Mortgage Rates in Free Fall Since Brexit Vote

DAILY REAL ESTATE NEWS | TUESDAY, JUNE 28, 2016

Ever since Britain’s surprising vote to leave the European Union, U.S. home buyers and home owners have been reaping an expected benefit -- mortgage rates that are quickly dropping. Mortgage rates are now at the lowest average in more than three years, and economists expect them to head even lower. 

Read more: 'Brexit' Could Give US Real Estate Brief Boost

On Monday, the 30-year fixed-rate mortgage averaged 3.46 percent, near the lowest average since late 2012, realtor.com® reports. 

“Lower rates produce lower monthly payments and greater buying power—those who are well qualified can afford a home that’s 8 percent more expensive than at the beginning of the year,” Jonathan Smoke, realtor.com®’s chief economist, writes in a recent column. “That’s more than enough to offset the rise in prices during that time.”

That said, low mortgage rates can prompt lenders to get more strict with underwriting standards, Smoke says. 

“As mortgage rates declined this year, we’ve seen that credit access has gone down too,” he notes. “That’s because lenders have become more risk-averse as their profit margins have been whittled down by the double whammy of lower rates and higher origination and servicing costs.” 

Source: “Thanks, Brexit! Well-Qualified U.S. Buyers Reap a Windfall,” realtor.com® (June 28, 2016)

The 10 Priciest Places to Live in the Country

DAILY REAL ESTATE NEWS | TUESDAY, JUNE 28, 2016

About one in five housing markets are currently deemed unaffordable, according to new data released by RealtyTrac. In those locales, buying a median-priced home is less affordable than the historically normal level for that county. In a handful of counties, prices are so high that residents’ must use most of their paychecks to afford household expenses. 

Read more: Could the Rental Market Lose its Mojo?

To come up with their ranking, RealtyTrac took a look at sales data from 417 U.S. counties and used wage information from the Bureau of Labor Statistics.

The 10 most expensive places to live in America: 

1. Brooklyn, N.Y.: 121.70% (the percentage of average wages needed to buy the median home in the area)
2. Marin County, Calif.: 118.10%
3. Santa Cruz, Calif.: 113.50%
4. San Francisco, Calif.: 94.60%
5. Maui, Hawaii: 92.80%
6. San Luis Obispo, Calif.: 90.40%
7. Napa, Calif.: 86.90%
8. Monterey, Calif.: 84.50%
9. Queens, N.Y.: 83.60%
10. Sonoma, Calif.: 82.10%

Source: “The Most Unaffordable Place to Live in America Is ...” MarketWatch (June 23, 2016)

Quicken Quietly Offers 1% Down Loans

DAILY REAL ESTATE NEWS | TUESDAY, JUNE 28, 2016

Quicken Loans has been fairly hush about its latest offering of a super low down payment mortgage, even as rival bank giants like Bank of America, Wells Fargo, and JPMorgan Chase all tout their new 3 percent down mortgage products. But late last year, Quicken Loans quietly began offering 1 percent down payment mortgages. 

Read more: Quicken Loans, Freddie Team for 3% Loans

The program emerged from a partnership between Quicken and Freddie Mac in October 2015 and was structured to be part of Freddie Mac’s Home Possible Advantage program, which requires a 3 percent down payment.

However, Quicken Loans offers its customers a 1 percent down because it grants the extra money to the borrower, Bill Banfield, Quicken Loans’ vice president of capital markets, told HousingWire in an exclusive interview. 

“We require 1 percent from consumer and we give the consumer a 2 percent grant, so the client has 3 percent equity immediately,” Banfield told HousingWire.

The 1 percent down-payment loans are available only for those purchasing a home and can only be used on a single-family home or condo (second home and investment properties or co-ops are not included). Borrowers also must have a FICO score of 680 or above and must earn less than the median income for their county. Their debt-to-income ratio must be 45 percent or less. 

“We want to try to help people and do it in a smart way,” Banfield told HousingWire. “For us, it was really a question of if you want to provide access to credit, how do you do it responsibly? How can you help people? If first-time buyers are struggling, are there smart ways to help them while still balancing access to credit? ... We wanted to have a conventional option to get people into more homes.”

Source: “Quicken Loans Now Offering 1% Down Mortgages,” HousingWire (June 24, 2016)

Private Equity Firms Repeat Banks’ Past Errors?

DAILY REAL ESTATE NEWS | TUESDAY, JUNE 28, 2016

During the housing crisis, private equity firms stepped in to allegedly help the millions of people who had lost their homes to foreclosure. They planned to boost the housing market by taking many of these lost properties and turning them into rentals.

However, some of these new investors are reportedly repeating the past mistakes that banks committed throughout the housing crisis, according to an investigation by The New York Times. 

Read more: Navigating Bumpy Terrain

“They are quickly foreclosing on home owners,” The New York Times reports. “They are losing families’ mortgage paperwork, much as the banks did. And many of these practices were enabled by the federal government, which sold tens of thousands of discounted mortgages to private equity investors, while making few demands on how they treated struggling home owners.”

Private equity firms tend to face less oversight than banks. 

One of the largest firms, Lone Star Funds, for example, ranks now among the nation’s biggest purchasers of delinquent mortgages from government and banks. The New York Times alleges that its investigation shows that the firm pushed thousands of home owners toward foreclosure. The New York Times alleges that Nationstar Mortgage repeatedly lost loan files and failed to detect errors in documents, which confidential regulatory records from 2014 state put “borrowers at significant risk of servicing and foreclosing abuses.” 

Nationstar’s chief executive Jay Bray counters that it outperformed banks on avoiding foreclosure.

The New York Times also says it found that other big private equity firms in the rental market “largely bypassed the nation’s poorest neighborhoods as they scooped up and renovated foreclosed homes across the country.” Instead, they tended to favor buying newer homes in middle-income areas because it was more lucrative for investors. 

“There has been a missed opportunity here,” says Dan Immergluck, a professor of city and regional planning at the Georgia Tech College of Design. He has studied the effect of the financial crisis on housing. “They are pushing the market up at the top end and neglecting the bottom end.”

Source: “How Housing’s New Players Spiraled Into Banks’ Old Mistakes,” The New York Times (June 27, 2016)

A Tiny Controversy Brews Over Tiny Homes

DAILY REAL ESTATE NEWS | TUESDAY, JUNE 28, 2016

The tiny home movement is gaining steam. These small housing options are being featured on TV shows touting the cost and environmental benefits, and more buyers are being swayed to go small. But now cities are sparring over which one has earned the title as tiny house capital of America. 

Read more: What Living in a Tiny Home is Really Like

The Gazette recently bestowed that honor to its local city of Colorado Springs. However, some in the tiny-home movement were quick to counter that Northern California and Portland, Ore., are the true epicenters of tiny-home living. 

“There are many more people who have lived in [Northern California and Portland],” couners Elaine Walker, one of the founders of the American Tiny House Association. “Colorado is pretty new” to the tiny house movement. 

Portland says it boasts the first tiny-house motel called Caravan. Colorado Springs has one too: WeeCasa in Lyons, Colo.

There may even be more competing tiny-home capitals popping up, Mark Stemen, a professor at California State University, Chico, who teaches courses on tiny homes, told realtor.com®. 

“I’m seeing them up and down the West Coast,” he says. “Everyone wants to be the capital.”

Other cities like Seattle, Austin, and Asheville, N.C., also have growing tiny-home movements, Walker says. 

Tiny homes are generally 500 square feet or less -- only a fraction of the typical U.S. home size of about 1,500 square feet. 

Source: “Tiny Homes Spark a Big Controversy,” realtor.com® (June 27, 2016)

Beware of These Home Inspection Red Flags

DAILY REAL ESTATE NEWS | MONDAY, JUNE 27, 2016

A home inspection not only allows buyers to learn more about their home, it also helps them uncover any potential problems.

Curbed.com recently featured a 14-point checklist to help home buyers during a home inspection. Here are a few items they suggest to investigate further during a home inspection that will give your buyers more confidence in moving forward. 

Read more: Home Inspector or Specialist?

HVAC system. Home inspectors will make sure the home’s heating, ventilation, and air-conditioning system is working, and they should also be able to estimate how long the home air conditioning condenser (the outside unit) should last too. They just need to check the serial number, says Nigel Turner with Total Home Inspection Services in West Milford, N.J. Many condensers last 12 to 15 years before needing replacement. 

Water drainage. "The biggest issue of any home is always going to be water disbursement," Turner told Curbed.com. "There’s the potential for damage to the foundation. If water is found to be in the vicinity of the house, you want the water to flow away from the house, not towards it." Home inspectors who use an infrared camera may be able to uncover potential water damage that lurks beneath the surface of a home too.

Roof. Learn how old it is and any potential issues, particularly if anything that you may have to one day bring up to code. Roof problems are responsible for 39 percent of home owners insurance claims, according to data from Trulia. 

Oil tank. Even if the house is heated with gas, it's still important to check and see if there's an oil tank on the property in case it once was heated by oil. A tank may still be present. Certain areas require the oil tank to be removed. Others may have just been filled with sand and gravel. Make sure you find out and to ensure it hasn’t leaked into the ground. "Make sure we sweep the whole property," Elice Shikama of RE/MAX in Franklin Lakes, N.J., told Curbed.com. "Because sometimes sellers think they only have one. They could have multiple underground tanks."

Chimney. "Chimneys can be a very costly enterprise, if there’s damage to the chimney lining on the inside, if the masonry around the chimney is faulty, corroded, or whatever it might be," Turner says.

See the entire 14-point checklist that Curbed.com offers for home inspections. 

Source: “Home Inspections 101: What to Look Out For,” Curbed.com (June 21, 2016)

Yun: ‘Flashing Yellow Lights on Affordability’

DAILY REAL ESTATE NEWS | MONDAY, JUNE 27, 2016

The median price of an existing home reached a new record last month at $239,700. That price increase was primarily driven by repeat buyers trading up or downsizing from their current home, according to data from NAR. First-time buyers, meanwhile, continue to be held back by affordability issues.

Read more: Homes Getting Less Affordable for Many

"We are seeing flashing yellow lights on affordability,” says Lawrence Yun, NAR’s chief economist. “People who are currently renting and want to convert into ownership — major difficulty. Home prices are rising way too fast compared to people's income and wage growth. … We are facing housing affordability challenges already with low mortgage rates, but what happens when the rates begin to rise?" 

Affordability issues are the primary reason why housing hasn't had a stronger recovery. "While housing should be pushing overall economic growth, it is not, due to the meager activity in home construction, says Diana Olick, CNBC's real estate correspondent. "Rental demand has been fueling most of the construction activity, but multifamily housing starts are starting to slow, as most of the activity was in higher-priced, urban rentals, where supply is now high."

"The tight supply of homes on the market continues to constrain sales, while low mortgage rates and job growth help fuel healthy demand,” notes Andrew LePage, research analyst at CoreLogic. “This results in a pressure cooker effect, and the market's traditional pressure release valve — new home construction — isn't helping much, given that new home sales are running more than 40 percent below historically normal levels.”

Source: “New Warning Lights for Rising Home Prices,” CNBC (June 23, 2016)

When Competitors Upstage You Online

DAILY REAL ESTATE NEWS | MONDAY, JUNE 27, 2016

Are your competitors earning more clout on social media than you are? Maybe their content is better than yours or they’re better at reaching new audiences by sharing content and know how to engage with their audience better. What can you do to carve out a space too? 

Read more: How to Rock Social Media the Subtle Way

Forbes columnist Jayson DeMers says that first you need to identify in which area you’re being overshadowed. From there, you can create a strategy to overcome the competition. 

DeMers suggests studying your competitors and pinpoint what they are doing right. For example, maybe they are producing more visually engaging content with embedded images that is winning them over more followers. Go beyond them then: Embed videos or focus on how you can incorporate a more visual marketing campaign. 

If your competitor hosts contests to gain interest, consider how you can incorporate one too – with even bigger reward offerings. (Just make sure it doesn’t look like you’re copying your competitor. Be unique!)

Also, look for ways to more strongly differentiate yourself from your competitors. Look for ways you can fill a void in content sharing or producing content that they’re not providing. Maybe that is touting an interview series with a lender online to glean financing tips or providing a first-time home buyer webinar. Or maybe it’s even moving your focus to a different social network. If they are more popular on Facebook, maybe you should up your presence on Instagram. 

DeMers says another strategy: if “you can’t beat ‘em, join them.” Engage your competitor in conversation or even their users directly. 

Source: “Are Your Competitors Upstaging You on Social Media? Here’s What to Do,” Forbes.com (June 26, 2016)

Could the Rental Market Lose its Mojo?

DAILY REAL ESTATE NEWS | MONDAY, JUNE 27, 2016

High demand among young professionals has pushed rents in cities to new highs over the last five years. Rents have jumped about 20 percent nationwide in that time period. But some housing experts believe the rental market may be showing some signs of cooling. 

Read more: Rent Out of Reach for Many Americans

Most of that cooling is due to a surge in new supply in key markets. For example, major markets like New York, San Francisco, Seattle, and Boston are starting to see slower increases in rents. 

Overall, annual rent growth for high-end urban apartments has slowed from its peak in 2011 of nearly 8 percent to about 3 percent, according to MPF Research, a firm that tracks the multifamily sector. Multifamily permits in urban areas climbed 39 percent in 2015 compared to a year earlier, which means plenty of new supply is entering many markets, according to Zelman & Associates data. 

New York is expected to see 2.6 times more apartments in the next year than its historical average. Boston is to see 2.5 times and Philadelphia is expected for double its usually supply too. 

“When a number of new buildings compete to attract renters in a neighborhood, developers often offer generous concessions to help lure them, such as one or two months of free rent,” The Wall Street Journal reports. “That forces owners of existing buildings to lower rents or risk losing tenants, placing downward pressure on rents across the market.”

Major landlords, such as Equity Residential and Essex Property Trust, are lowering their expectations for revenue growth this year. Still, while economists are predicting a gradual slowdown in the sector, they aren’t predicting any crash. 

“The demand to live in these high-density urban markets remains very strong from both millennials and aging baby boomers,” David Neithercut, president and chief executive of Equity Residential, told The Wall Street Journal. “This gives us great confidence that we are right where we want to be for the long term.”

Source: “Rents Are Booming, But for How Long?” The Wall Street Journal (June 21, 2016)

Top 10 Greenest Cities in the U.S.

DAILY REAL ESTATE NEWS | MONDAY, JUNE 27, 2016

You can still enjoy the perks of city life with plenty of nature too. Realtor.com®’s research team recently identified the top major urban U.S. cities that also offer residents the chance to spend time with nature on a regular basis.

Read more: The Greenest States of 2016

Researchers factored in the cities with the highest percentage of parkland in the area, air quality index, number of plots in community gardens per capita, percentage of homes that have a garden or greenhouse, and additional factors. 

The following cities ranked as the 10 greenest.

1. Portland, Ore.

• Percentage of parkland: 17.8%

2. Honolulu, Hawaii

• Percentage of parkland: 33%

3. St. Louis, Mo.

• Percentage of parkland: 9.5%

4. Austin, Texas

• Percentage of parkland: 14.6%

5. Seattle, Wash.

• Percentage of parkland: 12.5%

6. San Francisco, Calif.

• Percentage of parkland: 19%

7. Madison, Wis.

• Percentage of parkland: 13.4%

8. Jacksonville, Fla.

• Percentage of parkland: 13.8%

9. Greensboro, N.C.

• Percentage of parkland: 9.4%

10. Boston, Mass.

• Percentage of parkland: 17.1%

Source: “America’s Top 10 Green Cities for Nature Lovers,” realtor.com (June 27, 2016)

Columbus, Ohio Named ‘Smart City’ Winner

DAILY REAL ESTATE NEWS | MONDAY, JUNE 27, 2016

The U.S. Department of Transportation announced that Columbus, Ohio, has won the Smart City Challenge. With its win, the city will receive $50 million in grants to create a first of its kind city that uses data, technology, and creativity to model the future.

Columbus will receive support and $10 million of the grant money from high-tech industry sponsors, such as from Amazon, Vulcan, AT&T, DC Solar, MobileEye, among others.

Making Cities Smart

Commercial Pros Transforming Downtowns

A Model for the Future

AARP Strives to Improve Community Livability

Columbus officials say they plan to use the money for connecting its citizens and visitors, provide sustainable transportation options, and improving job opportunities. Anthony Foxx, the secretary of the DOT, says Columbus’ focus on improving the health and lives of the community was key in it being named the winner. 

Foxx says the Smart City Challenge was created to “challenge cities to inventory the challenges they faced and how they would use innovation and technology to solve those challenges.” The DOT expects to see implementation of solutions in Columbus within the next few years. The other six finalist cities in the Smart City Challenge will also receive support from industry sponsors. Those six finalist cities included: Austin, Texas; Denver, Colo.; Kansas City, Mo.; Pittsburg, Pa.; Portland, Ore.; and San Francisco, Calif.

Seventy-eight medium-sized cities from 35 states submitted proposals for the challenge. 

Source: “Columbus Wins the Smart City Challenge and $50M Grants,” Forbes.com (June 24, 2016)

Portland Market Action - For regular updates on Market Action - Please email me LFox@kw.com

More Home Buyers Have Renovation in Mind

DAILY REAL ESTATE NEWS | WEDNESDAY, JUNE 22, 2016

As buyers face more hurdles finding their dream home because of limited inventories, some are settling for a property they can eventually mold into what they want. Over a quarter of renovation projects are being driven by recent home purchases, according to the 5th annual Houzz & Home survey of more than 120,000 respondents. Home owners say they are opting to renovate instead of buying a "perfect" home largely because they think remodeling is a more affordable option or could provide a better return on investment, the survey found.

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Recent home buyers invest more in renovation than other home owners — $66,600 versus $59,800. They also tend to take on larger projects and are nearly three times as likely to renovate all of their interior spaces than other home owners, according to the survey.

Kitchen remodels are the most popular renovation projects, followed by master and non-master bathrooms. Other top priorities include the addition of home automation and curb-appeal projects, such as upgrading exterior paint, roofing, exterior doors, and decks.

"2015 was another strong year for the home-renovation market, with home owners continuing to increase investment in their homes," says Nino Sitchinava, principal economist at Houzz. "While the majority of renovations are spurred by home owners' desire to upgrade a home they have lived in for some time, recent home purchases are also an important driver of home-renovation activity. Recent home buyers tend to do more, spend more, and are more likely to hire professionals to help with their renovation projects than other home owners. As the churn in the housing market picks up in the near future, the home-renovation market should see meaningful growth."

Home owners who are preparing to sell reported spending slightly over half the amount that recent home buyers do on renovations ($36,300 versus $66,600), which shows they are "prioritizing immediate return on investment and rapid sale," the Houzz survey notes.

Source: Houzz

Report: Housing Costs Pinch 21.3M Renters

DAILY REAL ESTATE NEWS | WEDNESDAY, JUNE 22, 2016

A record high number of American renters — about 21.3 million — are devoting 30 percent or more of their income to paying rent, according to the annual State of the Nation's Housing report from Harvard University's Joint Center for Housing Studies. What's more, 11 million renters in 2014 paid at least half of their income toward housing costs, which marked another record high, the report shows. Most financial experts say consumers shouldn't pay more than 30 percent of their monthly income for housing costs.

Hurting for Affordable Housing

Survey: Stable, Affordable Homes More Unattainable

Report: Severe Shortage in Affordable Housing

Housing Shortage Is Running Up Prices, Rents

Rents, however, have been rising faster than wages for years now. "When you have to dedicate such a high proportion of your income to rent every month, it forces you to make difficult decisions," says Dan McCue, a senior research associate at Harvard's Joint Center. "It means spending less on essentials like food, clothing, and health care, as well as less opportunity to save for a down payment on a home or plan for retirement."

In 2015, the median rent for a new apartment was $1,381, according to the report. That means a renter would need to earn at least $55,000 a year to afford the rent. Yet on average, renters earn about $34,000 a year — so for them, an affordable rent would be closer to $850.

Source: Harvard University’s Joint Center for Housing Studies and “11 Million Americans Spend Half Their Income on Rent,” CNNMoney (June 22, 2016)

Lowest Rates in 3 Years Boost Mortgage Apps

DAILY REAL ESTATE NEWS | WEDNESDAY, JUNE 22, 2016

As mortgage rates plummet to three-year lows, more home owners are refinancing to lock in lower borrowing costs. The increase in refinancings helped to push overall mortgage applications up 2.9 percent week-over-week last week on a seasonally adjusted basis, the Mortgage Bankers Association reported Wednesday.

Mortgage applications are now nearly 35 percent higher than they were a year ago, MBA reports. Refinance applications last week were up 7 percent over the previous week.

Meanwhile, mortgage application volume hasn't been getting much of a boost from the purchase side. Applications for mortgages to buy a home — viewed as a gauge of future home buying activity — dropped 2 percent during the week. A low number of listings has dented potential sales, CNBC reports. Nevertheless, purchase applications remain 12 percent higher than last year at this time.

MBA reports the average 30-year fixed-rate mortgage dropped to its lowest level since May 2013 last week, averaging 3.76 percent.

"Rates fell on concerns that Britain may vote to leave the European Union later this week," says Lynn Fisher, MBA's vice president of research. "Although beliefs about the likelihood of an exit have since moderated, the 'Brexit' vote promises to bring continued volatility to markets."

Source: “Mortgage Applications Up 3% on Lowest Rates in Three Years,” CNBC (June 22, 2016)

New Zealand Requires Agent Safety Checks

DAILY REAL ESTATE NEWS | WEDNESDAY, JUNE 22, 2016

The real estate community in New Zealand is educating visitors at open houses about safety, pointing out that they need to watch their step on decks and use handrails on staircases.

Under new health and safety legislation, The Real Estate Institute of New Zealand is requiring all real estate professionals to take "reasonably practical" steps to ensure the safety of visitors at open houses. It recommends briefing each visitor upon arrival, such as by reading a list of potential risks and hazards before they view the home. Some agents are even requiring visitors to sign a waiver to acknowledge they received a list of risks and that they'll agree to proceed with caution.

Some professionals are also posting sandwich boards at the entrance of homes that list potential hazards, or posting signs on tiled floors reading "slippery when wet."

One house hunter who visited a recent open house says she was asked to sign waivers after reading a list of potential hazards, including a laundry room step. The waivers also stated she must be willing to take responsibility for any injuries she might suffer in the home.

Read more: The Safety Talk You Need to Have With Clients

"I thought it was really odd, very much treating me like a child," says Mel Street of Christchurch.

Some real estate professionals say they feel the new rules are cumbersome, and some agencies say they now have to have two agents at an open house — one to manage the safety checks and the other to talk more directly about the home.

Potential risks, such as an open trench or a room still under renovation, may be good areas to flag for visitors, but "as far as normal household conditions like steps and drive ways … I think its over-egging things to be going that far," says John Tulloch, communications manager for WorkSafe New Zealand.

Some real estate professionals say the safety checks should be more part of the talks with the home owners during listing appointments and how to remedy any possible red flags.

"If there was a significant hazard identified during the listing process that the vendor didn't want to rectify, we'd have to sit down and work out whether we'd take the listing — a deck that was rotten on the first or second floor, something that was pretty major," says Graeme Fraser, head of agency operations for Ray White New Zealand.

But flagging every single potential hazard at an open house is "over the top," says Wellington REINZ spokesman Euan Murrell. "It is becoming a nightmare," Murrell told reporters. "If we did everything that we were expected to do, you probably wouldn't do open homes."

Source: “Real Estate Agents ‘Over Egging’ Safety with Open Home Briefings and Waivers,” Stuff.co.nz (June 21, 2016)

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Title Issues to Watch Out for at Closing

Daily Real Estate News | Tuesday, June 21, 2016 

 

Title companies say that in more than one-third of all real estate transactions they must undertake “extraordinary work” to address title issues and ensure the deal makes it to settlement OK.

Read more: Title Snafus and You

Title companies will often scour public records back 50 years or more to look for past deeds, wills, divorce decrees, bankruptcy filings, court judgments, trusts, and tax records that could be defective or outstanding.
From that search, unresolved title issues can surface. And, any unresolved title issue – even if relatively minor – could jeopardize settlement. Here are some common issues title companies say pop up:

Mechanic liens: These are liens placed against a property that a general contractor or someone who worked to improve the home filed before beginning the work. This is to ensure the contractor gets paid, and the lien is to be released when the job is complete. The procedure for how mechanic liens are filed and processed vary widely from state to state. But problems can surface with these liens when the contractor doesn’t file a “satisfaction” of the lien and, thereby, the lien remains on the property title. Some mechanic liens will expire after a certain amount of time. Regardless, if a mechanic lien is still present when trying to go to settlement, the process can be time-consuming and could prompt a delay in closing.  (Check out state guidelines for filing and processing a mechanic’s lien at www.fullertonlaw.com.)

Bankruptcies: This can be cause a problem, for example, when a seller buys a home while single but then marries someone with a recent bankruptcy. The title company must ensure the new spouse has signed off on the deed and also that the bankruptcy case has been discharged. If not, the title company would need to petition the court to release the property from the bankruptcy process.

Divorces: This often causes problems when a divorced spouse doesn’t remember to remove a lien for child support, even though the debt may have been resolved long ago.  Also, lien issues may arise from past-due spousal support or delinquent taxes.

View a list of more than 70 possible title problems.

Source: “These Common Title Problems Can Snag Your Home Closing,” The Washington Post (June 20, 2016)

Young vs. Old: The Wealth Gap Widens

Daily Real Estate News | Tuesday, June 21, 2016 

 

Americans’ net worth has essentially doubled since the turn of the new century in 2000 to $88 trillion. But looking closer at the data, it's clear that something is wrong, NAR Chief Economist Lawrence Yun writes in his latest Forbes column.

Read more: Help on the Way for Younger Buyers

The widening inequality gap in recent years between older and younger households is alarming, he says. In the early 1980s, for example, the median net worth of young households under the age of 35 was $15,260. For older households ages 65 and older, net worth was $120,500. This represents a 10-to-1 income gap, which should be expected as people move up in their careers, Yun notes.
By 2013, the wealth difference between young and old households grew to more than 20-to-1 ($210,500 vs. $10,500).

“As with any big question of the day, there are no doubt multifaceted causes,” Yun writes. “However, one important contributing factor is home ownership opportunity. The home ownership rate among the older generation (65+) has been fairly steady over the recent housing cycle of bubble-bust-recovery with nearly 80 percent owning a property. But for those under 35 households, the home ownership rate has fallen from the recent cyclical peak of 43 percent to now 34 percent.”
Young households may be getting a tough break. Yun cites overly-stringent mortgage underwriting and high credit score requirements that are delaying them into home ownership. Also, growing student loan debt – which has tripled in size in the past decade – is also causing delays. The average balance for a recent graduate is $29,000. A recent survey by NAR and the American Student Assistance found that 71 percent of young grads who have not defaulted on their debt obligations say they plan to purchase a home but they will likely have to wait more than five years because of their debt load.

“Some of the younger generation may benefit from family inheritance in the future since there is sizable wealth to be passed along,” Yun writes. “Some may even brag of their small fortune, even if after they inherited a big fortune. But Americans respect the Horatio Alger type of stories of self-made progress, and not stories of parent wealth transfer.”

Source: “A Reason for Widening Intergenerational Inequality,” Forbes.com (June 16, 2016)

Landlords Charged with Evicting Renters to List Units on Airbnb

Daily Real Estate News | Tuesday, June 21, 2016 

 

City officials in Los Angeles say they are filing criminal charges against landlords who are evicting tenants from rent-controlled units in order to list the units on Airbnb or similar sites to make a quick profit.

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Owners of one formerly rent-controlled building in the Fairfax District are facing criminal charges for such a move, announced Mike Feuer, the city’s attorney, on Monday. Prosecutors say the landlord evicted tenants without giving them the opportunity to re-rent the units before they were put back on the market, which violates the city law.
The tenants say they found their former residence listed on short-term rental sites like Airbnb and HomeAway. The tenants are also suing the landlord under the Ellis Act, which is to protect tenants when landlords want to get out of the rental business
"In a city with a profound shortage of affordable housing, unlawfully converting rental units to operate hotels has got to stop," Feuer said in a statement. "My office will continue to intervene to keep rent-stabilized units on the market and hold owners accountable for not complying with the law."
Feuer has also filed civil charges against three other landlords in the Los Angeles area for similar issues.
Rent-controlled apartments are quickly vanishing from the city at a faster pace. Last year alone, 1,137 rent-controlled units were taken off the market.

Source: “LA Apartment Owners Charged with Allegedly Evicting Tenants, Then Renting Their Units Via Airbnb,” Los Angeles Times (June 20, 2106) and “Landlords Who Booted Tenants From Rent-Controlled Units Face Criminal Charges,” Curbed.com (June 20, 2016)

LGBT Senior Community Offers a Haven for Residents

Daily Real Estate News | Tuesday, June 21, 2016 

 

Gay and lesbian couples have reported they face discrimination from many mainstream retirement communities and are forced to conceal their sexual orientation in order to fit in. But a senior housing development north of San Francisco offers a community specifically geared to LGBT individuals in their golden years.

Read more: Real Estate's Union With Equality

Fountaingrove Lodge boasts resort-style living as well as offers continuing care services. The development was created by Oakmont Senior Living, which has created more than 40 retirement communities across the western U.S., and features 70 units ranging from 830- to 2,000 square feet.
“It took seven years of dreaming, planning, and development before the doors opened and our first residents moved in, but everyone has the same response: It was worth the wait,” says Cindy Gallaher, one of the Oakmont Senior Living’s founders.

Source: “California Project Offers a Place for LGBT Seniors to Call Home,” BUILDER (June 1, 2016)

Uh-Oh, New Home Construction Is Flatlining

DAILY REAL ESTATE NEWS | MONDAY, JUNE 20, 2016

Nationwide housing starts – including single-family and multifamily production – mostly held flat at a seasonally adjusted annual rate of 1.16 million in May. Permit issuance – a gauge of future construction – also held mostly flat at an annual rate of 1.14 million.

Read more: If They Don't Build Homes, You Can't Sell Them

Still, some inventory relief may be on the relief in some markets at least compared to a year ago: Single-family housing starts are up about 10 percent from last May, according to the latest data from the U.S. Department of Housing and Urban Development and the Commerce Development.

"Despite May's relatively flat report, our builders are telling us that the market is improving and consumers are more ready and willing to make a home purchase," says Ed Brady, chairman of the National Association of Home Builders.

Single-family and multifamily starts rose the most in the West last month, up 14.4 percent month-over-month. The South saw a 1.5 percent increase while the Northeast plunged 33.3 percent in May. The Midwest posted a 2.5 percent decrease. However, when excluding multifamily starts, single-family production rose in three out of the four regions in May – the Northeast, South, and West.

"Builder confidence rose this month and single-family housing starts are up roughly 10 percent from a year ago -- two indicators that we can expect further growth in housing production this year," says NAHB Chief Economist Robert Dietz. "However, builders continue to face supply-side constraints, such as shortages of buildable lots and labor."

Source: National Association of Home Builders

Choose Where to Live by Personality Type

DAILY REAL ESTATE NEWS | MONDAY, JUNE 20, 2016

Could your personality fit better in a different city? Realtor.com®’s research team used Myers & Briggs Foundation data (you know, the creators behind the Myers-Briggs popular personality test) to look at the most popular personality types in various American locales.

Read more: The Fastest-Growing Cities

Their research team took into account the best career options for the most prevalent personality types. They also analyzed various quality of life factors including affordability, and emerged with a defining list of cities that best fit certain personalities.

Take a look at their top city picks for each personality type:

Protector Personalities

• Characteristics: Dependable, practical, caring
• Top city choice: San Antonio, Texas

Provider Personalities

• Characteristics: Sociable, enthusiastic, warm
• Top city choice: Salt Lake City, Utah

Inspector Personalities

• Characteristics: Conservative, organized, detailed
• Top city choice: Orlando, Fla.

Composer Personalities

• Characteristics: Gentle, aesthetic, observant
• Top city choice: Boise, Idaho

Supervisor Personalities

• Characteristics: Decisive, take charge, practical
• Top city choice: New York, N.Y.

Performer Personalities

• Characteristics: Spontaneous, fun-loving, resourceful
• Top city choice: Austin, Texas

Champion Personalities

• Characteristics: Insightful, creative, open
• Top city choice: St. Louis, Mo.

Craftsman Personalities

• Characteristics: Analytical, curious, hands-on
• Top city choice: Chicago, Ill.

Source: “Which American City Is the Perfect Match for Your Personality?” realtor.com® (June 20, 2016)

What Would Make Baby Boomers Move?

DAILY REAL ESTATE NEWS | MONDAY, JUNE 20, 2016

Eighty percent of baby boomers recently surveyed by AARP say they want to stay in their own home as they age.

In fact, by market level, baby boomers in Houston; Lansing, Mich.; and Tallahassee, Fla. prove to be the most adamant about aging-in-place, with 87 percent of residents saying they don't want to move, according to AARP’s survey of residents age 50 and older in 11 metros across the country.

Read more: Talk Up Age-in-Place Home Possibilities

That said, looking at the markets evaluated, there are a few motivators that may make boomers think otherwise. In particular, many baby boomers said they’d be willing to move for functional or economic benefits.

Around 51 percent of respondents said they’d move from their current home if they found a home that would allow them to live independently as they age. Forty-nine percent also reported being swayed by moving to either a larger or smaller home.

Being close to family was less of a motivating factor for many boomers, just 35 percent said that was a major reason why they would move. Also, communal features such as public transportation and advanced health facilities aren’t big motivators either, at 21 percent and 20 percent respectively.

By market level, Washington County, Ore., respondents are most swayed by independent living features and moving to a different size of home. In Brownsville, Texas, baby boomers are most tempted by keeping close family ties as a reason to move. In Lansing and Philadelphia, baby boomers say they’d be more willing to move if they could lower their financial burden.

Source: “AARP: Most Boomers Want to Stay Put, But Active,” BUILDER (June 17, 2016)

Police Hunt for Texas Man Posing as Agent

DAILY REAL ESTATE NEWS | MONDAY, JUNE 20, 2016

A man posing as a real estate agent is being accused of stealing $20,000 from a potential home buyer who thought she was making a down payment on house, the San Antonio Police Department report.  

You can find all of NAR's safety resources on realtor.org.

Police allege Chris Hinojosa, 29, has been acting as a broker without a license in the city. They have issued multiple arrest warrants for Hinojosa, who remains at large.

A woman told police in January that she responded to a for-sale by owner real estate sign earlier this year. She alleges she met with Hinojosa, agreed to purchase the home, and gave him two separate payments of $20,000 for closing. She said she later discovered the man did not own the property and also was not a real estate agent.

“At no time did the victim sign a real estate title or any document recognized by the Texas Real Estate Commission,” police documents state.

"He fleeced this person," San Antonio Police Department Sgt. Jesse Salame told ABC affiliate KVUE. "It's probably best not to respond to a sign on the side of the road. Look up licensed REALTORS®."

The property’s actual owner has also sued Hinojosa.

Source: “SAPD Seeks Man Accused of Posing as Real Estate Agent,” ABC-KVUE (June 17, 2016)