Buying a house or building a home is one of the biggest investment decisions we make in our lifetime. The average median home in California have risen from $393,000 in the last two years to $503,100 in 2017, according to real estate tracking firm Zillow. California home values have gone up 7.5% over the past year and according to Zillow they will rise 2.8% within the next year. The median price of homes currently listed in California is $499,000. With sky rocketing prices it is very important to choose wisely where you purchase your house or build a home. Nothing is more important and valuable than living in a surrounding with good Neighbourhood by determining what is good for your family and hence, here are some of the most important factors to evaluate when making a decision.
Factors to take into Consideration:
- Real Estate Value: Since buying a home is one of the biggest investment decisions to make it is important to research current home prices, the resale value of homes and the long-term value estimates. In addition, it is also desirable to carefully review local housing price trends.
- Affordability: Affordability includes more than just housing expenses. Living comfortable and within the means should be the first priority. The prices of consumer goods like groceries vary from town to town, prices of gasoline, utility bill, water, taxes all play a crucial role.
- Down payment: This is one of the biggest obstacles in the way of a potential buyers. It is difficult to save up a large sum of money. In the move to make down payment for affordable both Fannie Mae and Freddie Mac have announced that they intend to back loans with down payments as low as 3%. The Conventional 97 is a low down payment mortgage program which allows first-time home buyers and repeat buyers to make down payments of just 3% against a home’s purchase price. The Conventional 97 can be used for primary residences where the mortgage loan size does not exceed the national conforming loan amount of $424,100.
- Taxes: Seven U.S. states currently don’t have an income tax: Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming and there are 5 states that do not have sale taxes for retail sales and some services like Alaska, Delaware, Montana, New Hampshire and Oregon. Consider local sales tax, income tax, and tax credits and exemptions when you’re looking for a place to live.
- Employment Opportunities: Start by analyzing the quality of employment opportunities within your industry, this helps in determining where the concentration of these jobs are located. Income levels of jobs keep varying from state to state. For Example: If your field is in Tech you would probably consider living in Silicon Valley.
- Crime Rates and statistics: Researching the crime rates and statistics for various areas, helps in learning about safety in a town or neighborhood. Crime rates vary from state to state and in order to gather more information, you can also stop by the local police station and they will be happy to help. The long term stability for a neighborhood can be determined by how safe your surroundings are also keeping in mind the future development of a particular location.
- Education system: A good Education system is essential for children to better handle their future. Living in a good school district not only brings in better teachers, better books, it also help preserve home values and ensure faster resale rates. Homes in good school district tend to sell faster than homes in lower- quality school districts. Although, homes tend to be more expensive in better school districts, it works in the favor of the buyer in the long run.
- Climate: The climate plays a large role in our lives as it impacts or hobbies, behavior and sometime even our jobs. Living in the climate that you are most comfortable with contributes to your mental and physical health, For Eg: If you like to ski some of the places you could live in would be Utah, Colorado, New York, New Hampshire etc. It’s always good to think about this during the decision making process.
- Healthcare Facilities: Healthcare facilities are important in any stage of life, and especially relevant when you have children or nearing retirement age. Access to good healthcare will always help in improving Quality of life and expectancy exponentially. Often, there is a co-relation between cities and the quality of healthcare.
- Commute time and Public Transportation Options: Metropolitan areas have made commuting times in many areas unbearable.
I hope this was helpful for new homebuyers as well as homeowners . Happy reading ! 🙂
Credits: Fannie Mae, Freddie Mac and Zillow.