Personal Finance Journal

The argument about whether it is better to buy or rent a home has raged for many years and will probably continue to do so. The consensus is that, basically, when you can do it, all things considered, it is better to buy a home. There are, however, many cases, especially in the short term, where renting a house makes more financial sense.

Recently there was a healthy debate on the issue from different sources, one claiming that are Rent Vs. Buy Myths That Ruined the Housing Market. The second article, written by Trent over at The Simple Dollar, calls the article nonsense and breaks down some very strong reasons whey this is the case.

Both articles are a little one-sided, as things are never really so black and white, but they both make some decent points. Of interest as well are the numerous comments on The Simple Dollar site. It’s obvious that people can get very emotional about this issue and there are strong arguments to be made on both sides.

The housing woes continued today as it was announced that new home sales had fallen more expected recently. The sales of new single family homes fell 4.7%, an annual rate of 604,000, lower than the projected 647,000.

This most recent drop makes for a fall of 26% for new home sales last year, the biggest decline since 1963, the Commerce Department said on Monday.

According to the NY Times, “last week, the National Association of Realtors reported that sales of previously owned single-family homes, a large portion of the overall housing market, suffered their biggest annual drop in 25 years. Prices have also fallen sharply. In December, the median price of a new home fell to $219,200, down 10 percent from December 2006.”

In our frequent discussions here regarding real estate planning and investing, we don’t get to talk much about building your own home. This is obviously a great option for many homeowners as it allows for the type of hands-on work and input that appeals to many people. If you’ve been thinking of building a home and like the style and elegance of an older home but want a new construction, you might want to consider acquiring Victorian house plans.

The home designs from Garant Homes Corporation feature some unique plans that allow the home owner to build a home with a modern floor plan and amenities while reflecting the architectural details from the past. The Victorian house plans from Garant Homes include many unique ideas that include plans from quaint cottages to much larger and more stately homes. They even have a plan that will provide a home designed as a fully functional bed and breakfast.

If you’ve been thinking of building your own home, you owe it to yourself to check out the house plans from Garant Homes. In addition to their Victorian plans they also have plans for Caribbean and Mediterranean houses so that you can build the home you’ve always wanted.

If you’ve been waiting out the seemingly endless rise in home prices the recent declines may bring a smile to your face. For everyone else, it’s just more bad news from the housing sector. A recent report listing a home price index has noted that home prices have fallen an average of 4.5% this year. This drop has been the biggest quarter-to-quarter fall in prices in the last 20 years that the index has been covered.

Unlike previous quarters, this last one has seen prices decline in all 20 cities that are covered in the index. The largest declines were seen in cities that had some of the biggest gains during the boom years.

After several years of an absolutely white hot real estate market in just about every corner of the US, it seems things are cooling down. In fact, the bubble has really burst just about everywhere as prices have actually begun to fall in many of the biggest markets around the country. Despite this fact, however, people are still buying and selling homes.

Some folks need to relocate, or find a bigger home, or, more likely, downsize a bit and get something more affordable. Whatever the case, homes are still on the market and since the tide has turned, it is now clearly a buyer’s market. Fortunately for these buyers, there are a bunch of online tools they can use to help them weave their way through this changing real estate market.

Most people still choose to use a realtor and these folks still have their place. Thee are, however, some useful websites to help you work your way through the real estate maze whether you’ve chosen to work with a realtor or want to do-it-yourself.

One of the most useful tools is just going to realtor.com and doing some searches for the homes in your area that fit your criteria. You won’t see as much information as realtors can see, but it’s a great place to start.

Another great place to explore is www.zillow.com. You can find homes in your prospective area that are for sale or have sold, but you can also get an estimate…or a “zestimate” …of the value of the home. This site also gives you information such as recent sales prices and tax rates on individual homes.

A similar site to zillow is Trulia.com. This site gives information like that found on zillow such as homes for sale, as well as information on the neighborhood and schools. Trulia also offers an interesting “Heat Map” that shows a colored map of home prices and trends.

If you want to tackle the real estate market yourself, but aren’t quite ready to do a FSBO, you can use the services of Redfin.com. Redfin will help you to either sell your home or buy a new one. If you are selling your home, rather than take the 3% that most agents take, Redfin will take a flat fee of either $3,000 or $4,000, depending on the options you choose. This can be quite a bit of savings, especially if your home is listed for a high price. For this fee, they will place your property in the multiple listing service (MLS), provide you with a lockbox and a sign for your yard, and then they will hadle all the negotiations and paperwork.

For buying a home, you do most of the legwork in finding a home while Redfin provides you with an agent who handles home tours, gives you advice on pricing and handles the negotiations and helps with the closing process. For this service Redfin takes 1% of the sales price instead of the full 3%, and you get to keep the remaining 2%. That can lead to some serious savings.

There are websites and tools popping up all of the time online to help you work your way through the maze of real estate. I suggest you take some time to use these tools to keep yourself better informed and ready for the market whether you’re using a realtor or not.

When you buy a home, you need to be aware of the various things that can limit your control over the property. This is as true for finished lots and single family homes as it is for townhouses, condos, and apartments. It’s a good idea to understand these limitations before you buy, so that you can decide whether you’re willing to live with them or not. After you buy, it’s too late; you’re stuck. Continue reading »