As the U.S. housing market continues to falter, consumers need tools to help with house hunting more than ever. At the same time, with App Stores reaching a total of over 100 billion app downloads, the market of services promising to help potential buyers simplify their search is becoming increasingly crowded.
Having helped build financial technology tools for over a decade, I thought I'd help cut through some of the noise. Whether you're unsure if you can even afford to buy, are concerned about your credit, don't know how to get a loan, or find yourself overwhelmed by different real estate options, these apps and websites will make your life easier and facilitate the process from start to finish.
Managing your money and long-term budget
In today's economy, first-time homebuyers need to budget more than ever before - especially if they want to live in a major city. Housing prices rose by over 11% in 2013, and a recent report showed that the median price per square foot across many major U.S. cities was $666. In a country where total household debt increased by $241 billion in the last three months of 2013, many prospective buyers will need to buckle down and commit to a long-term financial plan.
Many personal financial management apps and services now instantly connect to users' accounts, providing tailored financial advice and creating customized budgets. These apps in particular help potential homebuyers understand what type of home they can afford.
ReadyForZero arms potential buyers for the daunting task of reducing debt. The service sets out a personalized debt reduction plan, and then tracks progress in an encouraging way, by focusing on positive strides rather than remaining debt.
PlanWise does the heavy lifting of financial planning for you. It analyzes your accounts and shows how long-term decisions - from buying a house to modifying a loan payment - can affect your finances up to 50 years in the future.
A strong credit score has always been helpful when looking to buy a home, but with over four million renters looking to buy their first home this year in an economy where housing prices are rising and the total number of homes is at a low point, a strong credit score is becoming essential.
These free services help demystify consumer credit, and even find new ways for users to improve their credit ratings through everyday purchases.
3. Rental Kharma
With Rental Kharma, consumers can steadily build their credit with their monthly rent payment. The service automatically reports rental payments to credit agencies, improving your credit score while you prepare to buy a home.
4. Credit Karma
Credit Karma's recent $85 million funding round is a testament to the pain point it's addressing in consumer credit. The service connects users with their credit scores instantly and for free, avoiding the complicated processes and hidden fees of the past.
Finding Loans and Understanding Your Mortgage
Most Americans need to take out at least one loan to purchase a house - and with mortgage rates close to record lows, it's a great time for house hunters to get educated and jump on the opportunity to pay less in interest.
These services help navigate the process of finding loans - whether through a mortgage or through the less traditional approach of a personal loan.
5. Trulia Mortgages
Trulia offers insight into what kinds of mortgages consumers can afford, and how much their payments will be, through personalized rates based on data like property price, credit score and zip code.
6. Avant Credit
Avant offers extremely convenient personal loans at varying sizes, allowing users to apply online in 15 minutes, get approved in 24 hours, and have the money deposited the next day.
Finding and Evaluating Your Real Estate Options
Each city and region has a completely different housing temperature. In San Francisco, there are literally no homes on the market that are affordable with an average teacher's salary. Meanwhile, post-boom markets have resulted in some cities with homes for the price of a Ford Focus.
It's important to have a solid understanding of your local market when house hunting, and the tools below empower consumers to make informed decisions.
Zillow provides buyers with tons of real estate resources, ranging from listings, to advice, to agents - and the company's recent announcement of record earnings shows just how much Zillow is transforming house hunting for consumers.
HomeSnap is a mobile-first way to gain information about the properties you're visiting. Just take a snapshot with your smartphone's camera, and instantly get property information like how much the home is worth, whether it's for sale, its school district, amenities and more.
Redfin matches prospective buyers with agents - like the Uber of real estate. The company employs all of its own real estate agents to transform the search experience and maintain high customer satisfaction.
Technology continues to simplify our routine problems. As our economy recovers, many Americans are still struggling to stay afloat and on top of their finances, which in turn has caused a boom in digital services to help alleviate some of these issues. These tools break down the traditional barriers of entry to the housing market - like access to a real estate agent or knowledge about loan rates - and offer a wealth of information and free options that can save consumers thousands of dollars over time. If knowledge is power, then the growth of apps and services like the ones above signals a shift toward putting more power in the hands of buyers.
Did I miss any great house hunting apps? I'd love to hear your top picks in the comments section below.
Avg. listing price: $1,230,880 Median household income: $110,929 Pct. households $200,000+ income: 30.3% As of 2010, the median income of households in San Carlos was more than double the U.S. median of $51,914. Over 30% of households in San Carlos earned more than $200,000 per year, more than five times the national rate of 5.4%. San Carlos is one of the most expensive housing markets in the San Francisco metropolitan area. Over a twelve month period, ending in October, it had the nation’s highest median home price per square foot at $473 among all homes listed, according to Trulia. In San Francisco, the median age of home inventory was just 45 days as of the third quarter of 2012, according to Realtor.com, lower than in all but seven markets. Read more at 24/7 Wall St.
Avg. listing price: $1,232,167 Median household income: $74,489 Pct. households $200,000+ income: 18.7% Carmel-by-the-Sea, a small coastal city in California, is well-known for its former mayor, actor Clint Eastwood. Currently, the average four-bedroom, two-bathroom home in the city lists for more than four times the nationwide average listing price of $292,152. With nearly 19% of households earning more than $200,000 in 2010, many families and individuals in the small town can afford expensive properties. One house, despite being not much larger than 2,000 square feet, is currently listed for nearly $4.5 million. Read more at 24/7 Wall St.
Avg. listing price: $1,238,208 Median household income: $91,082 Pct. households $200,000+ income: 14.7% Kailua is one of just two cities on this list not located in California. The O’ahu Island city is 12 miles northeast of Honolulu, which had a vacancy rate of 2.7% — better than most areas but considerably worse than the other areas on the list. As of October, the median price per square foot for a home in the Honolulu area was $398, more than in any other metro except for San Francisco. According to Trulia, a 0.75 acres plot of land, which includes 128 feet of beachfront, is currently for sale for $16 million in Kailua. Read more at 24/7 Wall St.
Avg. listing price: $1,312,250 Median household income: $146,069 Pct. households $200,000+ income: 53.0% The average listing price for a four-bedroom home in Rye is more than $1,300,000, or more-than $1 million above the U.S. average. Employees in the often high-paying finance and insurance industries accounted for a 27.8% of employed population in Rye in 2010, well above the 7% average rate nationwide. As of 2010, 53% of households earned more than $200,000 annually, more than any other expensive city, and nearly 10 times the national rate of 5.4%. Additionally, just 1.3% of households lived below the poverty line versus 13.8% nationwide. Among the properties available for sale are a five-bedroom, 7,446 square feet waterfront home for $12.9 million and a 34.2 acre plot of land for $19 million. Read more at 24/7 Wall St.
Avg. listing price: $1,444,214 Median household income: $120,971 Pct. households $200,000+ income: 37.5% Los Gatos is one of several cities near San Jose on this list. Like these cities, Los Gatos likely benefits from the overall boom in the San Jose real estate market, which currently has the lowest vacancy rate of all metro areas surveyed by Trulia at just 1%. Currently, a number of unique properties are available in the city, including an 11,000 square feet property with an eight stall horse barn and a garage that fits 12 cars listed at slightly under $13 million. Also for sale is the former home of Apple Inc.’s co-founder Steve Wozniack. It is currently listed for $4.5 million. Read more at 24/7 Wall St.
Avg. listing price: $1,495,364 Median household income: $120,670 Pct. households $200,000+ income: 39.3% In Palo Alto, 48.7% of adults have a graduate or professional degree — well more than four times the national rate of 10.3%. The city’s proximity to Stanford University, one of the top universities in the nation, may be partly the reason behind the city’s highly educated population. Among the companies headquartered in the city are Hewlett-Packard and Tesla Motors. The city is a large employer of highly skilled employees, as 25.3% of its workers are employed in professional, scientific and management occupations, well above the 10.4% of workers nationwide. Perhaps the most famous resident of Palo Alto is Facebook founder Mark Zuckerberg, who Read more at 24/7 Wall St.
Avg. listing price: $1,506,909 Median household income: $107,860 Pct. households $200,000+ income: 34.9% Menlo Park is one of just four cities where the average listing price for a four-bedroom home exceeds $1.5 million. As of 2010, the median income in the city was slightly below $108,000. However, the recent Facebook IPO has been a windfall to the area. In June, real estate listing service Zillow reported that the “proportion of million-dollar listings” in Menlo Park — where Facebook is headquartered — rose by 87% between the company’s IPO filing and its first day as a public company. Among the houses available in Menlo Park are a five-bedroom home with a gym, theater area and wine cellar, which is listed for $4.6 million, and a six-bedroom 5,200 square feet home that’s listed for slightly under $5 million. Read more at 24/7 Wall St.
Avg. listing price: $1,582,434 Median household income: $145,023 Pct. households $200,000+ income: 43.1% Though home prices in the nearby San Jose metro area fell by 25.1% peak-to-trough, Saratoga is yet another example of how the Silicon Valley housing market has recovered. Currently, the median price per square foot for homes in San Jose is $337, according to Trulia, more than all housing markets except San Francisco and Honolulu. Prices for many homes in the area have skyrocketed, according to listings on Zillow. A home currently listed for nearly $10 million last sold for just over $2.1 million in 2000, while a home listed for $14.9 million last sold in 1994 for just over $1 million. As of 2010, 43.1% of Saratoga households earned more than $200,000 per year, while 40.9% of adult residents had a graduate degree, versus 10.3% nationwide. Read more at 24/7 Wall St.
Avg. listing price: $1,658,000 Median household income: $107,007 Pct. households $200,000+ income: 37.6% Outside of Northern California, Newport Beach is the most expensive city to buy a home. Home prices are so high in the city that in 2009 legendary bond investor Bill Gross bought a nine-bedroom, 11,000 square feet home for $23 million — and then tore it down. In 2011, Gross listed the empty plot of land for $26.5 million. Orange County as a whole has a vacancy rate of just 1.5%, among the ten lowest in the nation. Despite a 32.7% drop in home prices from peak to trough during the recession, Orange County’s median price per square foot is $265. This trails only the Honolulu, New York, San Francisco and San Jose metro areas. Read more at 24/7 Wall St.
Avg. listing price: $1,706,688 Median household income: $149,964 Pct. households $200,000+ income: 43.6% In Los Altos, the average four-bedroom, two-bathroom home lists for nearly $50,000 more than any other city in the nation. According to Coldwell Banker, for that price a buyer could purchase 28 similar homes in Redford, Mich., the nation’s cheapest housing market. In Redford, the average home lists for just $60,490. Currently, asking prices in the San Jose metro area have risen 12.7% year-over-year, according to Trulia. This is more than nearly every other metro area in the country. Read more at 24/7 Wall St.
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