New Study Reveals One Surprising Reason for the Inventory Shortage

There has been a great amount written on millennials and their impact on the housing market. However, the headlines often contradict each other. Some claim this generation is becoming the largest share of first-time home buyers, while others claim millennials don’t want to own a home, blaming them for the dip in homeownership rate.

While it is true that millennials have achieved milestones like getting married, having kids, and buying homes later in life than their parents and grandparents did, they are not solely to blame for today’s housing market trends.

Freddie Mac’s Insight Report explored the impact of the Silent and Baby Boomer Generations on the housing market.

If millennials are unable to find a home to buy at a young age like their predecessors, then who is living in those homes?

The answer: Seniors born after 1931 are staying in their homes longer than previous generations, instead choosing to “age in place.”

Freddie Mac found that,

“this trend accounts for about 1.6 million houses held back from the market through 2018, representing about one year’s typical supply of new construction, or more than half of the current shortfall of 2.5 million housing units estimated in December’s Insight.

Older Americans prefer to age in place because they are satisfied with their communities, their homes, and their quality of life.”

According to the National Association of Realtors, inventory of homes for sale is currently at a 3.5-month supply, which means that nationally we are in a seller’s market. A ‘normal’ housing market requires 6-7 months inventory, a level we have not achieved since August 2012.

“The most important fundamental in today’s housing market is the lack of houses for sale. This shortage has been identified as an important barrier to young adults buying their first homes.”

Bottom Line

If you are one of the many seniors who desires to retire in the same area you’ve always lived, you’re not alone. Will your current house fit your needs throughout retirement? If you have any questions about demand for your house, let’s get together to discuss the opportunities available today!

With Inventory Low: Will Your Dream Home Need Some TLC?

According to a new survey from Move.com, the wave of first-time homebuyers hitting the market this summer has resulted in an interesting statistic. Nearly 60% of buyers searching for a home this spring are willing to consider buying a fixer-upper, with 95% believing that the projects needed will increase their new home’s value!

Realtor.com’s Chief Economist, Danielle Hale, pointed to low-inventory at the entry-level price range for the increase in willingness to renovate.

“The combination of rising home prices and limited entry-level homes for sale is prompting many home shoppers to consider homes that need renovating.

Replete with inspiration at their fingertips – like Pinterest, Instagram, and various home renovation TV shows – some home shoppers are comfortable tackling home renovation jobs to find a home that balances their needs with their budget.”

Just over half of all respondents who said they would be willing to buy a home in need of some TLC, would also spend more $20,000 to make the home fit their needs.

The most common ‘expected’ renovation is a kitchen remodel which can run anywhere from $22,000 for a minor remodel to $66,000 for a major remodel.

This isn’t a new trend by any means. According to the Joint Center for Housing Studies at Harvard University, home improvement project spending reached a new high in 2018.

“Americans spent $336.9 billion on remodeling projects, up 7.4% from the $313.6 billion a year earlier.”

Home renovation television shows have given many buyers hope that they could renovate a home they can afford into their dream home!

Bottom Line

If you are one of the many Americans considering buying a home this spring, let’s get together to help you find a house with the potential to be your dream home!

 

Selling Your House: Here’s Why You Need A Pro In Your Corner!

With home prices on the rise and buyer demand still strong, some sellers may be tempted to try to sell their homes on their own rather than using the services of a real estate professional.

Real estate agents are trained and experienced in negotiation while, in most cases, the seller is not. Sellers must realize that their ability to negotiate will determine whether or not they get the best deal for themselves and their families.

Here is a list of just some of the people with whom the seller must be prepared to negotiate with if they decide to For Sale by Owner (FSBO):

• The buyer, who wants the best deal possible
• The buyer’s agent, who solely represents the best interests of the buyer
• The buyer’s attorney (in some parts of the country)
• The home inspection companies, which work for the buyer and will almost always find some problems with the house
• The termite company, if there are challenges
• The buyer’s lender, if the structure of the mortgage requires the sellers’ participation
• The appraiser, if there is a question of value
• The title company, if there are challenges with certificates of occupancy (CO) or other permits
• The town or municipality, if you need to get the CO permits mentioned above
• The buyer’s buyer, in case there are challenges with the house your buyer is selling

Bottom Line

The percentage of sellers who have hired real estate agents to sell their homes has increased steadily over the last 20 years. Let’s get together to discuss all that we can do to make the process of selling your house easier for you.

5 Reasons Why Millennials Buy a Home [INFOGRAPHIC]

Some Highlights:

• “The majority of millennials said they consider owning a home more sensible than renting for both financial and lifestyle reasons — including control of living space, flexibility in future decisions, privacy and security, and living in a nice home.”
• The top reason millennials choose to buy is to have control over their living space, at 93%.
• Many millennials who rent a home or apartment prior to buying their own homes dream of the day when they will be able to paint the walls whatever color they’d like or renovate an outdated part of their living space.

Frisco Texas New Homes

The post Frisco Texas New Homes Read more on:
https://www.builderhotspots.com/

Frisco Texas is one of the hottest spots in the United States right now.  There are a lot of companies relocating to Frisco because of great home prices and what the schools have to offer.

Frisco schools are ranked very well and is a top priority that the city really focuses on.  This is also one of the driving factors a lot of companies have taken under consideration when choosing Frisco to relocate to.

Frisco is one of the fastest growing cities in United States.  It’s about 20 mins north of Dallas Texas and you can take i75 or the Dallas North Toll Way to get to Frisco.

One of the most exciting things that is happening is PGA of America is moving their head quarters to Frisco Texas.  The association will anchor a 600-acre, mixed-use development. This also includes championship golf courses, a resort hotel, conference center space and the association’s headquarters.  This will be located south of 380 which is the north part of Frisco.

There are so many beautiful new homes that are being built in Frisco Texas.  Property taxes in Frisco is around 2.3%.  It is lower compared to other surrounding cities which is also a factor why buyers choose Frisco.  It’s consider one of the newer developed cities in the area.  Older homes that were constructed started in the 90’s.  There are older homes constructed in old down town Frisco.  Most of the major grown in the area started in the 90’s.

If you are thinking of relocating to the Frisco Texas area make sure you visit www.builderhotspots.com to search for new homes in the area.  You can see information on all the Frisco communities that are up and coming, view floor plans and thousands of interior images.

https://youtu.be/X6_qDiZEb14

Frisco Texas New Homes syndicated from https://builderhotspots.tumblr.com

Frisco Texas New Homes

The post Frisco Texas New Homes Read more on:
https://www.builderhotspots.com/

Frisco Texas is one of the hottest spots in the United States right now.  There are a lot of companies relocating to Frisco because of great home prices and what the schools have to offer.

Frisco schools are ranked very well and is a top priority that the city really focuses on.  This is also one of the driving factors a lot of companies have taken under consideration when choosing Frisco to relocate to.

Frisco is one of the fastest growing cities in United States.  It’s about 20 mins north of Dallas Texas and you can take i75 or the Dallas North Toll Way to get to Frisco.

One of the most exciting things that is happening is PGA of America is moving their head quarters to Frisco Texas.  The association will anchor a 600-acre, mixed-use development. This also includes championship golf courses, a resort hotel, conference center space and the association’s headquarters.  This will be located south of 380 which is the north part of Frisco.

There are so many beautiful new homes that are being built in Frisco Texas.  Property taxes in Frisco is around 2.3%.  It is lower compared to other surrounding cities which is also a factor why buyers choose Frisco.  It’s consider one of the newer developed cities in the area.  Older homes that were constructed started in the 90’s.  There are older homes constructed in old down town Frisco.  Most of the major grown in the area started in the 90’s.

If you are thinking of relocating to the Frisco Texas area make sure you visit www.builderhotspots.com to search for new homes in the area.  You can see information on all the Frisco communities that are up and coming, view floor plans and thousands of interior images.

https://youtu.be/X6_qDiZEb14

Frisco Texas New Homes syndicated from https://builderhotspots.tumblr.com

Buyer Demand Surging as Spring Market Begins

Last fall, some predicted that the 2019 residential real estate market would be a disaster. There was even belief we might experience a housing crash like the one that occurred during the last decade.

However, according to two separate reports*, buyer demand dramatically increased over the last three months, leading into this spring buyers’ market (the March data is not yet available).

Both the ShowingTime Showing Index and the National Association of REALTORS Buyer Traffic Index show that buyer demand has increased in each of the last three months.

Why the increase in demand? Increased buying power.

According to the National Association of Realtors’ Economists’ Outlook Blog, purchasing a home has become more affordable, which has led to increased demand.

“Due to the combination of falling home prices and mortgage rates, the income needed to make an affordable mortgage payment (mortgage no more than 25% of income) on a median-priced home with 10% down payment and 30-year fixed rate mortgage decreased from $60,425 in June 2018 to $53,783 as of February 2019, and the difference of $6,642 represents a gain in buying power because one can afford a home purchase at a lower level of income.”

Bottom Line

It appears the spring buyers’ market is going to be much stronger than many had projected. Whether you are selling or buying, this is important news.

 

*The methodology behind the indices:

The ShowingTime Showing Index

“The ShowingTime Showing Index® tracks the average number of buyer showings on active residential properties on a monthly basis, a highly reliable leading indicator of current and future demand trends.”

The National Association of REALTORS® Buyer Traffic Index

“In a monthly survey of REALTORS®, NAR asks respondents ‘Compared to the same month last year, how would you rate the past month’s traffic in neighborhood(s) or area(s) where you make most of your sales?’ NAR compiles the responses into an index, where an index above 50 indicates that more respondents reported “stronger” traffic than “weaker” traffic.”

Article sponsered by Builder Hot Spots.  A new home builders website give you the ability to online search 1000 of property floor plans, home images and city subdivisions when you are looking for a new house.

Are Low Interest Rates Here to Stay?

Interest rates for a 30-year fixed rate mortgage have been on the decline since November, now reaching lows last seen in January 2018. According to Freddie Mac’s latest Primary Mortgage Market Survey, rates came in at 4.12% last week!

This is great news for anyone who is planning on buying a home this spring! Freddie Mac had this to say,

“Mortgage interest rates have been steadily declining since the start of 2019. These lower mortgage interest rates combined with a strong labor market should attract prospective homebuyers this spring and could help the housing sector regain its momentum later in the year.”

To put the low rates in perspective, the average for 2018 was 4.6%! The chart below shows the recent drop, and also shows where the experts at Freddie Mac believe rates will be by the end of 2019.

Bottom Line

If you plan on buying a home this year, let’s get together to start your home search to ensure you can lock in these historically low rates today!

[Read More …]

Zillow buying homes?

Interesting read this past week.  Zillow is in the market to buy homes directly from the consumer.  They are charging 7% for their transaction fee to do so.  They offer a buy now option and then will come out to evaluate your home for the value.

If there are no additional damages or repairs needed to the house they will proceed to buy your house.  Wow!!! Interesting times we are in!  I wonder where we will be in a few years and how this will evolve!

Photo by rawpixel.com on Pexels.com

CEO Warning: The Housing Market Faces The ‘Perfect Storm’

Recently, CNBC interviewed Glenn Kelman, the CEO of Redfin, on the current state of the housing market. Kelman said that housing prices, interest rates, and taxes are whipping up a “perfect storm” on the coasts and elsewhere.

Student debt is already weighing heavily on the housing market, and interest rates poised to hit 6% could throttle the already precarious situation the economy is in now.  To be sure, the falling 30-year mortgage rate could reverse and hit 6% in the second half of next year. With record numbers of Americans in a record amount of debt, the slightest increase in interest rates could push some over the edge.  But that’s only one concern about the housing market.

There is no better barometer on the health of the United States’ economy than housing, according to Market Watch. It’s an industry that encompasses a myriad of vital sectors; including banking, manufacturing, commodities, international trade, transportation, and, of course, consumer spending. So it’s not surprising the Federal Reserve closely monitors housing trends in the course of setting monetary policy. It’s simply not possible to have a solid economic foundation without a robust housing market, and last year, the housing market was anything but robust.

The Fed’s hesitancy in raising interest rates further last week was due to volatility and instability in the housing market. This weakness is evidenced in the government’s own housing numbers.

Early this month, the government reported that new home sales dropped 6.9% in January to a 607,000 annual rate, which happens to be 4.1% below its year ago level. Not a great start to 2019. Sales crept up a disappointing 2.2% all of last year.

Existing home sales for February, on the other hand, rebounded with an 11.8% jump over January. It was certainly better than consensus expectations, which was in the range of a 5% increase. (Yet even with this bounce, the pace is still 1.8% off the same month last year.)-Market Watch

There are several factors that play into the “perfect storm” for the housing market.  One of those is the overall age of the population. Currently, baby boomers are retiring at a rate of 10,000 a day, which means looking to the millennial generation as the next wave of demand for homeownership. But many in this cohort are incapable of making such a financial commitment because they are burdened with a record $1.6 trillion in college debt. And “serious delinquencies” (those at least 90 days overdue or in default) of student debt topped a record $166 billion in the final quarter of 2018.

Lenders have also been more carefully assessing who the lend money to. With household debt reaching an all-time high of $13.5 trillion and interest rates rising the last three years, banks have also turned more cautious about granting credit to households, according to the Federal Reserve’s Senior Loan Officer Survey on Banking.

If the market is weakening as the Fed’s numbers and plans to back off in interest rate hikes are showing, then many will delay home ownership until there is more confidence in the overall economy.  So don’t look for the housing market to improve dramatically this year.

Article source: https://wordpress.com/read/blogs/80248012/posts/67405

This is a interesting read!  Interest rates have dropped this month.  It seems like the market is starting to soften a bit.  We have had a good run so I am wondering if this could be the start of a recession!  Lets see what 2019 brings us!!

Richard Lopez