Homeowners who earn a high income are showing a preference for the suburbs and even the far-out burbs over downtown living. A Census Bureau analysis of the 53 largest U.S. metros shows that only 3 percent of homeowners employed full-time who make more than $75,000 annually live downtown, while 11.4 percent live in inner-ring neighborhoods. But 14 percent live in the exurbs, and 71.5 percent are in the suburbs.

In 2015, a $75,000 salary represented the 77th percentile of incomes nationwide, according to Chapman University researcher Erika Nicole Orejola. She found that 16 of the 20 counties with the largest share of full-time employed residents who were earning more than $75,000 were suburban. The majority of residents were driving to work and living in low- to moderate-density communities. The remaining four counties in the top 20 fell on the other end of the spectrum and are considered some of the most urbanized parts of the country, such as New York and San Francisco.

Based on her research, the following counties have the most high-wage earners:

  1. New York County (Manhattan)
  2. Fairfax County, Va.
  3. San Francisco
  4. Santa Clara, Calif.
  5. Norfolk, Mass.
  6. Montgomery County, Md.
  7. Washington, D.C.
  8. Monmouth, N.J.
  9. San Mateo, Calif.
  10. Westchester, N.Y.

For households that earn incomes of more than $200,000 annually, the same urban counties ranked high: San Francisco (third), New York County (fifth), and Washington, D.C. (16th). But the remainder of the top 20 were mostly in suburban locales, led by Santa Clara, Calif., and Fairfax County, Va.

The biggest factors influencing where buyers settle are housing costs, jobs for a spouse, commute times, proximity to family, and quailty of K-12 schools, according to a survey by the Center for Demographics and Policy at Chapman University of more than 1,000 professionals ages 25 to 64 with household incomes greater than $80,000.

Source: Where America’s Highest Earners Live, Forbes.com (Oct. 3, 2017)

lender

The federal government is investigating a number of predatory lending schemes targeting thousands of veterans who have Veterans Administration mortgages. Officials say the scams aim to convince borrowers to repeatedly refinance, ultimately paying more on their loans. Some lenders also are being accused of using teaser interest rates, cash out windfalls, and lower monthly payments, using marketing materials that sometimes resemble Department of Defense information, the Chicago Tribune reports.

Veterans reportedly are being overwhelmed with misleading refinance offers sometimes refinancing properties multiple times in a year. We’re seeing borrowers refinance three times in less than six months, and their loan balances are going up, says Michael R. Bright, acting president of VA loan giant Ginnie Mae. The Department of Veterans Affairs has teamed with Ginnie Mae to create a task force to investigate such cases.

Ginnie Mae investigators have found that these refinancing offers often prompt homeowners to switch from a long-term fixed-rate mortgage to a riskier short-term adjustable-rate loan. The borrowers then find that the principal amount they owe to the lender has increased by thousands of dollars. In some cases, borrowers added $12,000 to their total loan amount in order to reduce their monthly payments by $165. Ginnie Mae economists say it would take more than six years just to break even on such a deal. VA home loans often have no down payment requirements.

The VA warned that lenders who make improper charges or fees that lead to foreclosure will face stiff penalties. The Consumer Financial Protection Bureau plans to fine and sue lenders who propagate these abuses.

Source: Government Cracks Down on Home Refinancing Scheme Targeting Veterans, Chicago Tribune (Sept. 26, 2017)

 

More new homes are coming equipped with front porches. Sixty-five percent of new single-family homes started in 2016 included a porch, according to a Census data analysis from the National Association of Home Builders. It’s only the second time since tracking began that new single-family homes with porches have moved back above 65 percent. For comparison, in 2005, 54 percent of new homes had porches.

Certain regions of the U.S. are showing higher preference for porches. For example, the East-South-Central region of the U.S. had the highest share of new homes started in 2016 with porches at 86 percent.

The Census data from the Survey of Construction report does not indicate much information about the look of the porches. However, the NAHB reports that the Annual Builder Practices Survey, conducted by Home Innovation Research Labs, shows that front porches on new homes tend to be more common than side porches. Also, most new home porches are open rather than screened.

The average size of a front porch on a new home is about 60 square feet, according to the report. The materials used often tend to be concrete and treated wood. However, some regions like the Mountain and Pacific areas of the U.S. tend to favor redwood over treated wood for their front porches.

Source:Share of New Homes With Porches Back Over 65 Percent, National Association of Home Builders Eye on Housing blog (Oct. 5, 2017)

 

hurricane

More single-family homes are in the pipeline, but the industry is skeptical about whether the increase will satisfy buyer demand. Single-family production increased 1.6 percent in August to a seasonally annual rate of 851,000, the Commerce Department reported Tuesday. Single-family production is now nearly 9 percent higher than a year ago. The uptick is welcome news to housing markets that are increasingly facing severe housing shortages, but the two recent hurricanes that struck the U.S. over the past few weeks could threaten progress.

The three-month average for single-family production has reached a post-recession high, but the months ahead may show volatility given that the building markets affected by hurricanes Harvey and Irma represent about 14 percent of national production, cautions Robert Dietz, the chief economist of the National Association of Home Builders.

Indeed, Lawrence Yun, the chief economist of the National Association of REALTORS, says a further temporary setback to housing starts is likely on the horizon due to the impact of hurricanes Harvey and Irma on Texas and Florida.

The shortage of labor in construction will further intensify as more workers concentrate on rebuilding rather than on new construction, Yun says. The nation’s housing shortage unfortunately looks to be with us well into the next year.

Despite the increase in single-family starts last month, the multifamily market underperformed in August. Multifamily starts plunged 6.5 percent in August to 329,000 units. The decrease in the multifamily sector brought overall nationwide housing starts down 0.8 percent for the month to a seasonally adjusted annual rate of 1.18 million units, the Commerce Department reported.

Across the country, combined single- and multifamily housing production rose by the highest amount in the Midwest, increasing 22 percent month-over-month. The West also saw an increase in combined starts by 4 percent. However, housing starts dropped by 7.9 percent in the South and by 8.7 percent in the Northeast.

By REALTOR Magazine Daily News

 

The exterior of the home counts big for creating first impressions. Indeed, 99 percent of real estate pros say that curb appeal is a critical factor in attracting a buyer, according to the National Association of REALTORS 2016 Remodeling Impact: Outdoor Features survey.

Here are a few things you can do to enhance the curb appeal to your listing:

1. Paint colorful flowers.

Adding colorful flowers, like yellows or pinks, to your landscaping can be the pop of color needed to attract buyers. Visit the local nursery or garden center to learn which varieties are the most hardy for where you live.

2. Freshen up the mailbox.

The mailbox counts too in adding curb appeal. Consider a new mailbox, or try to save the old one with a fresh coat of paint. Add new numbers to the box to spruce it up too.

3. Pressure wash.

Driveways can develop oil stains and a deck can show some wear and tear. To remove pesky stains, power wash the deck and driveway to get them clean.

4. Add lighting to walkways.

Beckon buyers to the front door by adding lighting to the path to the door. This will also create a clean border along your walkway. Select solar-powered LED outdoor lights, which don’t require any wiring, to brighten up the exterior pathways.

5. Revisit the front door.

Invest in a new door if the current one is looking too old and dingy. A fresh coat of paint may help improve an existing one, if a new door isn’t in the budget. Consider a new color, like red. Also, replace the hardware, like the doorbell and locks, to give the front door a fresh new look.

6. Repaint the shutters.

Painting the entire house may not be in the budget, but sellers can still make a big impact to the exterior by painting just the shutters. They might even want to consider changing up the color to boost their curb appeal.

View more curb appeal tips and photos at Cheatsheet.com.

Source: Foolproof Upgrades That Will Instantly Improve Your Home’s Curb Appeal, Cheatsheet.com (Sept. 26, 2017)

 

quickenMortgage applications dropped last week, slammed by back-to-back major hurricanes and higher interest rates. Total mortgage application volume, which includes for home purchases and refinances, dropped 9.7 percent week-over-week on a seasonally adjusted basis, the Mortgage Bankers Association reported Wednesday. Further, weekly applications were 21.5 percent lower than the same week a year ago.

Broken out, applications to buy a home dropped 11 percent during the week. Applications were still 1.9 percent higher than the same week a year ago, but the latest week’s total does mark the lowest annual growth rate since April, the MBA reports.

Refinance applications dropped 9 percent during the week and are 35 percent below a year ago.

The MBA reports that the 30-year fixed-rate mortgage averaged 4.04 percent, a slight uptick from 4.03 percent the week prior. Mortgage rates are at the highest level in a month.

“Applications decreased as Treasury yields rose 11 basis points over the week with news of higher than expected inflation and some market relief regarding the effect of the two major hurricanes in Texas and Florida,” says MBA economist Joel Kan. “Florida had a 22 percent decrease in overall mortgage application activity over the week. Texas rebounded from Harvey’s impact, showing a 27 percent increase in applications last week.”

Source: Hurricanes and Higher Rates Tank Mortgage Applications, Down 9.7%, CNBC (Sept. 20, 2017)

identity theft

The recent Equifax data breach, which exposed the personal information of about 143 million Americans’ one of the largest hacks on record could put home sales at risk. For consumers trying to get a mortgage, the data breach, which compromised people’s Social Security numbers, addresses, and credit card information, could stall their loan approval or put them at risk for having their information stolen and used in unlawful real estate transactions.

Scammers could also use stolen Social Security numbers to open up new credit cards and rack up debt under a person’s name, which could ruin the victim’s credit score. If you have your identity stolen, it causes a lot of problems, Don Frommeyer, a mortgage loan officer at Marine Bank in Indianapolis, told realtor.com. You have to prove it wasn’t you.

Rob Douglas, an identity theft expert, predicts there will be an increase in fraudulent mortgage and refinance applications due to the Equifax breach. Loan officers may have to put additional vetting procedures in place, which, in turn, could slow down the loan approval process and burden borrowers with extra costs.

What Consumers Should Do

For your clients to better protect themselves, security experts recommend taking the following steps:

  • Check your exposure. To see whether the Equifax breach affected you, go to https://trustedidpremier.com/eligibility/eligibility.html
  • Freeze your accounts. If you have been affected, contact each of the big credit-reporting companies immediately to freeze your credit, security experts recommend. You can either do this online or by calling them. Equifax: 800-349-9960; Experian: 888-397-3742; TransUnion: 888-909-8872. You will still be able to use your credit cards, even with freezes in place, but no one will be able to check credit scores and personal information without your permission. You can also undo the freezes at any time, though that does often require a small fee.
  • Continue to monitor your credit. It might be worth signing up for a credit monitoring service, says Pete Mills, senior vice president of residential policy at the Mortgage Bankers Association. It’s certainly easier to undo a fraudulent account within a few days than to wait a few months to address it.

Source: Why the Equifax Breach Might Make It Harder to Buy a Home and What You Can Do, Realtor.com (Sept. 15, 2017)

 

 

This house has great bones. As a real estate professional, you’ve heard the phrase countless times. You’ve probably even uttered it more than once. But what do we really mean when we say a house has great bones?

It’s a feature that all buyers want, but few can define. Understanding how to identify qualities that add up to the coveted great bones feeling can help you set your listing apart. Recently, Architectural Digest’s Lindsey Mather asked a handful of designers to get specific about the qualities that give a home this elusive quality. Here are a few distinct items to look for:

Good flow: Check how it feels to simply walk through the home. Do the rooms make sense next to each other, or do they seem choppy or lopsided? Alabama decorator William McLure says architects and designers often rely on symmetry and mirrored design elements to offer a feeling of balance to residential spaces. It makes the layout of the house not look like an afterthought,” he says. “You want rooms that look well planned and that structurally make sense.”

All the little things: Here’s where your macro lens comes in handy: The intricate details and architectural features that make a listing stand out in the eyes of buyers are often too small to see in a wide-angle property tour photo. Fancy plaster, original fireplaces, bespoke ceiling beams, thick moldings, and vintage lighting and hardware are all worth the time to fawn over in your listing descriptions. Also, any windows that are out-of-the ordinary can really help a place stand out as different.

Plenty of headroom: Sometime we use good bones to refer to elements that are hard to change, according to New York “based interior designer Alyssa Kapito. “A room or a house with great bones for us has high ceilings, tall windows, and is generally well proportioned, she says. “Everything decorative can be rather easily switched, but it’s quite difficult and expensive to get those three items on your checklist if they aren’t already there.” Make sure you check for drop ceilings, though. Good bones sometimes hide under tiles and panels.

When You’re Buying a Home, Look for These 4 Signs, Architectural Digest (Aug. 9, 2017)

 

A new watchdog program designed to monitor real estate deals involving shell companies has found that the buyers in 30 percent of high-end deals were linked to suspicious activity, the Treasury Department reported this week. Federal officials are now expanding the program, which aims to prevent money laundering by overseas buyers who use shell companies to mask their identities.

The program, called the Financial Crimes Enforcement Network, focuses on major markets that attract a high volume of international buying activity, including New York, Miami, and Los Angeles. Officials this week added Honolulu to the list. The program is monitoring wire transfers of funds as well as cash deals.

This could have a chilling effect, Redfin chief economist Nela Richardson told CNBC. That very high end of the market is the most vulnerable to these issues. If a lot of foreign buyers were parking their money in high-end real estate and that much of it is tainted, this rule will have an impact.

Under FinCEN, title insurance companies must determine the identities of shell company owners who are making cash real estate purchases at certain price points usually more than $1 million. The Treasury Department then determines whether those shell companies have been flagged on lists of suspicious activity. FinCEN focuses on transactions worth more than $3 million in New York, $2 million in California and Hawaii, and $1 million in Florida, among other price points and locations.

Through this advisory and other outreach to the private sector, FinCEN, [the real estate] industry, and law enforcement will be better positioned to protect the real estate markets from serving as a vehicle to launder illicit proceeds, FinCEN acting director Jamal El-Hindi told CNBC.

Source: A Third of Luxe Real Estate Deals Involve Suspicious Activity, CNBC (Aug. 24, 2017)

 

Your clients may be able to shave up to 30 percent off their energy bills this fall by conducting appropriate preparation measures on their home. For example, stripping and caulking the home to prevent drafts could be a major money saver, according to WIN Home Inspection.

WIN President Steve Wadlington offers the following five tips to share with your clients on how to clean and update the home to get it cold weather-ready:

  1. Check the roof. Sun exposure can cause warping, fading, chipping, and other deformities to roofs and siding materials. Inspect the roof for cracks or other damages, and repair any issues before winter.
  2. Sweep the chimney. If there is a blockage, or if residue is built up, the risk of fire and other safety issues increases. Homeowners will want to make sure the chimney is clean and in tip-top shape for winter use.
  3. Clean the gutters. Check gutters for leaves or other debris that may be blocking water flow. Be sure to clear them out so water can properly drain. Gutters are essential in preventing water damage and other costly repairs.
  4. Check weather stripping and caulking. This is essential to keep windows and doors sealed. Windows and doors may become slightly detached from their frames during colder months, so it’s important to make sure they are properly attached at the beginning of the season.
  5. Check out floors. With all the heat and moisture of the summer months, floors may be showing some signs of wear and tear. Scratched, dull, or damaged floors should be professionally scuff-sanded and recoated.

Source: WIN Home Inspection