The American real estate scene has experienced some tough times over the past five years, and now it looks like the market is finally making a turnaround. After you decide how expensive you want your home to be (see tile charts to the right), you should consider recent real estate trends when making your home purchase. What are a couple of hot trends in the real estate business today? Well, the two that come to mind is purchases of real estate owned (REO) homes (otherwise known as bank owned homes) and changes in the outlay of homes being built.
Hidden in the statistics of home purchases are the sellers of homes (supply side). When the onset of the housing contraction materialized about five years ago, the largest group of home sellers was private individuals working through real estate agents. Although this is still by far the largest group of sellers, REOs have taken on a larger portion of the market. Why? There are at least three reasons.
· Banks are not in the business of selling real estate and generally don’t want to own the properties. Thus, banks are selling properties for lower prices than private sellers.
· With REOs, the home is vacant, so you can do longer and more thorough inspections.
· REO homes come with the added benefit that the titles on the homes are probably clean, meaning claims, liens, and taxes shouldn’t be a concern.
If you’re in the market for a home, you should talk to your realtor about REOs. Be prepared, though, for potential bidding wars.
The second hot area is that builders and buyers are changing their demand/supply preferences. Some perhaps surprising changes that will impact the value of your home when compared with your neighbor’s include such things as:
· People are generally opting for larger garages. With the average household size getting bigger and older, families are demanding space for things like golf courses and visitor sofas.
· We’re seeing a shift in homes built with more than one master bedroom. Again, with household sizes generally increasing – either because adult kids or adult parents are moving in – there’s a greater demand for separate living spaces. You should think about whether you want this option.
· Homes are also getting more computer friendly, meaning more room is being devoted towards computer technology. You might want to consider how much space you want to devote to computers.
· There’s a small, but growing group that wants green homes. The return on investment isn’t generally positive, but you should consider how important it is to you and how it will affect your resale value.
Overall, you should talk to your realtor about REOs and new market trends. It will serve you well down the road.
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