Category: Real Estate

Baby Boomers: Who Needs to Downsize? | Realtor Magazine

A growing number of baby boomers are choosing not to downsize in retirement. Instead, they’re opting to remain in the homes where they raised their children, USA Today reports. But their reluctance to move is contributing to low inventory across the country, says realtor.com® Chief Economist Danielle Hale.

Baby boomers “have refused to follow what the traditional expectations were,” Barbara Risman, a sociology professor at the University of Illinois at Chicago, told USA Today. Baby boomers, mostly between the ages of 54 to 73, are working longer and, therefore, putting retirement off longer than previous generations. Their millennial children are also increasingly living at home with them and staying well into adulthood.

Baby boomers also may be struggling to find a smaller home to move into. Housing analysts have pointed to a dire housing shortage of less expensive entry-level homes—the type downsizing baby boomers could be seeking. The shortage has caused home prices to increase, and that may be erasing some of the incentive to downsize, housing analysts say.

Fifty-two percent of baby boomers say they’ll never move from their current home, according to a Chase Bank survey of 753 boomer homeowners conducted this year. Separately, 43% of 45- to 65-year-olds say they plan to remain in their current home through retirement, according to a 2017 Ipsos/USA Today poll.

About 20% of Americans 65 and older are working or looking for jobs, up from 12.1% in 1996, according to Labor Department data. “Baby boomers don’t want to become old in a way that has negative connotations,” Risman says. “Remaining in one’s old house is part of remaining in the prime of one’s life longer.”

And downsizing may be losing its appeal. For baby boomers who do plan to move, 43% say they want their next home to be the same size as their current one. Twenty-two percent say they want their next home to be even larger, according to a January survey of 50- and 60-year-olds by Del Webb.

Mortgage Rates Drop for Fourth Straight Week | Realtor Magazine

Mortgage rates continue to decline while lowering borrowing costs for home buyers this spring.

“Mortgage rates fell for the fourth consecutive week and continued the medium-term trend of lower rates since late 2018,” says Sam Khater, Freddie Mac’s chief economist. “The drop in mortgage rates is causing purchase demand to rise, and the mix of demand is skewing to the higher end as more affluent consumers are typically more responsive to declines in rates.”

Freddie Mac reports the following national averages with mortgage rates for the week ending May 23:

• 30-year fixed-rate mortgages: averaged 4.06%, with an average 0.5 point, falling from last week’s 4.07% average. Last year at this time, 30-year rates averaged 4.66%.
• 15-year fixed-rate mortgages: averaged 3.51%, with an average 0.4 point, falling from a 3.53% average last week. A year ago, 15-year rates averaged 4.15%.
• 5-year hybrid adjustable-rate mortgages: averaged 3.68%, with an average 0.4 point, rising from last week’s 3.66% average. A year ago, 5-year ARMs averaged 3.87%.

Top Reasons Americans are Moving | Realtor Magazine

Many Americans are moving because they want more space, according to a new survey of 1,000 consumers from Porch.com, a home remodeling website. More than one in four—and millennials, in particular—say their chief motivator for moving is the desire a larger home. Porch.com found the top moving motivators among consumers:

• Desire for a larger home: 26%
• Desire to own, not rent: 19%
• Downsizing: 12%
• New job or job transfer: 11%
• Desire for a better neighborhood: 9%
• Separating from a significant other: 6%
• Establishing own household (e.g. moved out of parents’ house): 6%
• Desire to be closer to family: 5%
• Desire for a shorter commute: 5%

Their reasons for moving also tended to impact their home search. For example, consumers who were looking to transition from renting to owning tended to take the longest time looking for a home—an average of 5.7 months. On the other hand, those who were moving for a job or because they split up with a significant other tended to move the fastest: less than 3 months.

 

© Porch.com

 

Home buyers also acknowledge having to make some compromises on the items they most desired in a home, according to the survey. Potential home buyers say they compromised the most on purchase price, housing features, and size. However, 62% of respondents say they didn’t have to make any compromises at all.

 

© Porch.com

Freddie: Mortgage Rates Won’t Go as High as We Thought | Realtor Magazine

Borrowing costs this year likely will be lower than originally predicted. Freddie Mac recently downgraded its forecast for the 30-year fixed-rate mortgage, projecting it will average 4.3% this year—below last year’s average of 4.5%. Further, Freddie economists predict only a small increase in rates in 2020, with the 30-year fixed-rate mortgage averaging 4.5% next year.

The lower mortgage rates likely will be a boon for housing, Freddie Mac notes in its May 2019 Forecast. “The combined positive impact of low mortgage rates, a strong labor market, low unemployment, and modest wage growth supports our forecast for a steadily growing housing market in 2019,” Freddie Mac says in its report.

© Freddie Mac

The declining interest rates are expected to help reverse a decrease in mortgage originations that occurred in 2018. Freddie Mac researchers note this will “continue to provide an impetus to first-time home buyers as well as homeowners looking to refinance.”

Freddie Mac projects that home sales will surpass 2018 levels and reach 5.98 million units in 2019. Most of the increase will come from existing-home sales. Freddie Mac’s forecast remains flat for housing starts this year, however, at 1.26 million units.

Schooled in Debt | Realtor Magazine

Consumers saddled with student loan debt often have to delay financial goals, like buying a home. But for those who want the benefits of ownership before their student debt is paid off, Fannie Mae has options that can make it easier to qualify and handle the monthly payments.

While you can’t give specific financial advice to clients, you can help them understand the benefits and risks. “We can be advocates for our clients and potentially direct them to the right place,” says Mary Shanley Aloisio, a sales associate with Dream Town Realty in Chicago.

Relief from the secondary market giant can come in one of three ways. First, buyers whose student loans have income-driven repayment terms (meaning they pay less when they’re making below a certain income) can qualify based on what they’re actually paying at the time of application, as shown on their credit report. So if they’re paying $0 each month based on their income, the debt won’t be counted in calculating their debt-to-income ratio. Second, lenders will exclude debt that’s being paid by someone else (like a parent) as long as the borrower can provide 12 months of documentation and there’s no history of delinquency. Finally, those who’ve already purchased a home may be able to improve their monthly cash flow through a cash-out refinance that’s used to pay off the student debt (no partial paydowns are allowed). The refinancing option is even available to parents who’ve co-signed student loans for their children. Freddie Mac also has special options for student loan borrowers. Buyers should talk to their lender to determine availability of, and their eligibility for, these products.

Aly, a 29-year-old Chicago public high school teacher (who asked that her last name not be published), graduated from the University of Illinois at Chicago in 2012 with $50,000 in student loan debt. She and her wife saved money, compared with renting, when they bought a home in 2016 for $147,000. But a combination of rising property taxes and rising home values prompted the couple to look into refinancing. With a cash-out refi, they were able to pay off Aly’s remaining $18,000 in student debt.

Tapping home equity to retire other kinds of debt can make financial sense by giving people more money to spend on other expenses or invest in tax-advantaged retirement plans, says John Kambs, a senior loan officer with the Kambs Jennings Group of Chicago, part of Compass Mortgage. Looking at home buying through this lens underscores the value of owning instead of renting and is a powerful motivator for people trying to decide whether to buy, says Kambs, who arranged the couple’s new loan.

But this tactic has significant risks, warns Robin Howarth, a senior researcher at the Center for Responsible Lending in Durham, N.C. For one thing, moving student loan debt into a different type of loan, such as a mortgage, means giving up the protections that generally come with borrowing money to attend school, such as being able to defer repayment during a financial emergency or to attend graduate school, she says. “It’s hard to look into the future and know if you might need to avail yourself of those protections.”

There’s also the risk that home values may decline and that the borrowers won’t be able to meet their obligations, Howarth adds. “Everyone underestimates the possibility of something going wrong,” particularly if they haven’t gone through the kinds of setbacks that befell many home owners during the Great Recession, says Howarth.

Aly was aware of the protections that come with student loans and even investigated debt-forgiveness programs designed for teachers, but she was put off by the bureaucracy required to take advantage of those options. “It would have been hours of paperwork and hunting people down,” she says. “Refinancing seemed much simpler.”

Bonus: The couple knocked about $400 per month off what they were spending on their mortgage and student loan payments.

Calif. Couple Fined $600K for Uprooting, Killing Ancient Tree | Realtor Magazine

A judge has ordered a Sonoma, Calif., couple to pay nearly $600,000 for uprooting a nearly two-century-old oak tree from the property they bought. The 180-year-old oak tree was protected under a conservation easement.

The Sonoma Land Trust, a nonprofit group, sued the couple for damaging the ancient tree as well as other surrounding vegetation that was protected under a conservation easement. The couple purchased the 34-acre property that included the tree. They attempted to move the tree and other vegetation to a place closer to their newly built ranch home within the property.

But the heritage tree did not survive the move.

Bob Neale, director of the Sonoma Land Trust Stewardship, said the couple was made aware of the conservation easement and the terms of it when they purchased the property.

The damage was discovered in 2014 and has been in legal proceedings. A concerned neighbor first reported to the Sonoma Land Trust Stewardship that they saw heavy equipment and digging on the property. Neale said he found more than 3,000 cubic yards of dirt and rock had been removed, and that the 180-year-old oak tree had been uprooted without permits for the work.

Sonoma County Superior Court Judge Patrick Broderick sided with the Sonoma Land Trust and wrote in his ruling that the land owners, Peter and Toni Thompson, “knowingly and intentionally” violated the conservation rules. They “demonstrated an arrogance and complete disregard for the mandatory terms of the easement,” he wrote.

Broderick ordered the couple to pay more than $586,000 in damages toward environmental restoration and other costs.

The couple reportedly plan to file a new lawsuit. They say the damage was not intentional.

“They went into this area because they appreciated the pastoral nature of it, the scenic beauty of it,” Richard Freeman, the couple’s attorney, told The Washington Post. “They wouldn’t have wanted to do anything that was going to cause harm, damage, or scar it.”

The couple has since listed the property, including the neighboring ranch, on the market for $8.45 million.

How to Write a Winning Real Estate Offer Letter – Redfin Real-Time

You’ve found the house of your dreams and you’re ready to make an offer; but how do you compete with a handful of other prospective buyers who’ve also deemed the home “the one”? This is a dilemma buyers are facing all over the country in today’s fast-paced, low-inventory housing market. And the reality is, you aren’t always going to be able to submit the highest real estate offer for your dream home.

Fortunately, there are ways to make your real estate offer letter more competitive when more cash isn’t an option. Most real estate agents say letters is one of the best ways to support your bid. The letter gives you the opportunity to connect with the sellers on a personal level, to explain to them why you want their home and why they should choose your offer. And that human connection, agents say, can sometimes even trump a higher price for sellers.

“I recently worked with some first-time homebuyers who fell in love with a highly desirable townhouse and were determined to get it,” said Redfin real estate agent Lesley Lannan. “Theirs was the first offer on the property, and the owner was so touched by their letter that he accepted their offer and canceled a subsequent Open House. I can’t underscore the importance of offer letters more.”

Here are some tips to help you write a strong offer letter:

1. Format Your Offer Letter and Make It Stand Out

As real estate offer letters become more and more common, you have to find a way to make yours stand out. Think of it as a resume. A beautiful letter with attention-grabbing fonts is going to jump out next to other letters. Need some inspiration? Check out this beautifully formatted offer letter that won this couple their home.

2. Explain in the Offer What You Love About the House

Don’t just tell the sellers you want their house, tell them why you want it. Whether it was a big backyard, a chef’s kitchen or a walk-in closet that grabbed your attention, the owners will be flattered to hear what you liked most about their home.

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3. Make Personal Connections in the Letter 

Though it may sound silly, bonds can easily be built over a mutual love for cats, or the Patriots or whatever it may be. If you share a common value or hobby with the sellers, mention it in your cover letter. It’s an easy way to make yourself more relatable, and will also show that you’re not sending the same generic letter with every offer you submit.

“A couple of clients of mine had a cat that had been recently diagnosed with diabetes,” said agent Cheryl Demarco. “They fell in love with a house and discovered that its owners also had cats. In their offer letter, they told the sellers how perfect the home was for them and their disabled kitty—down to the small pantry in front of the bathroom is a perfect place for all of his new supplies and medications. My clients won the home in a multiple offer situation.”

4. Print a Hard Copy of the Offer for the Sellers

Think about how many emails you receive daily versus how many hard-copy letters you get. If you send your real estate offer letter through email, you run the risk of it going to spam or being quickly buried beneath other emails. Instead, agents recommend leaving a hard copy of the letter on the seller’s’ kitchen counter during a showing. However, they advise you only do this if you know the owners still live there and will see it (as opposed to it being a vacant home), and if there are no other showings after you (as a subsequent agent could see it and possibly remove it.) This will show a little extra initiative on your part, and give you peace of mind knowing that it ended up in their hands and not in their spam folder.

Mortgage Rates Moved Slightly Lower This Week | Realtor Magazine

® REALTOR® Magazine

 

Home buyers saw mortgage rates edge lower again this week, with rates remaining well below year ago levels. 

“Modestly weaker consumer spending and manufacturing data, along with continued jitters around trade policy, caused interest rates to decline throughout the yield curve,” said Sam Khater, Freddie Mac’s chief economist. “While signals from the financial markets are flashing caution signs, the real economy remains on solid ground with steady job growth and five-decade low unemployment rates, which will drive up home sales this summer.”

Freddie Mac reported the following national averages with mortgage rates for the week ending May 16:

• 30-year fixed-rate mortgages averaged 4.07 percent, with an average 0.5 point, dropping from last week’s 4.10 percent average. A year ago, 30-year rates averaged 4.61 percent.
• 15-year fixed-rate mortgages averaged 3.53 percent, with an average 0.4 point, falling from last week’s 3.57 percent average. A year ago, 15-year rates averaged 4.08 percent.
• 5-year adjustable-rate mortgages averaged 3.66 percent, with an average 0.4 point, rising from last week’s 3.63 percent average. Last year at this time, 5-year ARMs averaged 3.82 percent.

5 DIY Ways to Increase Curb Appeal and Attract Buyers on a Budget – Redfin Real-Time

Landscaping, lighting, power washing and more–5 curb appeal ideas from HGTV’s Chip Wade.

 

With its crisp air and lovely weather, spring is the optimal time to list your home. Assuming it’s primed and ready to be introduced to the public, that is.

In life and in home tours, first impressions are everything. Just as we embrace spring as a time to shed possessions that don’t bring us joy ala Marie Kondo, it’s also a time to spruce up homes both inside and out to help attract potential buyers.

Emphasis on ‘out’–exteriors are particularly important, says HGTV and DIY Network home expert and Liberty Mutual consultant, Chip Wade.

“In the springtime, we have what I call the swing vote of curb appeal. Homes with it hold a distinct advantage,” Chip said. “Public interest is focused on the exterior of a home and even an only okay property can explode with interest because of it. This can really flip the competition on its head.”

Chip, who has appeared on HGTV shows such as “Curb Appeal: The Block,” “Design Star,” and “Wise Buys,” spilled secrets and tips for easy spring DIY updates that will give your home curb appeal to attract buyers, without breaking the bank this spring.

1. Create a clearly defined entry path

“The front door is a moving target and not always right on the front of the house. We want to clearly identify and demystify the route our visitors take when they enter the property. If it’s walking down the driveway, make sure that is really clear with no searching around. Uncertainty of where to go creates a sense of confusion for visitors, which is the opposite of the reaction we want. Focus your budget first on making sure that entry point and the path to reach it is clear.”

2. Don’t neglect your mailbox

“The mailbox strongly relates to curb appeal. Updating it is one of the most cost effective ways to transform the first impression of your home in a big way. You can invest in a new one, or maybe all it needs is a fresh coat of paint or a marginal amount of landscaping. A mailbox with a pine straw bed and a nice clean edge next to your grass is a great first step with minimal effort.”

3. Focus on the front door

“Make sure the front door is representative of the quality you want your visitor to feel about the entire house. If you have a nice house but a hollow, flimsy front door with cheap hardware, the potential buyer sees and feels that first, setting a negative tone. If you have a really nice firm door with solid hardware, that can elevate the sense of quality about the entire house, even if it’s actually not as nice as some of the competition.”

4. Let there be light–especially outside

“The one thing that makes a home so much better is exterior lighting. A lot of people think outdoor lighting is difficult to install and only worth doing if you have a beautiful yard. Both of those things couldn’t be further from the truth. In fact, it’s an affordable, game-changing installation any DIY-er can do. Put in a simple, three-piece low-voltage system that plugs into any exterior outlet. You can do this for path lighting, uplighting and indirect lighting. 

Good lighting makes you want to spend time outdoors, is safer, and is also incredible for aesthetics. Just make sure you are getting bulbs that are all of the same color temperature. You’ll see a range between 2700 Kelvin to 5000 Kelvin. It doesn’t matter what you pick; warmer tones are lower numbers, but the same color temperature will make everything feel cohesive and look great.”

5. Discover the magic of power washing

“Spring cleaning doesn’t only refer to the inside of your house. Do a full cleansing of exteriors. If you’re not getting a pressure washer out once every spring, you’re wasting a golden opportunity to transform your property. Just about anything that might bring the feeling of a property down can be fixed with a pressure washer, from dirty sidewalks and siding, to cobwebs and mud splatters. If you don’t own one, rent it for $100 or buy a nice electric one that stays in the corner of your garage for $200. It’s a super versatile tool to wash exteriors, cars and kids toys.”

DIY Backyard Fire Pit: Build It in Just 7 Easy Steps

Get ready

Before you begin building, consult your local fire code to see if fire pits are allowed in your city and, if so, how far away the fire pit has to be from a structure.

Then, gather your supplies:

• Bricks for the fire pit wall
• Gravel
• Twine or string
• Tape measure
• Stake
• Large shovel
• Trowel
• Tamp
• Level

When purchasing bricks for the fire pit wall, go for something sturdy like retaining wall bricks or concrete pavers. Some home improvement stores even carry bricks specifically designed for fire pits. Use a layer of firebricks, which have a higher heat resistance, on the inner layer of the fire pit as an extra safety measure.

Now that you have all your supplies and you’ve checked your local fire code, you’re ready to build!

1. Create a circle

Pick a spot for your fire pit (ensuring that it is located a safe distance from any structures, bushes or trees) and insert a stake in the ground where the center of the pit will be.

Tie one end of the string or twine to the stake and measure how wide you want your circle to be.

Typically, a fire pit has a diameter of about 4-5 feet. Cut the string and tie the other end to the handle of a trowel. With the string or twine taut, drag the sharp end of the trowel around in a circle, creating a line in the grass.

2. Shovel out the grass

Using a large shovel, dig out the grass inside the circle.

For safety purposes, the hole for a fire pit should be about 6-12 inches deep. Be sure to call 811 before you start digging to ensure there are no utility lines buried under the spot you’ve chosen.

3. Tamp down the dirt

If you don’t have a tamp, you can just use the bottom of your shovel.

4. Make sure the circle is level

Get down on the ground with your level to ensure that the surface is ready for the bricks. Keep making small adjustments until it’s completely level.

5. Add gravel

Put a pretty thick layer of gravel in the fire pit (at least a couple of inches). Spread the gravel around evenly.

6. Arrange the bricks

After you’ve spread the gravel around, arrange your bricks in a circle and stack them in layers until the fire pit wall is at least 12 inches tall.

For extra safety, you have the option to put an inner layer of firebricks. Though you don’t need to use mortar if the bricks are heavy enough to make a sturdy stack, you can use an outdoor fire-resistant mortar between the bricks for extra stability.

7. Relax and enjoy!

Gather a couple of Adirondack chairs, some firewood, a few friends and campfire treats to get full use out of your new fire pit.