Long Island NY Real Estate: Mistake Millennials May Make

When it comes to Long Island NY real estate, most millennials say they'd rather rent than buy a home — a decision that could cost them more than $700,000 (or more) over the course of their lives.

It is still cheaper to buy Long Island NY real estate than it is to rent

Nearly six in 10 millennials (59%) say they'd rather rent a home than buy one, with just one in four saying they are either very or completely likely to purchase a home in the next five years, according to a survey of 1,300 millennials released recently by EliteDaily and Millennial Branding. (This anti-home-buying trend can already be seen: Currently, only about one in four millennials own a home, down from about one in three in the mid-70s and early 80s, according to data from the Demand Institute.) That's "bad news for the Long Island NY real estate industry," the report concludes.

Long Island NY Real Estate Cheaper to Own Than Rent

Whatever the reason, this decision may be a costly one. "In the Long Island NY real estate market it is still cheaper to buy than to rent [each month]" — even when you factor in the insurance and property tax payments, in addition to the mortgage payments, according to Daren Blomquist, vice president of RealtyTrac. And because interest rates are so low, now is a good time to buy Long Island NY real estate — at least if you plan on staying in the home over the long term. As a very rough rule of thumb, if you don't plan on staying in a home you are buying for at least five years, it may make sense to rent instead of buy.

Many millennials will likely rent now but buy a home down the road. But waiting to buy has its costs, too — interest rates and median home prices are likely to rise down the road. At current rates of appreciation, in 10 years the average $190,000 home now would be selling for about $249,000. If interest rates return to their historical norm (from over the past 15 years) of 5.6%, a monthly house payment (including mortgage, taxes and insurance) on a $249,000 home would be $1,574 a month, a 52% increase over the $1,037 house payment for a median priced home now; plus, over that 30 years, you'd pay a total of $566,640 (assuming you put 10% down) for a home worth $558,356 at the end of that period.

If that same millennial rented — let's assume he or she pays $1,312 a month in rent this year (which is the average fair market rent for a three-bedroom nationwide, according to RealtyTrac) — and his or her rent appreciates at a rate of 2.7% a year (the average increase over the past decade, RealtyTrac says), he or she will end up shelling out nearly $717,000 in rent over that 30-year period — all without an asset to show for it in the end. Of course, he or she can cut that by having roommates, but at some age, he or she is probably going to want out of the roommate game, unless it turns out to be a spouse or love interest.

The bottom line in this whole scenario is simple. If you can afford to buy Long Island NY real estate rather than rent, do it.  If you can't afford it, don't. You don't want to end up in a situation where you have to foreclose on a home because you bit off more than you can chew.

Find more news articles as they relate to buying Long Island NY real estate in the Long Island NY Home Buyer Tips section under Long Island NY Real Estate Categories to your right. And find us on Facebook and follow us on Twitter for daily updates we post there as well.

Buying Long Island NY Real Estate: Things to Consider

If you're thinking about buying Long Island NY real estate, perhaps for the first time, we know it can seem like chaos trying to figure out all the things you have to do and the order you need to do them in. We're here to help with a list of things you might not ordinarily think about before buying Long Island NY real estate, but things you definitely should consider.

When buying Long Island NY real estate, it can seem like chaos trying to figure out all the things you have to do and the order you need to do them

Before Buying Long Island NY Real Estate

You've probably heard this 1,000 times. So make it 1,001. Get your credit score in order before starting the process of buying Long Island NY real estate.

The higher your credit score, the lower your interest rate will be, which makes your mortgage payment smaller in the long run. If your credit score isn't looking too good (below 660), see if you can improve your finances and boost the score before shopping interest rates.

As long as your credit score is above 580, you can always try for an FHA loan, which can save you some money. If you're looking to raise your credit score, it's all about making payments on time and keeping your debt payments current.

Take some time to get your financial house in order before you go hunting for Long Island NY real estate. Outside of your credit score, make sure you have some money saved. Yes a mortgage is a loan, but it still requires a good chunk of change up front.

Two of the largest items you'll pay for will be your closing costs and your down payment. Closing costs is a general term for many of the services and fees you'll have to pay when getting a mortgage: title fees, inspections, taxes and more are thrown into this. Your down payment is how much you pay upfront on the overall cost of your home – the remainder is your mortgage.

The larger the down payment, the smaller the loan you'll have to pay off. The recommended down payment size is 20% of the total cost of your home, but that's not a required amount. It's hard to give exact advice on savings for your down payment and closing costs, because the amount depends on what your home costs. Have a good amount of money saved, so you have the upper hand when approaching lenders.

Know How Much Long Island NY Real Estate You Can Afford

Know what you're financially capable of before you even start looking for any kind of Long Island NY real estate. Searching for a new home can be like ordering at a restaurant when you're starving – it's easy to overspend. Figure out realistically how much you can afford with your down payment and closing costs, and start searching for homes in areas that will accommodate your budget. There's no point in touring 8-bedroom mansions if you're in a 2 or 3-bedroom starter home bracket.

Buy Long Island NY Real Estate For the Long Haul

To prevent you from making impulse buying decisions when looking at any Long Island NY real estate, decide if the home you're going to buy is going to be one for the long haul, or a temporary move as a stepping stone on the way up to something bigger or better.

Think about all of the changes your life could have while you're living in your new home, and if this home will accommodate your needs long term.

Are you going to get married while living here? If so, are children in the plans? Does the surrounding community seem like it's getting better or worse? Is this a neighborhood you will want to live in at your current age? How about in 10, 15, or 20 years? It's a little weird to get that deep in thinking about your future, but it's a conversation you need to have with yourself, and your partner, if you have one.

We have more articles to help in the process of buying Long Island NY real estate at our Long Island NY Home Buying Tips link to your right under our Long Island NY Real Estate Categories.

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Winter: Good Time To Buy Long Island NY Real Estate

So you started thinking about selling your Long Island NY real estate, and you figure: Let's wait until the spring or early summer before listing. The yard will look its best and potential buyers will be out in force. And everybody knows that winter is dead time for Long Island NY real estate. Right?

Well, that's the widely held belief. But national statistical studies suggest it's not necessarily the case.

Buying or listing Long Island NY real estate during the winter can be a surprisingly advantageous time to do so

Advantages of Buying Long Island NY Real Estate During Winter

Winter — officially Dec. 21 through March 20 for the current season — can be a surprisingly advantageous time to list, shop, negotiate and buy Long Island NY real estate. Consider some findings by researchers at Redfin, the online realty brokerage.

Redfin studied home listing, sales price and time-on-market data from 2010 through this past October from around the country, updating a two-year analysis it completed last year. It concluded that if you want to sell for more than your asking price, listing in December, January, February and March gives you a better chance, on average, than if you list any time after June through November.

During the past three years, listing during these four months has produced higher percentages of above-asking price sales than any months other than April and May. In 2012, at the inception of the housing rebound, December listings produced the highest percentage of above-asking sales for the entire year: 17 percent.

Researchers are quick to note that the advantages of listing their Long Island NY real estate in winter compared with other seasons are not huge. But the fact that winter produces at least competitive or better results by some measures should encourage some potential sellers to get into the game sooner rather than later.

For potential buyers of Long Island NY real estate, the winter season may find some sellers more flexible about negotiations over prices and terms than they would during the middle of the spring.

In its two-year study completed last December, researchers found that sellers of Long Island NY real estate were better off listing their homes in the winter than during any other season.

Bottom line: Long Island NY real estate does not hibernate from December through March. More than 5 million homes typically are resold annually in the United States, and many of them are listed and sold during the winter months. In strong local housing markets such as Long Island NY , the likelihood of selling your home within 180 days is higher when you list during the winter months compared with any other season, according to Redfin's 2013 study.

With the forecast of higher mortgage rates on the horizon, there may never be a more affordable time to buy Long Island NY real estate than right now. Talk to us about rates, and where prices are for Long Island NY real estate. We're here to help you in any way that we can.

We have more articles about buying and selling Long Island NY real estate in the sections on Long Island NY Home Buying Tips and Long Island NY Home Selling Tips under our Long Island NY Real Estate Categories to your right.

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Long Island NY Real Estate Confidence Level Growing

The confidence level towards Long Island NY real estate is on the rise according to the latest Zillow Housing Confidence Index. Homebuyers generally feel more positive about the Long Island NY real estate market now compared to the beginning of the year. The index was 63.7 in January, but increased to 64.2 during the summer.

Long Island NY real estate buyer confidence level is growing

The Housing Confidence Index is measured on a scale of 0 to 100, and readings above 50 show a positive market sentiment. Sub-sectors within the index look at buying and selling conditions, predicted changes in home values, market trends, home affordability, home buying plans and attitudes towards home ownership. Residents in the areas surveyed reported increased overall confidence in the Long Island NY real estate market.

Younger Renters See Themselves Buying Long Island NY Real Estate

Younger renters were most optimistic about their future home buying prospects, and some 82% of those aged between 18 and 34 were pretty confident they would be able to buy their own Long Island NY real estate someday. In comparison 64% of those aged 34 to 49 felt this way, and just 48% of those aged 50 to 64 thought they'd be able to buy their own Long Island NY home.

The younger generation also have a much more optimistic view about the Long Island NY real estate market in general, and a 33% expected property values to rise more than 6% annually over the next 10 years compared to just 21% of middle-aged respondents, and 15% of those falling into the older age group.

Although strong aspirations are no substitute for financial capacity or credit worthiness on a mortgage loan application, feedback from millennial renters is significant because it confirms that they bear relatively few psychological scars from the housing bust, and because the attitudes of this generation will drive housing trends in the decades to come.

Experts point out we need this generation to feel confident about home ownership, and we should want them to buy regardless of the fact that they may initially struggle to purchase a home.

Follow news on the Long Island NY real estate market and the housing industry overall by periodically checking back in the Long Island NY Real Estate News section of our website under Long Island NY Real Estate Categories.

Long Island NY Real Estate Can Save Parents Money on College

Parents who are going to be sending their kids to college should consider some of the ways buying Long Island NY real estate could actually end up saving them money on those college costs.

Tuition plus room and board runs into the tens of thousands of dollars each year. Imagine what it will cost 5 or 10 years from now. Why not consider cutting down on that "room" portion you're going to be paying anyway by looking at Long Island NY real estate as an investment?

Long Island NY real estate as an investment could save you thousands on college costs.

Most students choose to live on campus for their first year or two, but after that they're pretty much on their own when it comes to housing. Many college students today end up going to school for 5 or more years. Many students look to get a house together to save on housing costs.

Long Island NY Real Estate as an Investment

Think about the great investment opportunity as parents to buy a condo or small house in the Long Island NY and rent it out to your student and some of his or her friends.

Most students are very picky about who they want to live with. They live with many people their first year or two in the dorms so they get a sense of how clean they are, how organized they are and things like that. They basically get a sneak preview of what it would be like to live with them without having to do any tenant screening. As a parent/investor, you would be able to leave the entire tenant screening process up to your student.

Nearly every student these days has guaranteed income in the form of their parents income or the federal government. When renting to students you know they will almost never lose their source of income. Just to be safe, you can always have their parents co-sign the lease too.

Even though students are only in school 9 months out of the year, most students understand they will need to sign a lease for 12 months. The only time you might have some trouble with turnover is in the summer months but during the school year you know you will get guaranteed income for 9 straight months every single year on your Long Island NY real estate investment.

Buying a second property or an investment property is always a risk. But when you have to pay up to $10,000 a year or more for your child's housing costs anyway, why not put that money to good use? Students don't expect much when it comes to amenities and repairs so you could save yourself a lot of the headache and heartache in that department as well.

Talk to your financial advisor or CPA about the benefits of offsetting college living expenses for your student before investing in Long Island NY real estate. Remember, your Long Island NY real estate will still be there working for you even after your student graduates.

For more on Long Island NY real estate trends and news, visit our Long Island NY Real Estate section of articles under our Long Island NY Real Estate Categories to the right.