Category: Real Estate

Home Features First-Time Buyers Choose | Realtor Magazine

A living room is considered essential for first-time home buyers, according to a poll of home shoppers conducted by the National Association of Home Builders. Sixty-one percent called the living room a must-have in the home they plan to buy. A laundry room and dining room also ranked high on the must-have list for first-time buyers.

The following are home features that first-time buyers call essential, ranked in order of what they deemed as most important:

1. Living room
2. Laundry room
3. Dining room
4. Garage storage
5. Walk-in closet in master bedroom
6. Shower stall/tub in master bath
7. Front porch
8. Great room
9. 2-car garage
10. Kitchen double sink

Foreign Buyers Coming to U.S. Are Changing | Realtor Magazine

Residents from other countries are increasingly eyeing U.S. real estate as a good investment, and they’re making up a significant portion of buyers in some markets. But who is coming is changing.

Chinese buyers have been the biggest portion, spending the most of any foreign group on U.S. real estate. They spent $31.7 billion on residential real estate in the U.S. between April 2016 and March 2017, according to the National Association of REALTORS®. But mainland China has since tightened restrictions on how much capital residents can spend outside the country. That has caused some markets to see a drastic decrease of Chinese buyers.

“You turn off one faucet, and another one opens,” says Jonathan Genton, the founding partner and CEO of the Genton Property Group.

Buyers from other countries have been coming in to fill the gap. For example, Genton he’s seeing more buyers coming in from Taiwan, Vietnam, and Thailand and more investors from Dubai, Kuwait, Georgia, and Turkey.

“Everyone recognizes the stability and security of the U.S. market more than ever before,” Genton says. He adds that up to 70 percent of a 59-unit Four Seasons Private Residences project in Beverly Hills likely will be foreigners.

Mauricio Umansky, CEO and founder of The Agency, says he’s been seeing more buyers from Great Britain in the luxury L.A. market. Umansky says that foreign buyers purchased about 10 of the 35 homes that The Agency sold in the Southern California market for more than $20 million in 2017.

“At any given point, who the front runners are changes,” says Karmely. For example, in the 1980s, Japanese buyers were accounting for some of the biggest portion of real estate purchases from foreign buyers in the U.S. In 2017, they made up only 2 percent of foreign property purchases.

As the foreign buyer group changes, Karmely says it’s important to note how U.S.-based real estate still continues to expand and accelerate among international buyers. Their searches are broadening too. For example, in Miami, foreign buyers are looking beyond just the beach and downtown locales. “This change has been transformation,” Karmely says.

“Foreign buyers make up a significant presence in the U.S. luxury market that will only increase as generations come here to study and geopolitical and safety factors continue to play a role,” Shahab Karmely, the CEO of KAR Properties, a New York-based development firm, told Mansion Global.

Which Markets Were Hottest in February | Realtor Magazine

Spring may have already sprung in the housing market. List prices have begun their traditional spring climb, reaching the median high from last summer of $275,000, realtor.com® reports.

“Rapid mortgage rate jumps, and confirmation of a brighter economic outlook have inflated the pool of home buyers early in the year, putting an extra squeeze on the mid- and entry-level market,” says Javier Vivas, director of economic research at realtor.com®.

The market is showing signs of being ultracompetitive this spring. Properties are selling 8 percent faster than this time last year, spending a median of 83 days on the market, according to realtor.com®.

San Francisco once again holds onto its top spot in February on realtor.com®’s latest hot market list. Realtor.com® bases its rankings on where homes are selling the fastest and getting the most property views at its site.

California markets continue to dominate in the rankings, accounting for 13 of the top 20 markets. But Midland, Texas, notably jumped from its previous number five spot on the list to number two in February.

 

The following cities made it on realtor.com®’s hot list for February:

1. San Francisco
2. Midland, Texas
3. Vallejo, Calif.
4. San Jose, Calif.
5. Sacramento, Calif.
6. Denver
7. Santa Rosa, Calif.
8. Colorado Springs, Colo.
9. San Diego
10. Stockton, Calif.
11. Santa Cruz, Calif.
12. Dallas
13. Chico, Calif.
14. Oxnard, Calif.
15. Modesto, Calif.
16. Columbus, Ohio
17. Fresno, Calif.
18. Spokane, Wash.
19. Fort Wayne, Ind.
20. Los Angeles

Factors Behind Property Tax Surges | Realtor Magazine

Homeowners may question why their property taxes keep going up, and some owners may be shocked by just how much. Property taxes are crucial funds for schools, libraries, police and fire departments, roads and parks, and more within a community. There are several factors that could cause property taxes to go up; home renovations and revaluations are the two most common reasons, according to an article at realtor.com®.

If homeowners renovate the home and add to its worth, they’ll likely see their property taxes increase. Converting a basement into livable space or a walk-up attic into a new room can all trigger an automatic reassessment, says Rita Patriarca, a real estate professional with RE/MAX Encore in Wilmington, Mass.

A revaluation can also prompt higher property taxes. Communities will periodically reevaluate properties to figure out the current assessed value of homes. These are conducted to ensure the tax burden is spread equitably and accurately. Assessors will factor in a home’s location, size, type, any changes since the last evaluation, as well as other variables like home sales and valuations in the neighborhood and changes in the economy. A revaluation does not mean your taxes will always go up, but it certainly can be one reason behind a rising bill.

Other reasons for an uptick in property taxes may involve new schools. The construction of a new school can come with a high price tag for a community, and an area may increase taxes in order to help pay for school projects.

Homeowners who believe their property taxes are too high can appeal their home’s property assessment.

“Most municipalities have a process to contest your property tax bill,” financial planner David Rae, president and founder of DRM Wealth Management in Los Angeles, told realtor.com®. “I’ve contested the value of my home in the past, and the assessor shaved $150,000 off the taxable value of the home. Definitely worth the effort.”

It’s important for homeowners to ensure property records reflect their home’s amenities accurately, such as the number of bedrooms and bathrooms. For any mistakes, notify the assessor’s office.

More Buyers Gamble With Sight-Unseen Offers | Realtor Magazine

Thirty-five percent of home buyers who purchased a home in November and December said they made an offer on the home without seeing it first in person, according to a newly released survey of more than 1,500 home purchasers conducted by the real estate brokerage Redfin. That is up from 33 percent in May 2017 and from 19 percent in June 2016.

Sight-Unseen Offers

The following lists the percentage of buyers by metro area who said they made an offer on a home they hadn’t seen first in person:

• Los Angeles: 57%
• San Diego: 46%
• San Francisco: 44%
• Chicago: 38%
• Austin: 35%
• Denver: 33%
• Washington, D.C.: 32%
• Phoenix: 31%
• Portland: 30%
• Sacramento: 30%
• Baltimore: 28%
• Dallas: 27%
• Boston: 25%
• Seattle: 19%

Source: Redfin

By age group, millennial home buyers are the most likely to make an offer on a home without visiting it first, at 45 percent, researchers found. Younger adults may be more comfortable with relying on information they find online about properties for sale and the neighborhoods, researchers note.

For buyers who can’t see the property in person first, some real estate professionals are relying on FaceTime video call tours or 3-D virtual tour programs to give them a better idea of the interiors. Angela Hunter, a real estate professional in Omaha, recalls helping a family expecting a child to relocate from Jacksonville, Fla., to Bellevue, Neb. She used video tours to show them properties in the area.

“While conducting video tours with them, I was very careful to explain things that they would not be able to experience virtually, like the sounds, smells, and textures,” Hunter says. “I pointed out flaws that are hard to detect through video so that nothing would be a surprise to them once they visited in person. It’s not the easiest way to shop for a home, but together we found the perfect match.”

 

Styling Tips to ‘Wow’ Spring-Time Home Buyers

The new year and the upcoming spring season brings with it a fresh outlook and new beginnings. What will prospective home buyers be thinking about while searching for their new “happy place”? For sellers preparing their homes to sell this spring, that means engaging buyers by showcasing a warm, welcoming and cheerful property that others can easily envision living in. The following are our spring décor styling tips to help sellers prepare their property to stand out among the sea of new listings.

Natural Elements Paired with Metallics

One of our favorite trends is plants of all shapes and sizes–succulents, trees or plants in baskets and colorful planters, and fresh or synthetic garden flowers in vases and wreaths. Since metallic accents continue to be on-trend, we love pairing the two together for an elegant touch to appeal to today’s buyers who like to feel close to nature.

Pops of Bright Accents

Pair bold pops of colorful accessories such as accent pillows, throws, artwork, glass bowls filled with fruit, and fluffy bathroom towels against a neutral backdrop to give any room a boost of energy and warmth. Mix and match different textures and patterns for added depth and a modern style.

Update Paint Colors

Whether you repaint an entire room or an accent wall, a fresh coat of paint works wonders to instantly brighten and open a space to make it appear larger. To spruce up your curb appeal, try a fresh coat of a trending spring color such as Benjamin Moore’s Caliente for your front door to create a welcoming first impression.

Fresh Bedding

To create a spring-like oasis in the bedroom, switch out winter bedding and replace it with fluffy duvets in white, or on-trend floral patterns paired with a soft, cozy throw and accent pillows in different sizes, colors, and textures.  To complete the look, add soothing nature-inspired wall art in complementary colors.

8 Hot Markets for Millennials, Gen X, Boomers | Realtor Magazine

Because millennials, Generation X members, and baby boomers are in different stages of their lives, they are seeking different types of real estate markets that meet their specific needs. Realtor.com® found the hottest locations for each age cohort based on migration data for each of the major U.S. metros, home-search activity on realtor.com®, and the percentage of positive change in homeownership for each city from 2016 to 2018. The research shows that millennials are lured to places with strong technology and cultural centers, Gen Xers favor more affordable markets, and baby boomers are heading to the Sun Belt.

Millennials

Booming job markets are important to millennials, as are cultural and nightlife amenities. Realtor.com® found that the hottest millennial markets are:

1. San Francisco
2. Seattle
3. Houston
4. Dallas
5. Washington, D.C.
6. Denver
7. Boston
8. Ann Arbor, Mich.

Generation X

“Generation X is looking for housing affordability, where they can meet the needs of growing families,” Chris Porter, chief demographer at John Burns Real Estate Consulting, told realtor.com®. They tend to prefer warmer weather and more business-friendly states, which may explain why “Texas has been one of the fastest-growing regions in the country for a while,” Porter added. The hottest markets for Generation X are:

1. Houston
2. Miami
3. Dallas
4. Washington, D.C.
5. Riverside, Calif.
6. Austin, Texas
7. Odessa, Texas
8. San Antonio

Baby Boomers

“A lot of [baby boomers] are looking to downsize,” says Lori Corwin, a real estate professional at Realty Executives in Phoenix. They may be looking for homes that require little maintenance, including in 55-plus communities. The hottest markets for baby boomers are:

1. Phoenix
2. North Port, Fla.
3. Miami
4. The Villages, Fla.
5. Punta Gorda, Fla.
6. Austin, Texas
7. Riverside, Calif.
8. Cape Coral, Fla.

IRS: HELOCs Still Deductible for Renovations | Realtor Magazine

Taxpayers can continue to deduct the interest they pay on home equity loans when the funds are used for home improvements, the IRS confirmed in a statement on Wednesday. The status of home equity deductions has been in question following the limits on the mortgage interest deduction included in recent tax reform legislation. The IRS says it has been fielding more questions from taxpayers and tax professionals on whether the interest on home equity loans, home equity lines of credit, or second mortgages can still be deducted.

In its statement, the IRS said despite the restrictions on mortgages, taxpayers can, in most cases, still deduct interest on home equity loans, a home equity line of credit, or a second mortgage.

The tax law, passed in December, suspends from 2018 until 2026 the deduction for interest paid on home equity loans and lines of credit unless the funds are used to buy, build, or substantially improve the taxpayer’s home, the IRS notes. As such, the interest on a home equity loan used for building an addition to an existing home would generally be deductible, Accounting Today explains. But interest on the same loan used to pay personal living expenses, like credit card debt, would not be.

Under the new tax reform, a limit has been placed on mortgages qualifying for the home mortgage interest deduction. Starting in 2018, taxpayers can only deduct interest on $750,000 of qualified residence loans, or $375,000 for a married taxpayer filing a separate return—down from $1 million or $500,000 for a married taxpayer, respectively.

The IRS offered the following scenario in describing how the new tax law works when it comes to home equity loans:

“In January 2018, a taxpayer gets a $500,000 mortgage to buy a main home with a fair market value of $800,000. The following month, the taxpayer takes out a $250,000 home equity loan to put an addition on the main home. Both loans are secured by the main home and the total doesn’t exceed the home’s cost. Because the total amount of both loans doesn’t exceed $750,000, all the interest paid on the loans is deductible. But if the taxpayer used the home equity loan proceeds for personal expenses, such as paying off student loans and credit cards, then the interest on the home equity loan wouldn’t be deductible.”

The National Association of REALTORS® welcomed the IRS  announcement Wednesday to clarify that tax deductions for home equity loans or home equity lines of credit can still be taken if used on home improvements.

“The National Association of REALTORS® is pleased with the IRS announcement clarifying and confirming that under the new tax law owners can continue to deduct the interest on a home equity loan, line of credit or second mortgage when the proceeds are used to substantially improve their residence,” said NAR President Elizabeth Mendenhall. “There has been much confusion on this issue, and the continued deductibility will bring real benefits to those who choose to take on remodeling projects to bring more resale value to their home or gain equity that may have been lost during the downturn.”

Townhouse Starts Indicate Sturdy Market | Realtor Magazine

Townhouse construction continues to post gains. Over 2017, townhome starts totaled 104,000, a 7 percent increase over 2016, according to an analysis of U.S. Census Bureau data by the National Association of Home Builders.

Further, townhouses or single-family attached housing numbered 29,000 of the starts during the fourth quarter of 2017, which is 21 percent higher than a year ago.

The market share of new townhouses accounts for 12.4 percent of all single-family housing starts. For comparison, over the past two decades, townhouse construction peaked in the first quarter of 2008 at 14.6 percent of total single-family construction.

“After a soft patch, the market share is rising again,” Robert Dietz, chief economist of the NAHB, notes on its Eye on Housing blog. “I expect future gains as townhouses are a useful bridge from rentership from homeownership for younger prospective home buyers in high-cost markets, among other market opportunities. … The long-run prospects for townhouse construction are positive given large numbers of home buyers looking for medium density residential neighborhoods, such as urban villages that offer walkable environments and other amenities.”

Higher Rates Offset Loan Demand | Realtor Magazine

Home buyers and homeowners may be getting spooked by higher mortgage rates. Mortgage applications for both home purchases and refinancings plummeted 6.6 percent last week on a seasonally adjusted basis compared to the previous week, the Mortgage Bankers Association reported Wednesday.

Volume is now just 3.5 percent higher than a year ago, with annual increases continuing to shrink week to week.

Applications to refinance dropped 7 percent last week but are still 2.8 percent higher than a year ago. Applications to purchase a home dropped 6 percent last week and are 3 percent higher than a year ago.

Affordability is weakening as home prices continue to rise. Mortgage rates also are now more than half a percentage point higher than at the start of the year.

“The drumbeat continues,” says Mike Fratantoni, the MBA’s chief economist. “Inflation is increasing, as are deficits, and the economy and job market continue to look strong, and rates are higher as a result. This upward move in rates is coming right at the start of the spring buying season and is a headwind.”

The 30-year fixed-rate mortgage averaged 4.64 percent last week, the highest level since January 2014, the MBA reports.

More borrowers are turning to adjustable-rate mortgages, which tend to have lower initial rates than the 30-year fixed-rate mortgage. However, the lower rates from an ARM can be risky since the rates are locked in for a shorter term. ARM applications rose to 6.4 percent of total applications last week