Posted in Home Investing

Home Price Expectations

Over the next five years, home prices are expected to appreciate, on average, by 3.6% per year and to grow by 18.2% cumulatively, according to Pulsenomics’ most recent Home Price Expectation Survey.

So, what does this mean for homeowners and their equity position?

As an example, let’s assume a young couple purchased and closed on a $250,000 home this January. If we only look at the projected increase in the price of that home, how much equity will they earn over the next 5 years?

Rising Prices Help You Build Your Family’s Wealth MyKCM

Since the experts predict that home prices will increase by 5.0% in 2018, the young homeowners will have gained $12,500 in equity in just one year.

Over a five-year period, their equity will increase by over $48,000! This figure does not even take into account their monthly principal mortgage payments. In many cases, home equity is one of the largest portions of a family’s overall net worth.

Not only is homeownership something to be proud of, but it also offers you and your family the ability to build equity you can borrow against in the future. If you are ready and willing to buy, find out if you are able to today!

Posted in Home Investing

House Flipping Staging a Comeback?

HomeValueMore Americans are once again on the hunt to snag a home at bargain prices, fix it up, and then try to resell it for a quick profit. Home flippers mostly vanished from the market during the housing downturn a few years ago. But with home values inching up, flipping is coming back.

RealtyTrac says flipping increased for the second year in row, rising a slight 0.33 percent in 2012 from 12 percent in 2011. The company defines flipping as buying and selling a property within six months.

RealtyTrac reports the average gross profits for these types of transactions was $37,375 in 2012. According to the company, some of the best places to flip homes in 2012 were Orlando, Fla.; Richmond, Va.; Tucson, Ariz.; and Charlotte, N.C.

For example, homes flipped in Orlando were purchased for $100,397, on average, and then for $174,895 — earning a gross profit, on average, of nearly $75,000, RealtyTrac reports.

Investors are showing signs of being more cautious with flipping than they were during the housing boom. More investors are coming in with all-cash deals to purchase the homes. They also are holding onto the properties longer than they once did. On average, the flipping time from purchase to resale stands at about 106 days today, according to RealtyTrac.

“That seems to be the sweet spot for a profitable deal,” says Daren Blomquist, vice president at RealtyTrac. “Back in the housing bubble, many flippers were solely relying on price appreciation, sitting back and selling for big profits within a month or two.”