2017 SCE HOUSING SURVEY FINDS INCREASED OPTIMISM ABOUT HOME PRICE GROWTH

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The Federal Reserve Bank of New York has released results from its February 2017 SCE Housing Survey, which provides information on consumers’ housing-related experiences and expectations. The survey, which is part of the broader Survey of Consumer Expectations, shows an increase in home price growth expectations, especially for growth during the next year. In addition, the majority of households continue to view housing as a good financial investment; expected changes in mortgage rates have slightly increased since last year’s survey; and renters’ perceived access to mortgage credit has continued to ease.

Here, the key findings from the February 2017 survey:

Home prices/rents

Average home price change expectations at both the one- and five-year horizons increased from 2016. For example, the mean one-year ahead expected change in home prices in 2017 was 5.1 percent, which is 1.8 percentage points higher than last year and the highest level since the inception of the survey in 2014. Five-year growth expectations also increased from last year, but remain at or below the levels in 2014 and 2015.

There was a drop in the perceived downside risk in home prices over both the one- and five-year horizons. At the one-year horizon, the average probability of home prices decreasing declined from 43 percent in 2016 to 37.5 percent.

Rent change expectations increased at both the 1- and 5-year horizons, by 0.8 and 0.5 percentage points, respectively.

Housing outlook

Attitudes toward housing continued to remain positive: 60.4 percent of all respondents think that buying property in their zip code is a very or somewhat good investment, and 12.7 percent think it is a bad investment. Although slightly less optimistic than respondents overall, most renters are also enthusiastic about buying property, with 55.9 percent viewing it as a good investment and 15.6 percent viewing it as a bad investment. Higher-income (annual income of $60,000 or more) and more educated (a bachelor’s degree or more) households continue to have a more optimistic outlook of housing compared to their counterparts.

The average probability of buying a home, conditional on moving within the next three years, was largely unchanged from 2016 at 63.6 percent. The average probability of moving during the next year declined slightly, from 19.2 percent to 17.8 percent.

Mortgage rates

On average, households perceive mortgage rates for themselves and nationally to have increased by about 40-50 basis points from 2016. This change is roughly in line with the increase in actual mortgage rates. Less-educated and lower-income households perceived larger increases.

Average expectations of future mortgage rates similarly increased for both the one- and three-year-ahead horizons. For example, the average year-ahead mortgage rate expectation was 5.6 percent, up from 5.2 percent in 2016. The average probability that mortgage rates will increase over the next year rose from 49.5 percent in 2016 to 52 percent; this is primarily driven by older respondents (ages 50 or older).

Owners

The average probability of mortgage refinancing over the next year declined to 10.2 percent, from 11.3 percent in 2016.

The average probability of investing at least $5,000 in the home over the one- and three-year horizons remained steady. The average probability for the one-year horizon stands at 32.4 percent; the corresponding value for the three-year horizon is at 46 percent.

Renters

Renters continue to perceive obtaining a mortgage (if they want to buy a home) as difficult, with 65 percent stating that it would be somewhat or very difficult to get a mortgage. However, renters are gradually beginning to perceive credit access as becoming easier. For instance, this year 20 percent of renters stated it would be somewhat or very easy for them to obtain a mortgage if they wanted to, compared to fewer than 15 percent in 2014 and 2015. These movements held across demographic groups, although they are less pronounced for older renters.

Renters continue to report a strong preference for owning homes. The share of renters who report preferring or strongly preferring to own instead of rent (if they had the financial resources to do so) stood at 72.3 percent, a slight decrease from 74.1 percent in 2016. Younger and less-educated respondents are particularly likely to express a strong preference for owning.esplanade

FOREIGNERS BUY UP PROPERTY IN SURPRISING U.S. MARKETS

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It’s no secret that foreign investors target real estate in the U.S. Markets like New York City, Los Angeles and Chicago seem to be the most likely recipients of funds from foreign investors, but you may be surprised to learn that this unique set of investors also targets unlikely areas like Watertown, New York and Anchorage, Alaska.
What’s the reason behind these investment decisions? That depends on the location. The popularity of Watertown relates to its proximity to Canada and its appeal to Canadian investors. Cities in the northern portion of Washington state also enjoy popularity among foreign investors for the same reason.
The appeal of locations like Anchorage is harder to identify. Investors from all over the world flock to the Alaskan city. Home prices are on the rise in Anchorage, and the relatively low unemployment rate may make the city more attractive for real estate investors who are hoping to quickly turn a profit on their purchase.
Miami is known to draw investors from Latin America, but market trends show that the entire state of Florida attracts foreign investors. Mexican real estate investors are active in Texas and California, and Indian investors tend to focus on markets in San Jose and New York.
Some investors have largely pulled out of the U.S. real estate market. Japanese investors maintain a minor presence in Hawaii and Seattle, but these investors once purchased real estate across the country. Domestic investors who target quieter markets may be surprised to learn that they have competition from abroad.
Tags: home buyers, home owners, housing market, real estate, u.s. market

Let’s Talk Apple Watch – How Sweet is it?

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Apple devices always contain the latest and greatest technologies. The company’s newest release is an Apple Watch, which offers impressive capabilities. Although the watch includes a host of amazing features, the best may be its home automation integration.

Upon its unveiling, Apple representatives showed how well third-party apps integrate with the watch. During one demonstration, it was linked to a home security application so that the wearer had access to home features, including lighting, garage doors, and door locks. In this particular case, the footage from a home’s security camera was viewable from the wrist. Also, it was possible to open doors automatically.

The abilities of this watch span well beyond doors. A home can be filled with smart-enabled equipment that is easily checked and remotely triggered. For example, lights can be turned on and off, and temperatures can be set to comfortable levels. These are wonderful features when you are at home or away on vacation. Imagine the convenience of being greeted by a toasty house on a cold night after you arrive home from a hard day at work. Also, this device will provide peace of mind for frequent travelers who worry about home invasion. It is a phenomenal idea that is sure to change the way people communicate.

“Smart Home” has already enjoyed success on Apple’s phones and tablets. However, having the technology readily accessible on the wrist cuts the need to pull out a bulky tablet or locate a cellphone. When everything is available on the arm, especially with helpful features like Siri, the interface is even more user-friendly.Apple

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