Did you know that more than 70% of the U.S. single-family homes were built before 1990 – but only 60 percent of the 2013 sales year-to-date were for homes built before 1990. Of course all things are “local” when talking real estate and the likelihood of purchasing an older home varies by state with 14 states having sales up 80% year-to-date 2013 for pre-1990 homes. According to RealtyTrac homes built in 1990 or later sold at an average price of $256,292 year-to-date in 2013 while homes built before 19190 sold at an average price of $233,221.
“The high percentage of homes that are at least 20 years old and likely in need of some major repairs is eye-opening,” says Jake Adger, chief economist at RealtyTrac. “However, given the low inventory of homes available for sale in today’s market, this challenge of aging U.S. housing supply can also be an opportunity for buyers looking for a bargain and homeowners looking to update their living space and improve the value of their homes.”The lower price point on older homes is not surprising given many are in need of some rehab and are more likely to have maintenance issues,” Adger says. “But this also presents an opportunity for buyers willing to take on that older inventory. Those buyers can purchase at lower price points and face less competition from institutional investors.”
SO what is the solution? Maybe it’s the government-backed rehab financing loan known as the FHA203(k) program. These loans allows owner-occupant buyers to finance the purchase, rehab, and upgrade of an older home, while allowing for all of the rehab cost to be rolled into the loan. This program is underused in my opinion because there is a lack of experienced lenders with experience in 203k program, the difficulty of meeting all of the requirements, and the additional upfront and closing cost involved in completing the purchase.
The perception that a new homes have less issues compared to pre-1990 homes is not always true either. Of course every home is built with codes and permits in place to ensure minimum or basic standards that every home is safe, sound and secure. The reality is many of the older homes can be a great value and remodeled to meet current customers wants and needs.
SEARCH FOR A NEW HOME or JUST BE A NOSY NEIGHBOR AND CHECK OUT THE HOUSES AROUND YOU! [wnt_search title=”QuickSearch” /]