- ELIZABETH CHASE, Realtor, ABR HARBOURTOWNE REAL ESTATE Contact: email@example.com "Helping You Unlock the Home of Your Dreams"
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Wednesday |Daily Real Estate News | Monday, April 24, 2017
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).
- Salt Lake City: 15.8%
- Miami: 13.1%
- Orlando, Fla.: 14.6%
- Seattle: 15.2%
- Houston: 14.5%
- Los Angeles: 15%
- Buffalo, N.Y.: 13.4%
- Albany, N.Y.: 12.7%
- San Francisco: 15%
- San Jose, Calif.: 14.2%
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)
Developers are pouring billions of dollars into giving facelifts to some transit hubs across the country. These improvements are not for expanding traveler capacity but to make these hubs more eye-catching and give commuters a reason to hang out and not just pass through. They’re mixing in dining, retail, event offerings, and even the chance to live there.
Developers believe that traditional rail and light rail station segments can spur development in an area while also “converting the old-time train station into a destination itself,” ConstructionDive reports.
Redeveloping and changing the perception of transit hubs will draw people in to shop and socialize, even when they’re not taking a trip, says real estate attorney B.A. Spignardo of Shapiro Lifschitz & Schram in Washington, D.C.
Major transit hubs like Union Station in Washington, D.C., Pennsylvania Station in New York, and 30th Street Station in Philadelphia are devoting billions of dollars to make over their transit hubs into bigger destinations. In D.C.’s Union Station, Amtrak announced last year that it plans to build a $50 million concourse, which will also include a 3-million-square-foot mixed-use complex called Burnham Place that will provide residential, retail, and commercial space above the station.
Last year, Amtrak also proposed a $6.5 billion upgrade to Philadelphia’s 30th Street Station, which would include the creation of a “dense urban neighborhood.” Also, a $1.6 billion, 255-square-foot renovation is slated of the James Farley Post Office to turn it into a transit hall for Pennsylvania Station in New York. Developers are looking to preserve the historical look of the existing structure while also adding in modern features for commuters. The Moynihan Hall is to be completed by 2020 and will feature 112,000 square feet of retail and 588,000 square feet of office space.
Source: “Full Steam Ahead: Why Transit Hub Development Is Seeing a Resurgence,” ConstructionDive (Feb. 23, 2017)
More borrowers are turning to shorter-term adjustable-rate mortgages as interest rates rise, but that may be a riskier move than your clients realize. While these mortgages offer lower interest rates, the rates reset after a certain preset time. Still, a five-year hybrid adjustable-rate mortgage averaged a 3.28 percent rate last week compared to 4.30 for the 30-year fixed-rate mortgage, according to Freddie Mac’s weekly mortgage market survey.
The share of ARMs in total mortgage application volume has doubled to 9 percent since November 2016. This marks the highest level of ARM applications since October 2014. “Home buyers in a strong housing market are looking for ways to extend their purchasing power, and ARMs are one way to do that,” says Mike Fratantoni, chief economist for the Mortgage Bankers Association. “While the ARM share got as high as 35 percent pre-crisis, it is really unlikely it will get nearly as high now, given [new] regulations, which effectively prohibit many types of ARMs that were prevalent then.”
Total mortgage application volume—including for home purchases and refinances—dropped 2.7 percent compared to the previous week, the MBA reports. Applications are now nearly 12 percent lower than a year ago. Broken out, refinance applications dropped 3 percent last week, while applications for home purchases fell 2 percent. Applications for home purchases, however, remain up 5 percent compared to a year ago, the MBA reports.
Source: “Mortgage Applications Fall 2.7%, as Borrowers Turn to Riskier Loans,” CNBC (March 22, 2017)
Your sellers may have “nose blindness.” The term refers to the process of adapting to the smells around you and becoming so desensitized to them that you learn to ignore them or become less sensitive to them, says Dr. Richard Doty, director of the Smell and Taste Center at the University of Pennsylvania.
But, of course, buyers will probably notice the stench as soon as they walk through the door. HouseLogic flags the following scents as common offenders in a home and how to get rid of them.
If the sellers have a pet, they will likely need to neutralize the trail of odors it leaves behind. Ask your clients to bathe and groom the pet regularly. Sprinkle some baking soda on the carpet and vacuum frequently. Remove pet hair, paying special attention to tight spaces where it most often accumulates, such as the border between the carpet and the wall or on the edges of steps.
Basement mustiness caused by mildew and mold is a common culprit in nose blindness, HouseLogic notes. Inspect the basement carefully, including every cardboard box, to try to find evidence of any gray or white splotches or mold. Take precaution when removing mold and mildew if using bleach. A trick to deodorize rooms: Set out a bowl of vinegar, cat litter, baking soda, or even an onion (the onion smell goes away in a few hours), HouseLogic suggests. Also, consider running a dehumidifier to improve the air circulation and ensure the smells don’t return.
Yes, mattresses can stink too and can make the entire room smell. Sprinkle baking soda on them and let it remain there for an hour or more. Then, vacuum up the baking soda. You also might try adding a few drops of essential oil (like lavender) to the baking soda.
Source: “You Can’t Detect These 4 Odors, But Your Guests Can,” HouseLogic (March 2017)
Parents are having a tough time saving money. Fifty-one percent of parents recently surveyed say their mortgage was having a “major impact” on their ability to save, according to Bankrate’s Money Pulse survey for February.
“It’s probably not as much about the mortgage as it is that stage of life,” says Jonathan Smoke, realtor.com®’s chief economist.
Homeowners with children are likely to be in their early 30s to mid 50s and have many financial goals. They’re not only tending to the needs of their children but also saving for college and retirement, maintaining a home, and paying the mortgage.
Jim Sahnger with Schaffer Mortgage in Palm Beach Gardens, Fla., says parents may need to change how they think of mortgage payments: It’s not just another form of paying off debt but it’s a form of savings.
“If you look at it from the aspect of you’re building equity, that’s obviously important,” Sahnger says. Further, homeownership can help shield you from rental cost increases, and there are tax benefits to owning, he adds.
Two in three parents who don’t own a home say that financial issues such as poor credit or being unable to afford the down payment are preventing them from buying.
The Bankrate survey also found that 15 percent of Americans say they’re very or somewhat likely to purchase a home this year, with older millennials (ages 27 to 36) and Generation Xers (ages 37-52) showing the greatest likelihood of buying.
Source: “Parents Have Trouble Saving Because of Mortgage Payments, Bankrate Survey Finds,” Bankrate.com (February 2017)
About 32.7 million Americans—or 10.2 percent of the U.S. population—claimed Irish ancestry in 2015, according to the U.S. Census Bureau. In honor of St. Patrick’s Day, do you know which U.S. city is the most Irish of all? Realtor.com® researchers scoured the data in the 300 largest U.S. cities to find the percentage of Irish-Americans living there.
New England boasts the most Irish descendants in the nation, with Manchester, N.H., leading the pack. Nearly one in five residents living in Manchester claim Irish heritage. Realtor.com® flagged the following cities as the Irish epicenters of the U.S. (based on the percentage of the population claiming an Irish ancestry):
- Manchester, N.H.: 19.4%
- Lowell, Mass.: 17%
- Pittsburgh, Pa.: 16.2%
- Naperville, Ill.: 15.9%
- Cedar Rapids, Iowa: 15.4%
- Worcester, Mass.: 15%
- Centennial/Highlands Ranch, Colo.: 14.8%
Source: “Celebrating Saint Patrick’s Day? Here Are the 10 Most Irish Cities in America,” realtor.com® (March 16, 2017)
More high-end home sellers across the country are being forced to offer discounts as the luxury real estate market shows signs of softening, The Wall Street Journal reports.
“Buyers are very price sensitive,” says Donna Olshan, a real estate professional based in Manhattan. “If it’s not priced right it’s going to sit until the cows come home.”
Real estate pros and sellers in the luxury market are having to adjust their expectations. In the third quarter of 2016, the median asking price for homes in the top 5 percent of listings reached $1.2 million, an 18 percent increase from a year ago, according to realtor.com® market data. The actual sales prices in that luxury segment, however, only rose by 3 percent during that period.
Luxury listings are lingering on the market longer than the overall market too. Luxury listings are taking a median of 131 days to sell, about 4 percent slower than a year ago, realtor.com®’s data shows.
“The smart sellers today are pricing for now, not 2014,” says Jeff Adler, of New York’s Douglas Elliman. “An $88 million apartment went into contract three years ago and just sold. Would they get $88 million today? Probably not.”
The strength of the U.S. dollar has caused some overseas buyers to pause. Also, oversupply may be another problem facing the luxury market. For example, a surge in luxury condos and speculative homes over the past five years in markets like New York and Miami has sparked a slowdown. A luxury apartment in Manhattan was listed in April for $120 million and is now being offered at $96 million, a $24 million discount. A luxury condo in midtown is seeing developer discounts now being offered at 10 percent to 15 percent on lower-level units priced between $4 million and $12 million.
“We’ve priced to account for today’s market,” says developer Gary Barnett. And, “the market wants to see some discounting.”
Source: “Luxury Home Sellers Slash Millions off Asking Prices,” The Wall Street Journal (Feb. 23, 2017) [Log-in required.]