Monday, November 30, 2015


Some Home Renovations Can Raise Tax Bills

Home owners tackling a remodeling project may want to consider how their renovations could impact what they pay on their taxes. Renovations can increase a home’s assessed value, and assessed value is used to determine the property tax owners pay.
The improvements that can increase a property’s reassessment can vary considerably by location. Home owners may be wise to ask their city in advance how a certain improvement might impact their home’s assessed value, if they want to avoid surprises later on.
In general, however, additions and increasing living space tend to increase an owners’ property taxes. Also, finishing space that the owner already has, such as in the attic, garage, or basement, also tend to increase the property tax bill.
“Anything that increases the square footage of the living space is likely to increase the value of the home, and therefore the assessed value,” says Tom Shaer, deputy assessor for communications with the Cook County Assessor’s Office.
Also, large renovations – such as adding a bathroom – likely will prompt a reassessment of a home too. That’s because an “additional bathroom allows more people to live in the house,” therefore increasing its value, says Pete Sepp, president of the National Taxpayers Union, a pro-taxpayer lobbying group.
Kitchen renovations can be one gray area, says Michael Kapp, public information officer for the Los Angeles County assessor’s office.
“If they’re replacing countertops and not extending them, it would probably not [trigger a reassessment],” Kapp says. “If they add additional cabinets or move a wall, for example, that would trigger reassessment,” even if the square footage does not increase.
Some owners may be surprised at what will trigger a reassessment. For example, adding a garden shed could potentially trigger a reassessment, Sepp says. Also, in-ground pools, a very large deck, or even re-grading the lot to improve its drainage could potentially increase the property tax bill too.
Source: “Home Renovations That Add Value – and a Heftier Tax Bill,”® (Nov. 27, 2015)

Housing’s Failure-to-Launch Buyer Problem

More young adults are living with their parents now than during the recession, according to the latest report from the Commerce Department. 
The number of 18- to 34-year-olds who are living with their parents swelled to 31.5 percent as of March 2015 – that’s up from 31.4 percent last year and up from just 27 percent in 2005.
Many economists have predicted that with an improving economy more young adults would start moving out on their own. In fact, the housing market has been relying on millennials driving new household growth and fueling an upsurge in demand.
Yet, the trend of young adults continuing to live with their parents isn’t likely to change anytime soon, says Jed Kolko, an independent economist and senior fellow at the Terner Center for Housing Innovation at the University of California, Berkeley.
Kolko says the rise in children living with their parents is likely related to the delay among young adults in marrying and having children compared to previous generations – and is not a direct tie to a weak economy or the housing market.
The increase in young adults choosing to live at home has contributed to the lowest share of first-time home buyers in nearly three decades, according to the National Association of REALTORS®.
“The boost to housing from young adults will come more slowly than people expect,” Kolko says. “The long-term demographic shifts suggest this might be the new normal, with young people living with their parents longer and more permanently delaying household formation and home ownership.”
Source: “More Young Adults Live With Their Parents Now Than During the Recession,” The Wall Street Journal (Nov. 23, 2015)

DIY Mortgage Applications

Quicken Loans recently announced a bold new move in the mortgage business: A self-service mortgage application, what some in the media are saying makes applying for a mortgage nearly “as easy as ordering a pizza.”
Its new system, called “Rocket Mortgage,” allows consumers to fill out information online that they would typically give to a salesperson in-person. Prior to this system, Quicken Loans only allowed consumers to do basic calculations and gather loan quotes online. This program goes further, allowing the clients to do all the work themselves.
After consumers fill out their information online, they will be given product options that are “completely personalized based on the way they answer the questions and the data they import” from their bank, Regis Hadiaris, the Rocket Mortgage product lead, told National Mortgage News. Hadiaris says this can speed the underwriting process. After receiving loan options, clients can click a button to see if they are approved contingent on underwriting and, if so, they can lock in the rate themselves.
“Up until now [consumers] had to talk to a mortgage banker to get that personalized information and get their options,” Hadiaris says. “Now they can see all their options online. … All the power and control is in our clients’ hands.”
Quicken Loans is still maintaining its signature call centers for those who prefer in-person. 
Source: “Quicken Loans Introduces Self-Service Application Option,” National Mortgage News (Nov. 24, 2015) and “Applying for a Mortgage Could Be (Almost) as Easy as Ordering a Pizza,”® (Nov. 25, 2015)

New-Home Sales Post Big Rebound

New-home sales for single-family homes zipped ahead 10.7 percent in October, finally a major sign that backs up the sentiment from builders that the sector is on the mend. The Commerce Department reported that newly built, single-family homes rose to a seasonally adjusted annual rate of 495,000 units in October.
“Our builders are reporting continued optimism in the housing market, and are adding inventory in anticipation of future business,” says Tom Woods, chairman of the National Association of Home Builders.
So far, sales are running nearly 16 percent ahead of 2014, according to NAHB’s Chief Economist David Crowe.
“With a firming job market, affordable home prices, and rising pent-up demand, [the latest] report is another indicator that the housing market continues to move on a modest upward trajectory,” Crowe says.
Regionally, new-home sales surged 135.3 percent month-over-month in the Northeast in October, followed by an 8.9 percent gain in the South and 5.3 percent increase in the Midwest. Sales dropped 0.9 percent in the West.
The inventory of new homes for sale was 226,000 units in October, or a 5.5-month supply at the current sales pace.

Wednesday, November 25, 2015

Ways to Renovate a Home for Millennials

The millennial generation is primed and ready to step into home ownership. First-time buyers accounted for 29 percent of sales in September, according to the National Association of REALTORS® latest housing report. Echoing this, a new report from the Commerce Department found that the home ownership rate for those under age 35 increased to 35.8 percent in the third quarter of 2015, representing the largest gain for that population since the second quarter of 2004.
Read more: Millennials Say They Don't Want a Home Like Their Parents'
These stats demonstrate why it's important for baby boomers looking to sell to consider the needs of young buyers when undertaking remodeling projects. The main thing to keep in mind: most young buyers are not looking to take on a fixer-upper.
"For the most part, Millennials are looking for the finished product and will pay for it. They want what they see in magazines — nothing less," says Sabine H. Schoenberg, president of the real estate brokerage firm PrimeSitesCT in Greenwich, Conn. "They don’t seem to view themselves living in any one place for a very long time, so there’s no time for gradually rolled out home improvements."
These are three upgrades that millennial buyers expect:
Open space to congregate. Young buyers are drawn to open floor plans, and in particular they want kitchens and family rooms that are open and connected, with plenty of room for people to hang out. "As a real estate broker, I frequently hear statements from millennial buyers like: “I don’t want to be in separate parts of the house and never see my family," says Schoenberg. Owners may want to consider adding a center island with a few stools to the kitchen, to emphasize the room as a prime entertaining space.
WiFi is key. The lack of a strong wireless internet connection is not just a deal killer in high-rises and condos in urban areas. If your house suffers from spotty wireless service, you may need to install WiFi boosters. However, if the cell signal in your home is strong, you'll definitely want to mention that to young prospects.
Think green. Young buyers generally prefer wood floors to carpet, so focus on upgrading to eco-friendly materials such as bamboo flooring and wood with FSC (Forestry Stewardship Certification). They're also looking for healthy homes with good air quality, energy-efficient heating and cooling systems, and most importantly, no environmental issues like mold and fungus, and non-toxic paint that contains low or zero VOC.
Source: "How Boomers Can Sell Their Homes to Millennials," NextAvenue (Oct. 23, 2015)

Dipping Into Stocks for a Down Payment

To finance a home purchase, some home buyers are reaching deep into their savings.
In 2014, about one-fifth of borrowers sold stocks or bonds or borrowed against their retirement accounts in order to pay for a home purchase, according to the National Association of REALTORS®.
“There are no hard and fast rules regarding if and when to cash in stocks to make a home purchase,” The Wall Street Journal reports. But many financial planners would caution about borrowing from a retirement plan since home owners risk penalties and an income-tax bill if they don’t follow the loan repayment terms.
Read more: What's an Average Down Payment?
As an alternative to selling stocks, some borrowers are instead getting a loan secured against their assets. For example, Bank of America Merrill Lynch offers a “loan-management account” that offers borrowers a line of credit based on their Merrill Lynch taxable brokerage portfolio holdings. The funds can go to several uses, including to come up with a down payment to pay for a home. But there is a risk: If the stock market drops significantly, borrowers may be required to a margin call and be forced to pay the difference between the required collateral amount and its current market value, says Mike McPartland, head of investment finance for Citibank Private Bank North America.
The Wall Street Journal highlights a few items for borrowers to consider:
  • Don’t wait until the last minute to cash in stocks, banking on values to rise. Stocks could drop and affect a borrower’s ability to qualify for a loan. Also, buyers could risk delays on the home closing since the sale and money transfer can take several business days, says Peter Grabel, managing director of Luxury Mortgage Corp., based in Stamford, Conn.
  • Lenders tend to value cash in a bank account as more than stocks or mutual funds when determining whether the applicant qualifies for a mortgage. Lenders usually value a portfolio at 70 percent of its current monetary value, Grabel says.
  • Capital-gains taxes could lurk. Borrowers who have had stocks appreciate significantly likely will face the tax when they sell their holdings, which could then end up adding to the cost of the home.
Source: “Selling Stocks to Buy a Home? How to Do It Right,” The Wall Street Journal (Oct. 21, 2015)

More Flipped Homes Hit the Market

Flipping is in vogue again. The share of U.S. homes flipped in the third quarter rose 18 percent compared to a year ago, according to RealtyTrac’s Third Quarter 2015 U.S. Home Flipping Report. The report showed 43,197 single-family homes and condos were flipped – sold for the second time within a 12-month period – which comprises 5 percent of all single-family and condo sales during the quarter.
Read more: Investors Show Slight Favor to Flipping
“After curtailing flipping activity last year due to slowing home price appreciation and shrinking inventory of flip-worthy homes, real estate investors have started to jump back on the flipping bandwagon in 2015,” says Daren Blomquist, vice president at RealtyTrac. “On the acquisition side, investors are finding creative ways to pinpoint potential flips in the off-market arena, and on the disposition side investors have a bigger pool of potential buyers thanks to a surge in FHA buyers this year, many of them first-time buyers looking for starter homes.”
RealtyTrac’s report showed the average gross flipping profit – the difference between the purchase price and flipped price (which does not include rehab costs)—was $62,122 in the third quarter. That is up slightly from an average gross flipping profit of $61,781 in the third quarter of last year, according to the report.
Eighty-five percent of the 101 markets RealtyTrac tracked posted annual increases in flipping activity. The following top 15 markets had the highest share of flipped homes in the third quarter:
  1. Memphis, Tenn.: 10.5%
  2. Fresno, Calif.: 9.5%
  3. Mobile, Ala.: 9.2%
  4. Tampa, Fla.: 9.1%
  5. Deltona-Daytona Beach-Ormond Beach, Fla.: 9%
  6. Las Vegas: 8.7%
  7. Miami: 8.6%
  8. Jacksonville, Fla.: 7.6%
  9. Baltimore: 7.4%
  10. Birmingham, Ala.: 7.4%
  11. Phoenix: 7.3%
  12. Orlando: 7.2%
  13. New Orleans: 6.9%
  14. Virginia Beach, Va.: 6.8%
  15. Riverside-San Bernardino, Calif.: 6.5%
Source: RealtyTrac

What’s Behind the Drop in Sales Contracts?

Pending home sales lost more ground in September, reaching the second lowest level of the year, according to the National Association of REALTORS®’ Pending Home Sales Index, a forward-looking indicator based on contract signings. Pending home sales dropped 2.3 percent month-over-month in September as all four of the major U.S. regions saw a decrease in contract activity.
Read more: Are Higher Home Prices Spooking Buyers?
Lawrence Yun, NAR’s chief economist, says several factors are contributing to September’s cool off in contract signings.
“There continues to be a dearth of available listings in the lower end of the market for first-time buyers, and REALTORS® in many areas are reporting stronger competition than what’s normal this time of year because of stubbornly low inventory conditions,” he says. “Additionally, the rockiness in the financial markets at the end of the summer and signs of a slowing U.S. economy may be causing some prospective buyers to take a wait-and-see approach.”
While pending home sales were down in September, they still remain 3 percent above last year’s levels. Yun says he’s confident the housing market will prove itself as one of the brighter spots of a more-sluggish economy in the coming months.
“With interest rates hovering around 4 percent, rents rising at a near eight-year high, and job growth holding strong – albeit at a more modest pace than earlier this year – the overall demand for buying should stay at a healthy level despite some weakness in the overall economy,” Yun says.
Here’s a closer look at how pending home sales fared in September across the country:
  • Northeast: pending home sales dropped 4 percent compared to last month but are 3.9 percent above year ago levels.
  • Midwest: pending home sales declined 2.5 percent month-over-month but are 4.3 percent higher than year ago levels.  
  • South: pending home sales fell 2.6 percent and are just 0.1 percent below last September’s levels.
  • West: pending home sales fell slightly by 0.2 percent month-over-month but are 6.6 percent above year ago levels.
Source: National Association of REALTORS®

Tuesday, November 10, 2015

3 Trends Set To Impact Real Estate

The real estate business is going to be shaken up by a changing mindset on how consumers want to live, work, and even drive.
The Urban Land Institute recently brought together a group of technology and real estate thought leaders who shared what innovations they think will have the most impact on the real estate business in the coming years.
The key takeaway: consumers and businesses are looking for ways to make real estate more efficient, more adaptable, and easier to share.
1. Flexibility. The panelists believe that flexible leasing options that align with what's happening in the market, adaptable building design and land use, and seeing tenants more as partners rather than clients are key trends that will impact commercial real estate. Seeing tenants as partners and collaborators was a big theme of the overall discussion.
“We need to align real estate providers’ interests with those of their tenants,” says Patrick L. Phillips, global chief executive officer at the Urban Land Institute. He listed WeWork, a company that provides coworking space, as an example of this push towards collaboration. “Yes, that is a real estate business,” adds Phillips. “But it’s also about creating an ecosystem of companies that benefit from close proximity to one another."
2. Driverless cars. A recent report revealed that we can expect autonomous vehicles to be in wide use in three years, and thought leaders agree that driverless cars will have a huge impact in the real estate industry, particularly in the evolution of cities. Driverless vehicles “will change the way that we think about designing cities,” says Randall K. Rowe, global chairman of the Urban Land Institute. However, it remains to be seen if driverless vehicles will prompt buyers to move to urban areas or if these vehicles will actually contribute more to city sprawl. These vehicles will also shape city planning efforts, since most likely they will have to redo building codes and parking requirements.
3. A culture of sharing. Co-working and communal living options are only growing in popularity. PivotDesk, for example, pairs small startups with other companies that have an excess of space and convinces them of the benefits of space sharing. “We’re so conditioned to think about our infrastructure and office space in a certain way,” says David Mandell, chief executive officer of PivotDesk. “You can leverage that asset,” he said. “Once they try it, they say, ‘I should have done this a year ago.’"
This move towards a sharing economy follows the recent trend of millennials in urban and expensive cities seeking out communal living experiences that not only save money and resources, but also create mutually beneficial social networks and a sense of community.
“The real estate industry has taken a linear approach instead of a disruptive one," says Mark Platshon, a senior adviser to BMW i Ventures, a venture capital firm. "But faster innovation not only will enable real estate businesses to cope with change, but also will create new business opportunities as well."

Home Affordability Shows Some Improvement

Good news for buyers: It’s getting easier to afford to buy a home.
The median price of a single-family home inched lower in August, the latest data available, while median family income edged slightly higher, according to the National Association of REALTORS®’ Housing Affordability Index. That, combined with still-low mortgage rates, prompted NAR’s affordability index to rise to its highest level since May. (The higher the number, the better indication of affordability.) NAR’s Housing Affordability Index was 157.7 in August, up from 154.5 in July. However, the index is down from one year ago, when it was 160.2.
“This year-on-year slippage reflects the well-known fact that home prices have been moving up at a rate much faster than incomes, year after year,” says Brad Hunter, chief economist for Metrostudy, a real estate research firm. “That said, homes are still much more affordable than they were during the boom, and mortgage rates are still extremely low, which helps all of the affordability measures.”
In a closer look at the numbers in August, median home prices decreased from 233,400 to $230,200. Median household income rose from $67,614 to $67,752.
“Buying a home has actually been more affordable this year than last year, despite rising home prices, thanks primarily to falling interest rates,” says Daren Blomquist, RealtyTrac’s vice president. “Just when we think interest rates are as low as they can go, they go a little bit lower, helping buyers eke a little more buying power out of their income.”
Source: “Home Affordability Takes a Turn for the Better, NAR Reports,” NerdWallet (Oct. 16, 2015)

5 Cool Home Features That Can Deter Buyers

Several amenities that often are viewed as favorites by home by owners may actually make the home more difficult to sell.® recently highlighted a few “awesome features” that surprisingly can limit your buyer pool. Such as:
  • Nearby retail. Some buyers will be drawn to restaurants and bars within walking distance as well as easy access to major thoroughfares. But unless the area is mostly urban, sellers may find it a more difficult sale since not everyone wants to live near a busy street. “Homes that are on busy streets command less value than interior homes,” says Bob Ripp, a real estate appraiser in Fort Collins, Colo.
  • A swimming pool. In some warm-climate cities, an in-ground pool is practically a necessity. But in mild or cold climates, swimming pools don’t always give sellers an advantage. “There are several instances where pools detract from the home,” says Ripp, such as when it requires significant maintenance compared with the amount of year it is usable.
  • Big renovations. Home owners who over-improve their homes may also not see a big pay off in the end. If no other homes in the neighborhood has features like high-end granite countertops or the fancy landscaped yard, home owners may not see their high-end upgrades as appreciated when they go to sell. They may price themselves out of the market or some buyers may not be drawn to the fanciest home on the block.
  • Big – or small – backyard. A giant backyard may be great for the home owner but some buyers may not want the extra maintenance. On the other hand, if the backyard is too small – particularly with zero privacy and barriers -- some buyers may overlook that too. “The size of the yard can be a very big factor,” says Amy Cook, a real estate professional in San Diego. “Some people actually don’t want any maintenance and prefer to have a very small yard. Others want a yard for their kids or want privacy. … Many homes get nixed because of the lack of privacy with other houses right beside it.”
  • Tile flooring. Tile floor can be one of the most difficult flooring types to remove and it can turn off some buyers. “Tile is very difficult and expensive to change, and often what owners choose just isn’t very attractive,” says Cook. “Basic white, dated tile is usually a big turn-off for buyers.”

Gap Between Rich, Poor Widest Here

Income inequality is high and growing. Among the wealthiest Americans, wages have more than doubled between 1979 and 2011. On the other hand, wages for the median U.S. worker have increased just 6 percent in that time frame.
Income gaps are widening at a faster rate in some states. 24/7 Wall Street recently reviewed the states with the widest gaps between the rich and poor. These states topped its list:
7. Rhode Island
Median household income: $54,891
Households earning $200,000+: 5.9%
Poverty rate: 14.3%
6. Florida
Median household income: $47,463
Households earning $200,000+: 4
Poverty rate: 16.5%
5. Massachusetts
Median household income: $69,160
Households earning $200,000+: 9.3%
Poverty rate: 11.6%
4. California
Median household income: $61,933
Households earning $200,000+: 8.1%
Poverty rate: 16.4%
3. Louisiana
Median household income: $44,555
Households earning $200,000+: 3.6%
Poverty rate: 19.8%
2. Connecticut
Median household income: $70,048
Households earning $200,000+: 10%
Poverty rate: 10.8%
1. New York
Median household income: $58,878
Households earning $200,000+: 7.6%
Poverty rate: 15.9%
Source: “States With the Widest Gap Between Rich and Poor,” 24/7 Wall St. (Oct. 5, 2015)

For Owners: Best Time to Remodel Is Now

As home values continue to rise, more home owners may find now is the best time to add to that value even more. Spending on home remodeling is expected to climb from 2.4 percent in the second quarter to 6.8 percent by the second quarter of 2016, according to Harvard University’s Joint Center for Housing Studies.
Best Remodeling Jobs for ResaleCost vs. Value Report
"Home improvement spending continues to benefit from the last years' upswing in housing market conditions including new construction, price gains and sales," says Chris Herbert, managing director of the Joint Center. "Strengthening housing market conditions are encouraging owners to invest in more discretionary home improvements, such as kitchen and bath remodeling and room additions, in addition to the necessary replacements of worn components such as roofing and siding."
Sellers are already diving into more remodeling projects and using some of the equity in their homes to fund the projects. Black Knight Financial Services reported an increase in cash-out refinancing this summer – a 68 percent jump in the second quarter year-over-year, and it’s now at the highest level in five years.
Also with interest rates still low – for now – some home owners may be rushing to do projects before interest rates go up, says Matt Proper of Freeman Builders in Washington, D.C.
With spending in the repair and remodeling industry expected to grow to $300.5 billion in 2016, much of that spending will be in small, discretionary projects, such as kitchens and bathrooms, according to John Burns Real Estate Consulting.
The consulting firm projects home price appreciation to be 4.2 percent next and estimates that each 1 percent of real appreciation will lead to 1 percent incremental higher average project size for big and small projects and a 1 percent increase in average small project spend per remodel.
Source: “New Kitchen? New Bathroom? Why the Time Is Now,” CNBC (Oct. 16, 2015)

Monday, November 9, 2015


Avoid These DIY Building Code Blunders

Small upgrades can help make the most of a home's living space, not to mention they can reallyboost its value. Tackling these small improvement projects yourself can also save a lot of money. But if these projects aren't done correctly, they can also cause a nightmare of building code violations that will render the original savings useless.
John Riha, the editorial director of the Black & Decker Home Improvement Library shares five of the most common DIY building code mistakes to keep in mind when starting a home improvement project.
1. Not getting the proper permits. Sure, not all home improvement projects need a permit, but it's better to be safe than sorry. Before starting your DIY project, you should discuss the details with a local building authority. Think about it this way, if your project has a permit it will be inspected by an expert, it will adhere to energy and water standards, and you won't be in danger of having to redo anything if you decide to sell. Not getting a permit means DIY mistakes "may be discovered by an inspector when you try and sell, putting a big damper on your plans. You may be required to fix any problems (with added expense) before a buyer will consider making an offer. And if your buyer should later discover fixes that aren’t up to code, you could be sued for repairs and damages," Riha points out.
2. Forgetting to test for dangerous materials. Lead paint and asbestos are two risky and strictly regulated materials still found in homes that you need to check for. Independent testing facilities can be found in most cities and for a small fee, can show if asbestos is present. If you want to test for the presence of lead, DIY lead test kits are cheap and easy to use. 
3. Failing to fasten deck ledgers. The good news: building a deck is fairly easy DIY project. The bad news: the most challenging step, fastening the deck ledgers, is one of the toughest and most important. Avoid securing the ledger to the house with old fastening techniques like plain nails, and make sure to keep water from collecting behind the ledger so the wood doesn't soften and rot.
4. Not making this basement addition. When turning the basement into an extra bedroom, you'll need to add an egress window. This type of window must be at least 20 inches wide and 24 inches high, and have a minimum opening of 5.7 square feet. "The installation of an egress window costs $2,500 to $5,000 — well worth it for your peace of mind and the safety of your family," says Riha. "Without an egress window, a real estate appraiser won’t qualify the space as a bedroom, which may hurt your chances to sell your home."  
5. Ignoring the rules for fence height. While in some instances you want to avoid seeing your neighbors at all costs, but unfortunately the law is not on your side. In fact, fence height arguments are one of the most common complaints to local building and planning departments. Most codes limit fences on the sides and in the back of property to 6 feet, and 42 to 48 inches in the front. Failing to follow these standards will result in a complaint and most likely, your fence will be torn down.
Check of this slideshow of other common remodeling mistakes at Houselogic.
Source: "The 7 Most Common Code Violations Remodelers Make," Houselogic (Oct. 2015)

Where Small-Town Living Pays Off

Living in a small town can offer more bang for your buck.® recently analyzed more than 500 metro areas with populations between 10,000 and 50,000 to find the most affordable small towns in the country – also factoring in crime rates, unemployment, job opportunities, and recreational activities into its rankings.
Through its analysis,® sought areas where households spend no more than 28 percent of their annual income on housing costs and the crime rate is lower than the national average.
The following small-town cities (which were then ranked by median list price) topped®’s list:
1. Oskaloosa, Iowa
Median list price: $94,000
2. Decatur, Ind.
Median list price: $98,000
3. Albert Lea, Minn.
Median list price: $100,000
4. Newton, Iowa
Median list price: $108,000
5. Austin, Minn.
Median list price: $108,000
6. Spencer, Iowa
Median list price: $110,000
7. Wahpeton, N.D.-Minn.
Median list price: $114,000
8. New Ulm, Minn.
Median list price: $114,000
9. Lexington, Neb.
Median list price: $118,000
10. Dumas, Texas
Median list price: $120,000
Source: “Top 10 Affordable Small Towns Where You’d Actually Want to Live,”® (Oct. 5, 2015)

‘Surprising’ Surges in Foreclosures Here

In September, 327,258 properties had a foreclosure filing, down 5 percent from previous month and up just 3 percent a year over, according to RealtyTrac’s third quarter foreclosure report. Eleven of the nation’s 20 largest market saw a year-over-year increase in activity.
But in three markets year-over-year foreclosure activity is particularly climbing dramatically. Those markets are:
1. St. Louis, Mo.: Foreclosure activity has risen 113 percent from year ago, driven by a 143 percent increase in bank repossessions and an 89 percent increase in foreclosure starts.
2. Boston: Foreclosure activity is up 55 percent from a year ago. Following a national trend, bank repossessions are up, increasing 81 percent year-over-year in Boston alone. Also, foreclosure starts are up 70 percent over the past year.
3. Dallas: In the third quarter, Dallas saw a 40 percent increase in foreclosure activity. While foreclosures starts were down 22 percent year-over-year, bank repossession were up 274 percent from a year ago.”
“The recent rise in home prices is likely encouraging lenders in these areas to push older foreclosures through the pipeline,” says Ginny Walker, a spokesperson for RealtyTrac.
Source: “Three Markets With a Surprising Surge in Foreclosure Activity,” RealtyTrac (Oct. 14, 2015)

Top 3 Reasons Why Americans Want to Own

The top reasons Americans say they want to own a home: The opportunity to build equity, the desire for a stable and safe environment, and the freedom to choose their neighborhood. That’s according to the National Association of REALTORS®’ 2015 National Housing Pulse Survey, a poll of 1,000 adults nationwide in the 50 largest metro areas.
More than eight in 10 Americans say that purchasing a home is a good financial decision, and 68 percent say now is a good time to buy a home, according to the survey. What’s more, 71 percent of those surveyed also believe they could sell their house for what they paid for it –up 16 percentage points from 2013.
“Home ownership is part of the American Dream, and this survey proves that dream is alive and thriving in our communities,” says NAR President Chris Polychron.
But some obstacles remain. Seventy-eight percent of respondents say college debt and student loans are the main barriers to them in making a home purchase affordable. Seventy-six percent of those surveyed say they have a full-time job but still do not make enough money to purchase a home, and 74 percent say they do not have enough money for a down payment and closing costs. A growing number of respondents are also concerned about climbing housing costs: 41 percent call the lack of affordable homes a “very big” or “fairly big” problem in their area – an increase of 9 percent points from 2013.

Friday, November 6, 2015

Owners Say Their Home Is Worth More

Home owners are overvaluing the price of their homes compared to appraiser opinions, according to Quicken Loans’ Home Price Perception Index for September, which monitors the difference between appraisers’ and home owners’ opinions of home values.
Appraiser opinions of home values in September were 2 percent lower than home owner’s views. The gap of the two values did narrow in September for the first time since February, but the findings marked the eighth consecutive month that home owners’ price perceptions outpaced appraiser opinions.
Here's a breakdown of cities where the gap between home owner and appraiser price opinions was the greatest.
Source: Quicken Loans

OPEN HOUSE 11-8-2015 - 1pm - 3pm

Tuesday, November 3, 2015

5 Common Buyer's Remorse Culprits

Some home buyers suffer from post-purchase regret.® recently spoke to real estate industry experts to find out what home features tend to spark the biggest regrets among buyers. Topping the list:
1. Buying too big of a home. Buyers may think at the time having a big home is what they want, but after moving in, they may later regret the expense and upkeep of maintaining a big home. Cooling and heating bills can be much higher and just cleaning the place can become a much bigger chore. Also if the room size is big, buyers may find their furniture a mismatch and too small. Urge buyers to bring a tape measure to verify their furniture would work in the space and also to consider the utility bills.
2. Awkward layouts. The kitchen island is often a desirable amenity among home buyers – it can add prep space, after all. But “kitchen islands can be a mistake if you don’t take your ‘work triangle’ into account,” Baumbusch says. She urges buyers to walk around the kitchen and consider their usual prepping and cooking patterns.
3. Not considering what’s missing. Architects and remodelers sometimes will remove something from a room to give it a more modern, cleaner feel. For example, “there is a trend to eliminate the bathtub in favor of just a shower,” Baumbusch says. “Some home owners regret that decision because sometimes they find themselves wishing for a nice long soak after a tough day.”
4. Pools. For some home buyers, the pool can become a selling-point that later turns into a source of regret. Pools can be costly and some buyers may fail to consider the all of the additional costs. For example, there’s regularly monthly maintenance and cleaning as well as pools in seasonal areas often are opened and closed by a professional. “It can cost upward of $600 just to open a pool and prepare it for swimmers,” Baumbusch says.
5. Falling for fads. “Today’s popular ice-white appliances, steel countertops, and Edison bulb light fixtures are yesterday’s saloon doors, linoleum, and brass hardware,”® notes. “If you buy a house just for its trendy look, you may end up regretting it when the styles change, especially if you have to sell the outdated design.” Baumbusch recommends buyers look for timeless features – classic, well-designed homes.
Source: “Skip the Pain: 7 Things That Will Fill You With Buyer’s Remorse,”® (Oct. 12, 2015)

Study: Most Buyers Fail to Shop for a Mortgage

Nearly 80 percent of Americans consider themselves bargain hunters, with the majority saying they search prices online before purchasing an item. However, when consumers are asked how often they search for better prices on big-ticket items, like a mortgage, they fail to shop around, according to a new LendingTree survey of more than 1,000 American customers.
Less than one-third – or 30 percent – of consumers say they always shop around for the best rates on major financial loans, such as a mortgage or auto loan, the survey found. About 18 percent say they never looked for better rates or prices on loans.
“It’s an interesting phenomenon,” says Andrea Woroch, LendingTree’s consumer savings expert. “Consumers are generally very savvy with their shopping behavior when it comes to day-to-day purchases and material goods. But, once it comes to a major financial investment, we see a collapse of the normally rational pattern of behavior and mentality for saving. Consumers sometimes may be too focused on price and fail to consider the lifetime cost of interest, which is really where banks and lenders make their money. Over a five-year auto loan, or thirty-year mortgage, a one percent difference between interest rates can easily translate to thousands of dollars.”
The survey found more than 80 percent of consumers say they would drive out of their way to save 10 cents per gallon on gas. However, only 17 percent of car owners negotiated the interest rate when financing their new car.
“There could be a number of causes for this irrational behavior and it may vary among types of consumers,” Woroch says. “One is simply that many Americans don’t understand the long-term costs associated with compounding interest and the time-value of money. Another possibility is that consumers are uneducated about loan shopping and the importance of comparing interest rates before financing a purchase. It’s easy to become emotionally involved with the purchase itself or to find the loan process so frustrating that you would rather finalize the purchase instead of shopping around.”
Source: LendingTree

First-Time Buyer Share Edging Up

First-time home buyers comprised 32 percent of existing-home sales in August, up from 29 percent a year ago, according to the August 2015 REALTORS® Confidence Index Survey.
“Sustained net job creation, a low interest rate environment with 30-year fixed rates at below four percent for most of 2015, and better pricing of FHA-insured mortgages appear to be helping first-time home buyers,” according to the REALTORS® survey.
Buyers age 34 and under accounted for 29 percent of sales reported by the respondents. Nearly half of buyers were 35- to 55-years-old. Renters, meanwhile, accounted for 38 percent of sales.
REALTOR®s surveyed report that tight inventory, increasingly unaffordable prices, and weak credit profiles that fail to meet tighter underwriting standards are conditions that continue to work against first-time home buyers.
Source: “Sales to First-Time Buyers: 32 Percent of Sales in August 2015,” National Association of REALTORS® Economists’ Outlook blog (Oct. 6, 2015)

Monday, November 2, 2015

Easy Autumn Home Maintenance Tasks

It's a week into October and fall is officially here. The change of seasons is always a good time for your clients to do a little maintenance and spruce up the interior and exterior of their homes before winter hits.
Here’s a checklist of things home owners, and those thinking about selling their homes in the next few months, might want to accomplish:
  1. Interior
  • Check the windows and doors for energy efficiency. It will help keep the home warm and save cost. Swap summer screens for storm shutters on windows and check weatherstripping around doors.
  • Inspect the batteries in the smoke detector and carbon monoxide detector – or better yet just replace them all together.
  • Think ahead to the holidays and see if there are changes to make to living spaces that might host gatherings, especially the dining room.
  1. Exterior
  • Keep up with raking leaves as they fall, to avoid an exhausting job once they are all on the ground.
  • Clean out the gutters and inspect the roof to help prevent winter weather damage.
  • Remove hoses and shut off water in exterior pipes to protect against freezing.
  • Replace exterior light bulbs and consider installing additional lighting if it’s necessary for the evenings that get darker earlier.
  1. Fun
  • Decorate the home with gourds and pumpkins. Not only are they fun and inexpensive, they add a nice burst of seasonal color to the interior and exterior of the home.
  • Avoid the holiday crowds and start planning a gift list now. This is especially true if making homemade presents is on the agenda. Planning now will save a lot stress and running around as the holidays approach.
For an in-depth list of tasks, be sure to check out all 15 steps on Houzz's Fall Maintenance Checklisthere.
Source: “Your October Home Checklist,” Forbes (Oct. 2, 2015)

Livability Ranks 10 Top Cities for Singles

The number of single households is growing: About three in 10 households in the U.S. now only have one person in them. With the number of single households thriving, set out to find out the top small-to-medium sized cities for singles in 2015.
For the rankings, the research site identified the highest concentrations of singles, the largest percentages of the population in prime marriage-level age (considered 20 to 34), places that offer a vibrant single scene with entertainment, as well as cost of living.
The following 10 cities topped’s list:
  1. Carrboro, N.C.
  2. Hoboken, N.J.
  3. West Hollywood, Calif.
  4. Oxford, Miss.
  5. San Marcos, Texas
  6. Ypsilanti, Mich.
  7. Ames, Iowa
  8. Miami Beach, Fla.
  9. Athens, Ga.
  10. Moscow, Idaho

Your Need to Know Guide to Buying a New Home

If you’ve been following along, you know that last time around we covered a lot of the important things you should be thinking about when b...