Today, we’ll highlight why you need to check the pipes of the home you’re intending to buy.
Depending on the age of a home and the material, the pipes that serve the home may be outdated and require replacement. Old pipes that have deteriorated may start to leak or burst, leading to water damage and even unsanitary health hazards. The most common culprit is galvanized steel piping, which was commonly used in homes built prior to 1960 for water supply lines, and have an average lifespan of 40 years. Copper pipes have been the standard for residential home use since the 1960s and have a lifespan that can reach beyond 50 years.
When considering a home, especially one that is at least 30 years old, or built before the 1960s, you should review the disclosures (especially any home inspection report) and any permit information to see if there are any outdated piping or history of leaks and if the plumbing has been replaced or updated at any time.
4 FACTS TO HELP YOU CHOOSE THE BEST OFFER
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What is Your Home Worth?
As shelter-in-place orders were implemented earlier this year, many questioned what the shutdown would mean to the real estate market. Specifically, there was concern about home values. After years of rising home prices, would 2020 be the year this appreciation trend would come to a screeching halt? Even worse, would home values begin to depreciate?
Original forecasts modeled this uncertainty, and they ranged anywhere from home values gaining 3% (Zelman & Associates) to home values depreciating by more than 6% (CoreLogic).
However, as the year unfolded, it became clear that there would be little negative impact on the housing market. As Mark Fleming, Chief Economist at First American, recently revealed:
“The only major industry to display immunity to the economic impacts of the coronavirus is the housing market.”
Have prices continued to appreciate so far this year?
Last week, the Federal Housing Finance Agency (FHFA) released its latest Home Price Index. The report showed home prices actually rose 6.5% from the same time last year. FHFA also noted that price appreciation accelerated to record levels over the summer months:
“Between May & July 2020, national prices increased by over 2%, which represents the largest two-month price increase observed since the start of the index in 1991.”
What are the experts forecasting for home prices going forward?
Below is a graph of home price projections for the next year. Since the market has changed dramatically over the last few months, this graph shows forecasts that have been published since September 1st.
The numbers show that home values have weathered the storm of the pandemic. Let’s connect if you want to know what your home is currently worth and how that may enable you to make a move this year.
“Newly pending sales are up 25.5% compared to the same week last year, the highest year-over-year increase in the weekly Zillow database.”
Whenever there is a shortage in supply of an item that’s in high demand, the price of that item increases. That’s exactly what’s happening in the real estate market right now. CoreLogic’s latest Home Price Index reports that values have increased by 5.5% over the last year.
This is great news if you’re planning to sell your house; on the other hand, as either a first-time or repeat buyer, this may instead seem like troubling news. However, purchasers should realize that the price of a house is not as important as the cost. Let’s break it down.
There are several factors that influence the cost of a home. The two major ones are the price of the home and the interest rate at which a buyer can borrow the funds necessary to purchase the home.
Last week, Freddie Mac announced that the average interest rate for a 30-year fixed-rate mortgage was 2.87%. At this time last year, the rate was 3.73%. Let’s use an example to see how that difference impacts the true cost of a home.
Assume you purchased a home last year and took out a $250,000 mortgage. As mentioned above, home values have increased by 5.5% over the last year. To buy that same home this year, you would need to take out a mortgage of $263,750.
This table calculates the difference in your monthly payment:
That’s a savings of $61 monthly, which adds up to $732 annually and $21,960 over the life of the loan.
Even though home values have appreciated, it’s a great time to buy a home because mortgage rates are at historic lows.
· The pumpkin spice latte is here, so you may be tempted to spend your extra cash on a daily caffeine fix, but that small expense can add up to a big number – fast!
· Saving for a down payment takes a little discipline, so limiting your extra purchases (like a latte a day from your favorite coffee shop) will help you get there faster.
· Depending on where you live, putting away just a small amount each day will get you to the average down payment you may need for homeownership faster than you think.