Employment numbers are on the rise across most of the country, but job growth is strongest in the West and South. Utah posted the highest growth, at 3.3 percent. Thirty-one states and the District of Columbia saw annualized growth between 0.2 percent and 1.4 percent year over year in March, according to the Bureau of Labor Statistics.

Idaho and Nevada have the nation’s fastest-growing populations, which increased at rates of 2.2 percent and 2 percent, respectively, between July 1, 2016, and July 1, 2017. The next highest: Texas, Florida, California, Washington, and North Carolina.

“Relatively stronger growth in employment and population across the West and the South may be contributing to the faster single-family construction growth over the past year, and faster home sales in these regions of the country,” according to the National Association of Home Builders’ Eye on Housing blog.

Source: “Growth Strongest Across States in the West and the South,” National Association of Home Builders’ Eye on Housing blog (April 27, 2018)

house flipHome improvement reality television shows have long misguided consumers about the renovation process. You likely have some clients who are obsessed with channels such as HGTV, and they may have developed some common misunderstandings about the real time and effort it takes to undergo remodeling a home. Fox News recently highlighted several myths these shows tend to generate.

The answer to creating more space is always to knock down walls. Designers on television often make major changes to floor plans to increase the dramatic effect. But the truth is large undertakings such as removing walls aren’t always necessary—or wise. “When someone buys a 1990s-era home—which [usually were] built quickly and on the cheap—we can’t rip out walls,” Teris Pantazes, a Baltimore contractor, told Fox News. “It’s important for a home to have good bones. I have been in this business for a long time, but I’m not an engineer. I still have customers question me, and I see them waste tons of money to verify what I already told them.”

A well-done remodeling project can be completed in a day. Viewers may forget that fitting an entire narrative into a 30- or 60-minute show requires editing out some—or most—of the actual renovation process. Your clients may falsely believe real-life work can be done as quickly as it appears on TV. “The number one problem with real estate television shows is that they significantly shorten the amount of time that almost anything takes for the purpose of advancing the narrative,” says Kevin Deselms, a sales associate with RE/MAX Alliance in Golden, Colo. That can mislead viewers to expect instant results.

The permit process is a simple, insignificant part of the equation. Remodeling, especially when it involves additions to the home, often requires securing building permits from the local government—which can significantly slow the timeline of a project. “HGTV shows sometimes discuss the need for permits, but they don’t often show how this process can slow the entire project,” says Jeffrey A. Hensel of North Coast Financial Inc. Waiting for permit approval can increase time and budget by 50 percent, he says.

For higher ROI, go bigger with renovations. “HGTV shows like to feature flips with full kitchen and bath remodels because the before-and-after shots make for more compelling viewing,” Bobby Montagne, CEO of Walnut Street Finance, told Fox News. “In fact, aspiring fix-and-flippers are often better off doing small-scale renovations that just need carpet, paint, and some freshening up—especially for their first projects.”

Cynthia Shafer, fourth from left, was presented with a surprise $2,000 check from the Wells Fargo Housing Foundation for her longstanding volunteer work to help foster kids and children who have been abused and neglected. The money will go toward her nonprofit, Bedz for Kidz.

Nearly 16 years after Cynthia Shafer was named one of REALTOR® Magazine’s 2002 Good Neighbor Award winners, her life-changing volunteer work with foster kids and neglected children in Florida continues. And now she’s receiving even more accolades—and funding—for her cause.

The Wells Fargo Housing Foundation surprised Shafer, AHWD, SFR, a sales associate at Lahaina Realty in Fort Myers, Fla., with a $2,000 check, five boxes of donated books, and 150 Wells Fargo “plush ponies” for her nonprofit, Bedz for Kidz. The organization, which Shafer founded in 2001, raises funds to buy and distribute beds to foster families so children in need of a caring and safe home have a comfortable place to sleep. Some foster families are asked to take in three or more foster siblings so that they won’t be separated, but often the home will have only one extra bed. Florida does not allow the foster siblings to stay in the home unless there is a bed to accommodate each. Shafer’s organization steps in to help provide families with the extra beds needed to make sure the kids remain together, which also keeps the foster system running smoothly.

Shafer’s unexpected honor sprung from a chance meeting with Martin Sundquist, executive director of the Wells Fargo Housing Foundation, during the REALTORS® Conference & Expo in Chicago last November. Shafer approached Sundquist at one of the convention booths, admiring the plush ponies he had brought with him as part of the company’s marketing campaign. The ponies serve as Wells Fargo’s unofficial mascots, representing the steeds the company employed during the horse-and-buggy days of the 1800s.

It was then that Shafer began to tell Sundquist of her charity work. Since 2002, Shafer and her husband John have driven 120,000 miles throughout the five-county region of southwest Florida, delivering more than 2,300 beds to foster homes. Every week, Shafer divides her time between her real estate business, volunteering as a guardian ad litem to kids in the Florida court system, and dropping off beds—along with a book, clean sheets, and a stuffed animal—to foster children.

Her moving story sparked an idea for Sundquist. “I got Cynthia’s information and had the idea to surprise her and deliver plush ponies to her for use in her nonprofit,” Sundquist says. “The ponies are pretty exclusive to get. We’ve never done anything like this before.”

On the morning of Feb. 6, Shafer thought she was meeting Sundquist at the South Florida REALTORS® Association building in Fort Myers to further discuss the work of her nonprofit, but instead she walked unknowingly into a touching ceremony in her honor. Wells Fargo also took time to honor Shafer’s 94-year-old father-in-law for his military service. Shafer says the multiple layers of the event were somewhat overwhelming. “It just snowballed: Here’s the check, here are the horses, here are the books. It just built to an honor that filled my heart; it pounded a little harder and grew a little bigger,” she says.

Some of the foster children she’s helped over the years have reconnected with her as adults, Shafer says. They’ve thanked her for her generosity, and a few have even invited her to meet their families. That’s what helps her stay motivated. “I deliver the beds, and I see the kids jump for joy,” Shafer recalls. “I met a 4-and-a-half-year-old little girl who said to me, ‘You mean I don’t have to sleep in a bathtub anymore?’”

Sundquist says the opportunity to double down on the good work REALTORS® do in their communities every day is part of the reason Wells Fargo is a sponsor of the Good Neighbor Awards. “When you think about the selfless leadership of REALTORS® across the country, that’s why the Good Neighbor program has been such a great program to support,” Sundquist says. “They’re truly heroes. They make such a meaningful difference in what they do.”

—Lauren Tussey, REALTOR® Magazine

Wednesday |


Monthly mortgage payments have risen an average of nearly 13 percent nationwide over the last year—or an extra $168—as buyers grapple with both higher home prices and increasing mortgage rates, according to a realtor.com® analysis. Luxury buyers are feeling the worst sticker shock, paying double the rate. In the top 10 percent of the market, owners are now paying an average $241 more per month.

Mortgage interest rates are about a half of a percentage point higher than they were at the beginning of the year, and the Federal Reserve has signaled there are more hikes to come. “There is an urgency in the market,” says Pete Boomer, executive vice president at PNC Bank in Downers Grove, Ill.

Different generations of home buyers may have varying tolerance levels for mortgage rate fluctuations. Millennials are pursuing homeownership at a time when interest rates are at historic lows, averaging in the 4 percent range, while older buyers remember when they were in the double digits. So for millennials, “even a minor upswing [in interest rates] may seem significant,” The Wall Street Journal reports.

“It’s really a psychological adjustment,” Guy Cecala, publisher of Insider Mortgage Finance, told the Journal. “If you grew up with rates between 3.5 percent and 4 percent, it’s a big shock to see 4.5 percent or 5 percent.” Mortgage rates are forecast to continue increasing through the end of the year. Therefore, more buyers are reconsidering adjustable-rate mortgages, which often come with lower interest rates for a set period before increasing.

Source: “Rising Interest Rates Squeeze Homeowners’ Budgets,” The Wall Street Journal (April 4, 2018) 

Pending home sales picked up the pace in March, but ongoing issues related to low inventory kept contract activity below year-ago levels, the National Association of REALTORS® reported Monday. NAR’s Pending Home Sales Index, a forward-looking indicator based on contract signings, inched up 0.4 percent to a reading of 107.6 in March. Despite the uptick, overall activity was down on an annualized basis for the third consecutive month.

“Healthy economic conditions are creating considerable demand for purchasing a home, but not all buyers are able to sign contracts because of the lack of choices in inventory,” says NAR Chief Economist Lawrence Yun. “Steady price growth and the swift pace with which listings are coming off the market are proof that more supply is needed to fully satisfy demand. What continues to hold back sales is the fact that prospective buyers are increasingly having difficulty finding an affordable home to buy.”

Regionally, pending home sales dropped by the largest amount in the Northeast, falling 5.6 percent month over month in March and 8.1 percent year over year. Yun says multiple winter storms and colder than usual weather contributed to the decrease. Meanwhile, contract signings rose by 2.4 percent in the Midwest but are 6 percent below a year ago, and they were up by 2.5 percent in the South but are just 0.3 percent higher than a year ago. Pending home sales fell in the West by 1.1 percent month over month and are now 2.2 percent below a year ago.

“Much of the country is enjoying a thriving job market, but buying a home is becoming more expensive,” Yun says. “That is why it is an absolute necessity for there to be a large increase in new and existing homes available for sale in the coming months to moderate home price growth. Otherwise, sales will remain stuck in this holding pattern, and a growing share of would-be buyers—especially first-time buyers—will be left on the sidelines.”

Source: National Association of REALTORS®

The Consumer Financial Protection Bureau says it has fixed what’s become known as an information “black hole” in the Know Before You Owe mortgage rules, and the agency is attempting to provide greater clarity to borrowers when it comes to disclosing increases in closing costs. Under a new amendment to the mortgage rules, the CFPB clarifies when lenders are allowed to pass increased closing costs on to consumers and makes the disclosure of such increases clearer on the Closing Disclosure form.

The mortgage rules, also known as TILA-RESPA Integrated Disclosure, or TRID, first took effect Oct. 3, 2015, and ushered in new Loan Estimate and Closing Disclosure forms that lenders must supply to consumers. But problems arose with closing timelines when a borrower’s mortgage costs increased after the lender already provided a Closing Disclosure. Such circumstances forced lenders to provide a new disclosure to the consumer, complicating the ability to meet closing dates.

The original rules did not contain provisions for how lenders should issue revised disclosures, creating a situation where banks were unable to provide either a revised Loan Estimate or a corrected Closing Disclosure. The amendment now clarifies that lenders will be allowed to reissue a Closing Disclosure as long as it has issued an initial disclosure to the borrower within four days of closing.

Leading up to the revision of the rules, the CFPB collected public comments, for which the National Association of REALTORS® provided feedback. In its letter, NAR advocated for adoption of the proposed rule and explained the advantages of additional lender flexibility to facilitate improved communication and an overall more transparent and efficient process for the consumer.

According to the CFPB’s proposed rule, “The Bureau proposed to allow creditors to reset tolerances using a Closing Disclosure without regard to the four-business day limit. Under the proposal, as under the current rule, to reset tolerances with a Closing Disclosure, creditors would have been required to provide the Closing Disclosure to the consumer within three business days of receiving information sufficient to establish that a reason for revision applies. Further, as under the current rule, creditors would have been allowed to reset tolerances only under the limited circumstances described in § 1026.19(e)(3)(iv).”

The final rule will take affect within 30 days after it is published in the Federal Register.

Source: “CFPB Fixes TRID ‘Black Hole,’ Amends Know Before You Owe,” HousingWire (April 26, 2018) and “CFPB Finalizes Revisions to TRID Timing Rules,” Mortgage News Daily (April 27, 2018)

Millennials purchased 36 percent of homes last year, which is the highest share of any age group, according to the National Association of REALTORS®. But faced with one of the tightest, most competitive housing markets in years, they’re being pushed out of some of the the nation’s largest and priciest cities.

Therefore, young home shoppers are relocating to more affordable parts of the country. Realtor.com® identified cities with the highest percentage of mortgages issued to millennials, a generation defined as those born between 1981 and 1996. The following markets had the highest share of millennial mortgages:

1. Appleton, Wis.

  • Median home list price: $150,000
  • Percentage of mortgages to millennials: 57%

2. Des Moines, Iowa

  • Median home list price: $294,000
  • Percentage of mortgages to millennials: 56.9%

3. Utica, N.Y.

  • Median home list price: $139,500
  • Percentage of mortgages to millennials: 56.8%

4. Provo, Utah

  • Median home list price: $376,700
  • Percentage of mortgages to millennials: 56.5%

5. Duluth, Minn.

  • Median home list price: $175,000
  • Percentage of mortgages to millennials: 56.3%

6. Lafayette, La.

  • Median home list price: $210,100
  • Percentage of mortgages to millennials: 56.3%

7. Lancaster, Pa.

  • Median home list price: $275,000
  • Percentage of mortgages to millennials: 56%

Source: “Forget SF, Goodbye NYC! You Won’t Believe the New Millennial Magnets for Home Buyers,” realtor.com® (April 30, 2018)

Median prices for luxury homes in the Santa Monica, Calif., ZIP code of 90401 have surged 60.7 percent over the last year, making it the hottest high-end ZIP code in the country, according to a new analysis by realtor.com®. The site’s researchers culled housing data from April 2016 through March 2017 for more than 600 ZIP codes where median list prices are above $1 million. They compared that 12-month period to the previous year to identify the ZIP codes with the largest median price increases. (Note: Researchers limited their list to two ZIP codes per state for geographic diversity.) The hottest luxury ZIP codes are:

1. Santa Monica, Calif.: 90401

  • Median list price: $3,045,000
  • Percentage increase in median home prices: 60.7

2. West Newton, Mass.: 02465

  • Median list price: $2,219,000
  • Percentage increase in median home prices: 60.4

3. Palo Alto, Calif.: 94301

  • Median list price: $5,599,000
  • Percentage increase in median home prices: 59.1

4. Kattskill Bay, N.Y.: 12844

  • Median list price: $2,365,000
  • Percentage increase in median home prices: 42.7

5. Seattle: 98101

  • Median list price: $1,475,000
  • Percentage increase in median home prices: 42.1

6. Bellevue, Wash.: 98005

  • Median list price: $1,480,000
  • Percentage increase in median home prices: 41.5

7. New York: 10002

  • Median list price: $1,806,000
  • Percentage increase in median home prices: 39

Source: “Luxury Liftoff? The 10 Ritzy Regions Where Home Prices Are Soaring the Highest,” realtor.com® (April 9, 2018)

Be careful: You and your buyer may be under surveillance when touring a property. Some sellers are using surveillance cameras inside their home to record the sight and sound as prospective buyers walk through.

The increase in these home recordings—many from security systems that owners already have installed—are raising some concerns surrounding privacy in real estate transactions, MarketWatch reports.

Jill Comfort, a real estate pro in Phoenix, told MarketWatch she recalls recently walking through a home with her client and spotting several surveillance cameras that appeared to be “following us” and that made her and her client feel “awkward.”

“I can understand where some sellers are leery of strangers walking through their house, but that’s what happens when you put your house on the market,” Comfort says.

Andie DeFelice, a broker with Savannah-based Exclusive Buyer’s Realty Inc. and the president of the National Association of Exclusive Buyer Agents, said she was unaware she and her client had been watched by the seller last fall when they toured. That is, until after the deal settled and the client was meeting a neighbor who informed him, “I just want you to know the guy who sold the house knew he had a buyer the minute you walked through.” The neighbor was able to repeat the conversation between the client and broker when they had first toured the property.

“It’s one of those things where it is the person’s home, they have the right to do whatever—but you feel a little violated,” DeFelice says.

Sellers may be “desperate” for feedback and turn to recorders to get it, says Ilyce Glink, author of 100 Questions Every First-Time Home Buyer Should Ask.

Source: www.realtormag.com