1.) Has the real estate market bottomed out?
The media has given us gloomy statistics on the real estate market, but these numbers are based on a national and state level. Let's focus instead on Scarsdale. How are we doing?
In 2008, there were 142 homes that sold. In 2009, 160 homes sold, an increase of 12.7%.
However, the average sales price for 2009 was lower than the previous year, and homes took longer to sell. But let's look into more specifics.
In 2008, 110 homes sold were under $2M. 32 homes sold above $2M.
In 2009, 126 of the 160 homes sold were less than $2M. People were still buying, they were just spending less.
What does this tell us? 2008 was most likely the bottom for Scarsdale, and the market has leveled off.
2.) When will it get better?
The short answer: It already has.
The long answer: Although predicting the future of the real estate market is sort of like reading tea leaves, if January is any sign, with 14 single-family homes having sold, then 2010 is set to be a much better year.
3.) What do I do if my house is worth less than what I owe?
Do you need to sell your home in the immediate future? If not, then great! Continue to make timely payments to your mortgage provider. The value of your home in Scarsdale will, eventually, increase.
You might even look into the possibility of refinancing, although this is especially difficult if you are already "underwater".
If you have to sell your home now, are you behind on any payments? If so, you might consider selling your home as a short sale. You will have to work on this with your mortgage provider and attorney.
If you are not behind on any payments, and have no choice but to sell now, you will most likely have to take a loss. For those in this category, you should consider the possibility of renting the home. It's a tough decision, and being a landlord isn't easy, but it might be better than selling at a large loss, only if the price you can rent the home for covers your mortgage and expenses.
4.) Do I qualify for the Homebuyer's tax credit?
In order to qualify for the $8,000 credit, your income can not exceed a combined income of $245,000 as a couple, or $145,000 for an individual.
This already eliminates many buyers in Scarsdale. However, don't forget that sellers who buy elsewhere might also qualify for a $6500 credit, especially if you don't exceed those income limits and have lived in your primary residence for at least 5 consecutive years.
5.) Can I get a mortgage?
With a good credit score, you can get practically anything, especially a mortgage.
Except, the amount you qualify for might not be as high as you might have received in the past, it will probably take a little longer to approve, and there will be more paperwork.
Banks are still lending. They are also paying more attention to how much buyers are putting down on a property. 5% or 10% down on a home may just not cut it anymore. Many banks are requiring at least 20-30% down.
6.) Is now a good time to buy?
Actually, now is a great time to buy....if you have the means to do it.
Crunch the numbers and figure out how much you can afford to pay each month on a mortgage. Now, factor in monthly maintenance fees (electric, gas, oil, cable, etc.). Also think about insurance costs, and put in a small cushion for any surprises. Now, look at that total. Are you comfortable paying that much each month? Make sure the numbers add up to what is affordable for you.
Buying a home may well be worth it in the long run, especially since mortgage rates are historically low and prices are more level. From a long-term perspective, real estate remains one of the best investments a buyer can make, but the decision must be made wisely.
7.) Should I renovate?
That depends. How soon do you plan to sell? Will the renovation make your home the largest on the block? If you plan on selling soon, and will increase your square footage dramatically, don't bother doing it. Having the largest home in the neighborhood is a big no-no for sellers!
If you are considering a renovation, and there is a possibility you will sell within the next year or two, get the advice of a realtor first. Show them the plans and be honest with how much it will cost. They will be able to tell you if such a renovation is worth it, what type of value (if any) it adds to your home, and if you will see any of that money back when you go to sell.
Rose Marinaccio is the Office Manager of Engel & Voelkers, Scarsdale. You may reach her by email at Rose.Marinaccio@engelvoelkers.com or visit the Engel & Voelkers website www.engelvoelkers.com/scarsdale