Real Estate News

Survey: Tight Markets Causing More Buyer’s Remorse?

NAR Daily Real Estate News - July 6, 2018 - 1:00am

A new study shows more home buyers could be suffering from post-purchase regret amid housing shortages and steep competition from other prospects.

Categories: Real Estate News

Mortgage Rates Fall to 3-Month Low

NAR Daily Real Estate News - July 6, 2018 - 1:00am

Rates posted a rapid increase throughout most of the spring but have reversed course recently, falling in five of the past six weeks.

Categories: Real Estate News

‘Bump Clauses’ Are Giving Sellers a Safety Net

NAR Daily Real Estate News - July 6, 2018 - 1:00am

In some cooling markets, more transactions are reportedly including a “bump clause” to assure those selling a home that they have received the best offer.

Categories: Real Estate News

Millennial Buyers Face a Tough Housing Market

RisMedia Consumer Advice - July 5, 2018 - 4:02pm

(TNS)—Yvonne Jimenez Smith and her husband, Brandon Smith, spoke in whispers recently as they visited a white stucco house they planned to buy on a leafy street in San Jose, Calif.

After six months of aggressive hunting, they were on their way to a small suburban home of their own after spending most of their 20s in noisy city centers.

“It was so quiet, it just seemed weird to speak out loud,” Jimenez Smith says. “We lived over a freeway entrance in San Francisco. It was always loud and we were always surrounded by people. It’s a big change.”

Like the couple from San Francisco, who are 28 and 30, other millennials are starting to follow in the footsteps of earlier generations and buy suburban houses after fueling a boom in city apartments. The share of 25- to 35-year-olds who own homes, which had been falling since 2005 as renting grew in popularity, rose slightly in 2017, according to a Stateline analysis of Census microdata from IPUMS-Current Population Survey.

Last year 32.3 percent of young people were homeowners, a slight increase from 2016 when it was 32.2 percent. That’s still well below the 45 percent in 2005 and the peak of 55 percent in 1980.

Millennials are hitting the market at a difficult time, though, with rising prices and few houses to buy as the housing industry has shifted to building more downtown rentals. Some people seeking to buy houses have been discouraged and have postponed the step, just as many have had to put off moving out of parents’ houses, forming couples and having children as they tried to build careers delayed by the recession.

Between 2011 and 2017, home prices grew 48 percent, while income for all age groups rose only 15 percent, according to National Association of REALTORS® (NAR) statistics.

“It just feels irresponsible right now,” says Jayme Fraser, a 28-year-old freelance journalist who considered buying a house in Missoula, Mont., three years ago but found prices too high. She and her husband, who is in graduate school, are now looking for a more rural home in Montana they can afford to buy while paying off student debt.

Student debt is a big obstacle to buying a home for many millennials, says Jessica Lautz, director of Demographics at NAR. The median student debt for millennials is $41,000, and they typically put off buying their first home for seven years after they wanted to buy, Lautz says.

Young people with college debt typically spend close to half of their income on loan payments, according to a 2017 study in The Journal of Consumer Affairs. This makes it almost impossible to qualify for a home mortgage with a small down payment.

“Contrary to popular opinion, millennials are not buying avocado toast instead of saving for a down payment; they’re paying their student debt,” Lautz says. “Somebody with $41,000 in student debt is going to be buying something far away with a long commute, or in a bad school district, or something too small. They’re not going to be able to stay there for long.”

Thirty-two is the median age for first-time homebuyers, according to a survey by NAR. That means many first-time buyers are squarely in the millennial generation, the oldest of whom reached their mid-30s in 2017.

The apparent increase in ownership in 2017, the first since 2005, was so tiny that it’s hard to say if the trend toward less buying and more renting is really over, says Chris Porter, chief demographer for California-based John Burns Real Estate Consulting.

Ownership is still “considerably lower than 10 years ago,” Porter says. “We may need another year or two of data to understand whether this is truly a reversal.”

Some young people who could buy houses are still on the sidelines, like Connor Coyle and his fiancée, Amy Branchini, both in their late 20s. Coyle, who works in wealth management, moved a few years ago from Manhattan to suburban Westchester County, N.Y., where he rents an apartment.

“Both of us were at the point where we wanted to get out of the city and live a more relaxed lifestyle,” Coyle says. The couple is ready to stop renting and own a house, but they just haven’t seen a house they love in their $500,000 price range.

“If we end up renting for another three years, that’s OK,” Coyle says. “What you’re getting for your money right now, to my mind, is subpar. Maybe in a few more years we can get something in the $600,000 to $700,000 range, and it will make more sense—we won’t have to put in $100,000 in renovations.”

In some expensive states, such as Hawaii, California and New York, and the District of Columbia, fewer than one in five millennials is a homeowner, according to the Stateline analysis. But in Iowa, the Dakotas and Minnesota, it’s close to half.

Today’s first-time buyers are increasingly living in ad hoc situations while they save, Lautz says, citing a survey from NAR. Twenty-one percent lived with parents, relatives or friends before buying in 2017, up from 12 percent in 1993.

Stateline’s analysis showed that the share of 25- to 35-year-olds in ad hoc situations, neither renting nor owning, has grown steadily from 21.2 percent in 2012 to 24.2 percent in 2017. Most in those situations are living with parents or other relatives.

A shortage of housing for sale is also driving prices up in some booming areas such as the San Francisco metropolitan area, where Jimenez Smith and her husband work and live. The area has added 189,000 jobs in the past three years, but only 14,000 housing units—the largest discrepancy in the nation, says Lawrence Yun, economist for NAR.

Other areas facing similar crunches are Boston, Washington, Orlando, Fla., Phoenix and Chicago, he says.

Even so, 25- to 34-year-olds are likely to insist they want to own a home in the future, according to the NAR survey.

The San Francisco couple felt the pressure to buy because their rent was rising and they were afraid that the price of a house would soon outstrip their income, even though they already could afford a $4,000 monthly mortgage and had saved about $150,000 for a down payment. Smith is a video graphics programmer for Apple, and Jimenez Smith is a policy aide for the Santa Clara County Board of Supervisors.

But in six months of shopping, they lost bidding wars again and again. Once they bid $350,000 for an empty lot with the facade and rubble of a burned-down home, figuring they could build a new home there for another $250,000. But someone else offered $480,000 for the same lot and is now trying to sell it for even more.

The couple feels lucky to have bought a modest two-bedroom house with 1,000 square feet of living space from a seller who turned out to be an acquaintance and helped them by accepting an offer matching the highest bid, not exceeding it.

“We were going through disclosures and praying it would appraise right,” Jimenez Smith says. “Fortunately, it did appraise right at $795,000.”

There were other scares. The couple had been counting on a new transit stop in the neighborhood that would have allowed Smith to commute to San Francisco, a doable but grinding hour and 40 minutes each way. The new stop was delayed, but Smith got his new job at Apple, about a half-hour away in Cupertino.

“Sometimes we worry that this is the top, that prices will go down, but our bigger worry was what if it goes up?” Jimenez Smith says. “If it went up to $900,000, we’d never be able to buy a house.”

©2018 Stateline.org
Distributed by Tribune Content Agency, LLC

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The post Millennial Buyers Face a Tough Housing Market appeared first on RISMedia.

Categories: Real Estate News

New Concrete Lets Walls React to Touch

NAR Daily Real Estate News - July 5, 2018 - 1:00am

Young and old alike have learned all the ways fingers can manipulate screens. Now a company has invented concrete walls that respond to fingertips.

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Toys ‘R’ Us Closures Prompt Spike in Retail Vacancies

NAR Daily Real Estate News - July 5, 2018 - 1:00am

Vacancies are growing in the retail sector after the closings across the country of the former toy giant.

 
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Young Adults Don’t Like to Live Alone

NAR Daily Real Estate News - July 5, 2018 - 1:00am

More young adults are taking on roommates and housemates or living with their parents.

 
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Have a Negative Yelp Review? Too Bad, Court Says

NAR Daily Real Estate News - July 5, 2018 - 1:00am

A California Supreme Court decision this week may have national implications for those who have customers review their business and services online.

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Lower Rates Lately Aren’t Enticing More Borrowers

NAR Daily Real Estate News - July 5, 2018 - 1:00am

Even a sharp drop in mortgage interest rates last week wasn’t enough to get mortgage applications moving much.

 
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June’s Hottest Housing Markets Offer Some Surprises

NAR Daily Real Estate News - July 5, 2018 - 1:00am

Californian cities no longer dominate realtor.com®’s top-performing housing markets. Find out which cities are getting more buyers looking and seeing homes selling faster.

 
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When and How Much Should You Water Your Lawn?

NAR Daily Real Estate News - July 3, 2018 - 1:00am

Help your clients learn lawn care tips that will boost their curb appeal.

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Freddie: Young, Aspiring Homeowners Stuck Until 2025

NAR Daily Real Estate News - July 3, 2018 - 1:00am

The rising cost of housing is the biggest hurdle for young adults to overcome, and they may be sidelined for several more years to come.

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Single Women Over 55 Double Their Buying Force

NAR Daily Real Estate News - July 3, 2018 - 1:00am

They’re the fastest-growing buyer segment since 1981, according to new research.

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Agent Celebrates Fourth of July With 1,000 Flags

NAR Daily Real Estate News - July 3, 2018 - 1:00am

Real estate pro Silvia Madriaga has decorated her community in Destin, Fla., with American flags for the past 19 years.

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More Investors Plan to Cash in on Short-Term Rental Trend

NAR Daily Real Estate News - July 3, 2018 - 1:00am

A higher percentage of vacation and rental property owners say they will convert their homes to STRs this year, according to NAR research.

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Big Cities With the Best Rental Bargains

NAR Daily Real Estate News - July 3, 2018 - 1:00am

See which ZIP codes offer the most promise for urban dwellers hunting for cheaper rent.

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Coworking Spaces Influence Shift in Commercial Demand

NAR Daily Real Estate News - July 2, 2018 - 1:00am

Landlords and investors are showing interest in offices that can be rejiggered for communal use, which may lead to changes in leasing practice.

 
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4 Renovation Myths Reality TV Shows Propagate

NAR Daily Real Estate News - July 2, 2018 - 1:00am

Home improvement programs misguide consumers about the time and effort it takes to remodel a home. Disavow your clients of these common misconceptions.

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Does a Shark Tank Make This Home Stand Out?

NAR Daily Real Estate News - July 2, 2018 - 1:00am

Luxury developers are incorporating extravagant amenities into spec homes to steal buyers’ attention.

 
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Some Design Trends Create Noise Pollution in Homes

NAR Daily Real Estate News - July 2, 2018 - 1:00am

Luxury owners spend big bucks for “acoustic consultants” to solve noise problems enabled by open floor plans and smart-home gadgetry.

 
Categories: Real Estate News