BABY BOOMERS POISED TO INFLUENCE THE HOUSING MARKET

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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.

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SINGLE-FAMILY SECTOR IMPROVES IN 2016

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singlefamilyimproves-240x170This could finally be the year that production of single-family homes outpaces apartments in the U.S., according to the National Association of Home Builders’ 2016 Spring Construction Forecast.

On the downside, factors that stand to hinder a full rebound include a shortage of build-able lots and labor, along with limited access to acquisition, construction and development loans.

“Builders remain cautiously optimistic about market conditions,” says Robert Dietz, NAHB’s chief economist. “2016 should be the first year since the Great Recession in which the growth rate for single-family production exceeds that of multifamily. And we see single-family growth accelerating in 2017 as the supply side chain mends and we can expand production.”

Steady job growth mixed with affordable home prices, low mortgage rates and pent-up demand have bolstered consumer confidence, with the single-family housing market expected to make a recovery during the next year and into 2017.

NAHB forecasters predict that single-family production will see an increase of 14 percent this year (to 812,000 units), and then rise another 19 percent in 2017 (to 964,000 units).

Referring to the 2000-2003 period as a healthy benchmark when single-family starts averaged 1.3 million units annually, NAHB estimates that single-family production — which bottomed out at an average of 27 percent of normal production in early 2009 — will reach 64 percent of historically normal levels by the fourth quarter of this year and rise to 77 percent of normal by the end of 2017. Single-family production now stands at 58 percent of normal activity.

“Consumer surveys suggest the ultimate goal of millennials is to purchase a single-family home in the suburbs,” says Dietz. “We see growth for single-family looking ahead. The recovery continues and is dictated by demand-side conditions and supply-side headwinds.”

On the multifamily front, production was recorded at 395,000 units in 2015, above the rate of 331,000 that is considered a normal level of production. Multifamily starts are expected to decline by 4 percent (to 379,000 units) in 2016 and increase 6 percent (to 402,000 units) in 2017.

Residential remodeling activity also is expected to increase 3.3 percent in 2016 compared with 2015 and rise an additional 1.3 percent in 2017.

THE TOP 10 BEST CITIES FOR NEW HOMEBUYERS

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10bestfornewhomebuyers-240x170While some cities are as unaffordable as ever, there are still places that offer reasonably priced residences as well as desirable amenities. The top 10 best cities for today’s new homebuyers range from Philadelphia to Virginia Beach.

Philadelphia 

With homes priced at around $220,000 and low unemployment rates, Philadelphia is becoming the place for New Yorkers to move to when they become overwhelmed by the Big Apple’s cost of living.

Baton Rouge 

Affordably priced homes make Baton Rouge a tempting place to live. This traditional Louisiana city also has a low median resident age of just 34.7, so Baton Rouge tends to cater to a younger crowd.

Minneapolis 

As one of the country’s fittest cities, Minneapolis is the place to live if working out is a priority. Outdoor spaces are in abundance throughout the city while a low median home price increases its livability rating.

Allentown 

According to recent reports, Allentown is on its way to economic redevelopment. A number of multinational companies have moved to Allentown making work options abundant.

St. Louis 

Access to higher education and the opportunity to take in plenty of Cardinals games make St. Louis an amazing place to live. With homes priced at around $164,000 and its low unemployment rate, the city offers a warm welcome to homebuyers.

Harrisburg 

Reasonably priced homes and ample job growth in the tech industry make Harrisburg a desirable place to live. This midsize city features outdoor spaces and quaint architecture.

Portland 

As the largest city in Maine, Portland features amazing restaurants and plenty of nightlife. The city’s average home prices are slightly more than $300,000 while its unemployment rate is low at 3.3 percent.

Albany 

Albany is currently experiencing an economic recovery with a number of tech companies moving into the area. Making the locale even more tempting for new homebuyers is the city’s median home price, which is at $238,000.

Dayton 

Dayton offers affordably priced homes and a large number of biking trails. These features are inspiring new homebuyers to move to the city.

Virginia Beach 

In Virginia Beach, the unemployment rate is low as is the median home price. With access to the beach and low-density neighborhoods, Virginia Beach is the city for those who dislike living in crowded conditions.

Despite the rising prices of homes across the nation, a number of cities continue to offer value with affordably priced residences and plenty of amenities.

HIGH RENTS, LIMITED INVENTORY AND LOW INTEREST RATES ENCOURAGE PEOPLE TO SEARCH FOR A HOME

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highrents-240x170High Rents, Limited Inventory and Low Interest Rates Encourage People to Search for a Home
High rent prices are driving people to buy their first home. A Redfin survey reports that one in four homebuyers confirm that they decided to purchase a home because rent is becoming unaffordable. This number is up from November’s report, which came in at one in five. Last August, one in eight homebuyers verified that they bought a home for this reason.

Is Competition Causing a Problem?

Since more homebuyers are entering the market, inventory is taking a dive. The survey showed that recent homebuyers are concerned about the number of homes that are available. Fewer homes increase competition, limit choices and lead to bidding wars. The Redfin survey found that 20 percent of buyers were worried about inventory. This number has grown by four percentage points over last quarter.

Rising Prices

Homebuyers are also predicting price increases. According to the survey, 53 percent of them expect to see higher prices soon. In the last report, 48 percent of home buying respondents felt that way. People are also worried that prices will increase significantly.

Unchanging Interest Rates

After the Federal Reserve raised rates last December, many in the housing market expressed concerns that rates would rise. Since rates appear to be holding steady, homebuyers are confident that they’ll stay there for at least the next six months.

Buying Now Instead of Later

Today, many people are more motivated to buy a home than they were a year ago. Consistently low interest rates combined with a limited housing inventory as well as rising rents are increasing buyer aggression. If you’re waiting to buy a home, it appears that now is a good time to start shopping for one.

REPORT: RENTER GROWTH TO EXPLODE BY 2030

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IMG_5227
Data from the Urban Institute indicates that between 2010 and 2030, the renting population is expected to exceed that of homeowners. The report, titled Headship and Homeownership: What Does the Future Hold?, looks at the year that millennials are to reach peak homebuying age and trends leading up to it. Although the number of homeowners is anticipated to increase during this two decade period, it is believed that in 15 years, renters will number 13 million to nine million homeowners.
The increase in renters over homeowners is due to the number of millennials and the ethnic makeup of the generation. According to the study, it is believed that the new surge of renters will create additional need for rental housing while reducing the demand for owner-occupied homes. Currently, the rental housing market is already at a fairly high occupancy, and rental rates are rising as a result. This is also leading to a number of single-family homes being turned into rental properties.
Nonwhite populations are where most of home ownership is expected to increase. In the next five years, 77 percent of new households are predicted to be nonwhite, and by 2030, that number is to be 88 percent. Additionally, by 2030, it is anticipated that the rate of Hispanic homeowners will reach 48.2 percent, up from 47.3 percent in 2010.
Along with a push from nonwhite households, home ownership is also supposed to increase as a result of growth among senior households, which are owned by individuals who are at least 65 years old.

Let’s Talk Year To Date Real Estate

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Avenues IMG_5227 IMG_5228 IMG_5232 IMG_5353 IMG_5371I’ve been harping on for years that the media takes it’s good sweet time to catch up to what is really happening in Real Estate at base camp where the top producing Realtors are in the trenches battling it out to get the best for their clients.

The prediction VS the reality of the “bottom” and the subsequent strong recovery of our housing market here in beautiful Southern California was happening much sooner than the media reported.

All that notwithstanding, the market is caressed by the faint chill of a pre-autumnal breeze. We track that data with hard numbers of sales, pending sales etc. But we the realtors, we just ‘feel it’ – The market has cooled.

So with rates up, inventory increasing and nothing too dramatic to report I thought I’d give you a personal view of what people are buying and selling so far this year as we cruise towards the back to school, back to fall, pre holiday fever.

My buyer’s new homes and my sellers newly sold homes represent quite a cornucopia of styles and legal descriptions.  Let’s start with Redondo Beach where my buyers are settling in nicely in a variety of Digs.

One happy family is thrilled with their newly renovated (down to the studs) Cape Cod single family on one of the best streets in South Redondo; Irena. Big smiles all around. Took some creative negotiating but that’s what I’m here for!

A newly transplanted South Bay resident and her precious puppy coming from up North near the Facebook HQ are happy on the Esplanade in a spacious single level condominium with a wrap around deck, small complex –  its perfect. I brought this to her off market and I knew it was the perfect fit. We dealt with multiple counters but we were the successful bidders!

A rare situation came up with my Air Force family. They were moving from back East and couldn’t see a property before inking the contract. Pressure!! Sight unseen, now that requires a large amount of trust in your Realtor.  I found them a great townhome in North Redondo and the large family of 5 and two dogs are joyously ensconced in their new Southern Californian life.

My dear client’s S. Historic Redondo Duplex I sold a couple years ago when they moved East, are back! I had to find them a rental without them setting their eyes upon it! Again, trust. They are happy so I’m happy.

My Doctor clients were being transferred to San Diego. I had sold them their townhome in a very challenging location on PCH a few years back. Flash forward and now I was selling it for them. Selling it this time required some teamwork as I was dealing with contract negotiations from Bora Bora! The deal got done and they relocated to San Diego.

My retiring Aerospace clients are almost ready for the Andy’s Fumigation Tent to go on their stunning front unit townhome on Broadway. It’s a big and emotional move for them. So far so good.  We were supposed to close escrow on Friday the 13th but the buyers are uneasy with that date, so an amendment is easily enough drawn up! Buyers and sellers are in agreement. September 12th is fine. I guess I’m the only one with 13 as my lucky number.

Hermosa Beach clients have also kept me busy these first 8 month of the year.

My sweetest little family of 3 from NYC  take possession of their cottage cute Hermosa Hills single family home on Friday. It’s been a long wait but this off market property I found them is just perfect; you know it is when the wife and mother to be breaks out into tears of joy when I opened the front door for the first time!

I sold my young Anesthesiologist client a Duplex in Hermosa Beach last year. I’ve put tenants into both units. But the last tenants surprised me. They gave notice and bought my listing on Ocean View Avenue (around the corner). It is a small world.  That property was a huge ocean view townhome with a roof top deck, and tons of windows, showing off the stunning coast line of Hermosa Beach and onto Palos Verdes.

I brought a buyer from the West Side an amazing Kim Komick new construction single family home. They finally moved in and it is a masterpiece. It sure is helpful to buyers that I have one of the South Bay’s preeminent builders in my speed dial and who takes my call, drops her surfboard on a Labor Day weekend and runs to walk the property still in the “framing” stage to a potential buyer. Thanks Kim!

My other favorite family of 3 took possession of their Hermosa Hills single family home on the dad’s 40th Birthday. What a gift.  The only person in the family who had a place to sit for dinner on their first night in their new home was their young son, who curtsey of Alison, had a spanking new, fire engine red plantation chair.

My career has many rewards.  It’s always fun to sell a home to a young newly married couple. The happiness, the expectations for the future. I am privileged to have shared in this newlywed’s joy. Several years later this Hermosa Beach family grew their family to bursting point. Kids, dogs they needed  Alison to the rescue. Mission: sell their contemporary view townhome and find them a big single family with a yard. Done! Success, happiness all around.

Now let’s head up the hill to Palos Verdes.

This client was a challenge. A young lad, a professional on the cutting edge with vision didn’t quite know what he wanted. Do I like/thrive on a challenge? You bet I do. I sold his single family home in North Redondo and after a year of looking I brought him the perfect off market property: A historic home in Palos Verdes Estates near Malaga Cove. This home would require quite a lot of renovation, but for an old bird, she was in pretty good shape. It was a long and troublesome escrow but with a good solid team behind me, we prevailed and renovations are in the works. He’s keeping the home Historic; stay tuned for a before and after piece.

Then there was my favorite kind of client, the illustrious referral. As it turned out I was in Bora Bora for 80% of the transaction but that’s why the internet was created, right? She settled in a cute little single family house in a great part of Torrance, very close to the Hollywood Riviera. Congrats!

The transactions may blur over time but the sense of satisfaction in bringing happiness or relief to my clients is the take away for me.

I’ve got two listings that are hoping for new owners to make them their own:

  • A townhome on the Golf Course in Manhattan Village. A stunning luminescent property that is unique in every way. The current owner used his talents with stone work to transform this home into an ethereal and elegant entertaining home.
  • Sitting high and pretty on the Avenues in South Redondo is the custom built single family home with views of Palos Verdes from almost every room and the roof top deck. The guest cottage is ready to welcome the guests of the new owners.

That’s a snapshot of my first 8 months of 2013. A great deal of love for my profession, patience, negotiating, psychological counseling, marriage counseling, countless hours of paperwork  and much more goes into each deal.

Happy September!

 

 

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