that percentage has been rapidly rising – in the first quarter of 2011, buying was considered preferable in 72% of these cities.
The top five cities in which to buy:
- Las Vegas
The top five cities where it’s ranked preferable to rent:
- New York City
- Fort Worth
- Kansas City
- Los Angeles
What this study doesn’t account for is potential rising prices of homes. If you’re renting, buying a home today may just be the smartest move you could make regardless of where you live.
The quality of schools is an important factor in the value of a home. For buyers, communities that support quality schools are the most desirable places to live and raise a family. For sellers, quality schools mean higher property values, better resale and more buyer interest when it is time to sell a home.
Experts agree. According to Thomas Downes, author of The Impact of Education Reform on Property Values, “individuals were willing to pay more for a house proximate to a school with higher standardized test scores.” Downes cites scientific studies that show the correlation between public school education (including test scores, year-to-year test score changes and spending per pupil) and residential home prices.
Every state has a site for standardized test scores to help you assess the quality of schools. For example, searching online for California brought up STAR at http://star.cde.ca.gov. I encourage all voters to support quality schools by voting for local school levies. It’s a good way to protect your property values both now and in the future.