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The City vs. Suburb Decision

Smart Moves by by Ellen James Martin
by Ellen James Martin
Smart Moves | September 19th, 2018

Millennials -- young adults born between the early 1980s and mid-1990s -- are famously urban. Give them a city apartment near trendy restaurants, pubs and a Pilates studio and they’ll be content for years, or so goes conventional wisdom.

But real estate analysts say something surprising happens to these young urbanites after they’ve had a child or two: They leave their city apartments and retreat to a suburban enclave in search of the same sort of classic detached house in which they were raised.

Skylar Olsen, a senior economist for Zillow, which tracks housing trends across the country, says recent data show that many millennials surrender their city lifestyles once they reproduce. As homebuyers, this generation is more like their parents than previously believed.

“Young buyers with kids want a detached home. They want a large living space and a three-car garage. But because of cost, townhouses are where many end up,” Olsen says.

Though many millennials eventually make the predictable transition from city to suburbs once they become parents, real estate specialists stress that suburban living is not for everyone, regardless of their life stage. They advise homebuyers to carefully ponder their housing moves before investing in any property.

Here are a few pointers for home-buying couples with kids:

-- Start by envisioning your ideal neighborhood.

Doro Kiley, a certified life coach who helps clients navigate major transitions, says that before starting a home search, families should first imagine their ideal neighborhood. That should help them get as close as possible to the optimal setting.

“Always begin by thinking about the end product -- what you’d really like as opposed to what you would settle for. In many ways, we create our own realities,” Kiley says.

Once you have a clear picture of your ideal neighborhood, begin factoring in such practical realities as your financial limits.

-- Next, imagine the ideal property.

Kiley says both partners should write down their respective visions of a dream house -- including home features. They should then share their visions, combining the key elements of both into a single statement.

Written statements help people clarify their thinking and refine their plans as they move through successive drafts. This is also a way to help reconcile conflicting views.

Merrill Ottwein, a real estate broker and former president of the National Association of Exclusive Buyer Agents (naeba.org), suggests prospective homebuyers try to reconcile their differences by distinguishing between “wants” and “needs.”

For instance, a couple with two young school-age children and one parent who needs a home office for telecommuting might decide that acquiring a place with at least four bedrooms is a genuine “need.” But a formal dining room could easily fall into their “want” category.

-- Factor commuting distances into your calculations.

As Ottwein says, one of the most wrenching trade-offs many families face is between a larger, newer house with a longer commute, and a smaller, older place that’s closer to the city center and the workplace of the primary breadwinner.

Buyers who consider an outer-tier suburb are often driven by the desire for a larger property or what they perceive to be better schools.

“Sadly, good schools often correlate with newer suburbs rather than older areas that are close in,” Ottwein says.

But before you opt for a distant suburb, he strongly recommends you do morning and afternoon rush hour test drives from your target area. This way, you’ll know more precisely what sort of traffic to expect should you live there.

As Ottwein says, buyers should disabuse themselves of the notion that the current level of traffic congestion on their path will remain static. The odds are traffic will worsen as the years go on.

-- Don’t assume you’ll need a huge yard to accommodate your children.

Many parents with young children hang on tightly to the hope that their kids will have as large a backyard as they had growing up. This aspiration can influence them to pick an outlying suburb at the expense of their convenience and commuting time.

But are the trade-offs necessary to acquire a large piece of land always worth it? Not in many cases, says Ottwein, noting that today's children often spend much more time in organized athletic and recreational activities than did their parents.

“Today’s kids are programmed to the hilt with team sports, music lessons and school events. They have little time for the sort of free backyard frolicking their folks remember so nostalgically,” he says.

There are only a few homebuyers whom Ottwein believes make as much use of their large lots as they intended when they bought their place.

“Mostly it’s just those few people who want horses -- or who are true isolationists -- who are justified in accepting all the sacrifices that come with a long commute,” he says.

(To contact Ellen James Martin, email her at ellenjamesmartin@gmail.com.)

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Condos and Condon'ts in Big Cities

Smart Moves by by Ellen James Martin
by Ellen James Martin
Smart Moves | September 12th, 2018

Stacy Berman has sold homes in the Washington, D.C., area since 2002. These days, she’s surprised by how many buyers of all ages are bailing on the suburbs. Instead, many aspire to ownership of a condo in a historic building close to the heart of the nation's capital.

But after they’ve thought through the implications of living in an old building, many of Berman’s city-oriented buyers modify their plans and instead choose a unit in a newish building with a stripped-down “industrial loft” feel and an open floor plan.

“For some people, there are too many everyday trade-offs to life in an old building. For example, many old buildings lack the convenience of a washer-dryer within the unit and are short on garage space,” she says.

Steven Israel, a real estate broker affiliated with the National Association of Exclusive Buyer Agents (naeba.org), urges urban condo buyers to consider the cost implications of living in an older building.

“Older buildings can be more expensive to run. You want to be sure the place you buy has been maintained in the past and has a war chest for future improvements,” Israel says.

Mark Nash, a longtime real estate broker and the author of “1001 Tips for Buying and Selling a Home,” says whether you buy an older condo or a relatively new one, it’s still possible to get a favorable deal in many gentrifying city neighborhoods.

But he advises against selecting any building where more than 20 percent of the units are “investment properties” occupied by renters.

“I don’t care what great people the renters are. They simply aren’t as motivated to keep the building nice as owners are,” Nash says.

Here are a few pointers for city condo buyers:

-- Seek to avoid a very large condo building.

When Nash shopped for a condo in Chicago some years ago, he had a wide selection of buildings from which to choose. To make sure he selected well, he did a thorough comparison of his choices.

Nash says his analysis convinced him that it’s better to avoid a condo in any building with more than 500 units.

“There can be many cons to living in a really large building. One is that you can confront a lot of red tape when dealing with the management company,” he says.

After several weeks of condo shopping, Nash ultimately chose a unit in a building with just 44 units.

“For me, this is perfect. The residents are friendly, and the building isn’t run like a bureaucracy,” he says.

-- Look for an area with easy transportation access.

One of the attractions of city living -- especially in a vibrant urban community -- is that you can often position yourself within walking distance of many desirable neighborhood amenities.

“People are increasingly interested in living near their work, especially if that area also has good restaurants and other positives. Besides, you can probably count on better appreciation in a neighborhood with close access to a subway or commuter rail system,” Nash says.

When choosing an urban condo, don’t overlook such basic amenities as close access to shopping, especially to a quality supermarket. In addition, Nash recommends you forgo buying a city condo unless you plan to remain in the area for a minimum of three to five years.

-- Seek a building where noise won’t be a problem.

An older building can be elegant and give you more square feet than a newer one for the same money. Yet in the long run, you could find a newer building more commodious. Much depends on the quality of construction and the era in which the property was built. Though generalizations don’t always apply, Nash says structures under about 10 years of age typically provide lifestyle features you can’t obtain in an older building.

“Besides the comfort of a more energy-efficient building with good windows, you usually get better soundproofing in a newly constructed building. The floors are better and the walls are more insulated,” he says.

-- Think through whether your parking access would be sufficient.

Many who hanker for an urban condo imagine a lifestyle more reliant on public transit than cars. But while it’s true that relatively few people residing in New York City own cars, condo owners in most other major U.S. cities want access to a vehicle of their own.

Because of that, Nash says it’s usually unwise to buy a unit in a building that doesn’t allow you at least one parking space. Ideally, the building should also provide parking for your guests or have arrangements in place for valet parking.

“The reality is that, unlike many people around the world, most Americans are still very car-oriented. Even if you don’t care about car ownership, you’ve got to consider where your family and friends will park when they come visit you,” Nash says.

(To contact Ellen James Martin, email her at ellenjamesmartin@gmail.com.)

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Stale Listings Can Mean Fresh Opportunity

Smart Moves by by Ellen James Martin
by Ellen James Martin
Smart Moves | September 5th, 2018

A decade ago, after the residential real estate market tanked, bargains were rife and qualified buyers had their pick of properties at reasonable prices. But now the picture is vastly different.

“Today, home prices are at or approaching record highs in many markets,” says Lawrence Yun, chief economist for the National Association of Realtors (realtor.org).

Yun forecasts that some of the nation’s most overheated real estate markets will experience sales slowdowns as 2018 progresses.

“Drops in home sales can be connected directly to supply shortages and corresponding price increases,” he says.

Buyers still determined to snag a decent deal in a popular neighborhood should consider what’s known as a “stale listing," according to real estate pros.

“Stale listings can be a treasure trove of good values,” says Stephen Israel, the president of a real estate firm affiliated with the National Association of Exclusive Buyer Agents (naeba.org).

What sets stale listings apart is that they’ve sat unsold for longer than the average selling time for their neighborhoods. But Israel cautions that selling times can vary widely depending on the popularity of a community and the local economy.

“Look at each home individually and find out its listing history. It may be the home was listed with a different agent before and then later relisted with a new agent. Because of that, you may need to dig to determine how long it’s really been up for sale,” he says.

Sid Davis, a real estate broker and the author of “A Survival Guide for Buying a Home,” says the most common reason a property goes unsold for a lengthy period is that it was overpriced when it first hit the market. Even after a series of price reductions, such a home typically retains its stigma, which continues to drive away potential buyers.

“The longer a house is on the market, the less it sells for. That’s one of the tenets of real estate,” Davis says.

Here are a few pointers for buyers:

-- Inform yourself about values in your target neighborhood.

Many who are open to the idea of buying a stale property are novice buyers on limited budgets. To navigate the market with confidence, Davis says they need to inform themselves about property values in the area where they’re searching.

“Do your homework before going out and making any offer,” Davis says.

Very often, the owners of a stale property will ratchet down the price in incremental drops. The key for a prospective bidder is to know when the sellers are approaching a realistic price point.

“You and your agent need to do a thorough analysis of the area so you’ll have a good feel for the true value of any house you like. That way, you won’t be flying blind when you venture a bid,” Davis says.

The key to determining market value is to closely examine the data on recently closed home sales on similar properties -- known as comparables, or comps for short.

“Make sure your agent shows you very recent comps that are really similar to the house you want to buy,” Davis says.

“When deciding how much to bid on a stale listing, don’t focus on the list price. Instead, orient your offer to what the market is really paying for that kind of a house in that neighborhood.”

-- Set up a system to ensure you’re alerted when price drops occur.

Have you found a home that’s appealing, but believe it’s significantly overpriced?

If so, Israel suggests you track that property closely, waiting for its owners to take a price cut that brings it closer to its true market value.

To stay alert to potential pricing changes for the property of your choice, Israel recommends you ask your real estate agent to keep you constantly updated by email or text.

“Ideally, you should be kept informed on a daily basis,” Israel says.

-- Seek to time your bid advantageously.

Are you focused on a particular property whose owners have finally agreed to a major price reduction after the place has lingered on the market for a lengthy time? In that case, you may be tempted to come in right away with your bid.

But Israel says it still could be wise to wait for a few days before bidding on a formerly overpriced place. That’s because typical sellers will wait a while after cutting their price before entertaining any offers.

“Of course, there are always exceptions. If you’re really in love with the house and think the sellers are finally realistic on price, don’t wait any longer. Bid right after the price drop or you could risk losing your dream house to another offer,” he says.

(To contact Ellen James Martin, email her at ellenjamesmartin@gmail.com.)

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