Millennials Are Heading to the ‘Burbs, After All

Daily Real Estate News | Thursday, March 10, 2016 

 

Millennials are leaving the city. While many millennials choose to live in urban areas as renters, when they're ready to buy, they're increasingly seeking single-family homes outside of urban areas, according to the 2016 National Association of REALTORS® Home Buyer and Seller Generational Trends study.

Check out the full NAR Home Buyer and Seller Generational Trends Report.

“The median age of a millennial home buyer is 30 years old, which typically is the time in life where one settles down to marry and raise a family,” says Lawrence Yun, NAR’s chief economist. “Even if an urban setting is where they’d like to buy their first home, the need for more space at an affordable price is for the most part pushing their search further out. Furthermore, limited inventory in millennials’ price range, minimal entry-level condo construction, and affordability pressures make buying in the city extremely difficult for most young households.”
The percentage of millennials purchasing a home in an urban or central city area fell to 17 percent in this year’s survey – down from 21 percent the year prior. Also, 10 percent of millennials purchased a multifamily home, down from 15 percent a year ago.
Millennials comprise the largest group of recent home buyers – 35 percent which trumps the 31 percent of baby boomers, 26 percent of Gen X buyers, and 9 percent from the Silent Generation, NAR’s survey showed.
When it comes to neighborhood choice, millennials were most influenced by the quality of the neighborhood (63 percent) and convenience to jobs (60 percent). Gen X buyers were most swayed by convenience to schools.
Source: “Millennials More Likely to Buy in Suburban Areas,” RISMedia (March 9, 2016)

These Buyer Compromises May Be Worth It

Daily Real Estate News | Thursday, March 10, 2016 

 

Your home shoppers may have a long wish list, but when it comes to finding a home – particularly under the tight inventories prevalent in so many markets right now – the word “compromise” may need to enter the conversation.
Dana Gonzalez, a real estate professional in Denville, N.J., told realtor.com® that buyers need to expect to compromise on their wish list, especially in at least one of three categories: price, location, and size/style/upgrades. “If you get 80 percent of what you want, you’re lucky,” Gonzalez says.

Read more: Help Buyers Deal With Kitchen Compromises

The following are a few compromises that home buyers may find are worth making too:
Location
“While they might want to find a home that is within walking distance to the downtown area with shops, restaurants, and public transportation, buyers do not want to compromise on their living space,” Suzy Minken, a real estate professional in Short Hills, N.J., told realtor.com®. “After all, they live in the home. Sometimes these homes are too small to fit their lifestyle needs, or the larger in-town homes are simply above their price range. So the dream of a walk-to-town location very often will get removed from a buyer’s must-have list.”
Yard size
Those visions of a sweeping landscape or the outdoor pool with the hot tub may have to go once buyers see what’s available and the price. “When it comes to describing their dream home, buyers frequently say they want a large backyard,” Minken says. “When I ask my home buyers to qualify what they mean by a ‘large’ backyard, the answer is almost universally the same: ‘large enough to fit a swingset.’ … So that means they have more homes to choose from, especially when inventory is low.”
Architecture
Home buyers may say they want a Craftsman bungalow but the asking price may be unrealistic for their budget. “Whether it be the architectural style of the house or type of kitchen counters, those things are one of the first things mentioned when clients tell me what they want,” says Amber Dolle, a real estate professional Sherman Oaks, Calif. “But when compromises have to be made and they’ve had time to look at homes for a bit and consider their budget, the home’s aesthetics usually are the thing they choose to overlook.”
View more compromises that may be worth making at realtor.com®.
Source: “5 Compromises Worth Making When Buying a Home,” realtor.com® (March 3, 2016)

You're 'Trendy' if You Live Here

Daily Real Estate News | Monday, March 07, 2016 

 

Realtor.com®’s research team was on the hunt to find the next “hipster meccas” popping up across the country. It analyzed 500 of the largest municipalities nationwide to find those that offer a fun, young, culture-rich urban scene and are still largely affordable.

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To pin down the 10 trendiest U.S. cities, the team took into account such factors as the increase in the population of 25- to 34-year-olds from 2013 to 2014; the number of cultural outlets (such as musical venues, independent movie theaters, and art galleries), yoga studios, and bike shops; and housing affordability, among other factors.
Considering those criteria, the 10 cities that emerged as the top 10 trendiest based on realtor.com®’s study are:
1. Salt Lake City
Median home price: $355,000
2. Richmond, Va.
Median home price: $170,000
3. Asheville, N.C.
Median home price: $350,000
4. Pittsburgh
Median home price: $149,900
5. Minneapolis
Median home price: $251,000
6. Ann Arbor, Mich.
Median home price: $349,450
7. Cincinnati
Median home price: $138,000
8. St. Louis
Median home price: $145,000
9. New Orleans
Median home price: $245,000
10. Charleston, S.C.
Median home price: $325,200
Read more about what makes each city trendy at realtor.com®.
Source: “The 10 Trendiest U.S. Cities That You Can Still Buy In,” realtor.com® (March 7, 2016)

Why New-Home Buyers May See Longer Waits

Daily Real Estate News | Monday, March 07, 2016 

 

Homebuilders across the country say that delays they face receiving building permits from their local governments are stalling projects.
Builder Jared Phifer in Denver says that the process can take up to eight months.

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The delays are “almost making us go bankrupt,” Phifer told The Wall Street Journal. “We’ve had to put a halt on so many projects that I’m in the process of getting a loan for $150,000 to cover all of our expenses.”
City governments are working with smaller staffs, after many reduced staff levels during the recession. That shortage could explain some of the long wait times builders are facing to get permits and other approvals.
Single-family developers reported a median delay of seven months in 2015, up from four months in 2011, according to the National Association of Home Builders.
In markets heating up such as Florida and California, permits are taking six to eight months, compared to the typical two to three months they once took, says Bradley Gaskins, chairman of the Codes and Standards Committee of the American Institute of Architects.
Those delays come as inventory levels are tight in many markets heading into the spring buying season. What’s more, the delays are costing “developers thousands of dollars in employee salaries, interest on loans, and other items,” The Wall Street Journal reports.
“It increases the costs to the consumers because ultimately all the costs are passed onto us,” Gaskins says.
Source: “Home Builders Slowed by Permit Delays,” The Wall Street Journal (March 4, 2016) [Log-in required]

Signs of a Bad Moving Company

Daily Real Estate News | Monday, March 07, 2016 

 

About 16.5 million households – or 38.7 million Americans – move annually. But Americans need to carefully screen those who help them move to make sure all goes smoothly in relocating their belongings.

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U.S. News & World Report recently highlighted these three warning signs when choosing a moving company:
The price is significantly lower than competitors.
Don’t just go with the cheapest quote. You may want a deal, but carefully consider what’s behind that lower-priced quote from a moving company — that could be 20 to 30 percent lower than any other companies' offers. “While finding an affordable mover doesn’t mean you’re about to get scammed, if you feel like you’ve landed an unbelievable deal, it probably is unbelievable,” U.S. News & World Report notes. The quote may be lower, but some consumers later complain that prices mysteriously triple on moving day, items are stolen or missing, or they find lots of damage.
The required deposit is high.
Movers may ask for a deposit fee, but that fee shouldn’t be above 10 percent of the job cost, says T.J. Peterson, social media coordinator for Oz Moving and Storage, based in New York. Oz Moving and Storage, as comparison, charges a flat $50 deposit. "It's not unreasonable for a mover to ask for a deposit of $100 or $200 to cover their costs if you change your mind, but if a mover wants more upfront – like 25 percent of the cost of the move – don't pay it,” warns Nancy Conner in her book, Buying a Home: The Missing Manual.
There’s very little information about the company.
Finding a moving company in the Yellow Pages may give you some assurance that it must be legitimate since it's advertising there, but don’t assume by just an ad. To check if the company is reputable, ask for itsDepartment of Transportation numbers. "If a company cannot prove [it is] registered with the state and United States Department of Transportation, that's a warning sign," Peterson told U.S. News & World Report. Also, consumers should be leery of any company that doesn’t have any Better Business Bureau profile or no reviews.
"A few hiccups for any reputable company is not a warning sign,” Peterson says. “It is an inevitable side effect of being in business." But nothing about the company should be more of a warning sign.
Source: “3 Signs of a Bad Moving Company,” U.S. News & World Report (Feb. 26, 2016)

Investors Upbeat, Yet Cautious About 2016

Daily Real Estate News | Monday, March 07, 2016 

 

Investors are bullish for real estate, but they still have some hesitations, a new study says.
Ninety-one percent of recently surveyed senior commercial real estate executives say they expect real estate fundamentals to be about the same or better this year, according to KPMG’s 2016 Real Estate Industry Outlook Survey. That said, investors say they are growing more cautious about the ability to expand their portfolios and are taking steps to “de-risk” their portfolios, the survey found.

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Only 8 percent of investors surveyed by KPMG say they will enter new markets. That is down from 28 percent last year.
“Investors are becoming more cautious in their decision-making as we near the end of the economic cycle, leading to changes in operations, portfolio management decisions, and the timing of their investments," says Greg Williams, national sector leader, building, construction and real estate. "They need to be prepared for the coming change in momentum."
Seventy-four percent of survey respondents say they expect foreign investment in U.S. real estate to increase over the next 12 months. They attribute the main reasons behind that expected surge as low interest rates, tax incentives in the U.S., and favorable risk versus return in U.S. real estate markets.
"Strong economic fundamentals, a reliable legal system, and other structural advantages in the U.S. have continued to fuel foreign interest in the U.S. real estate market," says Williams. "The continued inflow of foreign capital has led to a significant increase in competition for the best investments, leaving many investors with a major challenge in their hunt for yield across a variety of assets and markets.”
Investors continue to be the most bullish about multifamily properties. Also, the senior executives surveyed say they are growing more upbeat about healthcare investment prospects in development, likely due to a rise in healthcare demand from aging baby boomers.
Senior execs surveyed say they are looking for opportunities to add to their portfolios without adding greater risks, however.
"This 'de-risking' seeks to balance the sustained interest in U.S. real estate with a growing conviction that the market's growth trajectory may be turning soon," says Williams.
Source: KPMG 2016 Real Estate Industry Outlook Survey (February 2016)

Decks vs. Patios: Which Is More Popular?

Daily Real Estate News | Monday, March 07, 2016 

 

Patios are winning. In 2014, a majority of all new homes – 56 percent – were constructed with a patio. On the other hand, 23 percent of the new homes had a deck, according to the U.S. Census Bureau’s Survey of Construction.

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While patios or decks both let you enjoy the outdoors, the differences matter. Patios are like courtyards and can be attached to or separate from a house. They can take any shape and can be built using any type of material. They’re always at ground level so they do not require railings, as decks do. Decks, typically made of wood or composite wood material, are not usually built at ground level so they can be used to enjoy a great view.
While patios are more popular nationwide, geographic preferences come into play when it comes to patio and decks. Patios aren’t the most popular everywhere. For example, patios are less common than decks in the Middle Atlantic, New England, and East South Central regions. But they reign in the West South Central, Mountain, and Pacific divisions.
The map below from the National Association of Home Builders indicates regional preferences for decks and patios.


Source: “Patios: A Popular Feature in New Homes Started in 2014,” National Association of Home Builders’ Eye on Housing Blog (March 3, 2016)