Mismatched marketplace

Posted by at 11:26 am

The record-low supply of homes for sale continues to be a nationwide trend, due mostly to a mismatch with buyer demand. Sales inventory tumbled 8.9 percent nationally between 2016 and 2017, and as of Q2 2017, had fallen for  nine consecutive quarters. Bidding wars are to be expected with most offers, especially in larger metropolitan areas and their suburbs. However, the competition is mostly born out of a lack of homes at the low end of the market, where there is most demand. After the housing crisis, investors bought up a huge percentage of the existing starting home inventory, perhaps thinking of “flipping” the homes when prices recovered. But today, those investors are collecting high rents on those homes, leaving little incentive to sell. The remaining starter homes are in huge demand. New construction isn’t filling the void. While homes priced between $200,000 and $250,000...
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September 8th, 2017

Virtually impossible to stop tech revolution

Posted by at 2:27 pm

The Tech Revolution continues to pick up speed   –  and the array of new gadgetry to help real estate industry pros is no exception! In the 1990s and 2000s, cellphones and smartphones freed agents from their office chairs (and chained them to their cars). Who knew that was just the beginning? Now drones soar high overhead, offering professional-quality listing photos from unprecedented perspectives. How about the virtual real estate broker? The concept has been around since at least 1987, when the movie “RoboCop” showed a home tour guided by an agent who popped up on screens as shoppers moved from room to room. With instant messaging apps like Skype and FaceTime, buyers can take home tours without actually being present. One company offers a robot that tours homes for you with a camera, broadcasting videos that can be streamed online. Some...
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Buyers explore longer commutes

Posted by at 12:50 pm

  Stopping short of saying it’s a “major” trend, extreme commuting – or at least extended commuting – is becoming an established feature of the American workplace. About 21 percent of workers commute more than 60 minutes each way to their jobs. More than half of these drive the whole distance alone. Extreme commuters – defined as people who spend 90 minutes or longer getting to work each way – are still rare, making up only about 3 percent of the work force. But the numbers are rising. By coincidence, many companies today are bringing telecommuting workers back to the office, demanding more collaboration and contact with customers. U.S. workers who performed all or some of their work at home fell from 24 to 22 percent between 2015 and 2016. With soaring prices, many commuters say they are willing to sacrifice...
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Millennial concerns constrain home ownership

Posted by at 11:59 am

If you’re 35 or younger and you own your own home in America, you are somewhat of a rarity – a lot of your peers haven’t gotten there yet. Only about 35 percent of young adults in the U.S. are homeowners, an all-time low. In fact, a recent U.S. Census report found that a full third of America’s young adults still live at home with one or both parents – more than the amount who cohabitate with a partner or live alone. There are many reasons America’s young adults are struggling. Along with facing the highest home prices in history, Millennials are shouldering some serious student loans – borrowers who graduated in 2016 will pay back an average of $37,000. Many took out those loans at the height of the crisis – at some pretty high interest rates. Terms as...
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August 10th, 2017

Odds are there is no housing bubble

Posted by at 4:04 pm

In the post-crisis era, it can be hard to believe there’s no negative outcome lurking behind today’s soaring housing prices. But new analysis of data from 14 developed countries shows there’s minimal risk of a dramatic decline in home prices any time soon, despite current fears of a “bubble-bursting” correction. The research comes as housing prices set new records nationwide, surpassing their 2006 peaks in almost all areas of the country. The median house price jumped 6.5 percent in June to an all-time high of $263,800 – the 64th straight month of year-over-year price increases. But the study showed sustained increases in real house prices have been the norm since 1950, rather than the exception. While there is always a chance of a correction, odds are it won’t happen. Simple models put the chance of a 20 percent (or more)...
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July 13th, 2017

Spec construction poised for comeback?

Posted by at 10:10 am

With the rising price of existing starter homes, one segment of the new construction marketplace may be poised to take off at a pace not seen since the days following World War II. By the end of the 1940s, America had essentially ceased building homes – diverting usable materials to support the war effort. The demand for affordable homes created by the returning soldiers fueled the new “spec” home industry. “Spec” is another name for “speculative” construction, building new homes for sale with no particular buyer in mind. In the 1950s and 1960s, many builders turned out thousands of simple, mass-produced homes at an affordable cost. Most sold and the builders turned a tidy profit. Insert Millennials into the equation in place of GIs. Today, there are at least 30 million potential buyers younger than 36 looking to settle down. And it’s not...
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Report: Sacramento is hot!

Posted by at 12:08 pm

Sacramento, home of one of the newest branches of Bay Equity Home Loans, was lauded as one of California’s hottest housing markets in the May 25, 2017 issue of The Wall Street Journal. Though it’s the state capital, Sacramento had taken a bit longer to emerge from the Housing Crisis slump while the rest of the state surged. Led by an aggressive downtown renewal plan, many of Sacramento’s most desirable neighborhoods are cropping up in the urban core – a shift from its past developments featuring gated suburban communities. Among the standout downtown projects are Downtown Commons, a vacant mall converted into a two-level outdoor mixed-use entertainment and shopping complex. Condominiums with city and river views, as well as room service and concierge, are breaking new ground in luxury living. Other features include new artist lofts, warehouses renovated for unique retail and office...
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Self-Managed Homeowners Associations

Posted by at 2:32 pm

With the skyrocketing price of homes today, many homeowner association neighborhoods are looking to save where they can. Some have found they can maintain desired aesthetic standards at a lower cost with self-management, where neighbors agree to share administrative duties instead of paying a professional management company. This can mean a huge savings for the growing number of HOA communities. HOAs maintain standards for landscaping and cleaning of common areas, and enforce rules for upkeep on the membership’s homes. HOAs often protect property values by not allowing neighborhood problems to fester. Majority Rules Some self-managed HOAs are governed strictly by the majority rule. In America, the one-voice, one-vote concept is quite popular, especially considering some recent election results! In such “pure” democracies, community spirit is often enhanced. In an increasingly stratified society where folks often just stay in their own homes...
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A gift horse: The home seller’s curse

Posted by at 4:32 pm

So, you put your home up for sale, with a listing price based on local comparables. As luck would have it, a buyer comes along within days – maybe even hours – and meets that price. Heck, maybe they even throw in an extra 2 or 3 percent for good measure. This is probably one of those times referred to in the phrase: “Don’t look a gift horse in the mouth.” But sometimes, when everything goes right, we have trouble accepting it. It’s a curse The “curse of the first offer” is well-known to real estate agents who have been around for a while. The seller’s reaction to an early offer? Almost inevitable: “Maybe we should wait and see if we can get more.” Today’s seller is probably right about one thing: There will be other offers. In marketplaces around...
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Homeownership: A savings lifeline

Posted by at 12:30 pm

With home prices rising to all-time highs, many potential buyers may imagine drowning in a sea of monthly payments stretching across many years. Naysayers bob to the surface with harrowing tales of home-buying gone wrong. If the down payment doesn’t get you – well the property taxes, maintenance and insurance surely will! These so-called “savvy” investors say renters who dutifully put all money not spent on housing into stable investments – like mutual funds – may get a greater rate of return. Criticism of homeownership as an instrument of wealth-building has understandably become louder in the last decade, after a Housing Bust that put more than 10 million homeowners upside-down, and 4 million more into foreclosure. Though most underwater homeowners have swum back into positive equity, and many of those foreclosures are mortgage-eligible again, the math geeks remain in a...
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