BABY BOOMERS POISED TO INFLUENCE THE HOUSING MARKET

Leave a comment

Baby-Boomers-Poised-to-Influence-the-Housing-Market-240x170Whether they decide to move from their current homes or age in place, the decisions baby boomers and other older homeowners make during the next few years could significantly impact the single-family housing market. Today, baby boomers and other homeowners age 55 and older control almost two-third (or about $8 trillion) of the nation’s home equity. There also are more than 67 million 55-plus homeowners.

The new “Freddie Mac 55+ Survey”—which polled 4,900 homeowners born before 1961 regarding their current housing situations, plans and willingness to help their grown children become homeowners —found that this generation has the potential to generate significant new demand for mortgage credit and to tighten home-buying competition, especially for millennials and other first-time home buyers.

Here are some of the survey’s key findings:

• Consistent majorities said they are “very satisfied” with their current homes (64 percent), their communities (59 percent) and quality of life (54 percent). Nearly 90 percent of the respondents said people their age should own a home.

• Seventy-six percent of homeowners were confident they would have a comfortable retirement. These feelings were echoed across racial lines and shared by 55-plus homeowners who are still working, as well as retirees, and the 44 percent of homeowners surveyed had a mortgage.

• Consistent majorities said homeownership makes financial sense for married people with children (96 percent) and without children (85 percent), as well as single people with children (79 percent) and without children (53 percent). Almost 25 percent of the respondents also said they have offered down payment assistance to someone.

• This works out to an estimated 42 million homeowners who don’t plan to move. About a quarter (23 percent) indicated they would need major renovations to keep their homes accessible and a third (34 percent) would pay for improvements by refinancing their mortgage or taking out a second loan or home equity line of credit.

• Although movers were in the minority, it was a big minority. According to the survey, almost 40 percent of all 55-plus homeowners said they would like to move at least once more if they had complete control over it. This isn’t just about downsizing to a rental or nursing home; 19 million planned to buy a home and nearly 8 million expected to move within the next four years. Half of the 19 million likely movers also expected to buy less expensive homes.

SPRING USHERS IN ROBUST HOME MARKET

Leave a comment

Spring-Ushers-in-Robust-Home-Market-240x170This spring’s real estate market is coming in strong. New data released by realtor.com shows that homes in May are moving off the market at the fastest pace seen since the housing recovery began, despite record-high asking prices.

Based on realtor.com’s preliminary findings, homes spent a median of 65 days on the market in May—the same length of time as a year ago and three days quicker than April. The median home was listed at $250,000—9 percent higher than a year ago and 2 percent higher than the past month. For-sale housing inventory also has continued to increase on a monthly basis, but remains lower than a year ago.

Meanwhile, more than 550,000 listings have been added to the market to date in May (a 4 percent increase), but the level of inventory remains 4 percent lower than a year ago. Site traffic data on realtor.com shows a 30 percent growth in searches for homes for sale, compared with May 2015.

“Pent-up demand and low mortgage rates are driving consumers into the market with urgency,” says realtor.com Chief Economist Jonathan Smoke in a statement. “However, the recurring issue of limited supply is leading to higher prices.”

Thankfully, Smoke adds, gains in new single-family construction and new home sales are providing a pressure release. “Potential buyers are finding they can avoid a competitive bid situation if they elect to sign a contract on a home to be built,” he says. “As the share of new homes sold goes up, we should eventually see signs of more balance in the existing home market, like lower price appreciation. However, we clearly aren’t there yet.”

Here is a snapshot of the realtor.com’s May data:

• Median age of inventory is estimated to end at 65 days, the same as May 2015 and down 4 percent from April.

• Median listing price for May should reach a record high of $250,000—a 9 percent increase year over year and a 2 percent increase month over month.

• Listing inventory in May is showing a 4 percent increase over April. However, inventory decreased 4 percent year over year.

DISPELLING THE MYTH ABOUT MILLENNIALS AND HOMEOWNERSHIP

Leave a comment

mythaboutmillenialsandhomeownership-240x170“The American Dream of homeownership is as strong today as ever.” That’s the belief of HUD Secretary Julián Castro, who in a May 10 address at the National Association of Realtors’ Regulatory Issues Forum said millennials are just as committed to homeownership as their parents and grandparents.

Despite a widespread impression that members of the younger generation are not interested in owning a home, Castro noted a recent survey by TD Bank that found 40 percent of millennials are planning on buying their first homes during the next year.

Student loan debt has been the main obstacle to millennials buying a home, Castro said. About 40 million Americans have some amount of student loan debt and about 70 percent of students graduate with student loan debt, with the average amount of debt at graduation spiking by 56 percent from 2004-2014. The increase has been so great that it has caused many parents and grandparents of millennials to shoulder that debt, with 20 percent of millennials now providing some type of financial assistance to their parents and grandparents.

But things are beginning to improve, Castro said. The number of student-loan delinquencies is declining, and economic improvements have resulted in the creation of 14.5 million jobs during the past 74 months. The average hourly wage also has risen 14 cents in March and April, and the current unemployment rate of 5 percent is the lowest it has been post-recession.

The housing market is a part of the nation’s overall economic strength, he added. “Real residential investment has grown by more than 8 percent for six straight quarters, highlighting the housing sector’s solid, steady recovery,” Castro said. “In fact, growth in residential investment has substantially outpaced growth in overall GDP.”

Castro noted that 1.3 million families have taken advantage of the FHA’s lower mortgage insurance premiums since the association sliced its premium by 50 basis points in January 2015. The immediate result of the mortgage insurance premium cut was a 27-percent increase in the number of home loans endorsed by the FHA from 2014-2015 (up to 753,000), with many of these loans being secured by first-time homebuyers.

5 WAYS TO ATTRACT MORE LUXURY HOME BUYERS

Leave a comment

luxuryhomebuyers-240x170From posh outdoor living spaces to decked-out wine cellars, these luxurious features can transform ordinary homes into dream homes. According to real estate brokerage company Redfin, luxury home sales increased in fourth quarter 2015 and ended a nine-month slump, with an average luxury home sale price of $1.62 million. Sales in 2016 also are predicted to climb and attract a new wave of luxury homeowners. So, with that in mind, you might be thinking about how to attract homebuyers who are hunting for a property with a little something extra-special. If that’s the case, consider some of these popular trends emerging of late for some inspiration. While there are some simple fixes you can make — like landscaping and lighting —these amenities are the ultimate in luxury and creature comfort.

1. Think Smart

Wired high-tech spaces are in high demand, and according to a Smart Home Survey by Coldwell Banker and CNET Smart Home, 81 percent of current smart-home device owners said they would be more open to buying a home with connected technology already in place. Many high-end offerings let consumers control items in their homes remotely using a smartphone or tablet — including comforts like heating and ventilation —but consumers also can lock and unlock gates, windows and doors, and monitor encrypted security cameras from anywhere they’re online. In the future, expect sci-fi-level technology — like sensors embedded in your bed that record health-related data such as heart rate and body temperature and analyze it to make dining and recipe recommendations on a screen in the kitchen.

2. Wine Cellars

Remember the typical wine rack? It had individual square openings that you inserted the bottles into and then you had to pull each bottle out one by one just to read them? They have come a long way, baby. Today’s spacious wine cellars have custom drawers that can be pulled out to reveal multiple wine bottles for easy viewing and access, as well as rotating lazy Susans specifically designed to hold wine bottles and wooden wine cases — all installed behind climate-controlled glass doors. Homebuyers also are looking for complete tasting rooms that combine the cozy comfort of a den with restaurant lounge ambience to host friends and family. Add soft lighting, a fireplace and your best wine collection to complete the look.

3. Home Theaters

While home theaters have been around for a while, they now are being updated with actual theater seating — like a recliner, but with a bit more “theater” quality and feel — as well as theater-specific furnishings like popcorn and concession stands, theater “now showing” marquees, and even IMAX screens. There’s even tell of many a themed theater space — including a $300,000 pirate-ship-shaped home theater with leather seats on the ship’s deck and a movie screen for a billowing front sail, along with a keg disguised as a microwave and a door that appears to lead to the ship’s lower deck but actually masks a refrigerator.

4. Outdoor Living Spaces

Outdoor spaces can be as comfy and inviting as indoor areas. More homebuyers are seeking fully loaded, stand-alone outside entertainment areas for cooking, dining, playing and entertaining. Some examples include high-end tree houses; garden rooms; and spacious metal or wooden gazebos complete with climbing flowers pergolas, built-in fireplaces, kitchens, elegant seating areas and fire pits.

5. Underground Garages

The garage is not just a place to keep cars anymore. More and more people are looking for massive subterranean garages (most climate-controlled and with car elevators) that include everything from wet bars to TV lounges to maintenance bays … not to mention plenty of room to show off their prized car and motorcycle collection, and maybe even a golf cart or two.

THE NEW DEFINITION OF SUBURBS

Leave a comment

newsuburbs-240x170A generation ago, the American dream was based in the suburbs. After an economic downturn and a housing crash, the upcoming generations have their own version of the American dream, and it looks decidedly more urban.

In fact, while more people are moving back to cities in search of better jobs and more conveniences, suburbs have been struggling to survive. That is why more suburbs are turning to urbanization to revitalize their communities.

This process of urbanization is taking place across the country from New Rochelle, New York, to San Ramon, California. These suburbs have lost a lot of residents in recent years, leading to structural decay and economic stagnancy. To combat dwindling population numbers, these suburbs have changed the community focus. Shopping malls are being exchanged for office buildings. High rise buildings are replacing empty storefronts, combining commercial space with apartments.

More commercial development attracts businesses, which is critical in a time when workers are in desperate need of jobs. By including downtown living space, these communities can appeal to younger workers, who have an interest in keeping their lives simple. Smaller apartments are not only more affordable, but they give these young people more flexibility while they get their financial standing.

This urbanization is still a relatively new phenomenon so it is impossible to say how long it will last or how successful it will be. However, as society continues to evolve, this new definition of the suburb may still be part of the American dream after all.

YOUR NEW NEIGHBOR IN THE ‘BURBS? A MILLENNIAL. YES, REALLY

Leave a comment

surbs-millenials-240x170If you are a member of the millennial group, you are maturing and are moving to the suburbs to escape the high rents and to take advantage of better school districts for your children. According to a national poll, only 17 percent of people in this group purchased a home within a major city last year.

Millennials’ ages average 30 years old. This is the normal time to begin a family. Even if an urban setting is desired, it is not a great place to find affordable space.

Currently, rents are rising at a steady rate. Home prices have been increasing as well. As interest rates remain low, housing supply is extremely limited, especially in urban areas. Also, home builders are not heavily interested in city neighborhoods. First time buyers are looking for smaller homes that are more affordable, which means it is difficult for builders to make a profit.

Debt is a factor for many buyers as well. Many potential buyers do not have the savings necessary to make a down payment. Student loan debts are very prevalent among this segment of individuals. Back a few years ago, credit card debt was the major issue facing home buyers. Wages must grow so that the market becomes easier to tackle. Despite job creation, income must be increased.

Almost half of millennials have a desire to purchase a home. If this segment decides city life is the way to go, realtors are trying to woo individuals into the condo or “tiny home” movement. To make homes affordable, they must be smaller in space.

SIX THINGS TO CONSIDER WHEN BUYING AN INSURANCE POLICY FOR YOUR HOME

Leave a comment

6thingstoconsider-240x170As you begin the journey of homeownership, you’ll need to take steps to insure it as buying a home is a major investment. To make sure that you get the best protection for your home, consider the following six policy suggestions.

Your Home’s Location

Before agreeing to an insurance policy, assess your home’s surrounding area for potential discounts. For instance, if your house is near a constantly staffed fire department that is also highly rated, you could negotiate a policy discount with your insurance company.

When to Get Extra Protection 

If your new home comes with awesome amenities like a swimming pool and a hot tub, then consider kicking your liability insurance up a notch. This will protect you if someone suffers a serious injury on your property.

Claim History 

Check your home’s claim history because it could affect your homeowner’s insurance rates. When you buy a home that has had a claim filed for it during the past five years, your policy rates will probably be a little higher.

Embrace Earthquake Coverage 

California residents aren’t alone in their need for earthquake insurance. Other states also suffer from the natural disaster. In fact, at least 39 states experience earthquake tremors. Traditional home insurance policies generally don’t cover earthquake damage. Upgrade your policy to include it.

Is Flooding a Possibility?

Even if you don’t live in a flood zone, consider adding protection for it to your policy. According to reports, 90 percent of the nation’s natural disasters involve flooding, so protect your investment.

Take on a High Deductible 

If you take on a higher deductible, then your insurance company will reward you for it with lower policy rates. Since most people only file an insurance claim once every eight to 10 years, you’ll likely save more in the long run with lower yearly rates.

Insuring a Valuable Asset 

Homeowner’s insurance provides protection for one of your most valuable assets. When choosing a policy, be sure to compare the rates, coverage options and deductibles of several different insurers.

Older Entries

%d bloggers like this: