Category: Real Estate

Prices Rise Fastest in Disaster-Prone Cities | Realtor Magazine

The threat of natural disasters isn’t scaring buyers away from the most vulnerable cities. Home prices are rising twice as fast in areas with the highest risk of natural disasters compared to those with the lowest risk, according to a new study released by real estate data firm ATTOM Data Solutions.

Researchers analyzed more than 22,000 U.S. cities across 3,000 counties, factoring in six natural disaster threats: earthquakes, floods, hail, hurricane storm surge, tornadoes, and wildfires. The median home prices in cities in the top 20th percentile for natural disaster risk have increased an average of 65 percent over the past five years. On the other hand, median prices in cities within the bottom 20th percentile for natural disaster risk increased an average of only 32 percent in the same time period.

“Strong demand for homes in high-risk natural hazard areas has helped to accelerate price appreciation in those areas over the past decade, despite the potential for devastating damage, as evidenced by the recent hurricanes that made landfall in Texas and Florida,” says Daren Blomquist, senior vice president at ATTOM Data Solutions. “That strong demand is driven largely by economic fundamentals—primarily the presence of good-paying jobs, although the natural beauty that often comes hand-in-hand with high natural hazard risk in these areas is also attractive to many home buyers.”

But Blomquist adds that data shows more consumers in certain areas beginning to factor natural disaster risk—particularly floods—into their homebuying decisions. “Counter to the national trend, home price appreciation is slower in Florida and Louisiana cities with the highest flood risk than in cities with the lowest flood risk,” he says.

Housing Predictions for 2018 | Realtor Magazine

New homes are expected to be a “primary driver of sales in 2018,” as 1.33 million housing starts are predicted next year—up from 1.22 million in 2017, according to Freddie Mac’s September Outlook report, which gauges future real estate activity. Total home sales are expected to increase about 2 percent from 2017 to 2018, according to the report.

Economists also predict that the uptick in housing starts, coupled with a moderate increase in mortgage rates, will help slow the run-up in home prices next year. Freddie Mac forecasts a 4.9 percent increase in home prices in 2018, lower than the 6.3 percent growth seen so far this year. Mortgage rates also are up from near-record lows in 2016, prompting predictions that refinancings will fall to 25 percent of mortgage activity in 2018—the lowest share since 1990, according to Fannie Mae.

Still, homeowners likely will continue building equity next year. In the second quarter of 2017, the dollar volume of equity cashed out was $15 million, up $1.2 million from the first quarter. As home prices rise, cash-out activity has been rising, too.

“The economic environment remains favorable for housing and mortgage markets,” says Freddie Mac chief economist Sean Becketti. “For several years, we have had moderate economic growth of about two percent a year, solid job gains, and low mortgage interest rates. We forecast those conditions to persist into next year.”

Fed Hints at Looming December Rate Hike | Realtor Magazine

The Federal Reserve voted to leave its short-term rates unchanged on Wednesday but it did indicate that a rise to its short-term interest rates is likely on track for later this year.

“The basic message here is U.S. economic performance has been good,” Fed Chairwoman Janet Yellen said at a press conference following the Fed’s two-day policy meeting. “The American people should feel the steps we have taken to normalize monetary policy … are well justified given the very substantial progress we’ve seen in the economy.”

The Fed kept its key rates near zero for seven years. But since 2015, it has gradually raised rates by a quarter of a percentage point four times. Most recently it raised rates in June at a range of between 1 percent and 1.25 percent. Mortgage rates are only loosely tied to the Fed’s short-term rates, but the Fed’s actions do have some influence.

Mortgage rates, for example, have benefited from the Fed’s purchases of more than $1.7 trillion in mortgage-backed securities and rates have been near their lowest levels of the year, according to the Mortgage Bankers Association.

The Federal Reserve indicated after its meeting that it will start next month to unwind its purchases of mortgage-backed securities and U.S. government bonds. But any movements likely will be done so at a gradual pace.

 “That means that mortgage rates would rise up only modestly over time,” says Lawrence Yun, the chief economist of the National Association of REALTORS®. “Given the pace of unwinding asset purchases with the fewer rounds of anticipated short-term rate hikes over the next two years, it’s expected that mortgage rates should still remain at historically attractive levels.”

Yun predicts that the 30-year fixed-rate mortgage may rise to slightly above 4 percent by the end of the year, and may reach just 4.7 percent by the end of 2018.

Fall May Be Best Time for Buyers to Move | Realtor Magazine

A slower fall season in home buying may help more lingering home buyers to jump in.

Prices are easing somewhat. For the second month in a row, the median price of an existing home dropped. It reached $253,500 in August, after reaching a record high of $263,300 in June, according to the latest data from the National Association of REALTORS®.

“Median sales prices typically decline a bit heading into the fall,” says Danielle Hale, realtor.com®’s chief economist. “Summer is a big time for home purchases, so that families settle in before school starts in the fall. In the fall, the types of homes that sell are smaller for people without kids. So they tend to be less expensive.”

Existing homes are proving to be a bargain compared to newer homes. The median price of a new home reached $313,700 in July, which is 23.7 percent higher than an existing home.

Home buyers may find attractive mortgage rates this fall. Mortgage rates are still under the 4 percent psychological threshold, which can be a luring incentive for borrowers. Freddie Mac reported last week that the 30-year fixed rate averaged 3.78 percent, holding steady at a 2017 low.

Studies have shown that fall can be the best time to buy. A study conducted by RealtyTrac in 2015 found that October was the best month for home buyers. Purchasers in October paid 2.6 percent below the estimated market value at the time for their home, according to the analysis. In other words, buyers interested in a $300,000 home tend to see a $7,800 discount on it in the fall. Oct. 8 was found to have the best day for bargains too, with an average of 10.8 percent below estimated market value, according to the study.

Home sales in August started to decline heading into the fall season. Sales of existing homes fell 1.7 percent from July to August, but NAR mostly blamed the decrease on the limited number of listings for sale on the market.

Properties are staying on the market for less time, so buyers will need to be ready to act fast. Fifty-one percent of homes sold in August were on the market for less than a month, according to NAR. Properties typically stayed on the market for just 30 days in August.

6 Things You Need To Know About Retirement Before You Turn 30

If you’re in your 20s, retirement doesn’t seem high on the priority list. It’s hard to give a lot of attention to a financial milestone that’s 20 to 30 years off when you’re trying to figure out how you’ll pay off your student loans and buy a house in the next 15 years. Nonetheless, these are your most valuable years when it comes to saving for retirement. The money you put into your retirement accounts—and other long-term investments— in your 20s has the most opportunity to grow. In other words, time is really on your side when you start saving for your retirement as a young professional. Once you’re on sure-footing in terms of setting up your first retirement account—either a 401(k) through your work, or an IRA if you’re self-employed—it’s time to start looking into other ways to grow your money. Here are six retirement-related things you should know (or at least start looking into) before you turn 30.

How do you prepare for retirement beyond opening a 401(k)?

1. Why it’s important to cut back now to benefit later.

In general, delayed gratification will never be as enticing as swiping your card now. Understanding the value of putting money away because it could be worth more later (thanks to those lovely investment returns) is crucial. “Absolutely spend on experiences and creating memories with friends and family,” says Stephen Ng, a New Jersey-based financial advisor. “However, where can you make small changes to save more? Can you pack lunch for work a few more times a week? Can you buy one less cup of coffee a week? Make one less online purchase?”

2. What you can expand to after your first retirement account.

After you are signed up for your employer-provided 401(k)—hopefully with matching—you’ll want to take the next step toward planning for retirement. You may want to diversify or give yourself the option to contribute more to your retirement account than your company may allow. “If you are eligible, contribute to a traditional or Roth IRA,” says Ng. “The total maximum contribution to both types of IRAs is $5,500 per year. With a traditional IRA, you get the tax deduction but pay the tax when you withdraw after age 59 and a half. With a Roth IRA, you do not benefit from the tax deduction upfront; However, the funds will be tax-free at the time of withdrawal. If you think your tax bracket is going to be higher in the future, it is beneficial to contribute to a Roth IRA now.”

 

3. How you want to diversify your portfolio in the next five years.

Other than retirement, what do you want to save for or invest in? In addition to putting money away for retirement and emergencies, you want to put money into other investments—whether that’s a certain company, an after-tax investment account, or real estate. “Instead of renting, think of saving to purchase real estate,” says Ng. “Millennials have a tremendous window of opportunity where we are in a historically low-interest rate environment. Therefore, if you are thinking of buying a house or condo, the borrowing rate from mortgage companies is much lower than in the past. In addition, housing prices have not fully recovered since the last major correction in 2005. This is a window of opportunity.”

4. The value of putting your money in now.

You also want to know exactly how your money is working for you. What kind of returns can you expect on your various investments? How does that fit into your long-term investment strategy? Ng says, “A 25-year-old that puts a one time investment of $2,000 in their 401(k), with an average return of 8% per year, will have $43,339 at age 65. If the same person waited till age 55 and invested the same amount of $2,000, with an average return of 8%, that investment is $4,318 at age 65. That is the power of compounding.”

 

5. What your end goal (for retirement) is.

Patrick Renn, a Georgia-based CFP and author of Finding Your Money’s Greater Purpose says, “Each individual needs to start with the end in mind. Establish what will be needed at ‘retirement’ age and work back to today to determine what amount needs to come out of each paycheck to achieve that goal. The benchmarks at age 30, 35, 40, etc., can then be established and compared as progress is made.”

7 Common Mistakes First Time Home Buyers Need to Avoid

When you buy your dream house, there are many things to be happy about and this is especially true if it is your first time buying a house. It is possible that you end up making a few mistakes during your purchase. This is completely acceptable and a few glitches on the way are always acceptable. To make things a little smoother for you, we have compiled a list of the seven home common mistakes that first time home buyers generally make.

1. Know Your Budget and Stick to The Same

Budget is the first thing that every homebuyer plans beforehand. But many of them tend to still stretch or exceed their budget when they finally buy a house. The first rule is to not see anything that might exceed your budget. If you set your heart at something which is way more overpriced, most of the times you will end up buying it. This will lead you to reduce your monthly investments and make major lifestyle changes to pay off a higher mortgage than what you originally intended.

2. Don’t Be Indecisive

Many homebuyers are unable to make a decision even after going through many options. You need to decide which features you need and which you don’t in your new home. Some compromises will be needed if you have budget constraint and you need to accept that. Also, don’t rely on too many options as it might confuse you.

3. Think Long Term

It is advisable to have a clear vision about how your house will fit in your future. Some of the questions that you need yourself are–Are planning to re sell your house in the future or it is a long term investment? You need to be happy with the house that you invest in even after four to five years.

4. Not Taking the Help Of A Professional

When it comes to buying a house for the first time, it is better to trust an expert’s opinion. You can’t work your way in an open house without knowing any agent. A real estate agent can be an important home buying resource and can help you even save money when you finally decide to invest in a house. So, do take the help of a professional if you seriously need to buy a house!

5. Don’t Forget To Look Over Your House Multiple Times

When you finally make a choice and decide to invest, be sure to re-examine your house for any necessary repairs etc. Negotiate with the seller beforehand to make sure you are getting what you were promised. Many buyers have to shell an additional monetary investment to get the things they had been promised by the seller. Once the dotted line is signed, many sellers shy away from associating themselves with any problems that suddenly pop up. So, make sure you have checked your investment properly before making a decision.

6. Don’t Forget to Keep a Check on Secondary Factors

Before you buy the house of your dreams, check out additional factors that come with your investment. These factors include your new neighbours, the surrounding views and the community. A house comes with many things and these factors will have an impact on your new life. A good community, friendly neighbours and a pleasing view will improve your day to day life.

7. Don’t Be Impressed Easily

During an open house or when the seller displays his house for your benefit, a lot of things are exaggerated and many weak points are underspecified. Don’t be hasty in making your decision by being impresses by the staging of the house or by the buyer’s words. Try to make a practical decision only after analyzing all the pros and cons. The layout of the house, your needs etc should take precedence; not the overall decoration of the house.

These were the seven important points you need to pay heed to while buying a house for the first time. Make sure to make the right investment that fits into your vision for the present and the future.

What to Do if Your Home Doesn’t Sell

Has your property been on the market for months with little buyer interest? With a competitive fall market ahead, it may help to reassess the condition of your home, make necessary updates, then re-list a new and improved staged property to generate new buzz and buyer interest. Here are some questions sellers should ask themselves to get their home on top of the list and ahead of the competition.

Family Room Staging by PJ & Company Staging and Interior Decorating

Does it Make the Best First Impression?

The key is to look at your home from the perspective of the buyer. With more than 97 percent of homes sold on the Internet, the first point of engagement for buyers today is the online listing. Therefore, it’s more important than ever to feature professional quality photos using the best lighting to encourage buyers to schedule a showing. Once they arrive, be sure that your curb appeal and front entry are well maintained, tidy, and welcoming by trimming bushes, cleaning walkways, making repairs, and adding seasonal touches to the front porch.

Kitchen Staging by PJ & Company Staging and Interior Decorating

Does it Appeal to The Target Market?

According to a National Association of REALTORS(R) recent trends report, 66 percent of today’s first-time buyers are millennials, and they are looking for a home that is in move-in ready condition. These buyers will turn away instantly if the home is dated and gives the impression that it’s in need of renovation. They will, however, ultimately pay more for a home that looks fresh and inviting. Be sure that necessary repairs and cosmetic updates are made such as freshening up walls and cabinets with a coat of neutral paint, polishing hardwood floors, replacing lighting, hardware, appliances, etc.

Dining Room Staging by PJ & Company Staging and Interior Decorating

Can Buyers Visualize Living in This Home?

Whether selling an occupied or vacant home, keep in mind that If buyers can’t emotionally connect, it won’t be memorable. Consider renting furniture for vacant properties to show buyers how they can use their own furnishings in the space.  For occupied properties make sure there are no distractions such as personal items on walls, shelves and tables. Showcase every key room from the entry to the basement with a clean look and minimal accessories such as colorful pillows, wall art and simple vignettes.

Family Room Staging by PJ & Company Staging and Interior Decorating

Are Key Features Highlighted?

Be sure that your home’s best assets are not hidden. Is your stone fireplace covered with a cluttered mantle or distracting wall art? Are hardwood floors covered up with dated carpeting? Are floor to ceiling windows hidden behind heavy curtains? Are built-in shelves cluttered with old books and photos? If so, remove and simplify to show these features off, bring new life and increase perceived value to your home.

The Chocolate Chip Cookie Effect: Home Staging Tips to Spark Love at First Sight

It’s no secret that a properly staged home can sell faster than an empty one. But how far do you need to go to inspire the “chocolate chip cookie effect,” where a buyer walks in the front door and immediately feels right at home? Sellers often look to their agent for home staging advice, which can be based on initial impressions and feedback from early showings.

Here are five tips for effectively staging a home before the next potential buyer walks in the door.

1. Create a Welcoming Entry Way

When it comes to selling a home, the importance of curb appeal can’t be stressed enough. Buyers need to fall in love at first sight — which happens around the time they pull up to the front of a property. For sellers who need to spruce up their yard, recommend inexpensive outdoor projects like a garage door replacement or an exterior power wash.

2. Enlist All Five Senses

Rather than focusing solely on how a home looks, give buyers a multisensory experience. Smells like fresh-baked cookies or scented candles can help create a welcoming, comfortable atmosphere. Calming music can also help to set the proper mood for open-house tours.

3. Encourage Decluttering

When a buyer walks into a home, they need to believe in the possibility that this house could belong to them. Seeing personal articles like photographs, kids’ artwork, or pet toys can detract from the appearance of a home that’s ready for move-in. Any loose papers and other stray items should be removed from countertops and tables to avoid distraction.

4. Turn on the Lights

To avoid a dark and dingy look, be sure to maximize the use of available lighting. Open curtains for natural light and turn on overhead lights in every room. If further accent light is needed, consider bringing LED candles or portable lights to showings.

5. Keep It Natural (and Neutral)

Neutral colors are still a favorite of house hunters looking to add their own style to a home’s decor. If you decide to add accessories for staging purposes, go for neutral accents such as throw rugs, shower curtains and towels or linens. If sellers are willing, replace window treatments or repaint rooms with dated color schemes. Natural touches like flowers and plants can also add a breath of fresh air to a home.

Home staging can range from simple decorative touches to repainting rooms or removing furniture. As buyers move through the house, they should have a clean, consistent experience designed to show off the home’s best features and make them want to move in immediately. 

Study: Staging Could Lead to 10% Price Boost | Realtor Magazine

Fifty-nine percent of real estate professionals say staging a listing contributes to receiving higher offers from buyers, according to the National Association of REALTORS®’ 2017 Profile of Home Staging. Sixty-two percent of agents also say staging “slightly” or “greatly” decreases the time a listing spends on the market.

The amount of money sellers stand to gain from staging their home is significant. Thirty-one percent of practitioners surveyed say that staging a home before listing could lead to a jump in the sale price of five to 10 percent. In other words, a $300,000 home could potentially see a $15,000 to $30,000 price increase. That would easily pay for the cost of the staging, according to NAR’s report.

The majority of buyer’s agents say that staging makes it easier for their clients to visualize the property as their future home. The most important rooms to stage are the living room, master bedroom, and kitchen, according to the study. Thirty-eight percent of listing agents say they suggest all their clients stage their homes.

Twenty-five percent of listing agents say their client pays for the staging prior to listing. However, 21 percent say they personally offer to stage a home; 14 percent recommend an affordable home staging service to their client, according to the survey.

5 Things Your Real Estate Agent Wants You to Know About Buying a House – 24/7 Wall St.

If you are looking to buy your first house, there are approximately a million things you will have to deal with that may be new to you. Fortunately, a good real estate agent knows most of them.

In fact, if you have found an agent you believe and trust, that agent should know all of them. But you can make the agent’s life a lot easier if you know just a few things about the process.

The real estate pros at Realtor.com have come up with a list of just five things you should know or do to make the home-buying experience go more smoothly both for yourself and for the agent.

Here’s the list along with a few comments from the pros.

Know how much you can afford before you start looking. The best way to do this is to get preapproved by your mortgage lender. You can get a rough idea by using one of the many available online mortgage calculators, but getting a preapproval from a lender limits your search and makes it possible to make an offer quickly into today’s tight housing market.

Don’t call the listing agent. Typically the sellers will have their own agent and you will have your own agent. Let the two agents do the negotiating, otherwise the sellers’ agent may think that you don’t trust your agent and you are giving away your negotiating power.

Stop talking around other agents. Loose lips can sink deals. During a showing or an open house, avoid comments about how many houses you’ve looked at, how much you want the house or how much you can spend. Again, you’re giving away your (and your agent’s) negotiating power.

Don’t try to look at every house in a 100-mile radius. If you give your agent a clear description of what you’re looking for and stick to it, you won’t waste a lot of anyone’s time by trying to look at dozens of properties.

Don’t get cold feet once you commit to a house. Everyone’s heard of buyer’s remorse. The symptoms include thinking you’ll find another house even more perfect or worrying about whether you’ll lose your job.