Monday, November 27, 2017

Cities With Highest Spikes in Homeownership
The cities where homeownership rates are growing the fastest are mostly in the Rust Belt, as well as smaller metros near bigger and more expensive urban areas, according to research from®. The South is also seeing an uptick in homeowners thanks to booming job markets in the region. “Affordability is a strong draw to these areas,” says® Chief Economist Danielle Hale.
More than half of the metros on®’s list have median home prices under the national median of $274,492.®’s research team compared the ownership rates in the first three-quarters of 2014 to the first three-quarters of 2017. The following places are seeing the highest increases in homeownership rates:
1. Milwaukee
  • Median home price: $224,950
  • Current homeownership rate: 68.7%
  • Three-year homeownership change: 11%
2. Charlotte, N.C.
  • Median home price: $327,050
  • Current homeownership rate: 62.8%
  • Three-year homeownership change: 10.5%
3. Memphis, Tenn.
  • Median home price: $195,050
  • Current homeownership rate: 61%
  • Three-year homeownership change: 9.3%
4. Baltimore
  • Median home price: $300,040
  • Current homeownership rate: 68.4%
  • Three-year homeownership change: 7.3%
5. Allentown, Pa.
  • Median home price: $225,050
  • Current homeownership rate: 74.8%
  • Three-year homeownership change: 7.3%
6. Pittsburgh
  • Median home price: $174,950
  • Current homeownership rate: 74%
  • Three-year homeownership change: 7.2%
7. Albuquerque, N.M.
  • Median home price: $239,950
  • Current homeownership rate: 66%
  • Three-year homeownership change: 5.7%
Source: “Rent No More! 10 U.S. Cities With Huge Increases in Homeownership,”® (Nov. 27, 2017)

Tuesday, November 21, 2017

Know Your Home’s Earthquake Risk

Half of the world’s population lives near active earthquake faults, and some may not even know it.
“Small earthquakes are happening every day near you, and large earthquakes are happening somewhere around the globe that may not be in your mind,” Volkan Sevilgen, co-founder of Temblor, an app that estimates the likelihood of seismic shaking and home damage, told
States like California and Utah have thousands of fault lines running underneath, making them the most known for having frequent earthquakes. But don’t think earthquakes only happen there—know your seismic hazard risk and how prone your area is, experts advise.
“Not everyone will be affected by an earthquake on the same level,” says Sevilgen.
There are different mapping methods across the country. reports: “The Central United States Earthquake Consortium, for example, tracks central states, while the Cascadia Region Earthquake Workgroup tracks those in the Pacific Northwest. While maps can lay out fault lines and track earthquakes as they happen, they are unable to predict exactly when and where an earthquake will happen, how strong it will be, and the resulting seismic hazards.”
Newer homes in compliance with the latest seismic building codes and standards will be more resistant to earthquake damage than older homes built under less restrictive codes, experts note.
“If you own an older house—[from] 1979 or earlier—it’s probably not built to the latest building codes,” says Sarah Sol, a spokesperson with the California Earthquake Authority, a nonprofit that provides residential earthquake insurance.
For the most vulnerable properties, Sol recommends retrofitting the homes for earthquake protection and purchasing earthquake insurance.
“There’s often the perception that earthquake damage is covered by traditional home insurance, and in California it isn’t,” Sol says.
If you’re at any risk, Sol also recommends safety measures such as securing objects within your home that may fall during a quake and having a disaster plan in place. “You’ll want to have some preparation in place, as an earthquake can happen without any warning at all,” she says.
Source: “How to Assess the Earthquake Risk of Your Home,” (Nov. 20, 2017) 

Monday, November 20, 2017

6 Outdated Features in Your Clients’ Homes

Home buyers say they want the latest design trends in their next property—but 70 percent admit to having outdated features in their current house, according to a new consumer survey by home builder Taylor Morrison. The most common of these outdated features are:
  1. Linoleum floors (40 percent)
  2. Popcorn ceilings (29 percent)
  3. Wood paneling (28 percent)
  4. Ceramic tile countertops (28 percent)
  5. Shag carpeting (19 percent)
  6. Avocado green appliances (8 percent)
“This is why real and virtual house hunting is so popular,” says Taylor Morrison Chair and CEO Sheryl Palmer. “We all love to daydream and envision ourselves in a beautiful new environment. But keeping up with ever-evolving preferences for paint colors, home features, new technologies, and how we expect to use our homes over the years is difficult. We also know that home interior preferences vary by generation, by home style, by region, and even by city.”
Taylor Morrison found that the features home buyers say they most desire are:
  1. Better energy efficiency (62 percent)
  2. Personalized floor plans (58 percent)
  3. Easier maintenance (56 percent).
Also, the interior features home shoppers called most essential are:
  1. Wood flooring (65 percent)
  2. USB and Ethernet ports (44 percent)
  3. Whirlpool tub (36 percent)
  4. Sun room (34 percent).
Source: “Home Is Where the Shag Carpet Is?” BUILDER (Nov. 16, 2017)

Lift in Housing Starts Indicates Inventory Relief

Housing starts neared their postrecession high in October, with expectations that the new-home market will soon provide much-needed inventory relief, the Commerce Department reports.
Starts, which reflect combined totals within the single-family and multifamily sectors, jumped 13.7 percent in October to a seasonally adjusted annual rate of 1.29 million. That’s the highest reading for new-home production since October 2016, when starts had reached a postrecession high of 1.33 million.
Starts for single-family homes in October increased 5.3 percent last month, reaching a seasonally adjusted annual rate of 877,000. They are now up 8.4 percent from a year ago. Multifamily starts surged nearly 37 percent, reaching 413,000 units in October after a weak September production report.
“We are seeing solid, steady [new-home] production growth,” says Robert Dietz, chief economist of the National Association of Home Builders. “As the job market and overall economy continue to firm, we should see demand for housing increase as we head into 2018.”
Combined housing starts posted the largest upswing in the Northeast, where they increased 42.2 percent month over month. Housing starts also posted strong increases in the Midwest (18.4 percent) and the South (17.2 percent), but they dropped 3.7 percent in the West. However, building permits—a gauge of future production—rose in all four regions of the U.S. in October. Permits rose 13 percent in the West, 4.1 percent in the Northeast, 3.8 percent in the Midwest, and 3 percent in the South.

Friday, November 17, 2017

5 Trends the Housing Market Will Regret

Home buyers say tight inventory and rising home prices are causing several negative trends in the housing market. According to ValueInsured’s latest Modern Homebuyer Survey, a quarterly report based on more than 1,000 responses, buyers say the following trends will leave the housing market in a weaker position:
  1. The “no inspection” trend: 58 percent 
  2. The offer sight unseen” trend: 57 percent 
  3. The co-buying with strangers” trend: 54 percent 
  4. The cashing out from retirement savings” trend: 37 percent 
  5. The tiny home” trend: 36 percent
Source: ValueInsured

Median Sale Price - October 2017 -

REALTORS® Square Up After House Passes Tax Bill

The House on Thursday passed a tax reform package that the National Association of REALTORS® calls a tax hike on many middle-class homeowners and says would lower property values for all homeowners. “It’s disappointing to see this legislation move forward, but the real work to shape this debate is just getting started,” NAR President Elizabeth Mendenhall said in a statement.
The bill, called the Tax Cuts and Jobs act, was passed by a vote of 227 to 205 along party lines. It was approved entirely by Republicans—although several members of the party joined Democrats in opposition. The bill, which would increase the federal deficit by $1.5 trillion over 10 years, cuts the top corporate tax rate from 35 percent to 20 percent and, in a move that affects only the wealthiest households, nearly doubles the threshold for the estate tax and then phases it out entirely.
To pay for these and other measures, the bill would institute these changes:
  • Eliminates or curtails most itemized deductions, except those for mortgage interest and charitable contributions. The MID would be limited to mortgages of up to $500,000—half of the current limit—and the property tax deduction would be capped at $10,000.
  • Restricts the exclusion on gains from the sale of a principal residence by requiring households to live in the house for five of the last eight years, instead of two of the last five years. The bill also reduces the benefit for higher-income households. The exemption today applies to proceeds of up to $250,000 for individuals and $500,000 for married couples filing jointly.
  • Nearly doubles the standard deduction to $12,000 for individuals and $24,000 for married couples, but that increase is largely offset by elimination of the personal and dependency exemptions—a change that could hit larger families, as well as those with older children, particularly hard.
The House passage is the first of a multistep process before tax reform legislation can be enacted into law. In the Senate, the tax-writing Finance Committee is already working on its version of tax reform, and the full Senate may vote on the bill the week after Thanksgiving. That bill follows the same structure as the House bill but makes significant changes. Among other things, it makes no direct changes to the mortgage interest deduction, but it eliminates the deduction for all state and local taxes, including property tax. However, as with the House bill, the Senate version would limit the use of both tax incentives for owning a home to only about 5 percent of tax filers. Estimates show that this could lead to a drop in home values of more than 10 percent nationwide, with an even greater drop in high-cost areas.
“Make no mistake, middle-class homeowners will see their home values fall if this proposal moves forward, while large corporations walk away with the bulk of the tax cuts,” Mendenhall said. “American homeowners shouldn’t have to pay for corporate tax cuts with their home equity. It’s a matter of basic fairness; 1.3 million REALTORS® have known since the beginning what America’s 75 million homeowners are just beginning to learn: that homeowners will be the ones paying the tab. REALTORS® will do our part to spread the word as we work with the Senate to address this impending assault on homeownership.”
—Robert Freedman, REALTOR® Magazine

Would-Be Sellers Fear Becoming Priced-Out Buyers

With a seller’s market in many places across the country, why are so many homeowners reluctant to sell? Nearly 80 percent of more than 1,000 homeowners recently surveyed say they believe now is a good time to sell a home, but many don’t plan to list their homes anytime soon.
Numerous would-be sellers say they’re holding off because of the high price they’d have to pay for their next home, according to ValueInsured’s latest quarterly Modern Homebuyer Survey.
Out of the homeowners who say they are interested in selling their home to upgrade or downsize, the survey found:
  • 72 percent say they are concerned with timing the real estate market.
  • 63 percent say now is a good time for them to sell, but not to buy, due to high home prices.
  • 61 percent are “waiting until prices to buy are better to make a move.”
“Homeowners in many cases are eager to sell but don’t want to become buyers,” says Joe Melendez, CEO of ValueInsured. These homeowners have experienced a lot of home value volatility and see more uncertainties looming—tax reform, for example. By hesitating, these homeowners are actually controlling the market on both sides. Reassuring these individuals is the key to unlocking inventory.
Melendez says the survey discounts the notion that low refinance interest rates were keeping homeowners from selling. Only 18 percent of homeowners looking to sell say they haven’t done so because they don’t want to give up their current low mortgage payment.
Twenty-six percent of potential home sellers admit that they second-guess their desire to sell because they don’t want to pay broker fees, new mortgage closing costs, capital gains taxes, or other associated expenses that could possibly weaken their buying power for their next home, according to the survey.
Fifty-seven percent of all homeowners surveyed who say they are interested in selling and moving say it’s likely that they will eventually move from their current home within the next three years. However, some say they plan to rent out their home or pass it on to family instead of selling it.

Tuesday, November 14, 2017

6 Extra Costs In A Home Buyer’s Budget

Most home buyers put in the effort to save for their down payment, but that is only a fraction of the cost they should expect for homeownership. There are many other lesser-known costs that can sometimes come as a shock to buyers. Make sure your home shoppers plan accordingly for the following extra expenses, including:
Earnest money: The amount of earnest money required varies by state and local market. In a slower market, $500 to $1,000 might suffice. But a home with multiple bids may require a larger deposit of 2 percent to 3 percent of the offer price. Reassure buyers that the earnest money they put down will go toward the purchase of the home. To avoid being scammed, experts recommend making sure buyers receive a receipt and confirm the deposit is payable to a reputable third party, such as a real estate brokerage, legal firm, escrow company, or title company.
Inspection fees: Home inspections aren’t required prior to closing, but they are highly recommended in the real estate industry. The typical inspection may cost between $300 to $500, according to the U.S. Department of Housing and Urban Development. The home inspector may be able to spot any problems in the home and may be able to prevent a more costly repair later on.
Closing costs: These costs cover things like notary services, title company search fees, attorney expenses, real estate transfer taxes, insurance premiums, and more. Again, these vary by state and on the value of the property. Financial experts recommend setting aside 2 percent to 5 percent of the purchase price for closing costs. These funds must be available on closing day.
Mortgage reserves: Home buyers shouldn’t close on a home without a dime left in the bank. Theyll likely be required to show extra personal financial reserves, which are accessible liquid assets available to withdraw from after their mortgage closes. Lenders have different requirements, and some may not require it. But many lenders often want to see some type of assets left to show that buyers can continue to make mortgage payments even if they face a financial setback.
Moving costs: The cost of hiring a moving company or renting a truck can add up, too. And buyers will want to buy new furniture or items to decorate their home, so those costs will need to be factored in as well.
Maintenance costs: Many financial experts recommend putting aside 1 percent of a home’s value per year for maintenance expenses. On a $250,000 home, for example, that would mean budgeting $2,500 annually.
Source: “The Unforeseen Costs of Buying a Home,” AOL Finance (Nov. 1, 2017)

Single-Family Rentals Edge Out Apartments

Single-family rentals that are either detached or townhomes are developing faster than any other segment of the housing market, according to the Urban Institute. They are currently outpacing single-family home purchases and apartment living.
Within the last three years, single-family rentals have surged 30 percent. Single-family rental homes and townhomes comprise 35 percent of the nation’s 44 million rental units. That percentage is up from 31 percent in 2006.
Millennials are largely fueling this trend, but Americans over 55 years old are also showing a growing interest in renting. The number of renters aged over 55 has increased by 28 percent between 2009 and 2015, and many are showing a desire to rent homes instead of apartments.
During the recession, investors flocked to the market, buying up cheap homes and turning them into cash-flow rentals. These homes were often rented to families who had lost their homes to foreclosure or who could no longer qualify for a mortgage. Since prices have recovered, investors are no longer snatching up homes by the thousands. Small-time landlords are now dominating the single-family rental market. Investors who own only one single-family rental unit comprise 45 percent of the market share. 
To add even more inventory, some builders are constructing single-family homes intended to rent than sell, according to ATTOM Data Solutions.
“I can buy lots in areas that I can’t sell homes, but I can rent,” real estate practitioner Adam Whitmire told ATTOM in a recent report. “The local economy may not have enough income or enough credit to buy, but there is enough income to rent.”
The movement toward more single-family rentals can be either good or bad for a neighborhood. The professionalization of the single-family rental industry can help standardize levels of maintenance and management services, says Daren Blomquist, senior vice president at ATTOM. On the other hand, there will likely be “unintended consequences as the nature of some neighborhoods change,” Blomquist warns. Renters, for example, may not be as invested in communities as homeowners.
“For example, people who want to own a home may no longer be as active in the typical suburban white picket fence neighborhood as properties in those neighborhoods become more prominently rentals,” he says. “That may push those homebuyers back into more urban, walkable environments, or it might push them further out to more rural areas.”
Source: “Renting Is Overtaking the Housing Market—Here’s Why,” (Nov. 8, 2017)

Monday, November 13, 2017

Nearly half of nation’s largest 50 metros reach overvalue point

Nearly half of nation’s largest 50 metros reach overvalue point: Home prices increased in September from last year and last month, and nearly half of the nation’s largest markets are now overvalued. CoreLogic explained this overvaluation will become more of an issue if prices continue to rise next year as it anticipates.

Thursday, November 9, 2017

Real Estate Market - Tigard Oregon -

Portland Market - What is going on?

Homes Are More Affordable Than 20 Years Ago

Homes are actually more affordable now than they were in the late 1990s, according to the latest Mortgage Monitor Report by Black Knight Inc., a mortgage data and performance information provider.
Interest rates have plunged by 40 basis points over the past six months. However, the bulk of the potential savings is offset by the accelerating rate of home price appreciation across the country.
“Rising home prices continue to offset the majority of would-be savings from recent interest rate declines, which has kept affordability near a postrecession low,” says Ben Graboske, executive vice president of data & analytics for Black Knight. “That being said, when viewing the market through a longer-term lens, affordability across most of the country still remains favorable to long-term benchmarks.”
As of September, 21.4 percent of the median income nationwide was required to purchase a median-priced home. From 1995 to 1999, that percentage was 24.2 percent, and from 2000 to 2003 it was 26.2 percent, according to Black Knight’s report.
While the monthly payment needed for a median-priced home is up $100 from a year ago, the national “payment-to-income” ratio remains 2.8 percent below averages from the late 1990s, according to the report.
“In looking at the affordability landscape across the country, we certainly see varying levels of affordability in each market compared to their own long-term benchmarks,” Graboske says. “But, by and large, the overall theme is that affordability in most areas, while tightening, remains favorable to long-term norms.”
Black Knight researchers note that 47 of 50 states’ payment-to-income ratios remain below their 1995–2003 averages. Hawaii, California, Oregon, and Washington, D.C., are the lone exceptions, where payment-to-income ratios are higher today than their long-term benchmarks.
Source: Black Knight Inc.

Interest Rate Dip Fails to Lift Loan Demand

Interest rates on the 30-year fixed-rate mortgage dropped last week, but it wasn’t enough to entice more refinancers and potential buyers to take out loans.
The Mortgage Bankers Association reported on Wednesday that total loan volume—which includes refinancings and home purchases—was unchanged last week compared to the previous week.
Typically refinance applications perk up when interest rates drop, but the MBA reported the refi market actually saw the reverse, dropping 1 percent for the week on a seasonally adjusted basis. Refinance volume is now nearly 37 percent lower than the same week a year ago.
Applications to purchase a home did eke out a 1 percent gain during the week. Applications now are 9 percent higher than the same week a year ago. Home buyers seem to be less concerned about interest rates and more hampered by the limited number of homes for sale and rising home prices, CNBC reports.
The average 30-year fixed-rate mortgage dropped to 4.18 percent last week, from 4.22 percent the week prior. Mortgage rates were continuing to move lower this week and are at their lowest levels in about three weeks, the MBA reports.
Source: “Mortgage Demand Unchanged Even as Interest Rates Fall,” CNBC (Nov. 8, 2017)

A housing Bubble - Industry Experts Say No!

A Housing Bubble? Industry Experts Say NO!

A Housing Bubble? Industry Experts Say NO!
With residential home prices continuing to appreciate at levels above historic norms, some are questioning if we are heading toward another housing bubble (and subsequent burst) like the one we experienced in 2006-2008.
Recently, five housing experts weighed in on the question.

Rick Sharga, Executive VP at Ten-X:

“We’re definitely not in a bubble.”
“We have a handful of markets that are frothy and probably have hit an affordability wall of sorts but…while prices nominally have surpassed the 2006 peak, we’re not talking about 2006 dollars.”

Christopher Thornberg, Partner at Beacon Economics:

“There is no direct or indirect sign of any kind of bubble.”
“Steady as she goes. Prices continue to rise. Sales roughly flat.…Overall this market is in an almost boring place.”

Bill McBride, Calculated Risk:

“I wouldn’t call house prices a bubble.”
“So prices may be a little overvalued, but there is little speculation and I don’t expect house prices to decline nationally like during the bust.”

David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices:

“Housing is not repeating the bubble period of 2000-2006.”
“…price increases vary unlike the earlier period when rising prices were almost universal; the number of homes sold annually is 20% less today than in the earlier period and the months’ supply is declining, not surging.”

Bing Bai & Edward Golding, Urban Institute:

“We are not in a bubble and nowhere near the situation preceding the 2008 housing crisis.”
“Despite recent increases, house prices remain affordable by historical standards, suggesting that home prices are tracking a broader economic expansion.”

Wednesday, November 8, 2017


5 Reasons Homeownership Makes ‘Cents’

5 Reasons Homeownership Makes ‘Cents’
The American Dream of homeownership is alive and well. Recent reports show that the US homeownership rate has rebounded from recent lows and is headed in the right direction. The personal reasons to own differ for each buyer, but there are many basic similarities.
Today we want to talk about the top 5 financial reasons you should own your own home.
  1. Homeownership is a form of forced savings – Paying your mortgage each month allows you to build equity in your home that you can tap into later in life for renovations, to pay off high-interest credit card debt, or even send a child to college. As a renter, you guarantee that your landlord is the person with that equity.
  2. Homeownership provides tax savings – One way to save on taxes is to own your own home. You may be able to deduct your mortgage interest, property taxes, and profits from selling your home, but make sure to always check with your accountant first to find out which tax advantages apply to you in your area.
  3. Homeownership allows you to lock in your monthly housing cost – When you purchase your home with a fixed-rate mortgage, you lock in your monthly housing cost for the next 5, 15, or 30 years. Interest rates have remained around 4% all year, marking some of the lowest rates in history. The value of your home will continue to rise with inflation, but your monthly costs will not.
  4. Buying a home is cheaper than renting – According to the latest report from Trulia, it is now 37.4% less expensive to buy a home of your own than to rent in the US. That number varies throughout the country but ranges from 6% cheaper in San Jose, CA to 57% cheaper in Detroit, MI.
  5. No other investment lets you live inside of it – You can choose to invest your money in gold or the stock market, but you will still need somewhere to live. In a home that you own, you can wake up every morning knowing that your investment is gaining value while providing you a safe place to live.

Bottom Line

Before you sign another lease, perhaps you should sit with a real estate professional in your area to better understand all your options.

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