There are lots of good reasons to want a vacation home, and hardly any of them are financial. There are psychological reasons, emotional reasons, and family reasons. These kinds of reasons tend to push financial considerations into the background. But the financial side can’t be overlooked.
As with any real estate, location counts more than any other single factor. The best vacation properties offer something special — a view of the ocean, a mountain vista, a dock on a lake. For maximum appeal to potential renters or future buyers, look for a place within three hours’ drive of a major metropolitan areas. Longer distances or difficult roads make weekend trips a pain, and that limits your market. Read the rest of this entry →
New Jersey residents are in better financial shape than most others across the country, according to a new study by one of Wall Street’s regulators. But the results still show New Jersey residents need to do more to make themselves secure financially. The nationwide survey, conducted by the Financial Industry Regulatory Authority has found that folks in New Jersey are more likely than most to spend less than what they earn, set aside money for rainy days, and save for their children’s education. These are very sound money management principals but they are ones that will stimulate buying. Read the rest of this entry →
Compared to other states, Delaware is the place to be for those who mind their numbers—and for those who want a high quality of life. To start, housing prices here compare favorably with those of neighboring states. The median price of a home in Delaware in mid-January was $191,100. Compare that to New Jersey at $270,800, Virginia at $227,000, Washington, D.C., at $363,200, Maryland at $234,400 and Pennsylvania at $143,400. The median price of a home in Delaware many cases now approximates prices in 2004.
Other compelling arguments are low property and school taxes, and a lower cost of living. As a point of reference, the median property tax rate in Delaware is 0.43 percent, as reported by Avalara.com. In New Jersey it’s 1.89 percent. Pennsylvania is 1.35, Maryland is 0.87, Virginia is 0.74 and New York is 1.23 percent. Read the rest of this entry →
Cooperatives and Condominiums
New York is a city comprised mainly of cooperative and condominium apartments with a smaller selection of private homes, called townhouses or brownstones. Most important is understanding the differences between the two types of apartments you will find:
Structure of a Cooperative (Co-op)
Cooperatives are not a new concept, although they seem to be a type of ownership that is more common in New York City than elsewhere in the United States. In New York City, 85% of our apartments available for purchase are in cooperative buildings, while 15% are in condominiums. This means two very simple things to potential buyers in New York City. There is more inventory to choose from if the buyer includes co-ops into the mix of properties, and prices are, in general, more attractive for cooperatives – simple supply and demand. Read the rest of this entry →
Newark was originally founded in 1666 by Connecticut Puritans led by Robert Treat from the New Haven Colony. The city saw tremendous industrial and population growth during the 19th century and early 20th century, and experienced racial tension and urban decline in the second half of the 20th century, culminated by the 1967 Newark riots. The city has experienced revitalization during the 1990s and early 21st century.
Newark’s home resale inventories stayed the same, with a 0 percent change since September 2013. Distressed properties such as foreclosures and short sales decreased as a percentage of the total market in October. The median listing price in Newark went up from September to October. There were a total of 1 price increases and 10 price decreases. Read the rest of this entry →
Many baby boomers who haven’t saved enough to retire well are contemplating delaying retirement. But if working into your 70s isn’t possible (or appealing), moving to a place with a much lower cost of living can help stretch your retirement savings and finance a better quality of life. A retirement income of $40,000 per year certainly won’t go very far in Honolulu or Miami, but there are plenty of other places where it can fund a comfortable retirement lifestyle. If you’re willing to relocate to a place with a low cost of living and affordable housing, this modest retirement income could give you access to interesting activities and top-notch medical care. If you are ready to make the move to a retirement house, property appraisers like Abbe Edleman of New Jersey provide property appraisals to valuate your existing home.
Here are 10 great places to retire in 2013:
The low cost of living in Albuquerque is well-known to students at the University of New Mexico and people drawn to the community by the Kirtland Air Force Base and national laboratories. Retirees also benefit from Albuquerque’s many amenities and low housing prices. The median housing cost for people age 60 and older was $1,150 monthly for those with a mortgage, $358 for homeowners without a mortgage, and $657 for renters. There are also plenty of low-cost ways to get around town, even if you can’t or no longer want to drive. People age 62 and older can ride the bus for just 35 cents, and there are also more than 400 miles of bike paths and trails.
The host city of the Masters Tournament is best known for its golf courses. This city on the Savannah River is also home to the Medical College of Georgia, Augusta State University, and a wide variety of art galleries and museums. Housing costs for residents age 60 and older are a median of just $626 for renters, $1,064 for homeowners with a mortgage, and $353 for seniors who have paid off their homes. Augusta public transit costs 60 cents per ride for people 65 and older.
South Carolina’s state capital city offers the amenities of big-city life, but with a low cost of living and plenty of arts and outdoor activities. Monthly housing costs range from a median of $1,107 per month for homeowners age 60 and older who have a mortgage to $712 monthly for renters. Retirees who have paid off their mortgages pay a median of just $350 monthly for other housing costs. Bus fares for people age 65 and older are 75 cents. And South Carolina residents age 60 and older who are not working full time can qualify for free tuition to the University of South Carolina.
Your retirement budget will stretch much further in Mississippi’s state capital than in many other places. Homeowners age 60 and older paid a median of $1,053 per month in housing costs, which dropped to $329 if they had paid off their mortgage. Renters age 60 and older paid a median of $624 per month in 2011. The city is known for its music, especially gospel and blues, and also has a zoo, ballet, planetarium, and opera. There are lecture series and museums that are very low-cost things to do.”
The typical resident age 60 or older with a mortgage in Knoxville pays a median of $1,060 per month. For those without a mortgage, the median housing cost declines to just $347 monthly. And retiree renters pay a median of $625 per month. This city has a rich arts and music community as well as plenty of outdoor attractions, including 65 miles of greenway trails, more than 80 parks—among them the Ijams Nature Center—and is about an hour’s drive from Great Smoky Mountains National Park. Knoxville is home to the University of Tennessee and the headquarters of Regal Entertainment Group, where senior citizens qualify for a small discount on movie tickets and AARP members can get deals on soft drink and popcorn combos.
Little Rock, Ark.
Named for a rock formation on the Arkansas River, this state capital is home to the University of Arkansas at Little Rock and the University of Arkansas for Medical Sciences. Most homeowners age 60 and older pay reasonable housing costs, including a median of $1,059 if they have a mortgage and $360 monthly once the mortgage is paid off. Retirees who rent pay a median of $656 monthly. Senior citizens above a certain age can get discount admission to the Little Rock Zoo, Arkansas Museum of Discovery, and the William J. Clinton Presidential Library.
The host city of the Kentucky Derby is also known for its green space, which includes more than 120 parks covering over 14,000 acres. The 6,218-acre Jefferson Memorial Forest is located just 15 miles from downtown. The city is in the process of building the Louisville Loop, a partially completed bike and walking trail system that is estimated to eventually span more than 100 miles, encircle the city, and link existing parks and neighborhoods. Retirees pay housing costs of $1,068 monthly if they have a mortgage and just $373 if they have paid off their mortgage. Renters age 60 and older paid a median of $573 per month in 2011. Ticket prices to attend museums, the ballet, and orchestra are generally somewhere between $15 and $100 per person, so it’s not an outrageous market compared to several hundred dollars per ticket in Boston or San Francisco.”
Pittsburgh has a symphony, ballet, zoo, and a variety of museums. And between the Pirates, Steelers, Penguins, and Panthers, sports spectators have plenty of options. The UPMC-University of Pittsburgh Medical Center is ranked nationally in 14 adult specialties, including 10th in the nation in geriatrics. And senior citizens age 65 or older with proper ID ride free on the bus, T, or Mon Incline, thanks to a program funded by Pennsylvania Lottery proceeds. These world-class amenities are coupled with surprisingly affordable housing prices. People age 60 and older paid a median of $590 per month in rent and $1,079 monthly toward their mortgages in 2011. Those without mortgages get by paying just $435 per month in housing costs
Best known for the Gateway Arch, St. Louis also has a zoo, science center, a variety of art and other museums, and 111 parks covering 3,250 acres. Professional sports fans can choose between the Cardinals (baseball), Rams (football), and Blues (hockey). The teaching hospital, Barnes-Jewish Hospital/Washington University, is ranked 14th in the nation in geriatrics and is also ranked nationally in 15 other specialties. Housing costs for retirees are reasonable, including a median of $1,186 monthly for retirees with a mortgage, $442 among seniors with a paid-off house, and $657 monthly in rent
First colonized by the Spanish in the early 1700s, San Antonio now has an extensive 11,000-acre park system containing over 68 miles of trails and more than 50 golf courses. Yet housing remains affordable, costing homeowners age 60 and older a median of $1,155 monthly, or $398 if they have paid off their mortgage. Monthly rent for retirees is a median of $660. An added bonus: There is no state income tax in Texas.
“Go where the jobs are” may be considered sound business and financial advice in the current economy, but what if where those jobs are costs more than twice the national average to live? In the New York City area, the average pay for full-time civilian workers is 28.51/hour, nearly $6/hour above the national average of $22.71. That might sound nice, but when you take into account that the cost of living in Manhattan is more than twice the national average (216 percent), things aren’t looking so pretty. New Jersey (although it didn’t make the top 10) is not far from New York best is still a favorite of some on the east coast.
On the flip side, Indianapolis has a cost of living that’s much lower than the national average (87 percent), but the average wage is equally low at $19.80/hour, meaning you’re only spending less because you’re making less.
So where are the best places to live where you can actually spend less and make more? Property appraisers like Abbe Edleman provide property appraisals that are used in determining the cost of living and the valuation of houses. Below is a list of the cities across the country where it may be worth considering when relocating whether it is a family move or one that is occupation related.
The City by the Bay, provides residents with the best blend of entertainment, education, safety, clear air, and a prosperous economic base. As the heart of the Bay Area, San Francisco draws on the prosperity of Silicon Valley and possesses its own diverse history well represented at cultural centers such as the de Young Museum. Night life flourishes in the Mission and the Castro, while tech companies code away in SoMa.
Pro sports teams: 2
Park acres per 1,000 residents: 7
Percent with graduate degree: 16
Median household income: $90,640
Percent unemployed: 7.8
For the runner-up best city, we turn back to the Northwest to the nation’s spiritual home for coffee and personal computing: Seattle. Residents of Rain City will take the city’s famously prodigious rainfall in exchange for their high average median income, beautiful water-bound locale, and standout clean air. Microsoft and Boeing provide tens of thousands of jobs to the area, for those who can’t toss fish at the Pike Place Market.
Pro sports teams: 4
Park acres per 1,000 residents: 9
Percent with graduate degree: 16.8
Median household income: $90,303
Percent unemployed: 7.2
The District of Columbia’s been known for political dysfunction, but when it comes to leisure it has become the nation’s leader. The nation’s capital has an expansive series of parks to go with its lively districts, such as Logan Circle and Foggy Bottom. D.C. rivals Boston for its depth and quality of schools. Staying busy: Residents can shop in Georgetown or check out such cultural centers as the Smithsonian’s museums and the John F. Kennedy Center for the Performing Arts.
Pro sports teams: 5
Park acres per 1,000 residents: 12
Percent with graduate degree: 19.6
Median household income: $72,110
Percent unemployed: 9.1
Boston isn’t always one of the nation’s safest towns. But few cities can match Beantown’s blend of history, night life, and education. With 22 universities, Boston can seem very much a college town, owning a grimy charm. As New England’s cultural center, Boston combines Gilded Age class with some Atlantic brine, from L’Espalier to B&G Oysters.
Pro sports teams: 3
Park acres per 1,000 residents: 8
Percent with graduate degree: 13.8
Median household income: $62,180
Percent unemployed: 6.6
Portland is known for its Pacific Northwestern brand of laid-back living, with education and restaurant offerings to go with air quality you won’t find on the East Coast. The city’s become beloved of America’s hipsters, do-it-yourselfers, and localist foodies. The constant turnover of such creative types adds up to a busy, if offbeat, arts and music scene. Another popular recent arrival is the city’s major league soccer team, the Portland Timbers, which regularly sells out its games.
Pro sports teams: 2
Park acres per 1,000 residents: 25
Percent with graduate degree: 11.8
Median household income: $65,554
Percent unemployed: 7.9
The Mile High City has evolved into a major night life and dining hub, with more than 200 bars and 1,700 restaurants to offer up its craft beers and mixture of southwestern and Rocky Mountain cuisine. There is also exotic food, with such game haunts as the Buckhorn Exchange offering local takes on yak, rattlesnake, and, of course, Rocky Mountain oysters (look it up).
Pro sports teams: 6
Park acres per 1,000 residents: 10
Percent with graduate degree: 10.9
Median household income: $59,155
Percent unemployed: 8.9
The nation’s biggest and most international city, New York blows all other cities out of the water with its more than 1,200 bars, 22,000 restaurants, 350 museums, and almost as many libraries. World famous universities such as Columbia University and New York University dominate their respective neighborhoods. With Wall Street, Broadway, and the home of America’s advertising and fashion centers, be careful telling New Yorkers their city shouldn’t sit atop the list.
Pro sports teams: 8
Park acres per 1,000 residents: 5
Percent with graduate degree: 9.6
Median household income: $58,608
Percent unemployed: 11
The capital of the Lone Star state, Austin is our largest city without a major professional sports team, but don’t feel sorry—its main college attraction, the UT-Longhorns football team, can draw more than 100,000 spectators to games. With computer company Dell located just north of town, Austin has become a major destination for top tech talent, as well. It hosts the annual tech and music festival South by Southwest, which added a Startup Village for investing and schmoozing last year. There’s also the annual outdoor Austin City Limits music festival, which lures acts from around the globe each fall.
Pro sports teams: 0
Park acres per 1,000 residents: 37
Percent with graduate degree: 11
Median household income: $65,886
Percent unemployed: 6.3
San Diego, California
If weather were the leading data point in these rankings, San Diego might be No. 1. As it is, the city comes in with a strong 9th-place finish thanks to its relative safety, gorgeous beaches, and 16 colleges. For San Diego residents, picking which beach can be the hard part. Coronado lies just to the south, La Jolla to the north, with Mission Beach in between.
Pro sports teams: 2
Park acres per 1,000 residents: 36
Percent with graduate degree: 10.9
Median household income: $79,269
Percent unemployed: 9.2
St. Paul, Minnesota
St. Paul may be the smaller of the Twin Cities, but the state capital is also cleaner and safer, if slightly behind Minneapolis in median household income. St. Paul, which houses parts of the University of Minnesota campus, is known for its examples of Victorian architecture, such as the Alexander Ramsey House, and for its distinctive Cathedral of Saint Paul.
Pro sports teams: 3
Park acres per 1,000 residents: 14
Percent with graduate degree: 10.9
Median household income: $60,987
Percent unemployed: 6.3
In a world struggling with managing unprecedented debt levels and economic upheaval, Canada enjoys complacent stability. Its real estate markets following along are in a seeming state of near equilibrium, at least compared with other volatile regions, including most obviously the United States. As uncertainty continues around the globe, Canada sits in a sweet spot of low interest rates with the benefit of a natural resource/commodity based economy. When you have natural resources, it makes it easier to attract investors be it in real estate or capital. People live under the assumption that they have a profound safety net which provides confidence that things won’t go upside down. That’s the description of “a perfect world” and we all know there is no such thing. This sounds harsh but it’s true. From Vancouver’s Pacific gateway and Alberta’s oil sands in the west to Toronto’s global financial center and Halifax’s shipbuilding in the east, Canada is well positioned to sustain its economic consistency.
The rest of the world has taken notice. U.S. retailers are expanding into the dependable Canadian market, immigration is igniting growth in housing and condominium sales. Foreign investors try to gain footholds (most unsuccessfully) in property sectors against difficult odds (Canadians tend to buy and hold long term). But “cautiously optimistic” Canadians also struggle against complacency and must remain focused on the reality of how the world’s tenth-largest economy can be dragged down by everyone else. The huge deficit of the largest trading partner, the U.S., will restrain growth; energy markets and the resource sector will slow down. In other words, Canada cannot assume they are immune from the gray cloud hovering over the world’s major markets. For 2013, a balanced outlook is expected. Compared to other markets, Canada will do very well, but growth trends will be mediocre.” It’s safe to say that mediocre should be viewed as the new normal. Leading to real estate players scaling back expectations.
Canadian economy in 2013
Some concerns threatening the Canadian economy in 2013 is that commodities can get beaten up, especially the natural gas sector. Household debt has increased to near-record levels, and home valuations are level or have declined in some places. A property appraisal, from an expert property appraiser like Abbe Edleman located in New Jersey, provides valuations to any area selected. Canada’s real estate market is nowhere near a U.S. style meltdown, but higher interest rates could create problems. The housing slowdown affects the construction industry and retailers. Consumer buying quiets down from recent peaks. The government is also winding down stimulus and is trying to make fiscally responsible cuts. Growth will depend on the private sector alone. As a result, the unemployment rate hovers upwards of 7 percent in Canada and wage growth has been limited but still better than most global competitors. Call the economy and job growth slow and steady. There is an apparent disconnect in job opportunities and employee resources, as increasingly new jobs are concentrating in the commodity.
Interest Rate Benefits
As long as interest rates hold near rock-bottom lows, commercial real estate will continue to prosper: It’s an attractive alternative to residential real estate. If someone put dollars in the bank, they’ll get next to nothing, and bonds, not much more, so they’ll load up on real estate and get a 7 to 8 percent return in markets that are generally not oversupplied. Real estate experts expect rates to increase only marginally, heavily influenced by U.S. and European central bankers who engage in further monetary intervention to help their ailing economies, which need to produce more jobs.
Markets to Watch
Canada’s real estate market has an appetite for real estate transactions, but it is difficult to find deals. Even during a questionable global economy, the Canadian commercial real estate market continues to grow and attract capital. Real estate concerns are reducing, even with global economic uncertainty. Even with that attitude, investors still have their eyes wide open on struggling U.S. economy. In 2013, Canada’s stable economy, job growth, and alluring assets will continue to be an attraction to both domestic and foreign capital. Equity is in abundance, and debt for acquisitions looks to be in balance. Investors need to allocate this capital, and “instead of keeping
cash, they look for great assets—real estate.
Even with a possible need to change investment strategy, trends in 2013 real estate surveys results for investment, development, and homebuilding prospects managed to improve for most metro areas. Of the nine markets covered for commercial/multifamily investments, one was ranked “good,” six were “modestly good,” and two were “fair.” This performance is far better than 2012, when markets were basically split between modestly good and fair. The average rating value for all markets improved as well with only three markets seeing declines. The top movers were Montreal and Winnipeg, a primary and a secondary market. The larger markets such as Toronto, Montreal, Vancouver, and Calgary prevailed but still showed a decline from last year. This is a modest indicator that investors are ready to make some moves into secondary markets.
With your down payment in hand and your pre-approval letter for a mortgage loan, the next step is finding the house that will best meet your family’s needs. With realistic expectations, patience and plenty of research, you’ll be well on your way.
Once you narrow the search to neighborhoods you like, you’ll want to determine the maximum house price you can afford. This alone may reduce the number of neighborhoods you can choose from. Even though you’re pre-approved for a set loan amount, doesn’t mean you can afford it. You’ll want to factor in other expenses you currently have even before you start house hunting. Some examples of these expenses includes retirement, college savings, vacations, and home maintenance and repairs when you calculate how much you can afford for a monthly payment. Don’t forget to budget for homeowners insurance and property taxes. There may be homeowner’s association fees to factor in determining where you choose to call home.
Now that you are determining what you can spend on a house, separate your wants from your needs. If you are looking for a home in New Jersey, do you have to have a home 2 blocks from the beach? This is an example of a question you must ask yourself. You get the point, be honest with yourself. Do you need three bedrooms? A fourth room would be nice for a play room or guest room but is it necessary? You need a two-car garage, but a larger one would be nice for storage. Do I really need it? You need two bathrooms but do you want a luxurious master suite? Simply put, you have a set amount of money to divide it the way you want to. A bigger master bedroom may mean smaller bedrooms than anticipated. A double car garage will mean less basement to finish in the future (or now).
Your “wish list” narrows down the homes that you will consider. Be honest with yourself about getting everything you want. You may not get all 10 things you were looking for but instead may have to settle for seven of the ten. There is no formula for this. It’s strictly a personal preference as well as a personal decision.
Some of the exterior features to be mindful of might include the size of the yard, quality of fence, paint condition, roof condition, window conditions, garage, and backyard. Factor in the state you are looking in. When it comes to interior, think about square footage; the floor plan; condition of walls; the size, quality, and functionality of the various rooms and closet and storage space.
Your checklist should also include any other factors you deem important—the amount of traffic, the appearance of the neighborhood, safety in the area, and the reputation of local schools, etc.
Decision making guide
Below is a list that real estate agents have comprised to guide in a house hunting excursion:
- Don’t make a hasty decision, especially if you feel yourself becoming guided by emotion. Selecting a home takes time, thought and analysis. You should carefully weigh the pros and cons of each house you like. Rather than take the word of your real estate agent, have a property appraisal done by a certified property appraiser like Abbe Edleman.
- Find out how much utilities cost in the area selected.
- Stay on top of newly listed houses via a Multiple Listing Service on the Internet.
- Remain in close contact with your agent. This is extremely important if you’re in a strong seller’s market and/or in which homes that are priced right go fast. You want a good agent who will alert you of new listings and who will show you the houses as soon as they’re listed.
If you find a house you like, offer a competitive bid. Keep in mind you’ll likely be competing against other offers—especially if interest rates are low and the spring buying season is in full bloom. Once you make an offer, make it contingent upon the findings of a professional home inspection. If any major defects surface, you’ll have the leverage to renegotiate or back out of the deal completely. Happy hunting!
You may be surprised to find out that there is more money involved in owning a house than just taking out a home loan and making your monthly payments. What you weren’t responsible for as a renter becomes all yours as a homeowner. Property taxes, utilities, home maintenance and repairs, insurance and even decorating in any way you choose are all on you now, for better or worse. And if you live in an association or in other types of communities where special property taxes are assessed, you’ll have to contend with that, too. Below is a list of some of the costs broken down.
Closing costs can add on thousands of dollars when your loan is settled. Those fees are often negotiated and vary state-by-state. As a buyer, you may be responsible for a portion of them or the seller may assume all of them. The expense may be written into the offer so that the buyer doesn’t have to come up with the cash. Remember, there is room for negotiation so be prepared when going into the closing meeting and be knowledgeable about the process. It’s much easier (and effective) when you are prepared.
Your property taxes are the principal source of revenue for municipalities, counties and school districts. The United States average for property taxes is 1.38 percent of the home’s value with the highest rates in New Jersey, Connecticut, New Hampshire, New York and Rhode Island and the lowest in Louisiana, Alabama, West Virginia, Mississippi, and Arkansas. Additionally, there are variances within counties, parishes, boroughs and the like. To make sure your taxes are in line with other homes in your municipality, have a professional property appraiser like Abbe Edleman, provide a property appraisal. If you live in a condo or a community that assesses its residents a special tax, you will have fees on top of your property taxes.Talk with the institution that will hold the mortgage are and budget accordingly. Otherwise, you’ll have a shock when those taxes and fees become due.
You can’t get a loan without taking out homeowner’s insurance, but that doesn’t cover everything, especially if you live in an area where natural disasters occur. You should consider supplemental policies for floods, tornados, hurricanes and earthquakes. The mortgage holder determines if you will need flood insurance based on their demographic determination of previous history. If you live in a flood zone, you will be required to carry flood insurance or the mortgage will not be granted. If you have a lot of valuable items, such as jewelry, antiques, art or a lot of expensive equipment like computers or cameras, you’ll need to buy a rider if you want them covered.
One of the most satisfying things about home ownership is the ability to make your house look just about any way you want it. You can change the appearance of a house with something as simple as paint or as elaborate as a remodel. A new house generally needs furniture and other items like window treatments, carpeting and light fixtures. Your decorating costs are directly related to your tastes and expectations so budget accordingly.
Home Maintenance and Repairs
This is a subject that is not only a hidden cost but will remain a continual cost as long as you are a home owner. If you bought a fixer-upper, you pretty much know what’s ahead of you. Time, sweat and money. Your eyes will be the best compass to determine the amount of improvements needed. Even a house in pristine move-in condition is going to eventually need maintenance. There will come the day – maybe not now (depending on how long you stay in the house) that the roof will need to be replaced or the furnace breaks down or something goes terribly wrong with the plumbing. Ouch, these are a few of repairs that hurt your wallet. Your choice is to repair or replace. If you’re handy at DIY, you have an advantage, but you’ll still need to spend some money. Don’t be too startled if every year you have some sort of major expense, sometimes costing more than you expected to spend in repairs for the coming year. To take the sting out of those unexpected expenditures, start a savings account for your house. It’s important to maintain your house. To sell your house for the best price, you want to show a well-maintained home, not a neglected house. Maintenance and repairs can be a subject on its own for another article.