Category: Real Estate

Report: Kids Have Big Say in Real Estate | Realtor Magazine

Buyers with children put more weight on the neighborhood, local schools, and size of homes when shopping for the right property, according to the 2017 Moving With Kids report, produced by the National Association of REALTORS®.

The neighborhood, in particular, has a big influence on home buyers with children under the age of 18. Forty-nine percent of buyers who have children consider the neighborhood based on the quality of the school district, and 43 percent choose a neighborhood by the convenience to schools, according to the report.

Buyers with children also tended to purchase a larger home, at 2,100 square feet with four bedrooms and two full bathrooms. Buyers with no children tend to prefer a home with three bedrooms and two bathrooms at an average of 1,800 square feet.

Many buyers with children also say child care expenses can delay their home purchase. Twenty-two percent of buyers surveyed said they had to delay their home purchase due to the costs of child care. Also, they reported having to compromise on the price, style, and size of the home they purchased, according to the NAR report.

Sellers with kids also have unique needs. One notable need is that they usually have to sell their homes faster. Twenty-six percent of owners with children under the age of 18 sold their home urgently compared to 14 percent of owners with no children at home. The main reasons for selling a home for sellers with children were that the home was too small or they faced a job relocation or a change in their family situation.

The 20 Markets Dominating in August | Realtor Magazine

Half of the 20 hottest housing markets in August were located in California. Vallejo, Calif., held on to its top spot in realtor.com®’s “hot list” this month. Realtor.com® ranks the top 20 medium-to-large metro markets where homes are selling the fastest and where buyers are searching the most on realtor.com®.  

Detroit also made a comeback on realtor.com®’s list this month, entering the top five for the first time since October 2013. New metros added to the list for August include Grand Rapids, Mich.; Oxnard, Calif.; and Nashville, Tenn.

Realtor.com®’s 20 hottest housing markets in August are:

1. Vallejo, Calif.
2. San Jose, Calif.
3. San Francisco
4. Detroit
5. Stockton, Calif.
6. Kennewick, Wash.
7. Fort Wayne, Ind.
8. Columbus, Ohio
9. San Diego
10. Sacramento, Calif.
11. Dallas
12. Modesto, Calif.
13. Waco, Texas
14. Santa Rosa, Calif.
15. Fresno, Calif.
16. Grand Rapids, Mich.
17. Colorado Springs, Colo.
18. Denver
19. Oxnard, Calif.
20. Nashville, Tenn.

Living Rooms Are Heading Upstairs | Realtor Magazine

Upper-level living rooms are becoming a sought-after space among homeowners, The Wall Street Journal reports. Homeowners are finding these second-floor lounges can be cozier spaces than living areas on the first floor—and can offer more privacy, too.

Upper-level living rooms—sometimes labeled “pajama lounges”—are usually located right off bedrooms. They may include comfy sofas, a kitchenette, a television, and even a nook to work from. Architects are removing long hallway spaces upstairs to make room for these central living spaces upstairs.

The lounge area is intended for “the bedrooms [to] spill out, and the family can have a space to assemble,” says Kobi Karp, an architect in Miami who recently designed an upper-level living room in one of his projects. “It’s where you go on a Sunday morning and wait for the rest of the house to wake up.”

Upper-level living rooms tend to be more casual than their lower counterparts. They also tend to have recessed lighting instead of chandeliers and favor cozier seating areas over larger sectionals, Donna Mondi, a Chicago-based interior designer, told The Wall Street Journal. Mondi also says it’s not as important for the style of these spaces to match the rest of the home, either.

“Because it’s not part of the main area, all bets are off—you can do what you want with it,” says Mondi.

Madison Hildebrand, a real estate pro in Malibu and reality TV host, says he has sold dozens of homes over the past three years featuring these types of upper living spaces.

“After living in [an open floor] situation, [owners] realized that it’s nice to have the big open spaces, but also a little bit annoying,” Hildenbrand says. “Now there’s a bit more compartmentalizing.”

Hildenbrand says these upstairs living areas that are geared for families in larger homes are helping properties sell faster, too. Families are looking for the extra space to lounge, without having to make an office or playroom serve double duty, he says.

The idea behind these spaces are nothing new. Historic homes often have included an upstairs “retiring room” for mothers nursing children or for resting midday, says T. Jeffrey Clarke, an architect in Philadelphia.

30-Year Mortgage Rate Hits New 2017 Low | Realtor Magazine

 

Borrowers applying for a 30-year fixed-rate mortgage this week locked in the lowest rate of the year, as it dropped to its lowest average since November 2016, Freddie Mac reports. Additionally, “the 10-year Treasury yield fell 6 basis points this week amid concerns over lagging inflation,” says Freddie Mac chief economist Sean Becketti.

Freddie Mac reported the following national averages with mortgage rates for the week ending Aug. 24:

• 30-year fixed-rate mortgages: averaged 3.86 percent, with an average 0.5 point, dropping from last week’s 3.89 percent average. Last year at this time, 30-year rates averaged 3.43 percent.
• 15-year fixed-rate mortgages: averaged 3.16 percent, with an average 0.5 point, the same average as last week. A year ago, 15-year rates averaged 2.74 percent.
• 5-year hybrid adjustable-rate mortgages: averaged 3.17 percent, with an average 0.5 point, rising from last week’s 3.16 percent average. A year ago, 5-year ARMs averaged 2.75 percent.

Jumbo Loans Get Less Expensive | Realtor Magazine

The interest rate for jumbo loans—those greater than $421,100—dropped five basis points last week, averaging 3.99 percent for the week. That is now 13 basis points lower than the conforming rate, which is the largest spread between jumbo rates and the conforming rate since March 2016, according to the Mortgage Bankers Association.

“A strong appetite for jumbo loans and a highly competitive jumbo market has led to increased availability and lower pricing,” says Joel Kan, an MBA economist. Sales on the higher end of the market are increasing, which also explains the stronger demand for jumbo loans lately.

Meanwhile, sluggish inventory levels of homes for sale on the lower end are keeping applications down, according to the MBA. Total mortgage application activity—for refinancings and home purchases—inched down by 0.5 percent week over week on a seasonally adjusted basis, the MBA reported. This marks the second consecutive week that applications have barely budged.

Applications for refinancings last week eked out a 0.3 percent increase from the previous week, but remain 38 percent lower than the same week a year ago, when rates were lower. Mortgage applications to purchase a home dropped 2 percent for the week. Still, purchase applications are 9 percent higher than the same week one year ago, the MBA reports.

The 30-year fixed-rate mortgage averaged 4.12 percent last week, the lowest rate since last November.

58% Of Homeowners Think The Housing Market Is Set For A Correction–Are Bubble Fears Founded?

“The market is expensive, competitive and unaffordable, but there is no evidence of a bubble ” notes Nela Richardson, chief economist at Redfin

In each of the six months from December through May, the most recent month for which data is available, national homes prices set new highs. Home price growth has outpaced wage growth and inflation. So perhaps it is not too surprising that a new survey has found that more than half of homeowners expect home prices to decline in the not too distant future. Of 1,079 adults surveyed by Value Insured, a provider of down payment protection, 58% agreed with the notion there will be a “housing bubble and price correction” in the next two years. That’s up from 46% last quarter. Meanwhile, 83% of respondents believe it’s a good time to sell.

Over the past five decades home price cycles have tended to last seven to ten years. The last up-cycle was an exception, running 17 years before home prices crashed spectacularly in 2006 and finally began a sustained rebound in 2012. “Historical precedence is now on the side of those who think a housing market correction is near,” says Ralph McLaughlin, chief economist at home search site Trulia. It is possible, he notes, that the new norm is closer to 17 years. 

Being due for a correction does not necessarily equal a bubble. Corrections “can occur for many reasons that are unrelated to bubbles, such as a slowdown in macroeconomic activity, consumer demand, etc,” explains McLaughlin. “An asset bubble has a very specific meaning: when consumers and/or investors are willing to pay more for an asset just because others are doing it or because they think prices will increase indefinitely.” Think tulips, Beanie Babies and, yes, housing in the previous decade.

Economists see few, if any, signs of history repeating itself now.

“The market is expensive, competitive and unaffordable, but there’s no evidence of a bubble,” notes Nela Richardson, chief economist at (newly public) brokerage Redfin.

A defining factor in a housing market bubble is home price growth that is unsustainable or unsupported. A decade ago, the housing market was fueled by exotic mortgages and lax underwriting that allowed people to take on more debt than they could afford.What we have today is actually a very conservative and equity-driven market. We are seeing buyers in the hottest housing markets making sizable down payments, if not all-cash offers. Thus, unlike in the subprime boom, there’s equity that is supporting price growth along with good local economic drivers like job growth.”

In the most recent release of the monthly S&P CoreLogic Case-Shiller Home Price Indices, Managing Director David Blitzer declared that housing was not in bubble territory, because the amount prices have increased varies from city to city. During the bubble, price growth was nearly universal. Plus, the number of homes sold today is 20% below the pre-crash peak. That does not mean the housing market is without flaws. Mortgages are hard to get without stellar credit. Fewer homes are selling annually. And there’s just a four-month supply of homes available for sale–not nearly enoughto meet growing demand. But all of that is supporting price growth.

 

But perhaps the best evidence that we are not in a housing bubble is that people are talking about it. “It is healthy for buyers to have a little bit of skepticism in the market,” says Danielle Hale, chief economist for Realtor.com.

The biggest contributor to the housing boom and bust last time was speculation. People got in expecting that prices would never fall and builders built expecting that prices would never fall. And everyone turned out to be wrong. The skepticism we are seeing from homeowners this time suggests that attitude that home prices can never come down is definitely not present. So we are getting much more fundamental demand from natural growth in households and builders are building to meet that actual growth in households. It is a much more sustainable situation.”

In their survey ValueInsured found that Millennials, which they define as adults 34 and under and are the main drivers of new demand, are particularly wary of making a bad investment. This is in part because many are uncertain they can remain in a home long enough for their investment to pay off. (Expert typically recommend staying in a home for seven years or more to limit exposure to price volatility.)

“I just caution people against looking at their house as an investment versus as a place to live,” says Svenja Gudell, chief economist at Zillow. “If you have a ton of money and you’re wondering: ‘should I park it in a bunch of homes or should I invest in other ways?’ Our research has proven the returns are higher investing otherwise. But you still have to live somewhere, so it still makes more sense to buy a house that to rent.” 

4 Ways to Cut Kitchen Remodeling Costs | Realtor Magazine

Kitchen remodels don’t come cheap. The average cost to update a 200-square-foot kitchen—including installing new flooring, semicustom wood cabinets, and standard appliances—is a whopping $62,000, according to Remodeling Magazine. Homeowners who want to add in more luxurious touches, such as stone countertops, a commercial-grade cooktop, designer faucets, and top-of-the-line custom cabinets, may pay as much as $123,000.

Before your clients gut their kitchen, advise them to consider more affordable options that can still make a big impact at resale. The New York Times recently spoke with designers to get some of their best budget-friendly tips for remodeling a kitchen.

Try painting or resurfacing cabinets instead of replacing them. “A bold color and modern hardware can breathe new life into old, ordinary cabinetry,” interior designer CeCe Barfield Thompson told the Times. She gave her own 1990s-era kitchen a makeover by painting the cherry wood cabinets a smokestack gray color. She also covered pea-green tile floors with a parquet charcoal laminate surface. She says the renovations cost her $7,050, which included the labor, laminate flooring, paint, and new cabinet handles and drawer pulls.

You can also reface or resurface dated cabinets, keeping the existing cabinet framework and replacing the doors, drawer fronts, and side panels. New York–based designer Carolyn DiCarlo, who used this approach when working on a Manhattan loft, says new cabinets would have cost about $22,000—but the price to reface was just $2,500.

Consider alternative materials for countertops. Instead of choosing high-end items such as quartz or stone, go for less expensive options such as butcher block. This material can be purchased for as low as $99 in standard sizes. “It’s kind of like having a built-in cutting board throughout your kitchen,” says Kimberly Winthrop, an interior designer in Santa Monica, Calif. She says she paid $500 for a 20-foot butcher block to use in a recent kitchen makeover. But it requires some maintenance: Butcher block typically needs to be sanded and oiled twice a year.

Keep the layout intact. “Moving walls, electrical, and plumbing is where installation costs spike,” says Dana Hudson, divisional merchandising manager for kitchens at Home Depot. Mina Fies, a Reston, Va.–based designer and creator of RenovationRoadmap.com, recalls a client who wanted to reconfigure the kitchen walls to allow for more natural light. The layout changes would have required moving plumbing. Fies says she was able to show the client a design that met her needs but did not open up the walls, instead installing recessed lighting, pendant lights, and under-cabinet lighting. The client saved $8,000, Fies says.

New Home Inventory at 20-Year Low | Realtor Magazine

Builders failed to ramp up inventories last month, despite increasing demand from home buyers and calls from the real estate industry. New-home construction dropped 4.8 percent in July to a seasonally adjusted annual rate of 1.16 million units, the U.S. Department of Housing and Urban Development and Commerce Development reported Wednesday.

Single-family production fell 0.5 percent month over month in July to an adjusted annual rate of 856,000. The July reading does follow a strong, upwardly revised June reading, the National Association of Home Builders notes. Single-family starts are 8.6 percent higher than a year ago.

Multifamily starts, meanwhile, plunged 15.3 percent last month to 299,000 units.

“New-home production numbers this month are in line with our forecast for a slow and steady recovery of the housing market,” says Robert Dietz, NAHB’s chief economist. “We saw multifamily production peak in 2015, and this sector should continue to level off as demand remains solid.”

Overall, inventories of homes for sale are at a 20-year low, according to realtor.com® data. Economists have been calling for new-home construction to help make up the shortfall in the market.

“The housing shortage in America will intensify if new construction remains as lackluster as it was in July,” Lawrence Yun, the National Association of REALTORS®’ chief economist, said in a statement. “The softening multifamily housing starts brought down the overall new housing unit additions to the second lowest monthly activity this year. Moreover, the latest 15 percent drop in multifamily housing starts and 0.5 percent drop in single-family starts will hold back economic growth potential. Because of this shortage, expect rents and home prices to rise by at least twice as fast as the broad consumer price index.”

Regionally, combined single-family and multifamily housing production increased only in the South in July, inching up 0.6 percent month over month. Housing starts posted a 15.7 percent month-over-month drop in the Northeast, a 15.2 percent drop in the Midwest and fell by 1.6 percent in the West.

Housing permits, a gauge of future construction, dropped 4.1 percent to a seasonally adjusted annual rate of 1.22 million units. Single-family permits mostly held steady at 811,000 units while multifamily permits dropped 11.2 percent to 412,000.

Report: 1 in 4 Homes Now Equity Rich | Realtor Magazine

Homeowners should be feeling richer. At the end of the second quarter, more than 14 million U.S. properties were considered equity rich. (That means the combined loan amount secured by the property was 50 percent or less of the estimated market value of the property.)

Nearly 320,000 properties joined the “equity rich” category during the second quarter over the first quarter. Further, the number of equity rich properties is now up more than 1.6 million properties compared to a year ago, according to ATTOM Data Solutions’ Q2 2017 U.S. Home Equity & Underwater report.

The number of equity rich properties in the U.S. now represents 24.6 percent of all properties with a mortgage in the country.

“An increasing number of U.S. homeowners are amassing impressive stockpiles of home equity wealth, enjoying the benefits of rapidly rising home prices while staying conservative when it comes to cashing out on their equity—homeowners are staying in their homes nearly twice as long before selling as they were prior to the Great Recession, and the volume of home equity lines of credit are running about one-third of the level they were at during the last housing boom,” says Daren Blomquist, senior vice president at ATTOM Data Solutions. “However, this home equity wealth is unevenly distributed across different geographies, value ranges, occupancy statuses and lengths of ownership, with a disproportionately high equity rich share among high-end properties, investor-owned properties, and properties owned for more than 20 years.”

The states with the highest share of equity rich properties at the end of the second quarter were Hawaii (38.3 percent), California (36.6 percent), New York (34.2 percent), Vermont (33.5 percent), and Oregon (32.2 percent).

On a metro level, the areas with populations of 500,000 or more with the highest share of equity rich properties were San Jose, Calif. (52 percent); San Francisco (47 percent); Los Angeles (40 percent); Honolulu (40 percent); and Portland, Oregon (35 percent).

Buyers Want Bigger Yards Over Bigger Homes | Realtor Magazine

A property that offers a great outdoor space is taking a higher priority among home buyers. In fact, home shoppers recently surveyed said they would be willing to sacrifice some space from a larger house in order to get a bigger yard.

More than half of 1,000 buyers recently surveyed—or 56 percent—said they’d be willing to sacrifice square footage in a home for a great outdoor space. The survey was conducted by Wakefield Research on behalf of Taylor Morrison, a national home builder.

Survey respondents also rated the home’s distance to neighboring homes as the most important exterior feature. Forty-eight percent of millennials and 53 percent of nonmillennials believe the extra buffer is important, even more so than other curb appeal elements like siding, driveway styles, exterior paint colors, and roofing finishes. Women wanted outdoor space more than men (62 percent of women surveyed say they prefer less home square footage for a larger yard, compared to 51 percent of men).

“Demand for more elaborate exterior space continues to rise, and blending indoor-outdoor living to address customer preferences is critical to our success,” says Sheryl Palmer, Taylor Morrison’s CEO. Palmer notes that the findings come at a time when land prices are escalating and local approvals have forced smaller lot sizes.

In response, Taylor Morrison has been ramping up its properties: adding outdoor living rooms, floor-to-ceiling retractable glass walls that open to the backyard, and matching tile flooring that extends from the home’s interior to exterior for a seamless flow to the outdoor space.

Survey respondents were asked what they would spend an extra $10,000 to $15,000 on in their new home. Outdoor living items topped the list, edging out upgraded cabinets and kitchen islands.

“Outdoor living is no longer an afterthought to a home’s construction,” says Charlie Enochs, Taylor Morrison area president for the central region.