May as well dream of moving out of my apt!
I’ve been in SoCal for while and like many love to tour open houses, haunt redfin, and dream of what I would buy. If you think it’s time to to make your House Hunter dreams a reality I have a few thoughts!
I’m so looking forward to 2021 and hope for a better life for all of us. Like many, I’m fascinated by the real estate market so love to watch house hunters but I live in Los Angeles so it will likely be a dream unless I relocate. But with the economic upheaval all across the USA (and world) has made me think maybe housing costs will stabilize. So why not dream of homeownership and what that entails. It’s a lot of steps but the biggest is finances!
I recommend you look into how to save a downpayment, programs to help with homeownership, making sure your credit is good, and well money! I recommend you start with Fannie Mae to guide you through the process of getting ready for the biggest purchase of your life! They have a very useful page to educate you on the reality of homeownership and the unexpected costs that you may be unaware of.
You shouldn’t look at places out of your price range it will only make you feel distressed when you drool over 1M mini-mansions and then realize you might be able to afford a condo or small cottage. Instead, take inspiration from decorator magazines and TV shows to figure out what you want, need, and must-haves! I look at it like when I moved to my apt. I did not look at places out of my price range because it would have just left me disappointed with what I could afford. I live in SoCal and had the opportunity to buy when I lived in WDC years ago and deeply regret not trying harder for the rowhouse in an up and coming neighborhood before the metro was built <sigh>. Of course, a major issue is the lack of affordable entry-level housing in SoCal and across the USA. I found a very interesting article Housing Supply Chartbook on the Urban Institute that has lots of information regarding redlining, housing barriers for Black and minority people.
If your thinking that maybe right now is the moment to figure out the cost of homeownership you should check out one of the calculator sites. I usually like to look at MortgageCalculators.info when I see a place on redfin that’s in my budget. I’ve looked at a variety of options from looking to buying a plot of land and buying a tiny home or going the traditional route of a fixer-upper.
I think it’s really important on the journey of homeownership that you first start off with your budget to figure out how much home you can buy then look into other costs from having a budget for unexpected repairs, taxes, insurance and just getting it ready for you to live. So that’s why my first stop is the Mortgage Affordability Calculator. Until you have a mortgage in hand you really are just guessing what you have to work within searching for a residence. I find people will say I have xxx amount of money so should be able to buy this house but you have to take a lot into account. It’s not just what the house is listed but has to also realize it will often go over that amount, cash buyers and people who (before Covid) looked at them as short term rental opportunities depending on the location. Especially now when we have people who were planning to buy and are lucky enough to have no loss of income during the pandemic. It’s still a competitive market with people using real estate agents, virtual viewings, cash offers, and competition with having a preapproved mortgage in hand. Of course, you have to get your credit reports and credit score since your good credit (FICO score 620+) is what makes for a lower interest rate. So before you find your dream home you have to get all your ducks in a row and look at places in your price range so that you don’t fall in love with a place you can’t afford.
So while you shelter at home this is a great time to look at what’s on the market, what the property sold for vs listed, expanding from your ideal location, and considering what it costs to repair an older property to your specifications. You may realize after crunching the numbers, job stability, and location it might be time to evaluate looking to move to another city/state. Just make sure you look at the salary range, economy, and if they still have Covid-19 cases on the rise. I have quite a few friends that have lost their job and decided it was time to relocate. Some have moved back, others to less expensive states, and others have jobs that have offered permanent remote jobs so are able to go wherever they like.
Leave a comment below on how Covid-19 has made you change your plans for homeownership.