My sentiments regarding the current housing market are very clear. Do not buy in overpriced metropolitan areas. However, there are many of you out there that are ready to buy and plan on staying in a place for multiple years. If you have already committed to taking this plunge, there are a few absolute must websites that you will need to checkout before signing those closing documents. Let us begin with our top six sites:
#1 – www.zillow.com
Although Zillow may not be the most accurate tool for researching homes in tanking markets, it is an absolute must for any real estate buyer. Prior to Zillow, you would need to go to an individual County archives or website to research and dig up previous sales data. With Zillow, all you need is an address and a zip code. In addition, you can view recent sales in the neighborhood and price accordingly. A good measure is finding out the average price per square foot. Not all homes have previous sales data because owners may have bought before accurate records were available. In all my investing and researching I have found that Zillow goes back to 1992 with pretty good accuracy. There is also a “make me move” feature which current owners can name their price on moving; if anything it is amazing to see delusional pipe dream prices.
#2 – www.trulia.com
Another excellent site that can give you information regarding a specific community. Is this community hot? What is the median price for 90210? What is the average sales price in said community? Trulia is a great resource that allows you to view “heat maps” of certain regions. This is useful in seeing whether a community is isolated in appreciation growth or is common to the region. The color coding and mapping make this a must for visual folks who tire out by looking at Census data and rather see a mapped out representation of that data.
#3 - www.realtor.com
What is this? I’m actually recommending a realtor website? Well yes because the MLS is still primarily in the domain of a few folks and you need this information to make accurate assessments of a piece of real estate. One of the best features is searching for rentals via the zipcode function. If anything, the rental market should reflect a semblance of the price you are willing to pay for the home. Search first with homes for sale and then for rentals. Since pretty much most homes are reflected here you’ll get a good idea of what price you should expect to pay and also whether the market is overpriced.
#4 – www.craigslist.com
Craigslist is a fabulous site. I’ve found great deals on absolutely everything here. From rentals in foreign countries to great sporting tickets. But this is also a fantastic place to get real estate information. Just like realtor.com you can search for rentals and homes for sale. If anything, take this information as a quick slice of the market. Many investors post their rentals on here so you can gage by the language of the post whether the market is hot or not. In cold markets you may see wording such as “no deposit” or “free months rent.” These are key insights into a market you may be unfamiliar with. In addition you get a slice of the market that is hardcore for sale by owner. These folks don’t want to deal with traditional avenues of marketing their property and go straight to the consumer, you.
#5 – Google Maps
Do you ever wonder if you’re buying near power lines? Maybe a nuclear plant is in your backyard. Maybe your home is next to the 5 freeway. How would you know by simply looking at a snapshot of the house from the front. Google Maps is an amazing tool that you’ve probably used multiple times. It is amazing how many people I know that didn’t realize they were buying a property near a jail, freeway, school, etc. There is no reason for you not to know this. In addition, you can download Google Earth for your desktop and attach specific filters that highlight businesses, museums, and other key artifacts. There is no reason you shouldn’t spend a few hours looking at the geography of the area you are putting $500,000 on.
#6 – Census.gov
How much do people earn in a certain area? What is the crime rate? Do most people in this neighborhood have high school degrees? What is the vacancy rate? You’ll be surprised how much information you can find at the Census website. I’m a firm believer that the people that inhabit the area have a lot to do with long-term appreciation and rental cash-flow if you are an investor. It only takes a few hours but you can get a full understanding of the area you are going into. I’m not saying become and geographic systems expert but at least what you are buying into. You can even get net migration figures for areas. Amazing what is available to you online for free.
In conclusion I would say that these are 6 key sites in researching your future purchase. This goes without saying that you should also hire a competent inspector and get an unbiased appraisal. Have a real estate attorney look over your closing documents. If only a larger portion of folks buying homes took their mortgage papers to real estate attorneys we wouldn’t be in the mess we are in.
My sentiments on housing still remain; do not buy in high priced areas. This goes for pretty much all of Southern and Northern California. If you feel the itch to buy and have a comfortable down payment lock it into a 1 year CD. If you still have that itch in April of 2008 go for it and drop your money into the home after careful research. Afterall, where is that home going that you are in such a rush? They’re not making any more land but they’re not making anymore Beta machines either.