John Little

New Strategies for Today's real estate market

John Little — Thu, 13 Mar 2008 14:33:00 GMT

Three strategies for today’s real estate market

JONATHAN CLEMENTS; The Wall Street Journal

Published: March 13th, 2008 01:00 AM

Financial lore says you should buy when there’s blood in the street – which suggests real estate is a bargain, because there’s blood all over the neighborhood.

Time to invest? I wouldn’t be surprised to see home prices drop sharply this spring, as long-suffering sellers in hard-hit areas throw in the towel and slash their asking price.

That could spell opportunity for this year’s buyers.

But what if you already own a home – and have no desire to become a landlord? Here are three ways to play today’s battered housing market.

TRADING UP

If you’re hankering after a larger home or a house in a better neighborhood, this could be your chance to trade up on the cheap.

To be sure, when you go to sell your current home, you’ll likely get a modest price. Since 2006’s second quarter, real estate has fallen 10.2 percent, as measured by the S&P/Case-Shiller U.S. National Home Price Index.

But your new, grander house will also be relatively inexpensive, so you’re effectively cranking up your real estate exposure when the market is well below its peak.

That said, I wouldn’t think of this move as an investment.

Your new home will probably mean not only a bigger mortgage, but also higher ongoing costs, including homeowner’s insurance, property taxes and maintenance expenses. These ongoing costs will offset a large chunk of any future home price appreciation.

In other words, trading up to a larger home or a better neighborhood is really about wanting to consume more real estate.

Still, like any thrifty shopper, you want to buy when there’s a sale – and that’s what today’s market offers.

“It’s like going from a Honda to a Mercedes,” says Charles Farrell, a financial adviser with Denver’s Northstar Investment Advisors. “It’s a lifestyle choice. As long as it doesn’t cut into your ability to accumulate capital for retirement, this is probably a pretty good time to upgrade.”

DOUBLING DOWN

Instead of trading up, you might be eyeing a vacation home. If you don’t plan to rent the place out, the same logic applies: Once you subtract the annual costs from the price appreciation, you likely won’t make much money – which means the property won’t be much of an investment.

On the other hand, maybe you’re two or three years from retirement and are toying with buying a second home that could become your sole residence once you quit the work force.

Does it make sense to buy now, given the decline in home prices?

Buying today is no doubt appealing, because it’ll give you a chance to vacation in your future home.

But whether it turns out to be a wise financial move depends on what happens to property prices – and that’s tough to predict.

Still, I wouldn’t bank on a rapid bounce back in home prices.

At the current sales pace, it would take a whopping 10.3 months to clear January’s backlog of unsold homes.

By contrast, in January 2005, the supply of unsold homes was at a mere 3.6 months, according to the National Association of Realtors.

The bottom line: If you think you’ll get a lot of use from a second home, go ahead and buy. But if you view the purchase as a bet on rising home prices, I’d hold off for now.

HELPING HAND

While buying more real estate for your own use probably won’t be a great investment, you could help your adult children make good money – by transforming them from renters to homeowners.

To that end, you might give your kids an advance on their eventual inheritance, so they have enough money to make a down payment.

Yes, that means they’ll start to incur the housing costs I mentioned above, including property taxes and maintenance expenses.

But your children will also replace their monthly rent check with a monthly mortgage check, and that will allow them to start building home equity.

“If you have kids who are first-time buyers in markets that are relatively depressed, this could be a good time,” Farrell reckons. “These days, they might need to make a 10 percent down payment. You could make a gift to them of the down payment or make a loan to them.”

6013 Dixon Drive in Northclift is Sold!

John Little — Fri, 08 Jun 2007 06:00:00 GMT

Northclift, Raleigh - The 2 story at 6013 Dixon Drive has been sold.

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6002 Dixon Drive in Northclift is Sold!

John Little — Fri, 01 Jun 2007 06:00:00 GMT

Northclift, Raleigh - The 2 story at 6002 Dixon Drive has been sold.

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1 1/2 Story For Sale in Spencers Gate

John Little — Thu, 31 May 2007 06:00:00 GMT

AWESOME/PRIVATE 1 ACRE

• 1,410 sq. ft., 2 bath, 3 bdrm 1 1/2 story - MLS® $200,000

Spencers Gate, Youngsville - A CREAM PUFF! WONDERFUL OPEN SPLIT BEDROOM FLOOR PLAN. VAULTED CEILINGS. BREAKFAST AREA WITH BAY WINDOW. TONS OF STORAGE. FINISHED BONUS. CAREFREE VINYL SIDED. ROCKING CHAIR FRONT PORCH. DECK OVERLOOKING THE AWESOME WOODED BACK YARD. BUYER'S WILL LOVE THIS ONE. A MUST SEE!!

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2 Story For Sale in Brookstone

John Little — Wed, 30 May 2007 06:00:00 GMT

Immaculate home/Backs to greenway

• 1,426 sq. ft., 2 bath, 3 bdrm 2 story - MLS® $152,000

Brookstone, Raleigh - A CREAM PUFF! IMMACULATE 3 BEDROOM HOME WITH CAREFREE VINYL SIDING. LIVING ROOM WITH COZY CORNER FIREPLACE. LARGE KITCHEN WITH BRIGHT BREAKFAST AREA WITH ACCESS TO THE COVERED PATIO. FORMAL DINING ROOM. MASTER WITH CATHEDRAL CEILING AND PRIVATE BATH. BUYER'S WILL LOVE THIS ONE.

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2 Story For Sale in Evans Estates

John Little — Fri, 25 May 2007 06:00:00 GMT

PRE-SALE

• 3,695 sq. ft., 3 bath, 3 bdrm 2 story - MLS®

Evans Estates, Cary - PRE-SALE WITH FINISHED BASEMENT. SCEHEDULED TO BE COMPLETED SEPT. 2007. REMARKS TO FOLLOW.

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2 Story For Sale in Evans Estates

John Little — Fri, 25 May 2007 06:00:00 GMT

• 3,394 sq. ft., 3 bath, 4 bdrm 2 story - MLS® $450,000

Evans Estates, Cary - PRE-SALE: EXPECTED TO BE COMPLETED SEPTEMBER 2007. FEATURES WILL INCLUDE FIRST FL. MASTER. TILE IN GOURMET KITCHEN & MAPLE CABINETS W/GRANITE TOPS. RED OAK HARDWOOD FLOORING & CARPET. WHIRPOOL TUB IN MASTER BATH. DOUBLE HUNG WINDOWS. SMOOTH CEILINGS. EXCELLENT CRAFTSMANSHIP. CUSTOM BUILT. WILL BE ABSOLUTELY EXQUISITE.

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2 Story For Sale in n/a

John Little — Wed, 23 May 2007 06:00:00 GMT

ABSOLUTELY GORGEOUS/BISHOPS GATE

• 3,278 sq. ft., 3 bath, 4 bdrm 2 story - MLS® $522,800

n/a, Cary - ABSOLUTELY GORGEOUS BRICK 4 BDRM PLUS BONUS HOME. GLEAMING HRDWDS GREET YOU AS YOU ENTER THE 2-STORY ENTRY FOYER & FLOW THRU THE FORMAL DINING RM & GOURMET CHEF'S KITCHEN W/EAT-AT CENTER ISLAND W/VEGGIE SINK. BUILT-IN DESK & BUILT-IN APPLIANCES. GORGEOUS COUNTER TOPS. TILE BACKSPLASH. EXTENSIVE MOLDINGS. CONVENIENT TO SCHOOLS, SHOPPING & MAJOR ROADWAYS. BUYER'S WILL LOVE THIS ONE!

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1 1/2 Story For Sale in Lochridge/Lochmere

John Little — Tue, 22 May 2007 06:00:00 GMT

TOTALLY RENOVATED WITH NEW ORLEANS FLAIR

• 2,004 sq. ft., 3 bath, 3 bdrm 1 1/2 story "END UNIT TOWNHOME" - MLS® $227,500

Lochridge/Lochmere, Cary - TOTALLY RENOVATED WITH NEW ORLEANS FLAIR! GLOWING HARDWOODS GREET YOU AND FLOW TO THE DINING RM AND SUNKEN FAMILY ROOM W/VAULTED CEILING. HWD STEPS W/ WROUGHT IRON RAILINGS LEAD TO THE 2ND FLR LOFT AND 3RD BEDROOM W/ BATH. LGE DECK WITH ACCESS FROM MASTER AND FAMILY ROOM. GORGEOUS KITCHEN W/ NEW COUNTERS AND TILE. NEW CARPET AND FIXTURES THROUGHOUT MAKE THIS LOCHMERE BEAUTY SHINE!

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2 Story For Sale in Wakefield Plantation

John Little — Wed, 16 May 2007 06:00:00 GMT

• 4,248 sq. ft., 4 bath, 4 bdrm 2 story - MLS® $545,000

Wakefield Plantation, Raleigh - Immaculate 4 bedroom w/large rooms. Finished walk-out basement & lots of storage through-out. Dramatic 2-story entry foyer w/gleaming hardwoods. 2 story family room with fireplace, built-in bookcaes & deck access. Formal dining room & living room with crown molding & chair rail. Master suite has sitting area & glamour bath with vaulted ceiling. Game room, rec room and bath in basement. Gourmet kitchen features new stainless appliances. Many upgrades. A must see.

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7044 Buffalo Road in Rural is Sold!

John Little — Mon, 07 May 2007 06:00:00 GMT

Rural, Selma - The ranch at 7044 Buffalo Road has been sold.

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1569 Appaloosa Trail in Franklinton is Sold!

John Little — Mon, 07 May 2007 06:00:00 GMT

Franklinton, Franklin County - The manufactured home at 1569 Appaloosa Trail has been sold.

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Lot / Land For Sale in Rural

John Little — Fri, 04 May 2007 06:00:00 GMT

• lot / land - MLS® $30,000

Rural, Selma - VACANT 1 ACRE LOT. ADDITIONAL 2.8 ACRE LOT WITH APPROX. 2500 SQ FT HOME AVAILABLE. (SEE MLS# 909275)

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Ranch For Sale in Oakwood Park

John Little — Fri, 04 May 2007 06:00:00 GMT

• 1,188 sq. ft., 1 bath, 3 bdrm ranch - MLS® $165,500

Oakwood Park, Raleigh - ABSOLUTE CREAM PUFF!! IMMACULATE 3 BEDROOM 1 BATH. HARDWOODS THROUGHOUT UNDER CARPET. LOVELY LANDSCAPED LOT. CEILING FANS IN ALL BEDROOMS. 2 STORAGE SHEDS. GORGEOUS MATURE PECAN TREES IN BACK YARD. FENCED YARD. REFRIGERATOR CONVEYS. INSIDE THE BELTLINE. HOME IS SOLD 'AS IS'. A DEFINITE MUST SEE. WILL NOT LAST.

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1 1/2 Story For Sale in Evans Estates

John Little — Tue, 01 May 2007 06:00:00 GMT

• 3,200 sq. ft., 3 bath, 4 bdrm 1 1/2 story - MLS® $397,000

Evans Estates, Cary - ABSOLUTE BEAUTY! NEW TRAVERTINE FLOOR & GRANITE COUNTER TOPS IN KITCHEN. GLEAMING HARDWOODS IN LIVING ROOM, ENTRY FOYER & FORMAL DINING ROOM. 1ST FLOOR MASTER WITH TREY CEILINGS. MASTER BATH WITH JACUZZI TUB AND SEAMLESS GLASS SHOWER . WONDERFUL SPLIT BEDROOM FLOOR PLAN WITH 3 BEDROOMS DOWNSTAIRS. HUGE BONUS, OFFICE AND BEDROOM UPSTAIRS WITH FULL BATH. SCREENED PORCH THAT LOOKS OUT TO BEAUTIFUL LANDSCAPING. GREAT CARY LOCATION. CONVENIENT TO ALL. BUYER'S WILL LOVE THIS ONE!!!

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