- Historically, the choice between renting or buying a home has been a tough decision.
- Looking at the percentage of income needed to rent a median-priced home today (29.2%) vs. the percentage needed to buy a median-priced home (15.8%), the choice becomes obvious.
- Every market is different. Before you renew your lease again, find out if you can put your housing costs to work by buying this year!
Beavertail, our smaller Airbnb in Joshua Tree just turned 1 year old and we just got our 100th review. It was recently featured on the cover of California Lifestyle magazine! Follow Beavertail on Instagram.
I keep getting a ton of interest and lots questions about buying property in the desert! Weather you are thinking about moving out there full time, getting a second home or a vacation rental there are a ton of options. And compared to LA prices it is very affordable.
Some advice getting started:
1. Explore the area. Get to know it before you focus on looking at specific listings. Each desert community is unique and you need to identify places that you want to live. A good way to do this is to rent Airbnb’s in areas you are thinking about and spending some time there getting to know the area, going to stores, restaurants and living the life. I’m happy to orient you and give you overview of desert communities and to make suggestions on where to start.
2. Instagram. Follow people living in the areas you are curious about!. You can learn a lot about the people, and what is going on this way. Search hashtags for areas: #joshuatree #palmsprings #29palms, etc.
3. Stats. If you are thinking about buying a house to use as vacation rental, you really need to do your research. There is a ton of competition. Lots of people are already doing it, and there are a lot of people in the process of renovating places that will be online soon. You really need to smart about your strategy and do market research. I can point you in the right direction.
I’m usually in Joshua Tree a few days a week (typically Friday – Sunday) and I am happy to show you homes in Coachella Valley and the Hi-Desert.
History of homesteader cabins in Wonder Valley
Can your neighbors Airbnb impact your property value
The mortgage process – what you need to know (infographic)
How to renovate a house on a budget
Before they had a berry farm the Knotts lived in the hi-desert
Fall in love with the desert…. 35 iconic southwest sites
How Joshua trees were named
Hantivirus can live in old desert wood (like delapidated shacks)
Ambitious shipping container house proposed for JT
Conde Nest guide to JT
Palm Springs party pad w pool for $649k
Pioneertown – the new old west
There is no doubt that it is easier to sell your house when using the services of a local real estate professional. The agent will provide:
- Greater exposure to more buyers
- The skills of a professional negotiator
- A layer of protection from possible legal liabilities
- Professional guidance in navigating any pitfalls that may arise
- A level of safety while showing the home
There is no doubt that these services are valuable to any family that decides to sell. The only question is – how valuable? One of the main reasons For Sale By Owners (FSBOs) don’t use a real estate agent is because they believe these services are not worth the fee an agent charges. But, what if those services didn’t cost the seller a penny?
A study by Collateral Analytics, however, reveals that FSBOs don’t actually save anything and, in some cases, may be costing themselves more by not listing with an agent.
In the study, they analyzed home sales in a variety of markets in 2016 and the first half of 2017. The data showed that:
“FSBOs tend to sell for lower prices than comparable home sales, and in many cases below the average differential represented by the prevailing commission rate.” (emphasis added)
Why would FSBOs net less money on their own than if they used an agent?
The study makes several suggestions:
- “There could be systematic bias on the buyer side as well. FSBO sales might attract more strategic buyers than MLS sales, particularly buyers who rationalize lower-priced bids on with the logic that the seller is “saving” a traditional commission. Such buyers might specifically search for and target sellers who are not getting representational assistance from agents.” In other words, ‘bargain lookers’ might shop FSBOs more often.
- “Experienced agents are experts at ‘staging’ homes for sale” which could bring more money for the home.
- “Properties listed with a broker that is a member of the local MLS will be listed online with all other participating broker websites, marketing the home to a much larger buyer population. And those MLS properties generally offer compensation to agents who represent buyers, incentivizing them to show and sell the property and again potentially enlarging the buyer pool.” If more buyers see a home, the greater the chances are that there could be a bidding war for the property.
Three conclusions from the study:
- FSBOs achieve prices significantly lower than those from similar properties sold by Realtors using the MLS.
- The differential in selling prices for FSBOs when compared to MLS sales of similar properties is about 5.5%.
- The sales in 2017 suggest the average price was near 6% lower for FSBO sales of similar properties.
If you are thinking of selling, FSBOing may end up costing you money instead of saving you money.
If your house no longer fits your needs and you are planning on buying a luxury home, now is a great time to do so! We recently shared data from Trulia’s Market Mismatch Study which showed that in today’s premium home market, buyers are in control.
The inventory of homes for sale in the luxury market far exceeds those searching to purchase these properties in many areas of the country. This means that homes are often staying on the market longer which can eventually lead to a price change.
Those who have a starter or trade-up home to sell will find buyers competing, and often entering bidding wars, to be able to call your house their new home.
The sale of your starter or trade-up house will aid in coming up with a larger down payment for your new luxury home. Even a 5% down payment on a million-dollar home is $50,000.
But not all who are buying luxury properties have a home to sell first.
In a Washington Post article, Daryl Judy, an associate broker with Washington Fine Properties, gave some insight into what many millennials are choosing to do:
“Some high-earning millennials save money until they are in their early 30s to buy a place and just skip over that starter-home phase. They’ll stay in an apartment until they can afford to pay for the place they want.”
The best time to sell anything is when demand is high and supply is low. If you are currently in a starter or trade-up house that no longer fits your needs and you are looking to step into a luxury home, now’s the time to list your house for sale and make your dreams come true.
Just sold! I represented out of town buyers on this charming craftsman in Vermont Harbor. It’s near USC and Leimert Park. 4 bedroom, 2 bath, 1800sf. Wrap around porch. Stained glass in the den. Dozens of built in cabinets, dressers and bookcases. Sleeping porches, plate racks, wainscoting, tile fireplace… It needs some updating but it has all the original charm and craftsman detail! I’m so excited to see the reno. Sold for $535k. 15k below asking!
It’s fall, which means we can get out our sweaters and boots. It also means slightly less crazy house hunting. Typically late spring and summer are the craziest time around here. This is partially driven by the fact that everyone with kids wants to move during the summer break. Also, the weather is nice and people go to more open houses. In the fall and during the winter holidays a lot of casual buyers are distracted with other things going on. So, this time of year is ideal for serious buyers to buckle down. I would still expect multiple offers on most LA homes, but there will likely be less offers, which means your odds improve!
MARKET UPDATES / FINANCE
Mortgage rates still incredibly low, but up a bit because of the jobs report
Want to know why tons of SF people are moving here?
90% of families have had their wealth decline over last 27 years
Millionaire gives money advice to millennials
How are young buyers putting in all cash offer? Some are tapping equity in their parents house
LA prices keep climbing – 5th straight month
LA Renters expected to pay $136 more a month by 2019
CA landlords can’t threaten undocumented immigrant tenants anymore
What 1m will get you in LA
Cookbook opening second bigger location in the Figueroa corridor
20 things to do this fall in LA
DESIGN / HOME / RENOVATION
New roof is the best return on investment (podcast)
Easy DIY projects to add value to your home
The problem with tiny homes – where do you park it legally?
Srsl? I have way crazier real estate stories… just ask me
How to grout tile like a pro
Best investment furniture pieces for you first house
In the latest Rent vs. Buy Report from Trulia, they explained that homeownership remains cheaper than renting with a traditional 30-year fixed rate mortgage in the 100 largest metro areas in the United States. The updated numbers show that the range is an average of 3.5% less expensive in San Jose (CA), all the way up […]
That headline might be a little aggressive; however, as August 2017’s housing market data begins to roll in, we can definitely say one thing: If you are considering selling, IT IS TIME TO LIST YOUR HOME TODAY! In a recent article by CBS News, they explained that the number of existing home sales is shrinking, […]
Some Highlights: Buyer demand continues to outpace the supply of homes for sale! Buyers are often competing with one another for the listings that are available! Housing inventory is still under the 6-month supply that is needed for a normal housing market. Perhaps the time has come for you and your family to move on […]
Every three years, the Federal Reserve conducts their Survey of Consumer Finances in which they collect data across all economic and social groups. The latest survey data, covering 2013-2016 was released two weeks ago. The study revealed that the 2016 median net worth of homeowners was $231,400 – a 15% increase since 2013. At the same time, the median net […]
In a CNBC article, self-made millionaire David Bach explained that “the single biggest mistake millennials are making” is not purchasing a home because buying real estate is “an escalator to wealth.” Bach went on to explain: “If millennials don’t buy a home, their chances of actually having any wealth in this country are little to none. The average homeowner to […]