Monday, February 29, 2016

Expect a Strong Spring Housing Market

Recent housing and economic reports predict we'll see solid spring home sales, according to Jonathan Smoke,®'s chief economist. Here are some signs:
Read more: The 20 Hottest Housing Markets This Month
On jobs: "Job creation -- arguably the most important factor in housing demand -- is moving apace," Smoke notes. In January, 151,000 jobs were created and unemployment is near 10-year lows. Smoke predicts that the latest employment growth should translate into a 3 percent boost to home sales this year.
On home sales: Existing-home sales from January 2015 to January 2016 have grown 11 percent. Sales are taking longer close, due to new mortgage rules that took effect last fall, but the pace of sales is growing. New-home sales have also grown solidly year-over-year, and the median price of new homes is declining as more builders offer more affordable homes than catering to just the luxury.
On home prices: Prices are moving up and most of that has been attributed to the limited number of homes for-sale. At the current pace, there is a four-month supply of homes on the market -- much lower than the norms of six to seven months. "This is driving prices higher and encouraging consumers who hope to buy this year to get started as soon as possible," Smoke notes.
On mortgage rates: Low mortgage rates are improving home buyer affordability, for now. The 30-year fixed-rate mortgage averaged under 3.7 percent in the latest week, which offers buyers nearly 5 percent more buying power than they had at the end of 2015, Smoke notes.
But as Smoke notes: "not everything is rainbows and unicorns. The biggest negative trend impacting potential demand relates to the January and February declines in stock values, which have taken a toll on consumer confidence." Also, the tight supply of homes for-sale could also limit sales in the spring season. That said, for buyers that are able, the low mortgage rates of the season may prove a strong motivator why buyers shouldn't wait.
Source: "The Numbers Are In: Yup, 2016 Is Off to a Good Start in Home Sales,"® (Feb. 26, 2016)

The Oscar for Best Home Feature Goes To...

Which home features are considered the "best" when it comes to helping a home sell the fastest?
To sort out which features are winners for buyers,® researchers analyzed millions of listing records over the past three months to pinpoint the number of days each home stayed on the market and the number of page views each listing received on®. From there, researchers narrowed their list to the homes that generated the most interest and sold the fastest and looked at their architectural style and amenities.
Read more: Trends That'll Influence Homes in 2016
Based on some of the patterns that emerged, here are the home styles, views, specifications, and amenities that buyers crave right now.
Best housing style: Spanish-style  
Spanish-style homes spent a median of 47 days on the market, half the national average of 93 days. This home style is found mostly in California coastal cities, and comprises just 1 percent of for-sale listings, yet it proves popular with buyers. Here's a breakdown of the housing styles and median days on the market and list price:
  • Spanish: 47 days; $550,000
  • Traditional: 84 days; $233,000
  • Ranch: 95 days; $179,000
  • Craftsman: 103 days; $350,000
  • Victorian: 122 days; $259,000
Best view: City skylines
A home with a view often attracts buyers, but homes with an urban view may offer the best view of all. Homes with urban views spent 83 days on the market -- less than other views studied. Ocean views, however, have a much heftier median list price at $749,000 but they spend about 98 days on the market. Here's a breakdown on views, along with median days on the market and list price:
  • City views: 83 days; $420,000
  • Golf course views: 90 days; $412,000
  • Lake view: 95 days; $359,000
  • Mountain view: 96 days; $365,000
  • Ocean view: 98 days; $749,000
Best home amenity: Stainless steel 
Certain interior features help speed up home sales. Homes with stainless steel appliances tend to sell 15 percent faster than other homes. The popularity of fireplaces, on the other hand, may show some signs of waning. Here's a breakdown of the hottest amenities, along with median days on the market and list price:
  • Stainless steel: 79 days: $300,000
  • Granite counter: 82 days; $320,000
  • Open kitchen: 83 days; $269,000
  • Finished basement: 89 days; $260,000
  • Fireplace: 94 days; $290,000
Best location: Next to a good school
Location is a big part in real estate, and homes near good schools tended to sell the fastest than homes that promoted they were near other things, like shopping or the hospital. Here's the breakdown of the hottest location, along with median days on the market and list price:
  • Good school: 76 days; $330,000
  • Stadium: 77 days; $250,000
  • Shopping: 79 days; $217,000
  • Transportation: 88 days; $280,000
  • Hospital: 95 days; $192,000
Best price range: $200,000-$250,000
Lower-priced homes have the most fans. Homes listed in the $200,000 to $250,000 price range sold in a median of 83 days -- much faster than other price points. Here's the breakdown of hottest price range, along with median number of days on the market and list price:
  • $200,000-$250,000: 83 days
  • $150,000-$200,000: 86 days
  • $250,000-$300,000: 89 days
  • $1 million-$2 million: 118 days
  • $2 million-$5 million: 133 days
Best size: 1,500 to 2,000 square feet
Move over McMansion, smaller homes are showing more market popularity right now. While 8,000-square-foot mansions capture about 30 percent more page views on® than 1,000-square-foot homes, the smaller home trumps when it comes to selling faster. Here's the breakdown:
  • 1,500-2,000 square feet: 86 days; $194,000
  • 2,000-2,500 square feet: 90 days; $260,000
  • 3,000-3,500 square feet: 101 days; $400,000
  • 5,000-5,500 square feet: 127 days; $2 million
  • >100,000 square feet: 173 days; $3.45 million
Source: "The Features That Help a Home Sell Fastest -- and the Ones That Don't,"® (Feb. 29, 2016)

Mortgage Rates Back on Free Fall

Mortgage rates declined this week, giving a boost to buyer affordability, Freddie Mac reports in its weekly mortgage market survey.
Since the beginning of this year, 30-year rates have fallen nearly 40 basis points, “helping housing markets sustain their momentum in this year,” says Sean Becketti, Freddie Mac’s chief economist. The National Association of REALTORS® reported this week that existing-home sales had increased 4 percent in February over January and are up 11 percent from last year.
Freddie Mac reports the following national averages with mortgage rates for the week ending Feb. 25:
  • 30-year fixed-rate mortgages: averaged 3.62 percent, with an average 0.6 point, dropping from last week’s 3.65 percent average. Last year at this time, 30-year rates average 3.80 percent.
  • 15-year fixed-rate mortgages: averaged 2.93 percent, with an average 0.5 point, falling from last week’s 2.95 percent average. A year ago, 15-year rates averaged 3.07 percent.
  • 5-year hybrid adjustable-rate mortgages: averaged 2.79 percent, with an average 0.5 point, falling from last week’s 2.85 percent. Last year at this time, 5-year ARMs averaged 2.99 percent.
Source: Freddie Mac

Millennials Want the 'Anti-Suburb Suburb’

Forget what you’ve read about the millennial generation not buying homes in the suburbs. The latest surveys show they are, and not only that, they are leaving a powerful footprint on the feel of suburbia.
Millennials make up one-third of buyers nationwide, and represent the largest segment of all home buyers, according to research from the National Association of REALTORS®.
"Their buying power is huge," says Jessica Lautz, NAR's managing director of survey research. "They are definitely a force in the market. They are overtaking the baby boomers."
They are moving out of city centers, bypassing the small starter properties in the city in favor of larger homes in the suburbs – just like previous generations before them have, notes Tommy Choi with Weinberg Choi Realty.
In the suburbs, millennials are increasingly opting for very traditional homes too – a single-family, detached home with three bedrooms and two baths, Lautz says. They also are often purchasing older properties – which might be less expensive – and then remodeling these properties to match their style.
When they do move out to the suburbs, they are showing a desire for the “anti-suburb suburb,” Alison Bernstein, founder of Suburban Jungle Realty, told MarketPlace.
Bernstein says her clients want to hold onto at least some elements of the urban lifestyle even though they are in suburbia. Builders and cities are taking notice. For example, some communities are repurposing shopping malls and parking lots into green space. They’re creating retail hubs. They are also looking for ways to improve walkability and add more convenient access to public transportation.
Also, cities are adding quality schools within shorter distances of residents.
“A great education … an organic market down the street,” Bernstein notes. “They really do want to bring the best of urban living to the suburbs.”
Source: “A Move Toward Three Bedrooms and Two Baths,” MarketPlace (Feb. 25, 2016)

Strong Cellular Coverage Boosts Building Values

Only about 2 percent of commercial buildings have dedicated technology in place that offers a strong, reliable mobile coverage and capacity indoors, a new study finds. The buildings that do offer strong mobile coverage are seeing property values increase because of it, a new study by CommScope, a global network infrastructure company, suggests.
“People are obsessed with their mobile phones and see indoor wireless coverage as important as having access to water and electricity,” says Ispran Kandasamy with Building Solutions and CommScope. “The time has come for building professionals to step forward and take ownership for connecting their tenants to mobile networks.” 
Indoor wireless mobile coverage in commercial buildings stands to increase a property’s value by 28 percent, on average. That means a $2.5 million office building could be worth $700,000 more with a dedicated indoor cellular system, according to the survey of professionals building managers, facilities managers, real estate managers, and architects.
What’s more, survey respondents even linked a strong signal to an increase in workforce productivity (77%), helping in the recruitment of more talented individuals (46%), and attracting more visitors (39%). Also, two-thirds of survey respondents rated indoor wireless connectivity as “essential” for employees, the survey found.  
However, delivering mobile coverage in large, complex buildings could prove to be a financial hurdle for many buildings. Thirty-five percent of respondents cited the costs as the main roadblock.
“While there are clearly concerns around the cost and complexity of the technology, building owners must acknowledge that ignoring this issue could result in more costly work in the future,” Kandasamy says. “Engaging with architects, facilities managers and enterprises at an early stage will ultimately save money – as well as providing an enhanced user experience. Only by taking the lead will building owners be able to provide much needed connectivity in their properties.”
Source: CommScope

Where is the Inventory?

The median price of existing homes is rising, but the increases don't seem to be motivating many sellers or new-home builders, contributing to the growing lack of inventory in many markets. While NAR's recent existing-home sales report showed January's total housing inventory was up 3 percent from December, it was still lower than a year ago.
"The spring buying season is right around the corner and current supply levels aren't even close to what's needed to accommodate the subsequent growth in housing demand," says Lawrence Yun, NAR's chief economist. "Home prices ascending near or above double-digit appreciation aren't healthy – especially considering the fact that household income and wages are barely rising."  
The Fiscal Times recently looked at the main reasons behind the lack of inventory.
1. Builders aren't building new homes.
Builders say that the cost and availability of labor is a huge factor in why housing starts are down this year. A recent Commerce Department report showed that housing starts fell 3.8 percent in January month-over-month. "The disappointing construction numbers reflect the loss of small builders and a shortage of construction labor," says Yun. "Small construction companies have traditionally been the backbone of new-home building, but the difficult financing environment created by local banks since the downturn has thinned their ranks.
2. A slowdown in the distressed market.
Distressed sales are down from 11 percent compared to a year ago, and are at the lowest level since November 2007, NAR reports.
3. People are staying put in their homes.
Why aren't people interested in selling when home prices keep rising? There are a few reasons why they're not budging. More than two-thirds of baby boomer owners, for example, are choosing to make renovations to their home so they can age in place rather than move. There's also a decrease in people moving to a new area for a job, which previously was a big reason why new buyers would sell. Many owners are simply just stuck in their homes due to equity issues. According to CoreLogic, around 8.1 percent of homes are worth less than their mortgage. Finally, many owners are stuck because of the lack of inventory. Sure, they would be willing to sell, but then they face not having decent options in terms of buying.
Source: "Prices Are Rising. Why Aren’t There More Homes For Sale?" The Fiscal Times (Feb. 25, 2016)

Portland Approves Proposal To Salvage Historic Homes

Portland Approves Proposal To Salvage Historic Homes: Under the proposal, the city will require contractors to carefully deconstruct some older homes and salvage the materials inside.

8 Bad ‘Home Improvement’ Habits

Home owners can overdo it when it comes to the upkeep of their home. This Old House recently spotlighted several ways that home owners’ enthusiasm for home ownership may actually harm the house.
1. Having light bulbs that are too bright. You want a well-lit home, but exceeding a lamp or light fixture’s recommended wattage can be dangerous, particularly with incandescents or halogen lights, says John Drengenberg, consumer safety director for Underwriters Laboratories. "Using a bulb with too-high wattage will cause the fixture and its wiring to overheat," he notes, which could then allow the heat to travel to the wall or erode the insulation on the wires and lead to a house fire. Check the fixtures label to make sure you use the correct wattage.
2. Planting trees near driveways or walkways. A line of trees to the house may up its curb appeal but adding young trees near driveways or walkways could be putting your slab at risk. As these trees grow taller, their roots will go outward, potentially pushing up the paving and causing it to buckle or crack. This Old House recommends planting small trees that will remain under 20 feet at maturity and that are at least 10 feet from paved areas. For larger trees, leave at least a 20-foot radius.
3. Overscrubbing a sink. Don’t overdo it with abrasive cleaners; they can scratch the sink. "Cleaners with a grit or grain to them will wear away at the finish and dull it," Kohler's Mike Marbuch told This Old House. "That will make the sink more prone to gunk sticking to it—actually making it look dirtier." Try a liquid cleanser like vinegar or lemon juice on the sink and avoid scrubbing it every day.
4. Overdoing it with can lights. Excessive recessed lighting in a home can cause a lot of air leaks. Recessed lighting is known as causing heat-sucking air leaks, especially when the fixtures are unsealed in vaulted ceilings. Airtight recessed lighting fixtures are available that are rated for insulation contact (IC). Also, use as few recessed lights as you can, especially when it comes to adding them to cathedral ceilings or in rooms directly below unconditioned attics.
5. Spreading too much mulch outside. “Over-mulching will suffocate plants, confuse their root systems, and prevent water from percolating into the soil,” notes the article at This Old House. “If you’ve mulched so much that tree trunks and flowers’ and shrubs’ lower branches are covered by or dragging in it, you’ve gone overboard.” Have mulch no thicker than 3 inches.
6. Using glass cleaner on mirrors. Watch out for store-bought sprays that promise to make your glass sparkle. “A drop of liquid running around the mirror’s edge can cause the reflective backing to lift or craze,” This Old House notes. The black edge can occur from using ammonia- or vinegar-based cleaners. This Old House recommends using warm water and a soft, lint-free cloth to clean mirrors. Or if you do use the sprays, spray it onto a dry cloth first and not directly onto the glass.
7. Repainting too much. “Excessive paint is detrimental – especially on an older house, which may have layers of thicker oil-based paint, which becomes brittle with age,” notes This Old House. To avoid thick, cracked, or peeling paint, be sure to carefully power-wash prior to painting, sand areas that need it, and then use 100 percent acrylic-resin exterior paint.
8. Fertilizing too much. Fertilizing too often can spur more weeds to grow. Also, the Environmental Protection Agency warns over-fertilizing can cause “nutrient pollution,” which is when nitrogen and phosphorus runoff from lawn fertilizers and then leads to an overgrowth of algae that can even pollute local waterways. Some lawn experts recommend only fertilizing twice a year, late summer and fall only.
Source: “19 Ways You’re Killing Your Home With Kindness,” This Old House (February 2016)

Thursday, February 25, 2016

Are "Bestie Hoods" the Next Thing?

Many home buyers realize the compromises that come with buying a home: You want a nest of your own, but you want to be near friends. A group of four couples near Austin purchased enough land to meet both needs.
The "Llano Exit Strategy," as the eight call their getaway neighborhood, also nicknamed "Bestie Row," is an attractive parcel of land on the Llano River outside Austin, Texas, with four cabins and a larger common building for shared accommodations.
Each couple's 400-square-foot cabin cost $40,000 to build, while the 1,500-square-foot common building includes a kitchen, space for dinners and activities, and guest accommodations.
The homes were designed to deal with Texas' climate, using galvanized metal siding to reflect the strong sunshine and spray foam insulation to block summer heat while keeping the cabins warm in the winter.

NAR: Sales Make Gains, Prices ‘Rising Too Fast’

Existing-home sales kicked off 2016 on solid footing, according to the National Association of REALTORS®' latest housing report, released Tuesday. Existing-home sales in January moved to their highest annual rate in six months, while constrained inventory levels also pushed home prices to their fastest increase since last April, according to the report.
Regional Breakdown
Here’s a closer look at how existing-home sales performed across the country in January.
  • Northeast: Existing-home sales rose 2.7 percent to an annual rate of 760,000, and are 20.6 percent higher than a year ago.  Median price: $247,500 — 0.9 percent above January 2015.
  • Midwest: Existing-home sales increased 4 percent to an annual rate of 1.30 million in January, and are 18.2 percent above a year ago. Median price: $164,300, up 8.7 percent from a year ago.
  • South: Existing-home sales were at an annual rate of 2.24 million in January — unchanged from December — and are 5.7 percent higher than a year ago. Median price: $184,800, up 8.5 percent from a year ago.
  • West: Existing-home sales dropped 4.1 percent to an annual rate of 1.17 million in January, but remain 8.3 percent higher than a year ago. Median price: $309,400, 7.4 percent above January 2015.
All regions in the U.S. saw increases in January sales, except for the West region.
Total existing-home sales, which encompass completed transactions for single-family homes, condos, town homes, and co-ops, inched up slightly by 0.4 percent in January to a seasonally adjusted annual rate of 5.47 million. Sales are 11 percent higher than a year ago, which is the largest year-over-year increase since July 2013.
“The housing market has shown promising resilience in recent months, but home prices are still rising too fast because of ongoing supply constraints,” says Lawrence Yun, NAR’s chief economist. "Despite the global economic slowdown, the housing sector continues to recover and will likely help the U.S. economy avoid a recession."
Home Prices and Inventories
Heading into the spring buying season, home prices and the limited number of homes for sale are the top concerns.
"The spring buying season is right around the corner and current supply levels aren't even close to what's needed to accommodate the subsequent growth in housing demand," says Yun. "Home prices ascending near or above double-digit appreciation aren't healthy, especially considering the fact that household income and wages are barely rising."  
The median existing-home price for all housing types last month was $213,800, up 8.2 percent from a year ago ($197,600). The price increase in January was the largest since April 2015, when home prices moved 8.5 percent higher compared to a year ago.
Meanwhile, total housing inventory at the end of January rose 3.4 percent to 1.82 million existing homes available for sale. Inventories remain 2.2 percent lower than a year ago. At the current pace, unsold inventory is at a four-month supply, up slightly from 3.9 months in December 2015.
In January, properties typically stayed on the market for 64 days, below the 69 days average from January 2015. Thirty-two percent of homes for sale in January sold last month in less than a month.

Design Mistakes to Avoid With New Homes

When building new, home buyers may be overwhelmed at the abundant choices and then suddenly find themselves in a designer role for their new home. Denver interior designers Lita Dirks and Tony Crasi, Akron, Ohio–based custom builders, offer up some of the biggest mistakes new buyers make as they design their new home.
Help Design-Challenged Buyers
Granite: Granite countertops may not be the “wow” factor with all buyers as they once were, the article notes. After all, even some apartments now come with granite. To up the “wow” factor, Dirks and Crasi recommend more uniform surfaces like quartz or quartzite.
Over-the-top ceilings: Ceiling details can be a nice touch but can also quickly become “overkill” if there’s too much, the designers say.
Cramped laundry and mud rooms: These spaces are often found right off the garage and are becoming a priority for buyers. But they can be too small. The larger they are, the more comfortable they'll seem, and buyers will appreciate the storage.
Oversized islands: The island doesn’t need to take up the entire kitchen, dwarfing all else. If it does, the kitchen may need its layout tweaked or have the extra square footage go to somewhere else in the house.
Pantry doors: The doors often look like any other standard door in the house. “Don’t let it look like a bathroom; let it be part of the kitchen,” Crasi suggests. Try coordinating them with the cabinetry and using a different door for the pantry from the rest of the home.
Source: “Avoid These Seven Design Don’ts,” BUILDER (Jan. 26, 2016)

Loan Demand Cools in Latest Week

A slight increase in mortgage rates prompted loan demand to drop this week. Total mortgage applications, which include applications for home purchases and refinancing, dropped 4.3 percent on a seasonally adjusted week-over-week basis for the week ending Feb. 19, the Mortgage Bankers Association reported Wednesday.
Broken out, refinance applications, which had been soaring to highs in recent weeks, dropped 8 percent over last week, while applications to purchase a home rose 2 percent from a week prior, the MBA reports. Applications for home purchases are now 27 percent higher than the same week a year ago.
The 30-year fixed-rate mortgage, meanwhile, rose to 3.85 percent last week, the first increase after six consecutive weeks of declines. The week prior, the 30-year fixed-rate mortgage had averaged 3.83 percent, the MBA reports.
"The dollar volume of refinance applications decreased by 26 percent, while refinance applications based on loan count decreased 17 percent, indicating that the volume of larger loans dropped to a greater extent than smaller loans," says Michael Fratantoni, the MBA’s chief economist. "The average loan balance declined about 10 percent across all refinance loans."

Tuesday, February 23, 2016

The Ultra-Wealthy Tighten Up on Home Buying

The market for $100 million homes is vanishing. During the housing recovery, about two dozen mega-mansions at $100 million or more were available. The number of homes that actually sold for nine-figures has now shrunk to four, Forbes reports. The other $100-million-plus listings have had their price reduced or were taken off the market. 
“The quiet disappearance of many of these mega-priced listings from the market underscores what most brokers have known all along: there is no $100 million housing market,” Forbes reports. “Instead, what felt like a steady beat of $100-million-plus trades … were in fact a series of closely spaced anomalies.”
These anomalies included a home in Woodside, Calif., that sold in 2013 for a whopping $117.5 million, a $120 million sale in Greenwich, Conn., a $147 million home sale in East Hampton, N.Y., and then a $100.5 million Manhattan apartment sale at the end of 2014.
“All those transactions were one-offs,” appraiser Jonathan Miller of Miller Samuel told “It’s not that the market has physically changed, it’s that there’s more visibility. The word is out.”
Foreign buyers were mostly drawn to the heavy-set real estate price tags. Many of the buyers were in secret too, with many of these deals hidden under the shield of limited liability companies. But that is now changing.
Besides the mega deals, could the overall luxury market be cooling too? Some say signs are pointing to “yes.” In Manhattan, for example, the inventory is swelling for luxury listings. A total of 190 apartments priced at $10 million or higher sold in 2015, down from 214 in 2014, according to CityRealty data. In Miami, the absorption rate rose to 18.3 months compared to 11.3 months a year ago, according to a report from Douglas Elliman.
However, in Los Angeles, the luxury market posted its best year ever last year – having 482 closed sales over $5 million in 2015 on the west side of Los Angeles compared to 442 in 2014. What’s more, 37 of those transactions were for properties $20 million or more – double the number in 2014.
“We had a wonderful year last year,” says Steve Frankel, an L.A.-based luxury broker with Coldwell Banker Previews International. “We’re not completely dependent on China taking a downturn. There’s plenty of high-end money in Los Angeles and also from people moving from New York.” Los Angeles also seems to be one of the few places that are still introducing residences at $100 million or above.
Source: “The Vanishing Market for $100 Million Homes,” Forbes (Feb. 19, 2016)

Top Community Features for Baby Boomers

While many in the real estate industry are focused on the wants and needs of millennial buyers, older generations of home buyers still have a lot of purchasing power. Baby boomers actually make up 31 percent of the home buying population, and real estate pros need to be familiar with their housing and neighborhood preferences.
According to NAHB's new Housing Preferences of the Boomer Generation report, this generation seeks out single-family detached homes in low-traffic communities. In fact, nearly 80 percent of boomers say they prefer cul de sac designs since they limit the traffic-flow.
This study collected information from 4,326 recent and prospective buyers of all demographics. NAHB asked respondents to label 19 community features as essential/must-have, desirable, indifferent, and do not want.
Most essential community features for boomers:
  1. Single-family detached homes
  2. Close access to retail
  3. Proximity to a park or walking/jogging area
  4. Living near a lake
  5. Outdoor maintenance service provided
Check out the full report here.
Source: "Boomers Prefer Suburbs and Cul de Sacs," Eye on Housing Blog (Feb. 11, 2016)

States With Prompt Mortgage Payments

North Dakota boasts the highest percentage of residents who pay their mortgages on time. The state came in number one on a list of highest percentage of swiftest mortgage payers at 2.41 percent, followed by Colorado at 3.03 percent; Alaska at 3.24 percent; Minnesota at 3.29 percent; and South Dakota at 3.50 percent.
On the other side of the spectrum, Mississippi has the largest percentage of mortgage holders who were late on their payments at 13 percent. Mississippi was followed by Louisiana at 10.49 percent; New Jersey at 10.38 percent; Alabama at 9.25 percent; and West Virginia at 9.19%.  
A higher percentage of borrowers with delinquent payments appears to be a growing trend nationwide.
More home owners nationwide fell behind on their mortgage payments in January as the percentage of delinquent borrowers rose to 5.1 percent from 4.8 percent in December (or 3.4 million properties), according to a new report released by Black Knight Financial Services. Still, the percentage is down from 5.5 percent a year ago. Prior to the housing crisis, the delinquency rate generally averaged in the 2 percent to 3 percent range.
Black Knight took a look at payments that were 30 days or more late for properties that were not in foreclosure.
“If delinquencies keep going up, eventually you’ll see an uptick in foreclosures,” says Eric Tyson, co-author of “Mortgages for Dummies.”
But the uptick in delinquencies in January shouldn’t cause too much alarm – yet.
“It’s not like we’re in 2007,” says Umit Gurun, an accounting and finance professor at the University of Texas at Dallas. “I don’t think there’s something bad going on.”
Source: “Where in the U.S. Are the Most Deadbeat Mortgage Holders?”® (Feb. 22, 2016)

Bank of America Rolls Out 3% Loans

Bank of America announced a new loan program to help low- and moderate- income borrowers qualify for a mortgage with as little as a 3 percent down payment. The loans have financing available up to $417,000.
Eligible borrowers must not earn more than the median income for the area and are required to have a credit score of at least 660. The home the borrower is looking to purchase must also be their primary residence. Applicants must also have a debt-to-income ratio of no more than 43 percent.
Bank of America announced it will also consider non-traditional forms of credit, such as daycare expenses, health club memberships, and rental history in determining credit history.
"There are creditworthy borrowers -- people who have shown good experience paying off debts who fit income restrictions -- and except for the fact that they don't have the money for a down payment, they would be good home owners," says Terry Francisco, a spokesman for the bank.
Low down-payment mortgages are becoming more common. Freddie Mac and Fannie Mae announced last year that they would start backing loans with down payments as little as 3 percent. The Federal Housing Administration also offers low-down payment loans, but FHA also requires borrowers to pay monthly insurance premiums with the mortgage payments.
Bank of America officials say its 3 percent loans will have a less expensive mortgage rate than FHA loans. Rates, however, will be set by a borrower’s creditworthiness and credit score.
The average down payment for home buyers with a conventional 30-year mortgage in the fourth quarter of 2015 was 17.5 percent, reports LendingTree.
Source: “Bank of America Will Offer Mortgages for 3% Down,” CNNMoney (Feb. 22, 2016)

I'd love to answer any questions you have about listing your home!

6 Common Questions From Sellers

Home sellers have a lot of questions in getting their home ready for the market. Will you have all the answers?® recently asked real estate professionals to offer up the most common questions they get from sellers. Being able to give clients answers to these questions will help show your knowledge and value. You can also use these questions, and your answers, as content on your website, blog, or social media channels.
  • How much is my house worth?
  • How much needs to be done to my house before putting it on the market?
  • How long will it take to sell my house?
  • Is staging really important?
  • Should I be present when buyers view my house?
  • What is the agent’s commission?
Need help with the answers? Check out the full post at®.
Source: “The Most Common Questions Asked by Home Sellers – Answered,”® (Feb. 22, 2016)

Monday, February 22, 2016

Mortgage Rates May Be Headed for Record Low

The industry has been concerned about higher mortgage rates in 2016, but so far, rates have been low. And they may even head into record-low territory soon, according to analysts.
About two months ago, the Federal Reserve raised its funds rate for the first time in years. Since then, however, the 30-year fixed-rate mortgage has been dropping.
Read more: 30-Year Mortgages Hold at 3.65% This Week
"Mortgage rates are going down again, and it's good for borrowers, but is it really good for the housing market and the broader economy? The answer is no," said Guy Cecala, CEO and publisher of Inside Mortgage Finance.
Some analysts say rates could even fall into the 2 percent range. “It would help those on the low end but could hurt jumbo loan borrowers,” CNBC reports. “Banks, which generally hold these larger loans on their books, would not want to lend in that environment.” Banks would retreat back to where conforming government mortgages would be cheaper than private jumbo loans, Cecala says.
What’s behind the drop in rates? Investors are flooding into the U.S. bond market, which is leading to the drop in mortgage rates, CNBC reports. (Mortgage rates follow loosely the 10-year Treasury bond yields.)
“Investors are buying bonds as a safety play in a highly volatile and largely negative stock market,” CNBC reports. “Signs of weakness in the U.S. economy, in addition to trouble in overseas markets, pushed the yield on the 10-year Treasury to its lowest level since 2012, and mortgage rates followed south.”
The lower mortgage rates do help home buyers lessen their monthly payments and also to qualify for larger loans – which could help provide a boost to the spring home-buying market. But a weaker economy, on the other hand, mixed with stock market losses and sluggish wage growth can also hurt the housing market.
"Frankly, a healthier economy would be mortgage rates in the 5 percent range, but that's also assuming you could get 2 percent in your checking account," Cecala told CNBC.
Source: “Mortgage Rates Could Cross a Record Low,” CNBC (Feb. 12, 2016)

Did your property taxes go up more than other people's in Portland?

Did your property taxes go up more than other people's in Portland?

Oregon's unusual and complicated property tax system puts the brakes on how much your bill can grow each year, but it also allows for unavoidable and unexpected exceptions to the rule.
Housing reporter Luke Hammill recently explained some surprising changes in tax bills for residents of Portland's Lents neighborhood between 2014 and 2015.

To help identify this and other trends in home prices and taxes, we compiled extensive data from tax collectors in Multnomah, Clackamas and Washington counties for both years and calculated differences for every property.

The resulting maps allow you to see where you stand.

The maps indicate both changes in real estate prices across the region and changes in taxation.
You may know that unlike in other states, changes in real market values don't always correspond directly to changes in Oregon property tax bills.

Effective rates, meaning the size of your bill compared to what your home is worth, vary widely. Gentrifying neighborhoods often end up paying lower effective rates because of the Measure 50 limitation on annual growth.

The system causes a majority of homeowners to pay more than their share of the cost of governments services based on home values, an analysis by The Oregonian/OregonLive found last summer.
But it's not always easy to predict how Measure 50 will interact with other aspects of tax law.
Read the maps. See how the real estate landscape is changing for you and your neighbors. Let us know what you see.
-- Steve Suo
-- Interactive map by Mark Friesen

-- Reporting by Luke Hammill

American Millennials infuriated with the lacking housing market

American Millennials infuriated with the lacking housing market: As the housing market recovers from its horrific crash from a few years ago, it is expected to pick up heading into the spring homebuying season. But it’s not looking good to Millennials as they can’t afford to buy a home. One of the reasons why it is said to be infuriating.

Friday, February 19, 2016

How to Spot a Home Improvement Scam

Home owners looking to spruce up their homes need to make sure they don’t get duped by those who claim to be remodeling contractors.
How do you spot a scammer? Will Carpenter, assistant vice president of operations for Contractor Connection, recently offered the following tips in an article at RISMedia:
1. Pay up-front. Home owners should see red flags when a contractor requests that a home owner pay for a project in its entirety before even starting work. Down payments for materials and initial labor are standard practice. But then phased payments are often made as the work is completed.
Read more: Which Renovations Are and Aren't DIY
2. Door-to-door solicitations. So-called contractors may knock on a home owner’s door and talk about work they noticed needs to be done around the house. “This is a very common ruse and one that is, unfortunately, often successful,” Carpenter notes. Home owners will want to make sure they vet the contractor and the offer carefully.
3. Be wary of limited-time deals. Don’t let a contractor make you feel pressured to rush in order to receive a special discount. Reputable contractors offer savings but they won’t push a short deadline on you with pricing, Carpenter writes.
4. Unverified licensing. Be sure to verify credentials – licensing and available insurance coverage. Don’t just go on recommendations from friends and family. Look for examples of the quality of their prior work too.
Learn more at
Source: “Help Your Clients Recognize Home Improvement Scams,” RISMedia (Feb. 18, 2016)

30-Year Mortgages Hold at 3.65% This Week

Mortgage rates stayed low again this week, remaining near their 2015 lows, and offering home buyers and refinancers another chance at lowering their home financing costs.
"After another week of financial market oscillations driven by rumors of potential limits on oil production, the 10-year Treasury yield edged up 5 basis points, and the 30-year mortgage rate remained unchanged at 3.65 percent,” says Sean Becketti, Freddie Mac’s chief economist. “Despite this week's uptick in Treasury yields, the 10-year is still 54 basis points lower than it stood at the end of 2015, while the mortgage rate has dropped only 36 basis points over the same period."
Freddie Mac reports the following national averages with mortgage rates for the week ending Feb. 18:
  • 30-year fixed-rate mortgage: averaged 3.65 percent, with an average 0.5 point, holding the same average as last week. A year ago, 30-year rates averaged 3.76 percent.
  • 15-year fixed-rate mortgages: averaged 2.95 percent, with an average 0.5 point, also holding the same as last week. A year ago, 15-year rates averaged 3.05 percent.
  • 5-year hybrid adjustable-rate mortgages: averaged 2.85 percent, with an average 0.4 point, rising from last week’s 2.83 percent average. Last year at this time, 5-year ARMs averaged 2.97 percent.
Source: Freddie Mac

The Questions Your Buyers Want Answered® recently asked real estate professionals to weigh in with the eight most common buyer questions. Answering common real estate questions can help demonstrate your value and knowledge to clients. Your answers also serve as great fodder on your website, blog, or social media if you’re trying to reach out to prospective buyers.
Read more: How To Set Expectations With Clients
When coming up with a list of common questions, think about what buyers in your area would type into Google during the home search process. If you're able to answer these common queries clearly and thoroughly, you also have a better chance of appearing near the top of their results page. And this gives you a better chance at being the agent they call when they're ready to buy.
Eight common buyer questions according to®:
  1. What home can I afford?
  2. Can I buy a home and sell my current one at the same time?
  3. How many homes should I see before making an offer?
  4. What do you think the seller will accept as a fair price?
  5. How do I know if the property is a good deal?
  6. How quickly can I close?
  7. Should I get a home inspection?
  8. When can I back out if I change my mind?
Source: “The Most Common Questions Asked by Home Buyers – Answered!”® (Feb. 19, 2016)

Wednesday, February 17, 2016

Low Rates Spark Big Rush to Refinance

Applications to refinance mortgages surged to their highest level in more than a year as home owners rushed to take advantage of low rates. Thirty-year fixed-rate mortgages averaged 3.83 percent last week, the lowest level since April 2015, MBA reports.
The refinance boost fueled an 8.2 percent jump last week in total mortgage applications, according to the Mortgage Bankers Association. Refinance applications jumped 16 percent during the week ending Feb. 12. Mortgage applications for home purchases, on the other hand, dropped 4 percent during this same time. The volume for all refinances is now 50 percent higher than just four weeks ago.
"Treasury rates fell again last week, and mortgage rates fell to their lowest level in over a year, with rates on jumbo loans dropping to their lowest level since December 2012,'" says Michael Fratantoni, MBA’s chief economist. "As we have noted in recent weeks, borrowers with larger loans tend to be more sensitive to a drop in rates, because they stand to benefit more from refinancing."
Mortgage lenders reported a new record for the average loan size for refinances last week at $316,000, according to MBA.
While mortgage applications for home purchases fell last week, the gauge of future home-buying activity still remains strong for the year. Mortgage applications for home purchases remains 30 percent higher than the same week one year ago, MBA reports.
Source: “Refinancing Pushes Mortgage Applications 8.2% Higher,” CNBC (Feb. 17, 2016)

Where Renting Is on the Rise

The impact of the housing crisis still lingers as the number of renters remains high in every large metro area nationwide since 2006, according to American Community Survey data.
A closer look at the stats show the number of renters is growing particularly quickly for the 18-to-34 year-old cohort (up 9.1 percentage points since 2006) and for minorities. For example, the Hispanic renter rate (up 8.7 percentage points) climbed nearly twice the rate of whites, African-Americans, and Asians since 2006, according to an analysis by the real estate website Trulia.
The metro areas with the largest gains in renters continue to be those that were the hardest hit in the housing crisis, such as Las Vegas, Phoenix, and parts of Florida.
Here are the cities seeing some of the strongest gains in households who are renting their homes:
  • Las Vegas, Nev.: 9.9% (the percentage point change in renters from 2006 to 2014)
  • Phoenix, Ariz.: 9.2%
  • Fort Lauderdale, Fla.: 8.3%
  • West Palm Beach, Fla.: 7.8%
  • Tampa, Fla.: 7.5%
  • Miami, Fla.: 7.2%
  • Detroit, Mich.: 7.1%
  • Warren, Mich.: 6.7%
  • Oakland, Calif.: 6.7%
  • Riverside-San Bernardino, Calif.: 6.5%
  • Atlanta, Ga.: 6.4%
  • Orlando, Fla.: 6.1%
Source: “Where the ‘American Dream’ of Home Ownership Is Fading the Most,” The Washington Post (Feb. 16, 2016)

Wednesday, February 3, 2016

Home Ownership Rate Finally Makes Gains

The home ownership rate was on the rise for the second consecutive quarter as an improving job market and a slight easing in access to credit helped put an end to nearly two years of declines.
The Home Ownership Picture
The share of Americans who own their homes was 63.8 percent in the fourth quarter, which is up from 63.7 percent in the previous three months, the Census Bureau reports. Still, the home ownership rate remains near a 48-year low, which it first reached last year. It also remains far-below the peak it reached at the end of 2004 when the rate was 69.1 percent.
The latest Census data shows that home ownership is highest among people over the age of 65. About 79.3 percent of households that are 65 or older own their homes.
On the other hand, home ownership among those under age 35 remains at 34.7 percent. Among Americans ages 35 to 44, home ownership rose from 58.8 percent to 59.3 percent in the latest quarter.
“The home ownership rate has found a floor,” Matthew Pointon, U.S. property economist for Capital Economics Ltd., told Bloomberg Business. “We expect it to rise very gradually over the next few years."
Source: “Home Ownership Creeps Up but Remains Below 2004’s Peak,” The Chicago Tribune (Jan. 28, 2016) and “U.S. Home Ownership Rises as Jobs Bring Back First-Time Buyers,” Bloomberg Business (Jan. 28, 2016)

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...