Thursday, June 11, 2015

Why Renters May Be Losing Out

DAILY REAL ESTATE NEWS | THURSDAY, JUNE 11, 2015
Americans are better off buying than renting in the majority of places across the U.S., but the number of renters continues to be at record highs.
Realtor.com® finds that it's cheaper to buy rather than rent in 80 percent of the counties in the U.S. That's because renters continue to face sharp price increases. A record number of renting households are leading to fewer apartment vacancies, which in turn is continuing to push rents upward, notes Jonathan Smoke, realtor.com®'s chief economist, in recent commentary at realtor.com®.
But many renters – with home ownership aspirations – are struggling to break into the housing market. Indeed, 81 percent of renters indicate they would prefer to own a home if they could afford to do so, according to the Federal Reserve's Survey of Household Economics and Decisionmaking. Fifty percent of renters reported that they lack the funds for a down payment and 31 percent of renters say they could not qualify for a mortgage. Other reasons given for renting included 27 percent of renters saying it was cheaper for their household; 25 percent who thought renting was more convenient; and only 12 percent said they rented because they preferred it over owning.
The amount of income renters may have influenced their responses for why they choose to rent. For example, for renters earning less than $40,000 year, their top responses on why they rent were because they were unable to save for a down payment (52%) or qualify for a mortgage (35%). On the other hand, for renters who earn more than $100,000 a year, their top responses for renting were because they believed renting was more convenient (39%) or they preferred renting to owning (17%). Twenty-nine percent in the $100,000 and up earner group said they plan on moving in the near term.
Source: "Federal Reserve Report on Household Economic Well-Being," National Association of Home Builders Eye on Housing Blog (June 10, 2015) and "Midyear Report: The Housing Market Is on Track for Its Best Year Since 2006 (and it Ain’t a Bubble," realtor.com® (June 10, 2015)


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Wednesday, June 10, 2015

The Most Common Delays Toward Closing



DAILY REAL ESTATE NEWS | TUESDAY, JUNE 09, 2015
The majority of contracts – 64 percent -- are settled on time with no delays to closing, but some REALTORS® acknowledge facing delays or even having contracts terminated for numerous reasons, according to the latest REALTORS® Confidence Index Survey, a survey of more than 1,500 REALTORS®. Twenty-six percent of REALTORS® surveyed identified a delay to settlement, while 10 percent said they have even had a contract terminated prior to closing.
About 60 percent of REALTORS® reported some type of issue on their contract in April. For example, 12 percent of REALTORS® identified a financing issue; 8 percent had home inspection problems surface; and 7 percent had an appraisal issue. Three percent of REALTORS® also identified issues buying/selling distressed property; titling and deed issues; or with contingencies stated in the contract.
"It is surprising that in a 'tight' and 'difficult' credit environment, only 12 percent of contracts that were reported to have settled or terminated had financing issues," economists at the National Association of REALTORS® report. "One explanation may be that potential home buyers are deciding to sit on the sidelines for now, so these buyers were not captured in the data."
Source:"64 Percent of Contracts Are Settled on Time," National Association of REALTORS® Economists' Outlook Blog (June 8, 2015)


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Monday, May 18, 2015

12 Most Popular New-Home Amenities in 2015

DAILY REAL ESTATE NEWS | MONDAY, MAY 18, 2015
Master bedroom walk-in-closets and a laundry rooms are the top features that builders are most likely to include in a new home this year, according to a survey of builders conducted by the National Association of Home Builders.
"Both features speak to improving organization and storage characteristics of new homes," according to NAHB on its Eye on Housing blog.
Greater energy efficiency amenities also were ranked more important, with low-E Windows coming in No. 3 on the most likely amenity list on new homes. Energy-Star rated appliances and windows as well as a programmable thermostat also rated high.
The following were ranked as the most likely features and amenities to be included on an average single-family home in 2015:
  1. Walk-in closet in master bedroom
  2. Laundry room
  3. Low-E windows
  4. Great room (kitchen-family room-living room)
  5. Energy-Star rated windows
  6. Ceiling height on the first floor of 9 feet or more
  7. 2-car garage
  8. Programmable thermostat
  9. Granite countertop in the kitchen
  10. Central island in the kitchen
  11. Bathroom linen closet
  12. Front porch
On the other hand, the features identified in the survey as the most likely to be included in new homes this year are:
  1. Outdoor kitchen (cooking, refrigerators and sinks)
  2. Laminate countertops in the kitchen
  3. Outdoor fireplace
  4. Sunroom
  5. Two-story family room
  6. Media room
  7. Two-story foyer
  8. Walking/jogging trails in the community
  9. Whirlpool in the master bathroom
  10.  Carpeting as the flooring on the main level
Source: "What Builders Are Building," National Association of Home Builders Eye on Housing Blog (May 13, 2015)


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Tuesday, May 5, 2015

Realtor.com®: 'Furious' Spring Market Plays

DAILY REAL ESTATE NEWS | TUESDAY, MAY 05, 2015
Single-family, condo, co-op, and townhome listing views on realtor.com® in April soared 40 percent compared to last year at this time. Jonathan Smoke, realtor.com®’s chief economist, calls it "furious" activity in the housing market this spring -- so it’s only fitting he was inspired by soundtracks from the movie "Furious 7" to go along with a rundown of his latest action-packed housing report.
"The spring whistle blew and what's getting low?" writes Smoke at realtor.com® citing DJ Snake & Dillon Francis' "Get Low" from the soundtrack. "Inventory is moving fast among furious and growing demand." The median age of listings nationwide is now 10 fewer days than in April last year.
Realtor.com® traffic, searches, and listing views are up more than 35 percent over last year.
"With 3 million jobs created and close to 1.5 million new households formed in the past 12 months, many more people want a new home of their own, and they want it bad," Smoke says, channeling Sevyn Streeter's "How Bad Do You Want It (Oh Yeah)" on the Furious 7 soundtrack. "Their patience will be tested with tight supply – indeed, the No. 1 impediment of active shoppers in April was not being able to find a home that meets their needs."
Read Smoke's full commentary, including his music picks to match the market, at realtor.com®.


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Thursday, April 23, 2015

Landlords Say They're Raising Prices Again

DAILY REAL ESTATE NEWS | THURSDAY, APRIL 23, 2015
CEOs of the largest companies renting out single-family homes say they plan to raise rents up to 5.7 percent this year.  Investors are switching their focus from buying properties to optimizing the revenue from the thousands of properties they bought, taking advantage of the increased demand for rental homes, Bloomberg reports.
“In the 2015 rental season, we’re really seeing the ability to move rents,” David Singelyn, chief executive officer of American Homes 4 Rent—the largest publicly-traded single-family landlord, with about 35,000 homes—said at a recent conference in Miami Beach, Fla.
Large-scale investors—those who purchase at least 10 properties a year—have spent about $68 million snatching up 528,000 single-family rental homes since 2011, according to a report last month by Haendel St. Juste, a Morgan Stanley analyst. Now the CEOs of Silver Bay, Starwood Waypoint, American Residential Properties, and Blackstone Group all say they plan to raise rents this year.
“We are focusing aggressively on rent bumps,” Stephen Schmitz, American Residential Properties CEO, said during a panel discussion. “There’s a supply imbalance in some markets. The same thing that keeps occupancy high also drives rents.” Schmitz says they plan to bump up rental rates by 4 percent on renewals and up to 5.7 percent for new tenants.
Source: “U.S. Single-Family Landlords Are Raising Rents, CEOs Say,” Bloomberg (April 21, 2015)

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Tuesday, April 21, 2015

Fannie: Economy Likely to 'Spring Forward'

DAILY REAL ESTATE NEWS | TUESDAY, APRIL 21, 2015
Economic activity weakened in the first quarter of the year, mostly attributed to bad weather conditions across the Northeast and West Coast port disruptions. But the economy will likely gain momentum throughout the spring, which is expected to give a lift to the ongoing housing recovery, according to Fannie Mae’s Economic & Strategic Research Group.
Eye on the Economy
"We have downsized our first-quarter economic growth expectations in light of several transitory factors that weighed on consumption," says Doug Duncan, Fannie Mae's chief economist. "Although some momentum was lost in the first quarter as consumers remained cautious in their spending, perhaps putting an emphasis on repairing their personal balance sheets and replenishing savings, we expect that consumer spending will catch up during the second quarter and continue in subsequent months, supporting our forecast of 2.8 percent growth for the year. We believe this momentum will carry over into the housing market, as well, particularly if strong consumer income growth continues."
However, Fannie Mae economists caution that there could be some volatility, particularly with consumer spending and the financial markets, leading up to the Federal Reserve’s first expected rate hike in the coming months. 

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Price Jumps Are Leading to More House Flips

DAILY REAL ESTATE NEWS | TUESDAY, APRIL 21, 2015
More investors are flipping properties again, a trend that started last year and is building momentum across the country, according to Auction.com's First Quarter 2015 Real Estate Investor Activity Report.
Investors lately are showing more interest in purchasing a home to flip than renting it out. In fact there was a 6.5 percent quarter-over-quarter increase in favor of flipping in the first quarter of 2015.
"It seems clear that the unusually low inventory of homes for sale has led to higher home prices, which makes it challenging for investors to rent homes out at a rate that’s profitable, and still affordable for tenants," says Rick Sharga, Auction.com's executive vice president. "So in states like California, Washington, Nevada, and Arizona a large number of investors have decided that the best opportunity today is to meet the demand of prospective home owners by buying, fixing, and re-selling investment properties."
Survey respondents indicated a preference toward flipping over a rent-to-hold strategy in every state Auction.com conducts live auction events. The West and Midwest had the largest margins of investors favoring flipping over renting. The five states that had some of the largest numbers of investors in favor of flipping over renting were Nevada, California, Washington, Idaho, and North Carolina.
However, the preference depends on investor profile, Auction.com’s survey found. Survey respondents who said they were making a one-time purchase still tended to prefer a hold-to-rent strategy. On the other hand, survey respondents who identified themselves as full-time “real estate investors” and those who work on behalf of another investor showed a preference toward flipping.
Source: Auction.com


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