Is now the time to buy suburban dream castle?
Dubbed "dream castles" in the real estate field, large houses were built in abundance during the last 10 years. Now they're within reach.
Choose a neighborhood with strong schools. Real estate agents are reluctant to characterize schools, but they can quickly gather reams of statistics, such as test scores, that will let you compare one school to another.
"Families with young children typically love dream castles for all they offer—loads of bedrooms, bathrooms, walk-in closets, a game room for the kids and a country kitchen where everyone can hang out," says Abraham Tieh, a former president of the National Association of Exclusive Buyer Agents.
Of course, an increasing number of people are losing their suburban castles to foreclosure. And with mounting inventory on the market in many neighborhoods, the banks that now own these properties are marking them down to bargain levels, says Tieh, who contends now could be an opportune time to acquire one for a rock-bottom price, as long as you make an informed choice.
Here are suggestions for those currently considering this option:
Exercise caution in the selection of a neighborhood. James Hughes, a housing expert and dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University, is bullish about prospects for an eventual rebound in suburban property values. However, he says this recovery will come soonest in areas long popular with families who have school-age children, a large segment of the suburban home-buying market.
Those seeking to buy a suburban dream castle may find an excellent buy in a foreclosed property. But, as Hughes says, it could be a perilous choice to buy a home in an area plagued with a multitude of foreclosures—a clear signal of deep economic difficulties.
"You may have to wait a long time before all the excess inventory is sold off and prices bounce back," he says.
Avoid a distant suburb, if possible. For years, many families in pursuit of very large homes have been willing to accept lengthy commutes so they could enjoy the benefits of a spacious house and yard, because square-foot prices tend to be lowest in distant suburbs. The idea, real estate agents say, is to "drive until you qualify."
But, as Hughes notes, recent volatility in gas prices has caused many to question the viability of living in an outer suburb, no matter that energy costs have recently eased.
"People finally realize they can no longer count on the availability of cheap gas. They know that at any time, a crisis in the Middle East or elsewhere could suddenly push prices up again," he says.
Choose a neighborhood with a superb elementary school. Much has been made of the power of strong neighborhood schools to hold up real estate values over the long run. Hughes endorses this view and says a top-rated elementary school is especially important.
How can you be sure the home you purchase will be served by a high-performing elementary school? Real estate agents are reluctant to characterize schools, but they can quickly gather reams of statistics, such as test scores, that will let you compare one school to another. Or you can find the data by going to the local school system's Web site.
Look for a solidly built house. In a market where buyers have tremendous leverage, there's no reason to accept second-class construction. But how can you identify subdivisions where the home builders took extra care? Tieh encourages you to closely examine the interior detailing in a house as one indication of its construction quality.
"You can't see behind the walls of a house that's already built. However, you can see if the cabinetry and wood trim were well-finished. Also you can judge whether the builder used long-lasting roofing materials or the cheapest available shingles," he says.
Focus on your lifestyle reasons for seeking a dream castle. For the time being, Hughes says, many people are so preoccupied with fallout from the nation's financial crisis that they're not looking for a new house; they're trying to get by with what they have.
If you're the lucky exception to this rule and are financially secure enough to trade up on housing, he encourages you to select a place that would suit you and your children for up to 10 years or longer. For example, a family might want a master suite some distance away from their kids' bedrooms to give the parents extra privacy as their children get older and noisier. Then, too, they might need lots of storage space for the kids' athletic gear.
Hughes says you can count on the long-term market for your large property, so long as it's well- located.
"With the exception of houses in far-flung suburbs, people in the future will continue to prefer big houses, just as they'll prefer big cars if they can afford them. In America, bigger has always been better. And I don't expect that underlying preference to change in coming years," he says.
Universal Press Syndicate