March 20, 2020

Farmhouse-style home design is the most Googled type of interior decoration in the U.S. Terms related to the design trends draw about 318,950 searches a month, according to data analyzed by the firm SellHouseFast.uk. Though designers recently have called the style overdone, farmhouse still appears to have the public’s affection. The next-highest Googled interior design style—rustic—was a distant second at 190,240 searches a month, the data shows.

Here are the five most popular interior design trends by Google searches, according to SellHouseFast.uk’s analysis:

  1. Farmhouse: 318,950
  2. Rustic: 190,240
  3. Scandinavian: 126,540
  4. Vintage: 124,890
  5. Industrial: 118,100

The least searched interior design style? Directoire, Modernist, and American Colonial, all of which earned just 730 searches a month combined.

Low interest rates and inventory will draw buyers to the market, Lennar Corp.’s executive chairman, Stuart Miller, said on a conference call with industry analysts this week. The home builder, one of the largest in the country, said it was working on new ways for buyers to purchase new homes virtually, such as by leveraging its digital programs and offering drive-through closings. Such closings enable home buyers to sign documents from their car. “Even in the current environment, we are selling homes,” Miller said. “Since the first quarter, new orders continue to be strong.”

Miller acknowledged that in some cities, construction has been halted by local governments due to shelter-in-place restrictions aimed at slowing the spread of COVID-19. But Miller said Lennar has not halted its production yet, and the company will continue to build homes and adapt to the changing environment. He said low mortgage rates could incentivize a rush of new-home buyers once the coronavirus pandemic eases. The company has slowed its land purchases, focusing on reducing its outflow of cash to boost its liquidity and balance sheet position, a statement read on its earnings.

Lennar reported strong first-quarter earnings, totaling $398.5 million compared to $239.9 million in the first quarter of 2019. Its new orders also rose 18% on a year-over-year basis, with 12,376 homes in the first quarter.

Source:
Lennar Says Homes Are Still Selling Despite Coronavirus,” The Real Deal (March 19, 2020)

March 12, 2020

Some home sellers are making changes to how their listing is viewed by prospective buyers amid growing concerns over the COVID-19 outbreak.

About a quarter of real estate professionals surveyed by the National Association of REALTORS® said their sellers are taking extra precautions, including stopping open houses, requiring buyers to wash their hands or use hand sanitizer, or asking buyers to remove shoes and wear footies.

The survey examines the impact of the coronavirus on the real estate industry so far. Forty-four percent of real estate pros surveyed in the state of Washington and 34% in California reported changes to home tours. The two states currently have the highest number of reported cases of coronavirus in the U.S.

coronavirus sellers concerns chart. Visit source link at the end of this article for more information.

© National Association of REALTORS®

“We are seeing a lot more hand sanitizer and Clorox wipes at open houses,” Wes Jones, managing broker with Keller Williams in Bellevue, Wash., a Seattle suburb, told realtor.com®. “We also make sure to wipe down the front door handle a number of times throughout the open house. It also appears that not shaking hands at all is quickly becoming acceptable.”

Cara Ameer, a real estate professional in California, also said she’s taking extra precautions. “I now carry a canister of disinfecting wipes in my car so I can wipe my hands and the steering wheel after being in and out of houses,” she told realtor.com®. “I have also wiped down lock boxes, light switches, and doorknobs on my listings, and encourage customers to do the same. While you don’t want to make anyone feel uncomfortable, it is better to err on the side of caution rather than worry about exposure. You can never be too careful.”

The coronavirus is having a mixed impact on the housing market. It’s decreasing buyer traffic somewhat—although in still relatively low numbers—but it’s also not deterring some home buyers and sellers from taking advantage of the lowest mortgage rates in history, shows NAR’s survey, which is based on responses from more than 2,500 real estate professionals.

Sixteen percent of real estate pros say they’ve seen a reduction in buyer interest in their market since the onset of the coronavirus in the U.S. In California, 21% of members reported a decrease in buyer interest, and 19% of members said the same in Washington.

“Given that a home transaction is a major commitment, the uncertainties on how the economy will play out and the spread of the virus itself are barriers to home buying and selling,” says Lawrence Yun, NAR’s chief economist. “The stock market crash is no doubt raising economic anxieties, while the coronavirus brings fear of contact with strangers. At the same time, the dramatic fall in interest rates may induce some potential buyers to take advantage of the better affordability conditions. It is too early to assess the likely impact as to whether lower interest rates can overcome the economic and health anxieties.”

coronavirus buyers concerns chart. Visit source link at the end of this article for more information.

© National Association of REALTORS®

At least in the short term, Yun predicts home sales to be down about 10% compared to what they could have been due to the spread of the coronavirus.

One movement that could lessen its impact, however, is the dip in mortgage rates and its effect on buyers to move ahead with a purchase. More than one-third of members said that their clients are excited by the lower mortgage rates.

Real estate pros credit the lower rates for prompting the majority of home sellers to not make a change in the listing of their home, the survey shows. They want to take advantage of the lower rates on the buying side.

In some areas, the number of home sellers is rising. In California, 12% of members said the number of sellers is increasing because of the desire to take advantage of lower interest rates upon moving, according to NAR’s survey. Nine percent of real estate pros nationwide also reported a higher number of homeowners wanting to sell for this reason. Only 3% of sellers nationwide have decided to remove their home from the market and refinance into a lower mortgage rate so they can remain in their home.

Source:
REALTOR® Magazine Daily News

March 13, 2020
Mortgage rates for 30, 15, ARM. Full information at http://www.freddiemac.com/pmms/

© REALTOR® MAGAZINE

After hitting a record low last week, rates reversed course this week and inched up. Rates still remain at “extraordinary levels,” Freddie Mac said in its weekly rate report.

The 30-year fixed-rate mortgage climbed from last week’s 3.29% record low average to 3.36% this week.

“As refinance applications continue to surge and lenders work to manage capacity, the 30-year fixed-rate mortgage ticked up from last week’s all-time low,” says Sam Khater, Freddie Mac’s chief economist. “Mortgage rates remain at extraordinary levels and many homeowners are smartly weighing their options to refinance, potentially saving themselves money.”

Freddie Mac reported the following national averages with mortgage rates for the week ending March 12:

  • 30-year fixed-rate mortgages: averaged 3.36%, with an average 0.7 point, rising from last week’s 3.29% average. Last year at this time, 30-year rates averaged 4.31%.
  • 15-year fixed-rate mortgages: averaged 2.77%, with an average 0.7 point, falling slightly from last week’s 2.79% average. A year ago, 15-year rates averaged 3.76%.
  • 5-year hybrid adjustable-rate mortgages: averaged 3.01%, with an average 0.2 point, falling from last week’s 3.18% average. A year ago, 5-year ARMs averaged 3.84%.
Source:

The Federal Reserve called an emergency meeting Sunday to slash its benchmark rate to zero—its second response to the volatile economic reaction to the coronavirus outbreak. The Fed also said it would buy $700 billion in Treasury and mortgage bonds. After the Fed’s last emergency cut on March 3, mortgage rates plunged to all-time lows. Freddie Mac reported the 30-year fixed-rate mortgage averaged 3.29% for the week ending March 5. Could rates go even lower with the Fed’s latest emergency cut? Not necessarily, economists say.

The Fed’s benchmark rate is not directly tied to mortgage rates, although it often influences them. Mortgage rates are more directly tied to the 10-year Treasury note, which was pushed to a series of recent lows earlier this month but has climbed higher over the past week. Economists caution that mortgage rates don’t always respond in unison to the Fed’s rate adjustment. Further, lender backlogs are keeping rates from going lower. Because banks are handling more loan requests than they can handle, the financial institutions are charging some borrowers more. This trend will ease overtime as the backlog is worked off and lenders staff up or figure out how to do more work remotely.

Matthew Graham, chief operating officer at Mortgage News Daily, says mortgage rates are not likely to go lower after the Fed’s meeting on Sunday. But watch for rates to possibly go lower at some point in the coming weeks due to the Fed’s mortgage bond buying effort. Bankrate.com reports that the Fed’s action on Sunday is its largest emergency reduction in its more than 100-year history.

The Federal Open Market Committee lowered its federal funds rate to a target range between 0%–0.25%. “The monetary policy change is the same one applied a decade ago during the Great Recession—the lowest rates combined with quantitative easing,” says Lawrence Yun, chief economist at the National Association of REALTORS®. “This is an all-out measure to prevent a recession and fight the fear that is blanketing the country. It is the right policy, since the policy can easily be reversed should a vaccine be discovered or the virus goes away.” Yun adds that during the last recession, real estate was on “wobbly ground with loose lending and too much supply. Today, there is no subprime lending and too little supply. The real estate market will hold on much better.”

Fed officials on Sunday reassured Americans that the U.S. economy has the ability to remain resilient against the slowdown caused by the coronavirus. But some economists have warned that a recession could be on the horizon. “The coronavirus outbreak has harmed communities and disrupted economic activity in many countries, including the United States,” the FOMC said in a statement. “Global financial conditions have also been significantly affected. The Committee expects to maintain this target range until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals.”

March 13, 2020

Rental returns on single-family homes decreased from a year ago in the first quarter in more than half of the 389 U.S. counties tracked by ATTOM Data Solutions, according to the real estate firm’s Q1 2020 Single-Family Rental Market report.

On average, the annual gross rental yield was 8.4% in the first quarter (measuring the annualized gross rent income divided by the median purchase price of single-family homes), ATTOM reports.

“The business of buying single-family homes for rent has lost a little steam this year across the United States as rents aren’t rising quite as fast as prices for investment rental properties in the majority of the country,” says Todd Teta, chief product officer at ATTOM Data Solutions. “But from the national perspective, things are generally holding steady for landlords in the single-family home rental market. Also, profit trends are moving in favor of investors in higher-rent counties and against those in lower-rent regions.”

The counties with the highest potential annual gross rental yields for 2020, according to the report, are:

  • Baltimore City/County, Md.: 28.9%
  • Cumberland County, N.J., in the Vineland-Bridgeton metro area: 20.1%
  • Bibb County, Ga., in the Macon metro area: 18.2%
  • Mobile County, Ala.: 15.7%
  • Clayton County, Ga., in the Atlanta metro area: 15.1%

Baltimore City, Cumberland, and Bibb counties also had the top three yields in 2019, ATTOM researchers note.

The report noted the top growth markets for single-family homes include Detroit, Cleveland, Milwaukee, and Memphis. These areas are showing increasing wages over the past year and carry a potential 2020 annual growth rental yields of 10% or higher.

However, prices rose faster than rents in 59% of the markets that ATTOM researchers tracked in the first quarter. The largest annual gross rental yield decreases for 2020 compared to 2019 in the first quarter were in Delaware County, Pa., in the Philadelphia metro area (down 30.5%); Bibb County, Ga., in the Macon metro area (down 27%); Erie County, Pa. (down 26.6%); Saint Louis County, Mo. (down 26.5%); and Sussex County, Del., in the Salisbury metro area (down 26.4%).

February 25, 2020

Today, American households are more likely to include pets than children under the age of 18, according to the U.S. Census Bureau’s American Housing Survey. The share of households with kids stands at 27%, while the share of households with pets is at 68%. As a result, investors in residential real estate are targeting this large demographic of pet owners by making their rental properties more appealing and pet-friendly.

Pet-friendly rentals can also increase investors’ profits, suggests a study conducted by FIREPAW Inc., an animal welfare nonprofit research firm. Also, vacancy rates for rentals that allow pets tend to be lower than those that don’t allow pets. Furthermore, landlords spent less than half as much money on advertising their pet-friendly units, and were able to increase their profit by charging separate pet deposits.

This has made more investors want to make their properties appeal to pet-owning tenants. So, they’re taking on a variety of upgrades, such as swapping out carpet for ceramic tile, using pet-safe lawn products, and adding features like cat and dog doors or adjustable shower heads to bathe pets.

Pets also appear to be heavily on the minds of home shoppers. A survey by realtor.com® showed that 87% of home buyers with pets say they take their pets’ needs into account when searching for a home.

“To target the pet parents themselves, investors can provide information about local services such as pet sitters and dog walkers, plus leave pet-centric gifts such as toys and treats upon move-in,” Christopher Long, founder and chief executive at Radius Realty, wrote in a column for Forbes.com.

Certainly, damage to a property from pets is a chief concern among landlords. The FIREPAW study, however, found that tenants with pets tended to cause less damage than tenants with children. Further, even the worst of damages caused by pets tended to be “far less than the average rent or the average pet deposit,” the report notes.

Source:
Is Residential Real Estate Going to the Dogs?” Forbes.com (Feb. 24, 2020)

March 3, 2020

Many home buyers are having a tough time finding a home they want, and the problem will likely get worse. A new study by Freddie Mac puts the housing shortage in a dire perspective: a 3.3 million unit deficit nationwide.

Years of underbuilding has created an inventory shortfall, which is most pronounced in states with strong economies that have been luring more people to move for jobs, Freddie Mac’s latest Insight report notes.

“Simply put, new housing supply is not keeping up with rising demand,” says Sam Khater, Freddie Mac’s chief economist. Freddie Mac’s report says the housing shortage is rising by about 300,000 units a year. “More than half of all states have a housing shortage, and the shortage is no longer concentrated in coastal markets but is spreading to the middle of the country, in more affordable states like Texas and Minnesota,” Khater adds.

Those interior states as well as others, such as Colorado, are now feeling the crunch and need to build more housing units to accommodate areas growing in population. “Domestic migration is worsening the housing shortage issue in some states,” the report notes. “In pursuit of new opportunities in states with stronger economies, people have migrated from states with surplus housing like West Virginia, Alabama, and North Dakota, to states with housing deficits, putting pressure on high-growth states.”

The Freddie Mac report estimates 29 states have a housing supply deficit, and the shortfalls are driving up home prices in areas where inventories are the tightest. The states with the highest deficits are Oregon, California, Minnesota, Florida, Colorado, and Texas.

“We are in the midst of a demographic tailwind, and we expect home purchase demand will remain strong well into the next decade as the peak cohorts of millennials turn thirty years of age in 2020 and beyond,” Khater says. Freddie Mac predicts the housing shortages to worsen, too, as millennials and Generation Z enter the housing markets to form their own households over this decade. That will prompt home prices to continue to rise, the report notes.

Source:

March 4, 2020
neighborhood damaged by tornado

© Brian Copeland

Residents have described a deadly tornado that ripped through Nashville and parts of Tennessee on Tuesday as a sudden “train sound” that awakened them in the middle of the night. There was barely a warning as a tornado tore through a 145-mile stretch in the state, spiraling through Nashville’s downtown and its eastern neighborhoods. Residents woke up shocked to widespread damage, leveled homes and buildings, tossed airplanes, and downed power lines. At least 25 people have been killed by the twisters; dozens more are still unaccounted for, police say.

The real estate community is among those rushing to aid victims and help coordinate relief efforts.

“Our hearts go out to members of our community who lost their lives, homes, and businesses overnight,” Kristy Hairston, president of the Greater Nashville REALTORS®, posted in a Facebook message to members hours after the tornado struck the community. “As REALTORS®, we are committed to supporting our community. We will remain steadfast and strong. In the coming days, we will come together to comfort and assist those in need.” The association is currently working to coordinate relief efforts through the REALTORS® Relief Foundation, a national charitable fund that provides housing-related assistance to victims of disasters.

retail area damaged by tornado

© Brian Copeland

Real estate brokerages also are stepping in to help clients and residents affected. For example, the Parks Realty office in Brentwood, Tenn., posted on its Facebook page that it will serve as a donation center over the next few weeks to help provide supplies to tornado relief victims. It’s collecting water, clean towels, and catered food. KW Cares, the charitable arm of Keller Williams, is working with its regional leadership in areas affected by the tornadoes in coordinating financial assistance or other needs for any of its real estate professionals who may have been displaced by the tornadoes.

The local ABC news affiliate reported that in East Nashville, a Crye-Leike, REALTORS®, office had a large window blown out of the front of its brokerage from the tornado. A neighbor was helping real estate professionals board up the building on Tuesday. “That’s just how East Nashville is; that’s one reason we like selling over here and living over here,” a broker at the office told the KDRV-ABC.

Mitch Turner, communications director with the Greater Nashville REALTORS®, says the association is still trying to assess how many buildings and homes of its REALTOR® members were damaged by the tornado. The association has sent messages to all of its members to urge them to notify them of any damage so that they can start coordinating needed relief support.

“It’s like nothing I’ve seen,” Turner told REALTOR® Magazine. “We had an F3 tornado that ranged from one end of Nashville to the other.” Winds as strong as 155 miles per hour were reported in some parts of the city.

Turner says that many of the association’s members are also investors. “I know members are out today checking on their renters to make sure they’re OK,” he says. “Our members are helping people get into temporary homes as needed. It’s not just monetary. REALTORS® are committed to helping the community. We’ll help how we can. We demonstrated that during the floods in 2010, and we’ll do that again.”

Meanwhile, the real estate industry also is bracing for any long-term impact the deadly tornado could have on one of the nation’s hottest housing markets. At least 45 buildings in downtown Nashville were leveled by the tornado. Buildings and homes throughout the city saw substantial or catastrophic damage.

“The areas it hit were extremely hot real estate markets with thriving community districts and were densely populated with homeowners,” Brian Copeland, a real estate broker with Doorbell Real Estate, told realtor.com®.

Still, real estate pros are optimistic that the Nashville market will be resilient in the aftermath. Some real estate pros anticipate that home values could rise in unaffected areas as displaced residents look for temporary housing. Nashville has grown into a thriving employment center with a quickly climbing population over the last few years that, real estate pros say, will likely protect its home prices from any long-term downfalls.

The Nashville tornado was the deadliest to strike the U.S. in the past seven years. The city has faced deadly twisters in the past: In 1998, a tornado destroyed the same downtown neighborhoods that were pummeled by this week’s twister. In May 2010, the city faced catastrophic flooding from record-breaking rainfalls that resulted in substantial damage throughout Nashville and middle Tennessee.

Source: REALTOR® Magazine Daily News

January 17, 2020

While Amazon hunted for its second headquarters in 2017, senior executives at the company also wanted to secure an extra $1 billion for other real estate projects, The Wall Street Journal reports. That was a separate goal from the economic incentives Amazon was seeking for its HQ2 project, according to the report. The online retail giant has sparked a debate over whether incentives are a smart way for cities and states to attract jobs and development.

Amazon ultimately decided to put its second headquarters in Virginia, which offered $1 billion in incentives, including infrastructure improvements. Amazon abandoned plans to split its second headquarters between Virginia and New York after a public uproar in New York over $3 billion in incentives that the state was offering for the company to relocate there. “Like many other companies, we are eligible to access incentive programs created and regulated by cities and states to attract new investors, as they know that these investments pay a long-term dividend in the form of jobs, new economic opportunity, and incremental tax revenue,” Amazon told the Journal. “The vast majority of these incentives are statutory and post-performance; Amazon is eligible only after having created and maintained a certain number of jobs within the community.”

Amazon reportedly has been trying to focus less on tax breaks and more on transportation and workforce-related incentives. Real estate is also becoming a big source of its growth. “Amazon’s real estate footprint has grown sharply to accommodate campuses for its 750,000 global employees, a network of fulfillment centers, data centers for its cloud-computing arm, and physical stores,” the article notes. “Amazon leased or owned 288 million square feet of property globally, according to its 2018 annual report.”

State and local governments often use incentives to attract new companies. They spend at least $30 billion a year to attract and keep companies. Yet, the deals don’t always translate into economic benefits and wider job growth, a new study reported by the Journal suggests.

Still, Amazon is unique, researchers say. “The Amazon phenomenon is not very common,” says Didi Caldwell, president of Global Location Strategies, a site-selection firm. “You don’t see companies building that much bricks and mortar on an annual basis.”

Source:
Amazon Sought $1 Billion in Incentives on Top of Lures for HQ2,” The Wall Street Journal (Jan. 16, 2020)