Boomers and Engineers a Good Sign for Housing Markets

By: Realtor.com Team 

 

Metropolitan areas that are home to larger populations of math and science professionals and baby boomers are bucking the usual seasonal trend of a real estate slowdown as summer ends, realtor.com® research shows.

Properties in 12 major metro areas are spending less than two months on the market, according to the realtor.com® September National Housing Trend Report, released today.
The 12 markets include the greater Seattle, San Francisco, Austin, TX, and Washington, D.C. areas.
“When we see homes moving quickly in a particular market, we expect the trend to be supported by signs of local health like growth in industrial production and employment,” said Jonathan Smoke, chief economist for realtor.com®.

The high proportion of math and science professionals in these fast-moving housing markets likely has to do with the higher incomes found in those professions, which also attracts job seekers from other areas, Smoke added.

“So, assuming the portion of people moving in have above-average jobs, you have a recipe for strong demand up against tight supply,” he said.

As for the baby boomers, Smoke pointed out this is a huge generation and the one with the most wealth. Many of them are approaching or will soon be thinking about retirement, a major life event that spurs housing transactions—whether they’re downsizing because the kids are gone, upsizing to their dream home or selling to move to senior living communities.

All of those decisions support local construction and economic activity, providing a strong base for housing demand, Smoke said.



“As the technology industry grows and aging baby boomers decide to make housing moves to support their retirement, we’ll continue to see strong housing demand associated with these factors.”
On a national level, median age of inventory is lower than last year, with a reduced number of homes on the market. In September, homes spent approximately 90 days on the market, which is three days less compared to this time last year.

Median listing prices held steady for the fourth consecutive month, maintaining a 7.7% gain year-over-year. According to the National Association of REALTORS®, inventory continued to demonstrate persistently low months’ supply at five and a half months as compared with normal levels of six to seven months.

New homes months’ supply was even lower at nearly five months in August.
“To truly relieve the inventory shortage on a sustained basis, new home construction needs to rise by at least 50% from the current levels,” said Lawrence Yun, chief economist and senior vice president of research for the National Association of REALTORS®.

11 amazing real estate facts to entertain your brain

By Seth Williams, Inman News, Oct 20, 2014
        

Source: Flickr, Seeking Alpha

Source: Flickr, Wikipedia, HuffingtonPost

Source: Flickr, Wikipedia, Houselogic

Source: Flickr, LifestyleProperties

Source: Flickr, OneRedPaperClip

Source: Flickr, Wikipedia

 Source: Flickr, WashingtonCityPaper

Source: Flickr, HomesOfTheRich

Source: Flickr, CrazyFacts, Wikipedia

Source: Flickr, Gizmodo

Source: Flickr, Cnet

How Much Resale Value for a Garage?

Realty Times By PJ Wade on Wednesday, 15 October 2014

When you're planning renovations to boost the resale value of your home, don't overlook the other money maker on your property - your garage.
The ideas and suggestions offered here are aimed at detached garages, but most apply to attached garages as well:

1. Know your target buyers

Will this outside space represent true value to the buyers you're counting on to pay top dollar? If so, transform it into the best garage it can be. How can your garage separate your property from the competition? This may mean tearing down the worn-out version and building a new one, or adding a garage if none exists. Adding electrical power and running water can add value, but check value appreciation against costs and permit expenses before you undertake these changes.

2. Know your zoning bylaws
If your municipality allows accommodation to be added to a garage, the additional space and any related income may be the deciding factor for some buyers. If an occupancy permit is out of the question, the garage can still double as an art studio, workshop, or man cave, and differentiate your property from the neighbors. Will your zoning allow the space to be used for a home-based business?

3. Know how to expand storage
Fit out every corner of your garage as storage space for everything from seasonal decorations and furniture to extra chairs, bicycles, and sports gear. Shelves, hooks, bins, and cupboards are garage "jewellery."
4. Know how to go green
If green buyers are in your target, consider a green renovation with environmentally-friendly materials. Set the garage up to house electric and hybrid cars. Make a special bicycle section with the latest storage systems. Install a solar panel for lighting and other services. Add windows and skylights with insulated blinds to increase the amount of natural light when needed.

5. Know how to expand utility
Can the single garage be expanded to a double? How about a loft? Could a greenhouse be added to entice gardeners? Is there room for a hot-tub or sauna? Could an exercise room work here?

6. Know how to make value visible
Whether you match the garage's style to that of your home or give the garage a distinctive look, make the garage shine. Murals and trompe d'oeil can transform the mundane to the magical if you have a talented artist on hand. State-of-the-art door hardware, locks, and door openers make strong value statements.
Garages can add significant value or merely make a home stand out in a subdivision's crowd to become more saleable. However, the garden space taken up by a too-small or poor-condition garage may mean that demolition of the building and landscaping of the open space is the best value-adding approach.
Take care with this strategy. Once a garage has been demolished, some municipalities may not allow a new garage to be built on the property. That's where your real estate professional comes in. This local expert knows whether your garage represents value potential or a turn-off to target buyers. Ask the professional to back up their suggestions with actual sold examples, so you're not the one who pays for a misguided marketing approach.

How Older Homes Beat New Homes

Realty Times by Blanche Evans Tuesday, 07 October 2014

For a society that likes shiny new things, the latest research could foreshadow a surprising trend -- homebuyers choosing older homes over new construction.
Why? The prices and operating costs can vary widely. In August 2014, the median sales price of new homes sold was $275,600, while the median price of older homes was $219,000. Taxes and insurance may cost less for an older home.

     

People are often wowed when they go into a builder's model and see how beautiful it is. It has the latest bells and whistles, but when the buyer starts to add upgrades, the price can quickly increase. Once they see how much it costs to get everything they want, older homes start to look much more affordable.

Retro charm
Whether you prefer mid-century modern or Victorian shabby chic, older homes have personalities and features that are a lot of fun to decorate. You can also update an older home a little at a time instead of paying a big mortgage to have it all at once.

More available
Since the Great Recession, existing homes have been much less expensive than new homes, and builders have had a hard time getting market share traction. For example, the sales of existing homes in August were seasonally adjusted at 5.05 million units. Sales of newly built, single-family homes were 412,000 units, which is low by historical standards.

Stricter financing
A new home with a higher price tag may be harder to finance. Stricter lending requirements mean that borrowers have to stay within traditional guidelines of affordability, including down payments and debt to income ratios. An affordable home should not take more than approximately 30% of household gross income to cover mortgage notes, taxes and insurance.

Wealth effect is gone
Despite recent gains in the stock market, people simply don't feel as wealthy or as confident. In 2010, returns were about where they were in 2000, meaning a lost decade of wealth-building in stocks and bonds, as well as housing equity. Four years later, many investors have yet to make up their losses.

  Higher building costs
National Association of Home Builder's (NAHB) research shows lumber and wood products account for 15% of the cost of construction for a single-family home. Lumber prices are 27% above their average 2011 levels. NAHB economists estimate that a 10% increase in the price of framing lumber per 1,000 board feet adds approximately $660 to the price of an average new home.
Even a small change in home prices or interest rates can determine whether homebuyers can buy a home. A 2012 priced-out analysis done by NAHB found that a $1,000 increase in new home prices from $225,000 to $226,000 eliminates 232,447 households from being able to afford the same home. A 10% cost increase in the average wholesale price of framing lumber would mean that about 160,000 families would not be able to qualify for a mortgage on an average first-time home.

Commutes more expensive
Most new homes are built where land costs are cheaper, well outside the inner city. The Department of Energy expects commuters to pay an average $700 more annually in gasoline costs to live in the suburbs. The cost of commuting could make older homes in the inner city, walking communities, and homes near public transportation more attractive to homebuyers.

Where new homes beat older homes
Because it's easier to build green than to retrofit, new homes have the advantage over older homes when it comes to energy efficiency. Sixty-eight percent of homebuilders say the home of 2015 will have more energy-efficient features such as insulated windows and water-efficient fixtures, and Energy-Star-rated appliances, heating and cooling systems.
Whether homebuyers choose existing or new homes, one thing is certain- they can't go wrong either way. In an inflationary environment, buying a home is one of the best hedges against rising rents and higher building costs down the road.