September is typically a busy month for homeowners.
Kids go back to school. Work increases at many businesses as the fourth quarter looms. Major home renovation projects are in the midst of wrapping up, and smaller projects may be about to start!
If there’s anything I can do to help with questions, contractor referrals, advice, or information related to real estate, give me a call.
In fact, that’s the reason I stay in touch with you on a regular basis. I want to continually remind you that my services don’t end once I’ve helped you buy or sell a home. In the months and years in between transactions, I’m dedicated to helping you enjoy your home and understand your real estate options. So, if you need help or advice, get in touch with me. That’s why I’m here!
August 2019 once again shows the Quinte area has a busy real estate market.
The August monthly Dollar Sales for Residential Listings resulted in a substantial increase of 36.7% with $112,858,730 for 2019 compared to $82,583,368 for 2018. The 2019 Year-to-Date Residential number was $781,177,651 resulting in a healthy 14.0% increase over the previous year.
The Residential Average Sale Price for August continued the upward trend, once again showing an increase over 2018. The 2019 price was $370,029 and the 2018 amount was $327,712, for a 12.9% increase. The Year-to-Date Residential Average Sale Price also showed an increase of 9.4% over 2018.
Residential Unit Sales for August 2019 resulted in 305 sales, also up from 252 sales for 2018, which is a significant increase of 21%. The Year-to-Date comparison shows 2019 is currently 4.1% above the 2018 sales.
Total # of Residential Listings in August
Total # of Residential Listings YTD
Total # of Residential Sales in August
Total # of Residential Sales YTD
Total Residential Sales Dollar Volume in August
Total Residential Sales Dollar Volume YTD
Water Quality In The Home
Are you concerned about the water quality in your home or a home you are considering purchasing? The below article, published by Pillar To Post Home Inspectors informs home owners on how to ensure your water is safe.
“Municipal water systems are required to test and monitor drinking water supplies to ensure safe and good-tasting water. But what happens once that water has been piped into towns, neighborhoods, and homes? Older homes may still have service lines made of lead going into the home, which can cause lead to leach into the water. The local water supplier should be able to confirm the presence of lead service lines for homeowners. Older fixtures that contain lead, or lead that was used on pipe joints, can also cause elevated lead levels. Whenever possible, pipes and fixtures containing lead should be replaced with new materials.
Many homes built before the 1960s have galvanized steel pipes. While galvanized pipes do not create chemical contaminants on their own, they are susceptible to severe corrosion which can flake off and clog taps and faucets. In some instances, lead can build up inside galvanized pipes, especially if the service line into the home is or was made of lead. To be on the safe side, it is best to have all galvanized piping replaced.
Another water quality concern is what are known as emerging contaminants, which, if present in a home, usually occur in very low level amounts. These fall into two general categories: health effects and aesthetic effects. Emerging contaminants affecting health include detergents, pesticides, and medications. Other contaminants that don’t affect health may adversely alter water taste, odor, and/or color. Home filtration systems are the most common means of reducing emerging contaminants. Options include faucet or pitcher filters, plumbed, and reverse-osmosis filters that treat the entire home’s water supply. Any filtration system installed should be listed as meeting national standards for reducing multiple contaminants.”
If you have decided that buying a home is the right decision for you, then you are ready to take the next step; that is, determining what you can actually afford.
Let me start with a word of caution.
Before you contemplate a mortgage for the full amount the lending institution indicates you are eligible, think it through carefully.
For example, mortgage interest rates have been fairly low for the past couple of years. However, if you mortgage to the maximum amount allowed by the lending institution and interest rates have increased when it is time to renew your mortgage in five years, your mortgage payments may be higher as a result.
If you are not on a strict budget, this may not be a problem but, if you are, you may have to make some sacrifices to carry those higher mortgage payments. Of course, in that amount of time, you may have paid down your principal and are starting to think about moving up in the Real Estate market.
So, what can you afford? For the most part, lending institutions look at two simple formulas when determining what you can afford for a residential mortgage. These two formulas are called the Gross Debt Service Ratio (GDS) and the Total Debt Service Ratio (TDS). Don’t let the terms scare you off. They are quite easy to calculate!
Your GDS is 30% of your household’s total gross monthly income. The 30% figure is what is normally considered reasonable for principal and interest payments on residential mortgages. Therefore, if your family’s gross monthly income was $4,000 you would have $1200 available for principal and interest payments (30% of $4,000).
Take this one step further to calculate your TDS ratio. TDS also takes principal and interest payments into account, but it includes your property taxes and other fixed monthly expenses such as a vehicle or credit card payment. To calculate your TDS, take 40% of your gross monthly income. This amount is what is normally allowed for total debt servicing. For example, if you still have a $4,000 a month gross family income you can use $1600 for principal, interest, property taxes, and other debt servicing. In other words, if you had a monthly car payment of $250 and your monthly property taxes were $150, you would be able to use $1200 each month for mortgage principal and interest payments ($1600 – $250 – $150 = $1200). Keep in mind that these are general calculations and ratios. Some lenders may be more generous. Normally the lending institution will take the lesser of the GDS or TDS.
To put these examples in perspective in today’s marketplace consider the following: a $100,000 mortgage at 7% amortized over 25 years would cost approximately $700 a month for principal and interest. Don’t forget these calculations do not take into consideration the amount of money you have saved for a downpayment. So if you can afford to service a $100,000 mortgage and you are entitled to only put 5% down you can actually purchase in the $105,000 price range.
Note that the calculations and examples provided in this article are general in nature. Next we will discuss Investigating the Marketplace with a Qualified REALTOR®. Until then, keep educating yourself so you will be prepared to make the move to home ownership!