For many years people have been giving out the same home buying advice. The recent boom and bust cycle of the housing market, however, has turned a lot of that advice on its head. It’s time for a lot of the old advice to be updated.
Old Advice: Move to the suburbs.
According to recent statistics, urban centers have grown in population faster than suburban and rural areas for the first time in several decades (usatoday). In short, people are moving into the city instead of away from it. Being in the city allows a family to stay close to stores, schools, churches, and other services.
Unlike past decades, many families and individuals now have to consider the costs of commuting. In addition to gas and wear and tear on a vehicle, there is also the time commitment involved with commuting to and from the suburbs. For this reason, real estate values in the cities have risen, while property value in the suburbs has fallen.
Old Advice: Take on a fixer-upper
So many so-called “fixer-uppers” were bought and flipped during the real estate boom that it can be hard to find a house that needs work in some parts of America. Furthermore, many buyers and sellers became more informed about how much repairs would actually cost.
Today, there are so many homes on the market at greatly discounted prices that it rarely makes sense to take on a home that needs a lot of repairs unless you can do the work yourself. Be careful not to make the mistake of taking on a house that needs more repairs than you can afford. Extensive damage to a home that is not quickly repaired can cause further damage and lead to more costly repairs.
Because of this, it makes sense to find a home that is in good repair and bargain with the seller to get a good price. There are too many good homes on the market to waste time and money on a fixer-upper.
Old Advice: Buy a home on the water
Waterfront property used to be considered a great investment. It was believed that real estate that was bordered by the ocean, river, or lake would always retain its value. In recent years, however, these properties have dropped in value significantly. In some areas, waterfront property has dropped in value by nearly fifty percent (usatoday).
There are several reasons for this trend. To start, a spate of recent hurricanes and bad tropical storms has made it next to impossible to find affordable home insurance for houses located in coastal flood zones. Furthermore, many cities and counties have imposed restrictions on how homes in these areas can be constructed. This makes it more expensive to build new houses, and to replace or repair a house located in one of these areas when it is damaged.
If you have your heart set on buying waterfront property, protect your investment as much as you can. Buy flood insurance and replacement coverage property insurance. Be sure to factor these costs into your budget when deciding on a price range for your new home purchase.