October 8, 2019

Concerns over personal finances are giving some home buyers the jitters even as lower mortgage rates are boosting affordability, a new consumer index from Fannie Mae finds. Consumer sentiment in housing dropped in September from August’s high, the index found.

More respondents believe now is a good time to buy and sell a home, but there was a notable drop in the share of consumers who said they were not concerned about losing their jobs.

Overall, Fannie Mae’s consumer sentiment index on the housing market fell in September by 2.3 points to a reading of 91.5. Still, it is 3.8 points higher compared to a year ago.

“Consumer sentiment remains relatively strong overall, though uncertainty about the economy and individual financial circumstances appear to be weighing on housing market attitudes a bit more than a month ago,” says Doug Duncan, Fannie Mae’s chief economist. “Consumers who are pessimistic about current housing market conditions are more likely to cite unfavorable economic conditions than the prior month. Job confidence remains high but still well shy of its July reading.”

The share of consumers who say their household income is significantly higher than it was a year ago was at 21% in the September survey.

More consumers do believe now is a better time to buy rather than sell. Lower mortgage rates are helping to spread that attitude. Because of lower mortgage rates, average monthly payment on an average priced home is 10% lower than it was last November when mortgage rates were nearing 5%, Black Knight reports. Lower mortgage rates are allowing buyers to purchase a home that costs $46,000 more and pay the same monthly payment as they would have compared to last November, Black Knight data shows. Home prices are still rising, but they are moderating.

“Back in November 2018, we were reporting on home affordability hitting a nine-year low,” says Black Knight Data & Analytics President Ben Graboske. “Interest rates were nearing 5%, pushing the share of national median income required to make the principal and interest (P&I) payments on the purchase of the average-priced home to 23.7%. While still below long-term averages, that made housing the least affordable it had been since 2009, spurring a noticeable and extended slowdown in home price growth.”

Here are some additional findings from Fannie Mae’s latest consumer housing survey taken in September:

  • 28%: The net share of Americans who say now is a good time to buy is up 3 percentage points.
  • 44%: The net share of those who say it’s a good time to sell increased by 4 percentage points, matching the same level as July.
  • 29%: The net share of Americans who say home prices will rise is down 7 percentage points, continuing a decline that started in June.
  • 69%: The net share of Americans who say they are not concerned about losing their job is down 8 percentage points and continuing a decline from last month.

October 24, 2019

Millennials are increasingly using Veterans Affairs loans to become homeowners. The number of loans backed by the Department of Veterans Affairs rose 2.3% annually in September. The uptick was led by a 14% jump in the number of mortgages for millennial veterans and active-duty military personnel, according to a report by Veterans United, one of the nation’s largest VA lenders.

“There has been a question in real estate circles for years about when millennials are going to start buying,” says Chris Birk, director of education for Veterans United. Some young buyers are jumping in sooner than their peers because of VA loans, he says. “They don’t have to spend years saving for a down payment,” he notes.

VA loans allow qualified veterans and service members to purchase a home with no down payment and no mortgage insurance.

Millennials and Generation Z buyers comprised 45% of all VA purchase loans in the last fiscal year ending September 30.

The top cities for millennial and Generation Z buyers who used a VA loan from September 2019 to September 2018 were:

  1. Jacksonville, N.C.
  2. Killeen-Temple-Fort Hood metro area, Texas
  3. Oklahoma City
  4. El Paso, Texas
  5. Fort Walton Beach-Crestview-Destin metro area, Fla.
  6. Austin-Round Rock, Texas
  7. Jacksonville, Fla.
  8. Tampa-St. Petersburg-Clearwater metro area, Fla.
  9. Augusta-Richmond County, Ga.
  10. Las Vegas

October 8, 2019

Homeowners can do plenty to spruce up their home and make it more enticing for buyers. But when they’re narrowing their list, what are a few quick fixes that can have a big impact? Besides a fresh coat of paint, Redfin highlighted some additional ideas on its blog, including:

Update the door.

A new front door can be a cost-effective update that can make a big difference, real estate pros say. “Solid wood doors are always a classic style for homes not to go out of style anytime soon,” Redfin notes on its blog. “They’re solid and typically last much longer than alternative materials like fiberglass. Additionally, front doors with inlaid glass can also give your entryway more natural light for the interior of your home.”

Modernize the lighting.

First, make sure all interior lights have the same color temperature so it’s consistent throughout the home. “Updating your light fixtures, ceiling fans, and even your hardware on doors and cabinets is an easy and cost-effective way of increasing the perceived value of your home,” Redfin notes. For example, replace dated brass light fixtures to more contemporary ones, like lights with a black finish. Find fixtures that will add more light and brighten your home too.

Upgrade your mailbox.

It may sound trivial, but the look of the mailbox is all part of helping to build a strong first impression from the curb. “It’s also the easiest home improvement you can do,” Redfin notes at its blog. “It could just be a new mailbox that replaces the old, weathered one you’ve had for years. … Or you could upgrade to a ‘next generation’ mailbox that allows USPS to deliver large packages to your mailbox instead of your front door.”


October 8, 2019

Homeowners seem to have a love-hate relationship with their homeowners associations. They appreciate those that mow the lawn, manage neighborly disputes, offer amenities, and organize social events, but they don’t agree with all their rules.

The number of Americans living in a community association has grown over the last 50 years from 10,000 communities in the 1970s to more than 300,000 as of 2016, Porch.com reports. (Those figures also include condo and co-operative communities.)

The most received HOA fines to homeowners were for improper landscaping and trash being put out too late or early, according to a survey by Porch.com, a home remodeling resource. Porch.com surveyed more than 700 people who live in  HOA communities.

Fifty-two percent of homeowners say they have not paid an HOA fine. Millennials were the most likely to skip out on paying a fine at 54%, followed by Generation X at 53%. Zero percent of the baby boomers surveyed say they did not pay an HOA fine they received.

Twenty-nine percent of homeowners say they have knowingly broken an HOA rule (the age groups were fairly matched in breaking the rules). Nearly one-third said they had broken one of their association’s rules and hoped they would never get caught.

Porch.com HOA rules chart.Visit source link at the end of this article for more information.

© Porch.com

Hidden HOA Sentiments,” Porch.com (October 2019)

The once-priciest property in the U.S., listed for $1 billion, has sold for a fraction of its original list price for $100,000 at a foreclosure auction this week. The $100,000 sale falls extremely short of the $200 million loan outstanding on the property, too.

“The Mountain” in Beverly Hills has long been known as one of the last prized undeveloped parcels of land in the Los Angeles area. At 157 acres, the mountaintop property is located at the highest point in the 90210 ZIP code.

But with a 99.99% markdown, the property sale comes with a lot of fine print, the Los Angeles Times reports.

The sole bid at the auction came from the Mark Hughes Trust, the estate of the late Herbalife founder, who previously owned the property. But in 2004, the Hughes estate sold the property to Atlanta investor Chip Dickens, which set off a complicated, intertwined story of how the property ended up at a foreclosure auction in the first place.

To purchase the property, Dickens borrowed about $45 million from the Hughes estate. The debt eventually surged to about $200 million, including interest and fees. Dickens then transferred ownership of the parcel to a limited liability company. That LLC was controlled by his partner on the project, Victor Franco Noval, who is the son of convicted felon Victorino Noval.

The LLC—Secured Capital Partners—failed to successfully declare Chapter 11 bankruptcy last month. That has ultimately forced the Hughes estate to sell the property at a foreclosure auction to try to recoup the losses or buy the property back. By repurchasing it, they would lose the $200 million they were owed in the process, however.

Any other buyer who bid at the auction would have been on the hook to pay the $200 million outstanding debt. No one else did. So after 15 years, the parcel of property returned to the Hughes family.

“This is the largest non-judicial foreclosure sale and the largest loss from a lender I’ve seen in 27 years,” says Ronald Richards, the attorney for Secured Capital. Secured Capital did make a last-minute offer prior to the auction for $150 million, but Richards says their proposal was ignored. “My $150 million offer was legit, and now they have a catastrophic loss,” he says.

Once Listed for $1 Billion. Sold for $100,000. What Just Happened?” The Los Angeles Times (Aug. 20, 2019)

October 2, 2019

That single-story home may be more desirable than it once was. The construction of single-story homes is increasing at a more rapid pace than two-story homes, according to new data from the U.S. Census Bureau.

While overall the share of starts of homes of two-plus stories was higher than single-story homes in 2018, the two-story percentage is shrinking while one-story construction is growing. The share of new homes started with two or more stories dropped from 55% in 2017 to 53% in 2018. However, the share of new homes with a single-story increased from 45% to 47%, the data shows.

The growth of single-story homes was most pronounced in the South, the National Association of Home Builders’ analysis of the data shows.

A map showing the popularity of single-story homes. Visit source link at the end of this article for more information.

© National Association of Home Builders

A separate report from the real estate brokerage Redfin showed single-story or ranch homes were the most popular home style of home sold last year. The style also tended to be more affordable, they noted.

The preference of a single-story home rises with age, a recent survey of home buyers by the NAHB shows. Eighty percent of baby boomers say they prefer a single-story home so that they can more easily age in place. However, only 35% of millennials say they want a single-story home.

“Homes with one story are more common in non-metro areas, while two or more stories homes are common in metro areas,” the NAHB notes on its blog, Eye on Housing. “However, we experienced an increasing share of one-story homes in both metro and non-metro areas from 2017 to 2018.”

Single-Story Home Construction Increased in 2018,” National Association of Home Builders’ Eye on Housing (Sept. 30, 2019)

September 25, 2019

A big culprit to the ongoing housing shortage: The dwindling number of new-home construction over the last several years. A new study from John Burns Real Estate Consulting is putting it into perspective at just how much new-home construction has been lagging: The top 10 housing markets in the country are building at a rate that is 54% lower than they were 14 years ago.

Markets like Chicago, Riverside-San Bernardino, Calif., and Las Vegas have been building just 18%, 21%, and 29% from their peak construction levels in 2005 and 2006 respectively, the research shows. Chicago has plunged from the seventh largest new single-family housing market to the 32nd largest. In Atlanta, builders are constructing 36,000 fewer homes than in 2005. Phoenix has built 37,000 fewer in that time.

Builders have pointed to ongoing labor and lot shortages and rising costs of materials to explain why they haven’t ramped up calls for more new homes, despite rising calls from the industry to do so.

“Cost increases at every step of the way have pushed home prices to a point where home builders find it very difficult to build homes priced $250,000 and below in places where most people want to live,” writes Erik Franks, senior vice president at John Burns Consulting, on the study’s findings. “There is plenty of total housing demand, but most of the demand is below today’s new home prices.”

In 2003, half of the new homes nationwide were priced below $191,000; today, half of new homes are priced above $313,000. Fifteen of the 18 largest publicly traded home builders boast an average sales price of $365,000 or more.

Builders are trying to respond to the urgent calls for more new homes to meet buyer demand. Some entry-level builders are building on smaller lots, using less costly materials, or moving further from job centers, Franks reports.

Home Building Less Than Half of What It Used to Be,” John Burns Real Estate Consulting (Sept. 24, 2019)

Fifty-five percent of prospective home buyers who were actively searching for a property to purchase in the second quarter of this year say their house hunts were unfruitful for three months or longer, according to a new survey from the National Association of Home Builders.

The survey respondents cite numerous reasons for their failed home searches, including being unable to find a home at a price they can afford (50%); not being able to find a home in their neighborhood of choice (43%); and not finding a home with the features they want (40%). The share of buyers who consider high prices their biggest barrier to homeownership has increased 5 percentage points from a year ago.

The good news is the majority of prospective buyers who report an unsuccessful home search say they plan to keep looking until they find their dream home, according to the NAHB survey.

  • 62% say they will continue looking for the “right” home in their preferred location.
  • 36% say they are expanding their search area.
  • 21% are willing to accept a smaller or older home.
  • 16% say they might consider buying a more expensive home.
  • Only 16% of respondents say they are putting off their house hunt until next year or later.
Unaffordable Prices Hold Back Prospective Home Buyers,” National Association of Home Builders’ Eye on Housing blog (Sept. 5, 2019)
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September 25, 2019

A 20,000-square-foot Beverly Hills mansion has lingered on the market for two years with several price cuts. But this month, the home sellers decided to do something different: Instead of reducing the price further, they raised it by $20 million.

The mansion, nicknamed the “Opus,” features seven bedrooms, 11 bathrooms, two pools, a car museum, two kitchens, and more. It was originally listed in 2017 for $100 million. In January, the price was cut to $68 million; four months later, it was reduced to just under $60 million.

The home is currently listed for $79.9 million.

The seller and his real estate agent have been quiet on the price jump, but realtor.com® recently asked real estate pros to weigh in on whether such price jumps can be a smart move for a listing.

Recent high-end sales in the area may have prompted the price increase. In July, a 56,500-square-foot mansion, known as the Spelling Manor, in Holmby Hills, Calif., sold for a Los Angeles county record of $120 million, realtor.com® reports. The estate had been listed for nearly four years, originally listed at $200 million in 2016. A few weeks later, a Bel Air 25,000-square-foot estate sold for $75 million; it had originally been listed last year for $88 million.

“They see the ultra-high-end buyer coming back,” Roger Perry, a real estate pro with Rodeo Realty and who has no connection to the Opus property, speculated on the price jump. “Or they want to give themselves a little more room for negotiation.”

Other real estate pros speculate that it could be a marketing ploy to get more attention back on the home. “They start out priced extremely high, knowing that’s not going to be the ultimate sales price,” says Scott Tamkin, a luxury real estate pro with Compass, also not affiliated with the sale. “Does it mater if it’s listed at $80 million or $65 million or $99 million? It doesn’t matter. The buyer is going to negotiate it.” Those who can afford such a home have pretty already seen the listing. The price bump is to entice them to take a second look, Tampkin speculates.


September 23, 2019

Homes selling for less than $100,000 still exist. “If you’re looking for affordability, you’ll find it in the South, Midwest, and [more remote] parts of the Northeast,” says Danielle Hale, realtor.com®’s chief economist.

Realtor.com®’s research team scoured single-family listings to find the metros offering the highest number of homes for sale under $100,000. Here are the seven metros that topped the list:

1. Pittsburgh

  • Median home sales price: $168,000
  • Number of homes under $100,000 (listed on realtor.com®): 2,452

2. Detroit

  • Median home sales price: $180,000
  • Number of homes under $100,000: 2,402

3. Chicago

  • Median home sales price: $252,000
  • Number of homes under $100,000: 2,070

4. St. Louis

  • Median home sales price: $185,000
  • Number of homes under $100,000: 1,900

5. Cleveland

  • Median home sales price: $146,000
  • Number of homes under $100,000: 1,587

6. Memphis, Tenn.

  • Median home sales price: $185,872
  • Number of homes under $100,000: 1,083

7. Philadelphia

  • Median home sales price: $250,000
  • Number of homes under $100,000: 1,004