|An exit strategy for old houses|
When the 3.5% to 5% downpayment is added to the closing costs of the loan--usually 1% to 3%--first-time buyers don't have a lot of geedas laying around for fix-it work.
And your--our--1990's and 1980's (and older) suburban homes don't just need work. They are boring houses in boring neighborhoods run by cranky HOAs with school districts in decline. Okay, that's not universally true, but still. It sort of is true. When new construction houses are the same price and more appealing than older ones, what does it mean for the recovery of the overall market?
Mostly, it means what the data show: Sales of existing homes are down for the eighth straight month. The National Association or Realtors has weighed in, touting high prices because of low inventory and blaming cold weather for everything else. Now Is a Great Time to Buy a House and Always Has Been, and of you don't believe it, ask a Realtor.
In other words, the headlines announcing the loud sucking sound of buyers inhaling homes is really more of a wheeze. Look around the suburbs of Denver Metro and you'll see block after block, neighborhood after neighborhood, community after community of houses decades old, occupied by members of the Flower Power Generation and all wondering if they can sell their houses to someone and if they did, where would they move. And it's not so different in suburbs everywhere else, where the only thing residents can walk to is the corner fire hydrant.
That said, the way things are now isn't the way they will always be, a statement which defies the feelings of day traders and baseball fans. As I learned in an appraisal class years ago, the only certainty in real estate is that nothing is certain. Change is inevitable.
Buyers: A killer deal may be had in someone's old house. Tell your friends, and before long, you'll have a community.