With Terry Story, 26-year Veteran Real Estate Agent with Coldwell Banker in Boca Raton, FL
So with the housing market doing pretty well, Terry sheds some light on why people buy and sell their homes and key factors of what’s driving home sales. The #1 reason for sellers appears to be “I’m just tired of it” as people accumulate junk through the years, tire of the same old layout, have no desire to go through renovations and are basically just done with the home and looking for a change. The #1 reason for buyers, at least right now, is that mortgage rates are still at all-time lows – under 4% – rates we last saw in 1971! Moreover, home prices still appear reasonable, especially with the lower mortgage rates.
Now, with the economy bouncing back, people feel more confident – financially – and have recovered some of their losses through the 2008 recession – so they are more comfortable with making the financial commitment, have an employment and salary history that can get them a mortgage, and have money saved up for a down-payment, which no longer needs to be as high as 20% but is down to single-digits, especially for those with good credit.
People are also buying and selling homes because of changes in family circumstances – births, deaths, families merging together, etc.
And the #1 mistake when you’re buying a new home or building a custom home is over-building! With the average cost of construction at about $105 per square foot, shaving off even 500 square feet is about $50,000 in savings. Not to mention the maintenance, furniture and fittings. People should also think of resale value and look at whether people are really looking to buy a 5,000 sf home. In the same vein, holding back on upgrades can save you money that can be better used on must-have features. And stay on top of the process.
Terry also talks about millennials becoming a more important demographic as 10,000 baby-boomers retire each day and are looking at down-sizing – eyeing some of the same properties that younger millennials may find attractive, and winning out with greater buying power.