Thursday, October 30, 2014

Housing’s Zombies Still Lurk, But Bite Lessens


DAILY REAL ESTATE NEWS | THURSDAY, OCTOBER 30, 2014
The number of homes in the foreclosure process that are vacant – known as zombie foreclosures – are lessening their trail of destruction on housing markets. Zombie foreclosures made up about 18 percent of all active foreclosures (or 117,298) in the third quarter, down from 23 percent (or 152,033) a year ago, according to RealtyTrac’s Third Quarter 2014 Zombie Foreclosure Report.
The homes are vacated by home owner before the foreclosures are completed.
“The most effective preventative vaccine for the blight caused by vacant, abandoned foreclosures has proven to be a short and efficient foreclosure process,” said Daren Blomquist, vice president at RealtyTrac. “Absent that, the best antidote for a zombie foreclosure infestation is a pro-active land bank program like that in Cleveland and more recently Chicago designed to aggressively take possession of vacant foreclosures and rehab or demolish them.”
The state that saw the largest declines in zombie foreclosures in the third quarter compared to a year ago was Missouri, where such foreclosures have fallen by 73 percent. Zombie foreclosures have also fallen in Virginia, by 59 percent; California (down 56 percent); Massachusetts (down 46 percent); New Hampshire (down 45 percent); and Illinois (down 44 percent).
At a metro-level among cities with populations over 200,000, 138 metros saw declines in zombie foreclosures in the third quarter, led by Portland, Ore. (down 53 percent); Cleveland (down 52 percent); Phoenix (down 52 percent); and Boston (down 52 percent).
But the zombies are still lurking in many housing markets.
“Markets with lengthy and lengthening foreclosure timelines have unintentionally created a zombie foreclosure breeding ground,” Blomquist says. "As we see a backlog of delayed distress finally hit the foreclosure pipeline in some of those markets, the problem is coming more to light.”
In the third quarter, 16 states saw increases in owner-vacated foreclosures compared to a year ago, with some housing markets seeing zombies swell by up to 75 percent in the past year. The states that saw the largest increases were New Jersey (up 75 percent); North Carolina (up 65 percent); Oklahoma (up 37 percent); and New York (up 30 percent).
The following are the top 10 markets for zombie foreclosures (including the total owner vacated):
  1. New York-Northern Jersey-Long Island, N.Y.-N.J.-Pa.: 13,366
  2. Miami-Fort Lauderdale-Pompano Beach, Fla.: 9,869
  3. Tampa-St. Petersburg-Clearwater, Fla.: 7,509
  4. Chicago-Naperville-Joliet, Ill.-Ind.-Wis.: 7,326
  5. Philadelphia-Camden-Wilmington, Pa.-N.J.-Del.-Md.: 5,405
  6. Orlando-Kissimmee, Fla.: 3,732
  7. Jacksonville, Fla.: 2,462
  8. Las Vegas-Paradise, Nev.: 1,694
  9. Atlatna-Sandy Springs-Marietta, Ga.: 1,684
  10. Palm Bay-Melbourne-Titusville, Fla.: 1,384
Source: RealtyTrac


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Tuesday, October 28, 2014

Pending Home Sales Up, But Credit an Issue

DAILY REAL ESTATE NEWS | TUESDAY, OCTOBER 28, 2014
Pending home sales inched up slightly in September, and for the first time in 11 months, they were above year-ago levels, according to the National Association of REALTORS®' Pending Home Sales Index. However, tight credit conditions continue to be a barrier for many borrowers, NAR notes.
The Pending Home Sales Index rose 0.3 percent in September to 105. That's 1 percent above the September 2013 reading and the second-highest level since that time.
Opening the Credit Box
But sales are being held back because of potential buyers who are still unable to qualify for a mortgage. About 15 percent of REALTORS® in September indicated that the main reason for not closing on a deal was because their clients could not obtain financing.
Lawrence Yun, NAR's chief economist, says the final qualified residential mortgage rule will likely improve access to credit next year.
"The rule provides clarity for lenders and is a win for creditworthy consumers by ensuring they continue to have access to safe and affordable loan products without overly burdensome down payment requirements," Yun says.
Also, low mortgage rates, moderating price growth, and sustained inventory levels should help more buyers enter the market, Yun says.
"Housing supply for existing homes was up in September by 6 percent from a year ago, which is preventing prices from rising at the accelerated clip seen earlier this year," Yun notes.
In September, the Pending Home Sales Index rose in the South and Northeast but decreased in the Midwest and West.
Pending home sales were up by the highest percentage in the South — 1.4 percent month-over-month to a reading of 118.5. That was 1.7 percent above September 2013. Pending home sales also rose in the Northeast by 1.2 percent to 87.5 and are 2.9 percent above year-ago levels.
Meanwhile, pending home sales fell 1.2 percent in the Midwest to 101.2 in September and are now 4 percent below year-over-year levels for that region. Pending sales also fell in the West, dropping 0.8 percent last month to 101.3 but are still 3.6 percent above a year ago.


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New-Home Sales Inch to 6-Year High

DAILY REAL ESTATE NEWS | MONDAY, OCTOBER 27, 2014
For the third consecutive month, sales of newly built single-family homes edged up, “demonstrating steady growth in the housing market,” says Kevin Kelly, chairman of the National Association of Home Builders. However, housing analysts caution that the sector remains fragile.
New-home sales inched up slightly by 0.2 percent in September to a seasonally adjusted annual rate of 467,000 units—the highest level since June 2008, according to new data from the U.S. Department of Housing and Urban Development and U.S. Census Bureau. The median price of new homes in September was $259,000, a 4 percent drop year-over-year.
"We expect the housing market recovery to remain relatively gradual over the coming months," Gennadiy Goldberg, an economist at TD Securities in New York, told Reuters.
In September, the inventory of new homes rose to 207,000—a 5.3-month supply at the current sales pace. Most economists consider 6 months a healthy balance between supply and demand. The slow-growing inventory of new homes points to builders gaining confidence in the market, says NAHB Chief Economist David Crowe.
Regionally, new-home sales rose the most in the Midwest, posting a 12.3 percent gain month-over-month, followed by a 2 percent rise in the South. Sales stayed flat in the Northeast and fell 8.9 percent in the West.
The government revised August’s reported new-home sales figures, reflecting the fact that sales actually posted a sharp decline last month, as opposed to what had been originally reported. August’s sales numbers were revised down to 466,000 units from the originally reported 504,000 units.


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Friday, October 24, 2014

Rates Haven’t Been This Low Since 2013

DAILY REAL ESTATE NEWS | FRIDAY, OCTOBER 24, 2014
The 30-year fixed-rate mortgage took another dip this week, staying below the 4 percent threshold and keeping borrowing costs at the lowest rate in more than a year. It marks the fifth consecutive week that mortgage rates decreased.
Freddie Mac reports the following national averages with mortgage rates for the week ending Oct. 23:
  • 30-year fixed-rate mortgages: averaged 3.92 percent, with an average 0.5 point, reaching a new low for the year and dropping from last week’s 3.97 percent. Last year at this time, 30-year rates averaged 4.13 percent.
  • 15-year fixed-rate mortgages: averaged 3.08 percent, with an average 0.5 point, dropping from last week’s 3.18 percent average. A year ago, 15-year rates averaged 3.24 percent.
  • 5-year hybrid adjustable-rate mortgages: averaged 2.91 percent, with an average 0.5 point, dropping from last week’s 2.92 percent average. Last year at this time, 5-year ARMs averaged 3 percent.
  • 1-year ARMs: averaged 2.41 percent, with an average 0.4 point, rising from last week’s 2.38 percent average. A year ago, 1-year ARMs averaged 2.60 percent.
Source: Freddie Mac


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Thursday, October 23, 2014

Home Equity Rebound Slows its Pace

DAILY REAL ESTATE NEWS | THURSDAY, OCTOBER 23, 2014
More home owners are eeking out equity again on their properties, but with slowing home appreciation, millions of home owners may still be at risk of foreclosure.
Equity-rich properties – those with at least 50 percent equity – grew to 10.8 million, or 20 percent of all properties with a mortgage, in the third quarter, according to RealtyTrac’s third quarter U.S. Home Equity & Underwater Report. That percentage is up from 19 percent of properties in the second quarter of 2014.
Another 8.5 million properties – or 16 percent of all homes with a mortgage -- are teetering on the edge of equity, with between 10 percent of negative equity and 10 percent of positive equity.
But many home owners have yet to regain equity. There are 8.1 million U.S. residential properties seriously underwater – in which the combined loan amount secured by the property is at least 25 percent higher than the property’s estimated market vale, according to RealtyTrac. The number of properties with negative equity has fallen to the lowest level since RealtyTrac began tracking such data in 2012. The peak was in the second quarter of 2012 when 12.8 million properties – or 29 percent of all properties with a mortgage – were seriously underwater.
“The decrease in underwater properties is promising but the estimated $1.4 trillion in negative equity means that the flood waters are not receding as quickly as they were before, corresponding to slowing home appreciation,” says Daren Blomquist, vice president at RealtyTrac. “Slower price appreciation means 8 million home owners seriously underwater could still have a long road back to positive equity.”
To paint a picture of the typical underwater home owner, RealtyTrac found it’s often a home owner who bought or refinanced during the housing bubble years (from 2004 to 2008), owns a home worth less than $200,000, and who lives in the Sun Belt or Rust Belt.
On the other hand, the highest percentage of equity rich home owners were those who bought or refinanced between 1994 and 1998; have properties valued at $500,000 or more; and tend to live in New York, California, and Washington, D.C.
The States With the Highest Levels of Negative Equity
The following states had the highest percentage of residential properties seriously underwater in the third quarter, according to RealtyTrac:
  • Nevada: 31%
  • Florida: 28%
  • Illinois: 26%
  • Michigan: 25%
  • Rhode Island: 22%
The metro area (with population of 500,000 or more) with the highest percentage of properties seriously underwater was Las Vegas at 34 percent.
The Equity-Rich Markets
The following metros had the highest percentage of equity-rich properties – those with at least 50 percent equity or more – during the third quarter:
  • San Jose, Calif.: 45%
  • San Francisco: 41%
  • Honolulu: 36%
  • Los Angeles: 32%
  • New York, N.Y.: 31%
Source: RealtyTrac


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5 Markets to Watch for Investors in 2015

DAILY REAL ESTATE NEWS | THURSDAY, OCTOBER 23, 2014
Typical investor magnets like San Francisco, New York City, Boston, and Seattle are getting new competition from some rapidly growing markets. The coastal cities are no longer the top choices for investors: Other markets are stepping in as the ones to watch for 2015, according to Emerging Trends in Real Estate 2015, a report co-published by PwC US and the Urban Land Institute. The report is based on a survey of more than 1,000 leading real estate experts, including investors, fund managers, developers, property companies, lenders, brokers, advisers, and consultants.
Houston and Austin edged out San Francisco for the top spots this year, proving to be the top picks for real estate prospects in 2015. Charlotte, N.C., nabbed a seventh place spot on the ranking list, edging out Seattle and Boston; while Nashville, ranked No. 14, topped Manhattan.
“Investors are looking closely at opportunities beyond the core markets,” says ULI Global Chief Executive Officer Patrick L. Phillips. “These cities are positioning themselves as highly competitive, in terms of livability, employment offerings, and recreational and cultural amenities,”
The report ranked the following five markets as the ones “to watch in 2015”, based on survey respondents and their outlook on each market:
  1. Houston: “Investors believe that the energy industry will continue to drive market growth and that will support real estate activity in 2015,” the report notes. “Houston was ranked number one in both investment and development expectations for next year; housing market expectations are ranked number two.”
  2. Austin: “Interviewees like the industrial base, the appeal to the millennial generation, and the lower cost of doing business in Austin,” the report notes. “The market was a top choice for both the office sector and the single-family housing sector and the number two ranked market for retail.”
  3. San Francisco: Falling from its No. 1 spot last year, survey participants note the city is still poised for growth but other cities are catching up. “The strong local economy and improved domestic and international travel have made San Francisco the number one choice for hotel investment in 2015,” the report notes. “Respondents ranked the office market number three and the retail market number four.”
  4. Denver: Proving to be one of the most popular markets with the millennial generation, “Denver’s industry exposure to the technology and energy industries has also attracted investor interest,” according to the report. “The results of the survey put Denver retail at number five and office at number six.”
  5. Dallas/Fort Worth: “The market continues to be attractive to real estate investors because of its strong job growth, which benefits from the low cost of living and doing business,” according to the report. “Single-family housing in the market is the highest ranked property sector – and it also has the highest ranked industrial sector (number four) among the top five markets from this year’s survey.”



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Wednesday, October 22, 2014

More Owners Delay Remodeling Projects, Again

DAILY REAL ESTATE NEWS | WEDNESDAY, OCTOBER 22, 2014
Remodeling and home improvement spending posted a strong rebound last year, but the rebound was short-lived, a new report says. Remodeling projects and expenditures are back on the decline this year as housing market conditions and fading tax incentives cause more home owners to delay projects once again. 
Getting Back Remodeling Bucks
The primary driver of home remodeling expenditures is the pace of single-family existing home sales, writes Robert Dietz, an economist with the National Association of Home Builders, in an article at U.S. News & World Report. Between the summer of 2013 and March of this year, existing-home sales fell, Dietz says, despite a recent rebound. As such, Dietz says the remodeling market has seen declines in the annual pace of improvement spending since December 2013. 
“Existing home owners are most likely to improve a home prior to placing the home on the market, and new home owners find the best time to make substantial changes to a home is immediately after purchase,” Dietz notes. 
The pace of remodeling in August was down more than 10 percent year-over-year, according to U.S. Census Bureau data. 
Dietz points not only to the stall in home sales but also to the expiration at the end of 2013 of a set of federal energy-efficiency tax credits for the slowdown in remodeling expenditures. The tax credits helped home owners to offset the cost of replacing older windows, hot water tanks, and appliances with new energy-efficient models. 
“Despite these economic and policy headwinds, the prospects for the remodeling sector appear more positive for 2015,” Dietz notes. An index of professional remodeler sentiment shows a gain in confidence, particularly as the existing single-family sales market improves. The National Association of REALTORS® is forecasting a 7.7 percent growth in existing sales in 2015.
“Underlying these market improvements is the fact that our nation’s housing stock continues to age, and aging homes require upgrading and modification,” Dietz notes. The median age of owner-occupied homes was 35 years old, according to the 2011 American Housing Survey (in the 1985 AHS survey, the median age was 23). 
Source: “In Need of Housing Improvement,” U.S. News & World Report (Oct. 20, 2014)


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September Marked 2014 High in Home Sales

5DAILY REAL ESTATE NEWS | WEDNESDAY, OCTOBER 22, 2014
Existing-home sales bounced back in September, surging to the highest annual pace of the year, according to the latest report from the National Association of REALTORS®. All regions except for the Midwest reported gains in sales last month.
The Future's So Bright
“Low interest rates and price gains holding steady led to September’s healthy increase, even with investor activity remaining on par with last month’s marked decline,” says Lawrence Yun, NAR’s chief economist. “Traditional buyers are entering a less competitive market with fewer investors searching for available homes, but may also face a slight decline of choices due to the fact that inventory generally falls heading into winter.” 
Existing-home sales rose 2.4 percent in September, reaching an annual rate of 5.17 million. Sales are at the highest pace of 2014 but remain 1.7 percent below the 5.26 million level from last September, NAR reports.  
Snapshot of Housing Indicators for September
  • Home prices: The median existing-home price was $209,700 in September, 5.6 percent higher than a year ago. It is the 31st consecutive month for year-over-year price gains. 
  • Days on market: Homes stayed on the market longer in September — 56 days, compared with 53 days in August. Short sales remained on the market for a median 116 days in September, while foreclosures sold in 59 days. About 35 percent of homes sold in September were on the market for less than a month, according to NAR. 
  • Inventory: Total housing inventory dropped 1.3 percent to 2.30 million existing-homes for-sale, representing a 5.3-month supply at the current sales pace. Unsold inventory is 6 percent higher than a year ago.
  • All-cash sales: Sales involving all cash made up 24 percent of transactions in September, down from 33 percent compared to a year prior. 
  • Distressed homes: Foreclosures and short sales rose slightly in September to 10 percent, from 8 percent in August. Distressed sales, however, are down from 14 percent a year ago. Foreclosures and short sales in September sold for an average discount of 14 percent below market value.
By the Region
Here’s an overview of how existing-home sales performed across the country in September: 
  • Northeast: Existing-home sales rose 1.5 percent to an annual rate of 680,000, but were 1.4 percent below sales levels from a year ago. Median price: $249,800 (up 4.8 percent from a year ago)
  • Midwest: Existing-home sales fell 5.6 percent to an annual rate of 1.17 million, and remain 4.9 percent below September 2013 levels. Median price: $165,100 (up 4.9 percent from a year ago)
  • South: Existing-home sales rose 5 percent to an annual rate of 2.12 million, and are 1.4 percent higher than September 2013. Median price: $180,900 (up 5.1 percent from a year ago)
  • West: Existing-home sales surged 7.1 percent to an annual rate of 1.20 million, remaining 4 percent below levels from a year ago. Median price: $294,200 (up 4 percent from a year ago)


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Tuesday, October 21, 2014

10 Best ZIP Codes in 2014

DAILY REAL ESTATE NEWS | TUESDAY, OCTOBER 21, 2014
The ZIP code of the country's best place to call home is 20004, according to real estate company Movoto.com. Right smack in the heart of the nation's capital, it's where you'll find portions of the Smithsonian museums, Ford's Theatre, and it's close to the White House. The ZIP code boasts an average household income of $131,111 and an unemployment rate of 1.93 percent.
It's All About the ZIP
Movoto ranked the following top 10 ZIP codes top for 2014:
  1. 20004: Washington, D.C.
  2. 77005: Houston
  3. 98039: Medina, Wash.
  4. 95497: Sea Ranch, Calif.
  5. 11930: Amagansett, N.Y.
  6. 92121: San Diego
  7. 60603: Chicago
  8. 60602: Chicago
  9. 67230: Wichita, Kan.
  10. 64113: Kansas City, Mo.
To compile its rankings, Movoto factored in data from the U.S. Census' American Community Survey, researching ZIP codes for median household income (the higher, the better); unemployment rate (the lower, the better); average commute time (the lower, the better); median rent (higher rents indicate a more desirable area); median house worth (higher values indicate a more desirable area); and more.
Source: “These Are the Best ZIP Codes in America,” Movoto.com (Sept. 30, 2014)


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Markets Still Plagued by Inventory Crunch



DAILY REAL ESTATE NEWS | TUESDAY, OCTOBER 21, 2014
The number of homes for sale is still low in many markets: Supply nationwide in September was at five and a half months; most economists consider a normal level to be six to seven months. The supply of new homes was even lower, at nearly five months, according to realtor.com®'s September National Housing Trend Report.
Inventories Show Signs of Improvements
"To truly relieve the inventory shortage on a sustained basis, new-home construction needs to rise by at least 50 percent from the current levels," says Lawrence Yun, chief economist for the National Association of REALTORS®. 
The following markets have posted some of the biggest drops in listings year-over-year:
  • Las Vegas: -37.9%
  • San Jose, Calif.: -36.2%
  • Columbus, Ohio: -29%
  • Cincinnati: -26.5%
  • Houston: -25.2%
  • Washington, D.C.: -25%
  • San Francisco: -23.4%
  • Chicago: -22.8%
Meanwhile, in some markets, home buyers have found more choices in the past year. These markets have seen the biggest growth in inventory levels year-over-year:
  • Honolulu: +27.5%
  • Orlando, Fla.: +25.8%
  • Miami: +22%
  • Charleston, W.Va.: +20.1%
Nationwide, the median age of inventory fell slightly year-over-year in September due to the reduced number of homes on the market, according to realtor.com®. Homes spent about 90 days on the market in September, three days less than a year ago.
Also, median listing prices held steady for the fourth consecutive month, maintaining a 7.7 percent gain year-over-year. The median list price in September was $214,900 nationwide.


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Monday, October 20, 2014

Fannie, Freddie to Loosen Up on Lending

DAILY REAL ESTATE NEWS | MONDAY, OCTOBER 20, 2014
The regulator of mortgage giants Fannie Mae and Freddie Mac is reportedly working on a deal with the financing entities that will loosen up lending standards and make mortgages more affordable for those with less-than-perfect credit. The move is expected to expand home buyers’ access to financing, as tight credit the last few years has kept many sidelined. 
The new rules reportedly will include a lower minimum down payment requirement (from 5 percent to 3 percent), in order for lenders to qualify to sell a loan to Fannie Mae and Freddie Mac. That would bring down payment in sync with the Federal Housing Administration, which insures loans made to lower-income borrowers and first-time buyers. Fannie Mae and Freddie Mac guarantee about 59 percent of all mortgages written.
The Federal Housing Finance Agency, which regulates Fannie and Freddie, reportedly will include more safety measures to help lenders protect themselves from making bad loans. Lenders have faced numerous high-dollar settlements after issuing loans that later defaulted. The new agreement would give greater confidence to lenders so they won’t be penalized years after a loan is made, The Wall Street Journal reports. 
The potential agreement “would allow credit to flow more freely to lower- and middle-income households,” Mark Zandi, chief economist at Moody’s Analytics, told The Wall Street Journal. “That’s vital to getting the housing recovery moving forward.”
During the financial crisis, the financing giants faced steep losses as home loans defaulted. The spike was blamed on poor underwriting by lenders in ensuring that borrowers could afford their mortgages. In response, the companies, which were seized by the government in 2008, have had banks tighten their credit standards, which some critics say has gone too far and prevented many home buyers from qualifying for a home loan. 
The Urban Institute has estimated that 1.2 million more mortgages would have been issued in 2012 alone if lending standards that were commonly used in 2001 were still in place. 
"Understandably, after the [financial] crisis the pendulum of mortgage credit standards swung to a far extreme” Paul Leonard, California director of the Center for Responsible Lending, told the Los Angeles Times. “It's now working its way back to a more moderate position.”
The FHFA is expected to formally announce the plans later this week. 
Source: “Fannie Mae, Freddie Mac Reach Deal to Ease Mortgage Lending,” Los Angeles Times (Oct. 17, 2014) and “Mortgage Giants Set to Loosen Lending,” The Wall Street Journal (Oct. 17, 2014)


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Thursday, October 16, 2014

Foreclosures Back to Pre-Crisis Levels

DAILY REAL ESTATE NEWS | THURSDAY, OCTOBER 16, 2014
A new sign that the foreclosure crisis may largely be in the rearview mirror, new filings in the third quarter of this year were down 16 percent from a year ago — bringing overall foreclosure activity down to its level before the housing crisis, according to RealtyTrac's Foreclosure Market Report. What's more, default notices, scheduled auctions, and bank repossessions in September dropped 9 percent from the previous month and were down 19 percent from a year ago. That's the lowest level since July 2006.
Not so fast. Could it be that thedip in foreclosures is only temporary?
"September foreclosure activity was back to pre-housing-bubble levels nationwide, in large part thanks to a continued slide in bank repossessions," says Daren Blomquist, vice president at RealtyTrac. "However, a recent rise in scheduled foreclosure auctions in many markets across the country shows lenders are continuing to clean house of lingering delinquent loans. This rise in scheduled auctions foreshadows a corresponding rise in bank repossessions and auction sales to third-party buyers in the coming months."
While foreclosure filings fell last month, they were up slightly by 0.42 percent in the third quarter from the previous quarter. It's a small percentage, but it does mark the first quarterly increase since the third quarter of 2011, according to RealtyTrac. The uptick was largely attributed to a 2 percent increase in default notices and a 7 percent quarterly increase in scheduled foreclosure auctions.
That proves the foreclosure crisis isn't over in every market quite yet. Default notices in the third quarter rose from a year ago in 10 states, including Indiana (up 59%); Oklahoma (49%); Massachusetts (38%); New Jersey (19%); Iowa (12%); and New York (2%).
Lenders are taking longer to process foreclosures, too. The foreclosure process took an average of 615 days in the third quarter, up 13 percent from a year ago. That's the longest average time to complete a foreclosure since RealtyTrac began tracking such data in 2007. The states with the longest foreclosure wait times are New Jersey (1,064 days); Florida (951 days); Hawaii (937 days); New York (902 days); and Illinois (889 days).
The five states with the highest foreclosure rates in the third quarter were:
  • Florida
  • Maryland
  • New Jersey
  • Nevada
  • Illinois
Source: RealtyTrac


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Wednesday, October 15, 2014

Major Incentives for Home Buyers This Fall

DAILY REAL ESTATE NEWS | TUESDAY, OCTOBER 14, 2014
Homebuilders are throwing in some extras to lure home buyers back this fall. For example, 10 homebuilders in a new suburban Phoenix community called Bridges at Gilbert are offering swimming pools, built-in barbecues, and subsidized mortgages.
Unique Incentives
Joseph Beben, a home buyer in the Phoenix area, says he chose to have a house built by Woodside Homes, which agreed to cover up to $10,000 of his closing costs as well as the price of a swimming pool. Beben will pay $332,000 for a 3,000-square-foot house. 
"Builders in volatile housing markets, such as Phoenix, Sacramento, Las Vegas, and Orlando, are sweetening offers as sales slow," Bloomberg Business reports.
The large increases in home prices last year have discouraged some buyers. The number of new-home communities in Phoenix rose by a third in the past year to 457, but sales per community dropped 45 percent last month from a year prior, according to Jim Belfiore, president of Belfiore Real Estate Consulting.
Builders in Nevada also saw a big drop in sales this year. In Las Vegas, new-home sales surged 32 percent in 2013 — but in the first eight months of this year, they have fallen 26 percent from the previous year, says Dennis Smith, president of Home Builders Research, a Las Vegas-based consulting company. A similar trend is taking hold in Sacramento, Calif., where new-home sales plunged 16 percent last month year-over-year.
Builders are beginning to discount homes and look for ways to boost sales. Orlando builders, for example, reportedly are advertising discounts and appliance packages, as well as offering to cover closing costs, after new-home sales dropped 19 percent year-over-year in June.
Buyers are enjoying being the drivers at the moment in some of these markets. Bob Berg, a retiree from Chicago, was looking for homes in the Phoenix area. "A couple of builders said to me, 'What will it take for you to buy this home?'" Berg says. "That's kind of drastic when they say something like that. It tells me they want to move that home."
Source: "Homebuilders Offer Goodies as Sales Slow," Bloomberg BusinessWeek  (Oct. 9, 2014)


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10 Best College Towns for House Flippers

DAILY REAL ESTATE NEWS | TUESDAY, OCTOBER 14, 2014
College towns have long been known as havens for investors looking to cash in on rentals or turn a profit on a home flip. RealtyTrac recently ranked the best college towns for flippers in 2014.
Want to Flip? Know This
RealtyTrac analyzed public four-year universities that had enrollment of 20,000 or more as of 2012 and also were located in counties that had unemployment rates below the national average of 6.2 percent. The top 10 college towns for flipping were ranked based on the average gross return on investment (ROI) percentage for single-family home flips there during the first eight months of 2014. (Note: Some college towns did not have sufficient sales or flipping data to be included in the rankings).
Here are the college towns that topped RealtyTrac's 2014 list:
  1. University of Minnesota (Minneapolis)
    Average gross flip profit: $105,292
    ROI: 65.59%
  2. University of Washington (Seattle)
    Average gross flip profit: $168,247
    ROI: 61.88%
  3. University of Nebraska (Lincoln, Neb.)
    Average gross flip profit: $53,763
    ROI: 55.01%
  4. San Francisco State (San Francisco)
    Average gross flip profit: $402,790
    ROI: 54.16%
  5. Thomas Edison State College (Trenton, N.J.)
    Average gross flip profit: $40,497
    ROI: 48.06%
  6. University of Florida (Gainesville, Fla.)
    Average gross flip profit: $41,235
    ROI: 47.95%
  7. University of Colorado (Denver)
    Average gross flip profit: $103,658
    ROI: 45.86%
  8. University of Cincinnati
    Average gross flip profit: $45,929
    ROI: 44.88%
  9. University of Akron (Akron, Ohio)
    Average gross flip profit: $35,909
    ROI: 42.95%
  10. North Carolina State (Raleigh, N.C.)
    Average gross flip profit: $61,028
    ROI: 38.52%
Source: RealtyTrac


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Tuesday, October 14, 2014

Landscaping Boosts Home Values Up to 12%

DAILY REAL ESTATE NEWS | TUESDAY, OCTOBER 14, 2014
You might want to take a closer look at your listing's curb appeal: Upgrading a home's landscape from average to excellent can raise its overall value by 10 percent to 12 percent, according toresearch from Virginia Tech.
Up Your Curb Appeal
Researcher Alex X. Niemiera with the Department of Horticulture at Virginia Tech found that a $150,000 home with no landscaping could fetch an additional $8,300 to $19,000 by adding a landscape with color and large plants.
The value of landscaping differed greatly from state to state. For example, the change in value from a home with no landscape to well-landscaped ranged from 5.5 percent in Louisiana to 11.4 percent in South Carolina. Michigan homes saw the biggest difference in landscaping appeal, with a home's value being increased by 12.7 percent.
"The most preferred landscape included a sophisticated design with large deciduous, evergreen, and annual color plants and colored hardscape," according to Niemiera. Adding different plant sizes to a front yard, for example, can boost curb appeal, as well as mixing fruit trees and flowers for added color.
The following landscape elements were found to be most important to survey respondents:
  • Design sophistication
  • Plant size
  • Diversity of plant material type
"Survey results showed that relatively large landscape expenditures significantly increase perceived home value and will result in a higher selling price than homes with a minimal landscape," Niemiera writes in the paper. "Design sophistication and plant size were the landscape factors that most affected value. The resulting increase in 'curb appeal' of the property may also help differentiate a home in a subdivision where house styles are similar and thereby attract potential buyers into a home. This advantage is especially important in a competitive housing market."
Source: “Does Landscaping Increase Your Homes Value?” Realty Times (Oct. 13, 2014)


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