Forty-nine percent of those who don’t own their homes say they expect to purchase a home within the next five years. Ten percent say they plan to buy within the next year, according to a recent survey by Gallup of more than 1,500 adults. An additional 20 percent of non-homeowners say they plan to become homeowners within 10 years.

That leaves only 28 percent who say they have no plans to buy a home, according to the Gallup poll.

The percentage of non-homeowners who are looking to buy has risen over the past year. Gallup’s survey from April 2016 showed 38 percent of non-homeowners did not intend to buy in the foreseeable future, and 41 percent said they would buy within five years.

The most willing buyers tend to be millennials and Generation X members. Fifty-two percent of respondents age 18 to 34 say they plan to buy within five years; that number is 58 percent for those age 35 to 54. Only 30 percent of non-homeowners over the age of 55 say they plan to buy within that time period.

The persistent constraints on housing supply, however, pose a big problem for those looking to buy. Home shoppers are facing a limited selection of homes for sale. And as more owners stay put, inventories are being constrained even more. Sixty-four percent of U.S. adults surveyed by Gallup say they do not think they’ll sell their home in the foreseeable future. Twenty percent of survey respondents say they expect to sell within the next five years, 13 percent plan to sell within the next 10 years, and just 4 percent say they plan to sell next year.

“If real estate demand continues to outpace real estate supply, home prices will continue to rise and could rise beyond what most Americans can afford,” says Jeffrey M. Jones, who reported the Gallup poll findings. “To the extent that happens, many would-be homeowners may not be able to achieve their goal of owning a home.”

Source: “Gallup Poll Shows High Hopes for Homeownership,” Mortgage News Daily (May 9, 2017)

Mortgage volume is starting to rise again, and home buyers are fueling the increase.

Total mortgage application volume, including for refinancings and home purchases, rose 2.4 percent last week on a seasonally adjusted basis, the Mortgage Bankers Association reported Wednesday.

Home buyers are seemingly undeterred by higher home prices and the limited number of homes for sale. Mortgage applications to buy a home increased 2 percent last week and are now 6 percent higher than a year ago.

The total volume is still nearly 14 percent below a year ago, mostly due to a drop in refinancing volume. Last week, mortgage applications to refinance increased 3 percent, but remain 32 percent below a year ago. Interest rates are higher now than they were last year, which provides less incentive for homeowners to refinance.

“Continuing strength in the job market and improving consumer confidence drove overall purchase applications to increase last week,” says MBA economist Joel Kan. “The index for purchase applications reached its highest level since the beginning of October 2015, which was the week prior to the implementation of the federal government’s ‘Know Before You Owe’ rule.”

At that time, the public feared new mortgage documentation and processes would cause delays in the process, so buyers rushed to lock in their applications.

The average 30-year fixed-rate mortgage rate was 4.23 percent last week, unchanged from the previous week, the MBA reports.

Source: “Mortgage Applications Rise 2% as More Buyers Hit the Spring Market,” CNBC (May 10, 2017)

A home’s landscape provides curb appeal and, if designed smartly, it can also offer wellness and environmental benefits. When your clients undertake a new landscaping project, it’s important that they keep the local ecosystem and environmental considerations in mind.

Since some areas of the country are still experiencing drought conditions, the Outdoor Power Equipment Institute (OPEI) recently created an infographic that shares what your clients living in these areas need to know before designing their landscaping project.

Source: The Outdoor Power Equipment Institute (OPEI)

 

In competitive housing markets across the country, making an offer that sticks has become increasingly difficult. Ensure your client doesn’t make the process even tougher by succumbing to one of these common mistakes.

Delaying

“Time kills deals,” says Andrew Sandholm of BOND New York Properties in New York. “Dragging your feet means you could wind up paying more in a bidding war situation or missing out on the property altogether.” Buyers need to be ready with their paperwork, such as bank statements, a preapproval letter, and documents supporting proof of funds, from the day they begin house-hunting mode. That way they can pounce quickly with an offer when they do find a home they like.

Making an offer for their preapproved amount

Smart buyers are getting preapproved to show a seller they’re financially able to purchase a home. However, Chuck Silverston, principal at Unlimited Sotheby’s International Realty in Brookline, Mass., warns buyers against using that document to come up with an offer amount.

“Many buyers come in with a preapproval for the exact offer price, but when you’re competing against other offers, including cash offers, you want to show financial strength,” Silverston says. “An exact preapproval could make a listing agent nervous because not only does the buyer not have any wiggle room to negotiate, but they might no longer qualify if interest rates rise.”

Submitting a lowball offer

Lowballing a seller often backfires, particularly in a seller’s market. “A lowball offer that isn’t backed up with math or comparable sales data is disrespectful and could turn off the seller and possibly mean you will miss out on the property completely,” Sandholm says.

Waiving inspection contingencies

“I don’t care whether it’s new construction or even your mom’s house you’re buying from her – get it inspected,” urges Joshua Jarvis of Jarvis Team Realty in Duluth, Ga. Further, if you waive the inspection contingency in your offer, you may lose the earnest money if you later back out of the deal.

Not presenting yourself well enough

In a seller’s market, buyers need to take steps to make sure they look good in the eyes of the seller. “In today’s highly competitive environment, the listing agent is trying to determine which buyer will be the easiest to deal with,” Silverston says. Buyers may want to avoid pointing out every defect, making nitpicky queries, or questioning the seller’s tastes.

“Basically buyers who act less than enthusiastic will see themselves at a competitive disadvantage when sellers are comparing multiple offers,” he says.

Source: “In It to Win It: Land Your Dream Home By Avoiding These 7 Mistakes on Your Offer,” realtor.com® (May 10, 2017)

 

The student housing market is hot. Sales of this market segment are outperforming the rest of the commercial sector in the first quarter. In fact, if investors continue to buy and sell student housing at the current rate, they’re on track to match the record acquisition volume of 2016.

Investors purchased and sold $1.1 billion in student housing properties in the first quarter of 2017, according to CBRE, a real estate services firm.

For the past three years, student housing transaction volume has set records, says David Borsos, vice president of capital markets with the National Multifamily Housing Council. In 2014, student housing sales totaled $3.5 billion; they were $6 billion in 2015 and $10 billion in 2016.

But economists believe student housing sales could be much higher if it weren’t for a shortage of supply, which they say will likely keep the number of student housing properties sold close to last year’s pace.

“Interest in student housing has been growing steadily, as more investors look toward less traditional asset classes within commercial real estate,” says Ethan Vaisman, a real estate economist with CoStar, a real estate research firm. “Much more institutional capital has entered the student housing space as of late.”

Source: “Student Housing Sales Outperform the Rest of the Market,” National Real Estate Investor (May 8, 2017)

Forty-eight percent of homes sold in March were on the market for less than a month, according to housing data from the National Association of REALTORS®. The average for all sold properties, though, was a little higher, at 34 days. Still, that’s down significantly from 47 days a year ago, according to NAR. Nondistressed homes spent a median of 32 days on the market, which is the shortest length of time since NAR began tracking such data in May 2011.

Realtor.com® reveals that the following metro areas had listings on the market the shortest amount of time in March:

  • San Jose-Sunnyvale-Santa Clara, Calif.: 24 days
  • San Francisco-Oakland-Howard-Hayward, Calif.: 25 days
  • Seattle-Tacoma-Bellevue, Wash.: 28 days
  • Denver-Aurora-Lakewood, Colo.: 28 days
  • Vallejo-Fairfield, Calif.: 31 days

With strong buyer demand supporting shorter times on market, home prices are rising as well. The median existing-home price for all housing types was $236,400 in March, up 6.8 percent from a year ago. “Last month’s swift price gains and the remarkably short time a home was on the market are directly the result of the homebuilding industry’s struggle to meet the dire need for more new homes,” says NAR chief economist Lawrence Yun. “A growing pool of all types of buyers is competing for the lackluster amount of existing homes on the market. Until we see significant and sustained multi-month increases in housing starts, prices will continue to far outpace incomes and put pressure on those trying to buy.”

Source: National Association of REALTORS®

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The average time to close on all home loan types dropped to 43 days in March—the quickest pace since February 2015, according to Ellie Mae’s Origination Insight Report. A year ago, the average closing time was 46 days. Broken out, loans to purchase a home took 43 days to close, and refinance loans took 43 days in March, down from 45 and 47 days, respectively, in February.

The share of purchase loans last month rose to 63 percent of total originations, up from 57 percent in February, according to Ellie Mae’s report. That marks their highest share since July 2016. “The purchase market continued to heat up in March,” says Ellie Mae president and CEO Jonathan Corr. He also attributed the drop in closing times to Ellie Mae lenders who are automating more mortgage processes “to improve efficiency, quality, and compliance.”

More borrowers are opting for adjustable-rate mortgages as well, according to Ellie Mae’s report. ARMs increased from 5.3 percent to 5.6 percent in March, which is the highest percentage in three years.

Source: “Lenders Speed Up Loan Processing: Ellie Mae,” Mortgage News Daily (April 21, 2017)

For some buyers, the bathroom is a deal breaker. So if your listing includes these fading bathroom trends, you might have a harder time selling it. Realtor.com® notes some fads you may want to suggest your sellers change before putting their home on the market.

All-white bathrooms: They’re tough to keep clean, so this trend is definitely reaching its end. “White tile and flooring can stain very easily, and any little mark glares at you from across the room, tainting the crisp, clean concept of an all-white look,” says Tonya Bruin, CEO of Canada-based To Do-Done Handyman Services. “I have so many homeowners coming to me now to ask for these white baths to be torn out and replaced with a more varied color design.” To offset an all-white look without a complete overhaul, paint one wall a different color or add colored towels and a bath mat, Bruin suggests.

Too many funky colors: However, you don’t want to be too bold with your color scheme. Mustard, salmon, and avocado, for example, aren’t the most desirable colors in a bathroom. “Colors like these tend to look tacky and make your bathroom feel like it’s stuck in the 1980s,” says Scott Allis with Miracle Method, a bath and kitchen refinishing company. Go for a more muted palette for your listing, such as a mix of three colors in a 70/20/10 distribution. “Use the most neutral color for 70 percent of the walls, floor, and tile, a rich contrasting color for 20 percent of the look, and then an accent shade for the last 10 percent,” says Bee Heinemann, an interior design expert at Vant Wall Panels.

A big bathtub: Design magazines may celebrate the luxurious standalone bathtub in the center of a bathroom, but it doesn’t always work in reality. “This elaborate, oversized fixture is far from practical and actually has low resale value,” Heinemann says. Bathtubs are used less often than showers, and if there’s at least one bathtub in the home, there’s no need to spotlight one in another bathroom. For bathroom remodels, designers recommend investing in a quality water-saving shower.

Subway tile and nickel finishes: Subway tile and cool finishes such as nickel and chrome are on their way out, designers say. Instead, “large format tile is a good way to go, as are mini mosaics and geometric tiles,” says Nicole Rojas, a designer with Tellus Design in Southern California. Also, brushed gold and even black finishes are gaining popularity. “The silhouette is still clean and streamlined,” adds Bea Pila, author of Sacred Spaces for Inspired Living. “But these newer tones add an element of modernity and sophistication.”

Source: “7 Bathroom Design Trends Home Buyers Want to Flush Away,” realtor.com® (April 19, 2017)

Salt Lake City was named the top city for millennials this year, according to a new ranking released by realtor.com®.

In the U.S., the average share of the 25–34-year-old population is 13 percent. In Salt Lake City, millennials comprise 15.8 percent of its total population. Salt Lake City also has the lowest unemployment of all the markets on the top 10 list, at 2.9 percent (below the national unemployment rate of 4.7 percent).

Some surprising cities joined the millennial hot-spot list this year, notably Buffalo, N.Y., and Albany, N.Y. Buffalo ranked number one with the most affordable home prices relative to salary at 22.7 percent, realtor.com®’s analysis showed. Albany boasts high affordability too; homeowners there use 27.3 percent of their income to purchase a home. On the other hand, Salt Lake City buyers use 30 percent of their income on their home.

“High job growth in markets such as Orlando, Seattle, and Miami, and the power of affordability in places like Albany and Buffalo are making these markets magnets for millennials.” says Javier Vivas, manager of economic research for realtor.com®. “But what really stands out is that all these markets already have large numbers of millennials, which translates into strong populations of millennial home buyers.”

Realtor.com® analyzed the 60 largest U.S. markets to compare the share of millennial page views in each area to the national average. The following are the cities ranked in order (listed as well with the percentage of each city’s population that are millennials).

  1. Salt Lake City: 15.8%
  2. Miami: 13.1%
  3. Orlando, Fla.: 14.6%
  4. Seattle: 15.2%
  5. Houston: 14.5%
  6. Los Angeles: 15%
  7. Buffalo, N.Y.: 13.4%
  8. Albany, N.Y.: 12.7%
  9. San Francisco: 15%
  10. San Jose, Calif.: 14.2%

Source: realtor.com®

Baby boomers are expected to sell their homes in large numbers over the next decade.

Arthur C. Nelson, a University of Arizona professor, predicts the “great senior sell-off” will occur in the mid to late 2020s. It’s a few years later than what Nelson had originally predicted in 2013 (he originally said by 2020). He says baby boomers are living in their homes longer, holding off on selling in the hopes of netting an even higher price later on.

Indeed, homeowners are holding onto their properties significantly longer than they used to—now about nine to 10 years. With ample housing shortages across the country, they are having a tough time finding a replacement home—but they may also be waiting to recover even more in value from what they may have lost in the Great Recession, Nelson notes.

“It’s not that boomers are going to ‘age in place,’” says Nelson. “They’re going to be stuck in place, and they’re going to make the best of it.” He says that those who can afford it will opt to remodel.

But Nelson says it may not be easy for boomers to sell their homes. Millennials—who are largely expected to be the buyers of boomers’ homes—have differing tastes, with more opting to live in central cities or in the oldest, closest suburbs, or they’re showing preferences for smaller homes and not sprawling McMansions in the exurbs. Nelson says the surrounding cities likely will be the toughest for boomers to sell their homes in.

“The boomers in the exurbs are going to be in a real pickle,” says Nelson. “Even in a dynamic market like Washington, D.C., or other booming cities, the market for those homes is going to be soft.”

Exurbs and rural areas may see the biggest fall-out from the boomer/millennial house preference mismatch, says Jennifer Molinsky, a senior research associate at Harvard’s Joint Center for Housing Studies.

Nevertheless, “the baby boomers are a large generation,” Molinsky says. “Nothing they do is going to happen en masse.” She also believes that boomers will demand a variety of housing options, which will help spread out sales over the time. Therefore, she doesn’t foresee a sudden glut of housing appearing.

Source: “Who Will Buy Baby Boomers’ Homes?” The Atlantic CityLab (April 14, 2017)