Home Buyers May Find Themselves in a Seller’s Market

Home buyers who have been sitting on the sidelines watching as the real estate market tanked, may soon find themselves right smack back in the middle of a sellers market. As we wrote in the May issue of this newsletter, some markets are already experiencing what may be the beginning of this very thing, believe it or not, where buyers are finding themselves caught in bidding wars for homes for sale.

Sales of previously owned homes rose at a robust clip in April, and prices jumped, the latest indications that the hard-hit housing market is recovering.

Existing home sales were up 3.4% from March, and if that pace holds up, 2012 could be the strongest year for home sales since 2007, just after the housing boom. The median home price, meanwhile, increased 10.1% from a year ago, the strongest year-to-year gain since January 2006.

Even more recent data shows that sales of newly built homes rose 3.3% in April from the March figures, and 9.9% from a year ago.

Home buyers would be wise not to sit and wait much longer, or they’ll find themselves suddenly in a seller’s market again like many homebuyers found themselves prior to the housing crisis. When sellers once again have the upper hand in negotiations because the market has turned in their favor, buyers will be kicking themselves for waiting so long and missing the bottom.

As most experts will tell you, cashing in on the bottom of any market, be it real estate, or any other, is a crapshoot. You’re playing a form of Russian Roulette with your finances to even try to time the bottom of the housing market.

With mortgage rates still breaking records, and the apparent bottom of the housing market either here, or already gone, now is the time to get into the real estate market and find your dream home, before it’s too late.

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Problem to Avoid When Buying a Home

There are all sorts of things you need to watch for when looking for a home. Since sellers often fail to disclose all the facts about their home, you need to have a watchful eye whenever you walk into a prospective property. If you could hire a home inspector to look over everything on each home you’re considering, you’d be keenly aware of most problems, but that of course is not financially feasible.

So we’ve put together this list of “Problems to Avoid When Looking for a New Home” to help you spot problems that may be lurking and waiting for you. Here they are, in no particular order:

1-Poor Upkeep

Look for the obvious signs that the current owners are not keeping up with maintenance. Things like a neglected lawn, gutters that are full of leaves and debris, paint that is peeling or in need of repair.

2-Foundation Damage

Glance at the slope of the yard and driveway. Does it slope towards, or away from the house? If it slopes toward the house, it could present a problem with water seeping into the foundation walls and basement area (if your area has basements). These problems can be expensive to repair, so look at the foundation of any home you’re considering for signs of buckling or cracking.

3-Archaic Wiring

You may not be a licensed electrician, but take the time to check switches and outlets. Make sure they are all in working order. Check to see if any of the switchplates are warm to the touch. If so, this could be a sign of wiring problems and you’ll want that checked before you buy.

4-One Newly Painted Wall

A fresh coat of paint can be a good thing, IF it’s the entire room. But if you detect one wall of a room with a fresh coat of paint, that could be a sign that the seller is trying to hide a problem like water damage, mildew, or mold. If you see any signs of water staining or sagging walls or ceilings, have a professional home inspector check that out.

5-Peculiar or Foul Odors

If you notice any peculiar or foul odors inside or outside the home, there could be a serious problem causing the smells. If you notice smells and you can’t figure out where they’re coming from, it could be serious. Don’t discount what your nose may be trying to tell you. Likewise, if you detect a strong scent of air freshener, this could be the sellers trying to cover up an issue.

6-Locked Doors

When you’re walking thorugh a home for sale, the sellers should never have any doors, closets or storage areas locked. If you encounter restricted areas, ask the sellers to open up. If an area is locked, there may very well be something the owner doesn’t want you to see.

7-Major Renovations

While additions may be nice, and renovations may have been made to modernize things, use caution here. If you detect that a home has had any major renovations, like a floor or structural wall removed or changed, proper adjustments may not have been made to ensure the home is sound. This could shift weight to other areas and repairs to fix this could be costly. If you suspect that any major renovations have been made, secure a structural engineer to check the home for safety.

While this list is far from complete, keeping these items in mind when looking for a home for sale could save you money after the purchase. And as always, we strongly recommend you get a complete home inspection on any home you are serious about buying, and make a satisfactory home inspection a contingency of your home purchase.

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Welcome to Another Hurricane Season

June 1st means the start of yet another Atlantic hurricane season. And even though tropical cyclone activity doesn’t usually peak until late summer/early fall, we’ve already had two named storms (Alberto and Beryl) this year before the season even officially begins. Next up is Chris.

Does this mean we’re in for a stronger storm season this year because of all the activity already?

According to the preseason forecast, we’re expected to get 11 named storms, 6 hurricanes, and 2 major hurricanes. These forecast numbers are below the long-term average from 1950-2011. However, don’t let your guard down. Forecasts simply cannot accurately predict critical details like, where or how many landfalls will occur.

Fewer hurricanes doesn’t necessarily mean less damage and destruction. In 1992, there were only 5 named storms. However, one of those was Hurricane Andrew, a Category 5 hurricane that devastated South Florida. In 1983 there were only 4 named storms. One of those was Alicia, a Category 3 storm which pounded the Houston-Galveston area and caused almost as many fatalities there as Andrew did in South Florida.

There are six lists of hurricane names that continue to rotate. The lists only change when there is a hurricane that is so devastating, the name is retired and another hurricane name replaces it. As there were no significant hurricanes in 2006, the 2012 hurricane name list is exactly the same as the 2006 hurricane name list.

Now is the time to make sure you have proper insurance coverage, because once a storm forms and is named, most insurance companies stop writing any new insurance coverage. Flood insurance has a 30 day waiting period before it goes into effect, so if you don’t have flood insurance, now is the time to be checking into that.

The Atlantic basin is not the only activity center for hurricanes, as many storms form in the Pacific as well. So no matter where you are along any of our U.S. shorelines, you are not 100% safe from the wrath of mother nature in the form of a hurricane or tropical cyclone. Be prepared.