Smart Moves by Ellen James Martin

Tips for Buying a Long-Term House

After multiple years of intense rivalry among homebuyers competing for property in popular neighborhoods, the news is mostly favorable for purchasers. A gradual increase in inventory means more available homes. This, coupled with unexpectedly low mortgage rates, has brought a degree of relief for those who seek homeownership.

But housing analysts say wannabe owners from the current generation of millennials are extremely thoughtful when selecting a property. Rather than pick a “starter home” where they could live for just a couple of years before trading up, more young families now aspire to a place where they could remain indefinitely.

“These days, even people with very little children are shopping for a neighborhood that offers more than a good elementary school. They’re also looking for a strong high school their kids could attend years into the future,” says Eric Tyson, a personal finance expert and co-author of “Home Buying for Dummies”.

That’s because it’s becoming increasingly

costly to move frequently.

“Remember, when you sell a house, you pay commissions to a real estate agent. In addition, there are transfer taxes and charges. Beyond that, there are moving costs, which alone can be ruinous to a budget,” Tyson says.

At the national level, U.S. home values fell slightly from March to April, the first month-over-month decline since February 2012, according to Skylar Olsen, the director of economic research for Zillow, a Seattle-based firm that tracks real estate markets throughout the country.

Olsen cautions against drawing conclusions about a one-month change in home values. Still, she says the statistic should serve as a reminder to buyers that values don’t always rise.

“It’s too early to say if we’ve hit another home-value peak and are at the beginning of a sustained downturn, or if this is just a bump in the road,” Olsen says.

Is your family hoping to buy a place where you could afford to live for years to come? If so, these few pointers could help:

-- Assess the costs of commuting from a distant suburb.

You might be enamored of a very spacious and reasonably priced house in an outlying area. But how much would it cost you and your spouse to commute from that distant location?

Too few prospective buyers anticipate their commuting costs down the road, says Christopher Leinberger, who chairs the Center for Real Estate and Urban Analysis at George Washington University.

If possible, he encourages buyers from dual-income households to look for a property from which at least one spouse could walk to work or commute by public transit. That way, the household could slim down to a single vehicle, saving lots of cash in the process.

-- Factor in the utility costs for a large home.

“Anyone who hasn’t noticed rising utility costs has been sleepwalking through the last decade,” says James W. Hughes, a professor and housing analyst at Rutgers University in New Jersey. He urges buyers to take into account the costs of heating and cooling any place they plan to buy.

“Be sure to ask the current owners to give you two to three years’ worth of utility bills. Notice the trend, keeping in mind that energy costs will undoubtedly keep rising,” Hughes says.

-- Remember upkeep expenses.

If you buy a brand-new house from a builder with high construction standards, you can often expect relatively low repair and appliance-replacement costs for a period of five to 10 years. But chances are you’ll be less lucky if you select an older home, which could be especially expensive to maintain if it’s large.

“When you need a new roof on a big house, that’s going to be extremely costly, as would be a new cooling system. So, be sure you could handle those expenditures,” Hughes says.

He also recommends you think twice about the upkeep costs of a house with a lot of wood trim and siding, which will probably need extensive repainting every few years.

One way to gain help in approximating future upkeep costs is to be sure your home inspection is done by a well-trained inspector. One source of referrals: the American Society of Home Inspectors (ashi.org).

-- Take note of the trend in homeowner association fees.

Whether you’re planning to move to a gated community in the suburbs or a condo in an urban setting, the odds are you’ll be subject to a monthly fee to cover the costs of maintenance, security and other common expenses.

Before you commit to any property with a monthly management charge, Hughes says you should get detailed information on these charges, going back multiple years. Then examine the statistics carefully to see if inflation has been a major factor pushing up these costs. If so, he says you should assume this trend will continue in coming years.

“When you’re choosing a home, you really need to become an amateur accountant -- calculating not only your monthly mortgage payment, but also all the other costs of living there,” Hughes says.

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