Category: Real Estate

Buying Frenzy Heats Up in Second-Home Market | Realtor Magazine

Homes are selling much quicker than they did a year ago, and sales of resort and second homes are no different. “Properties are moving fast,” Gay Cororaton, senior economist and director of housing and commercial research at the National Association of REALTORS®, said Friday during the virtual 2020 REALTORS® Conference & Expo.

In September, 68% of vacation homes sold in less than a month, according to the REALTORS® Confidence Index Survey. Historically, about 30% sell that quickly, she said. “It’s a pretty amazing uptick compared to past years,” Cororaton added. Sales of resort and second homes accounted for 6.3% of overall home sales in the third quarter, up from about 4.5% in the second quarter, according to the RCI.

One consequence of the pandemic has had a clear influence on these sales. “Working from home is a positive factor in demand for vacation homes,” Cororaton said. Many people who can work remotely are choosing to do so in their second or vacation homes, she said.

Price increases are following those sales. In the third quarter, prices in vacation-home counties rose by about 32% year over year. Seventy-nine percent of these counties experienced year-over-year price gains. NAR defines a vacation-home county as one in which seasonal housing accounts for at least 20% of stock.

Sales in vacation-home counties increased 48% on average year over year in the third quarter; overall, 81% of vacation-home counties saw a year-over-year sales increase. Areas with the biggest boosts were in the far Northeast; the Upper Midwest, including Minnesota, Wisconsin and Michigan; and the Southwest, mostly in Arizona, Colorado, New Mexico, and Utah.

While commercial land sales have been relatively flat during the pandemic, sales of recreational land increased by 5% in the third quarter, according to NAR’s Q3 Commercial Real Estate Market Survey. Developed residential land was up 6% during this time period as well.

An unsurprising result of the pandemic is the reduction in the share of international buyers in the second-home market. Their share of purchases in September was down about 4%, but that’s being made up by domestic buyers, Cororaton said.

30-Year Rates Dip to New Low: 2.78% | Realtor Magazine

© REALTOR® MAGAZINE

 

For the 12th time this year, mortgage rates have hit a record low. The 30-year fixed-rate mortgage fell to an average of 2.78%, the lowest ever recorded in Freddie Mac’s books dating back to 1971.

Sam Khater, Freddie Mac’s chief economist, attributed the record-low rates this week to “economic and political ambiguity.”

“Despite the uncertainty that we’ve all experienced this year,” he said, “the housing market, buoyed by low rates, continues to be a bright spot.”

Consumers are saving much more than they were before the rise of the pandemic—nearly 14% of their disposable income, according to the National Association of REALTORS®. Personal income also rose 6% in September compared to a year earlier. “With people saving more than ever before, home buying is more attractive, although home prices continue to rise,” writes Nadia Evangelou, a research economist, on NAR’s Economists’ Outlook blog. “Meanwhile, these ultra-low mortgage rates significantly lower mortgage payments, making housing more affordable than a year earlier in many areas.”

For example, in the Washington, D.C., metro area, home prices have jumped nearly 12% compared to a year earlier, Evangelou says. However, due to low mortgage rates, the monthly payment on a 30-year fixed-rate mortgage is lower than a year ago, averaging $1,820.

The housing market is also getting a boost from an improving job market. This week’s labor market report showed that the U.S. added another 638,000 in net job gains. The unemployment rate now stands at 6.9%. Since the April lockdown from the COVID-19 pandemic, about 12.1 million jobs have been recovered. Another 10 million jobs are needed to return to pre-pandemic levels, says Lawrence Yun, NAR’s chief economist. Residential construction and contracting trades added a major bulk of the jobs last month at 23,800, Yun says.  

Freddie Mac reports the following national averages with mortgage rates for the week ending Nov. 5:

• 30-year fixed-rate mortgages: Averaged 2.78%, with an average 0.7 point, falling from last week’s 2.81% average. The previous all-time low for the 30-year fixed-rate mortgage was set in October with an average of 2.80%. A year ago, 30-year rates averaged 3.69%.
• 15-year fixed-rate mortgages: Averaged 2.32%, with an average 0.6 point, unchanged from last week. A year ago, 15-year rates averaged 3.13%.
• 5-year hybrid adjustable-rate mortgages: Averaged 2.89%, with an average 0.3 point, rising slightly from last week’s 2.88% average. A year ago, 5-year ARMs averaged 3.39%.

Freddie Mac reports average commitment rates along with points to reflect the total upfront cost of obtaining the mortgage.

Buyers Under Pressure as Homes Continue to Sell Quickly | Realtor Magazine

House hunters who see a home they like should consider making an offer quickly or risk losing out. Homes in October sold 13 days faster than a year ago, an unseasonable trend, a new report from realtor.com® notes.

This also marks the first time since 2011 that the pace of sales has accelerated from September to October, “signaling buyers continued to face tough competition in this anything but normal year,” according to realtor.com®’s Monthly Housing Trends Report.

Among the nation’s 50 largest metro areas, homes spent an average of 45 days on the market. The metros where homes sold the fastest compared to a year ago are:

• Hartford, Conn.: 23 days faster than a year ago
• Virginia Beach, Va.: 22 days faster
• San Diego: 20 days faster

“In the fall, we normally see homes sell more slowly and prices pull back from peak levels,” says Danielle Hale, realtor.com®’s chief economist. “But this October, we saw a drop in the time it takes to sell a home even while home prices remain at their summer peak. Drawn in by low mortgage rates and the hope of more space, buyers have stayed in the housing market this fall, keeping prices high and pushing time on the market to unseasonable lows.”

The number of homes for sale is down 38.3% nationally. The metros with the largest declines in new listings compared to a year ago are Nashville (down 27.5%); Charlotte, N.C. (down 22.9%); and Richmond, Va. (down 21.8%). However, there is a slight indication of turnaround in inventory in sight, realtor.com®’s report says. Newly listed homes are down 7.7% compared to a year ago. That is a “substantial improvement” from September, when new listings were down 13.8%, realtor.com® reports.

 

© realtor.com

 

 

Jumbo, FHA Mortgage Rates Fall to Record Lows | Realtor Magazine

The rates for jumbo and FHA loans dropped to all-time lows last week. Jumbo loans are for borrowers taking out larger loans while FHA loans offer borrowers’ low-down-payment loans. Their new lows fueled mortgage demand last week, the Mortgage Bankers Association reports.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $510,400) dropped to 3.18% last week. The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA fell to 3.08%. The 15-year fixed-rate mortgage also saw new lows last week, decreasing to an average contract rate of 2.55%, MBA reports.

“The drop in rates spurred an uptick in demand for refinances,” says Joel Kan, MBA’s chief economist.

Refinances overall increased 6% last week and are now up 88% compared to a year ago. The drive was essentially all driven by those “seeking conventionally and government loans,” Kan says.

On the other hand, mortgage applications to purchase a home dropped 1% last week. Applications are still more than 25% higher than a year ago.

“After a solid stretch of purchase applications growth, activity decreased for the fifth time in six weeks, but has increased year-over-year for six straight months,” says Kan. “2020 continues to overall be a strong year for the housing market.”

Home Sellers Stand to Gain More Equity This Winter | Realtor Magazine

With low housing inventories and high buyer demand, home sellers are expected to continue to command higher home prices this winter—an unseasonable trend in the housing market.

“Sellers will have the ball in their court, so to speak, as there are more buyers than sellers,” says Danielle Hale, realtor.com®’s chief economist. “This means seller-friendly trends like rising home prices and quick-selling homes.”

In September, home inventory was 39% lower compared to a year ago. But buyers are out in force trying to lock in record-low mortgage rates to help them save on financing costs. Seventy-one percent of homes sold in September were on the market for less than a month,according to NAR data. Properties typically stayed on the market for just 21 days in September—an all-time low. That is down from 32 days a year ago. The median existing-home price for all housing types sold in September was $311,800, a 14.8% increase compared to a year ago.

Indeed, home prices are on the rise. The national median home listing price climbed 11.1% in September compared to a year ago. It’s now at $350,000. Price per square foot has increased 13.9%, realtor.com® data shows.

“Prices are high,” Simon Isaacs, broker-owner of Simon Isaacs Real Estate in Palm Beach, Fla., told realtor.com®. “People are getting what they’re asking.”

Move-in-ready homes tend to be most in demand, real estate professionals say. Homes that don’t require repairs, as well as homes that show off in-demand amenities—such as extra space, outdoor areas, privacy, and rooms that can double as home offices or learning areas—likely will sell the fastest, real estate pros say. Homes for sale that offer virtual tours, which buyers can peruse from the safety of their own homes, have also grown in appeal during the pandemic.

Home sellers need to be ready for possible multiple offers for their home. Real estate pros are suggesting to their buyers that they don’t rush to accept offers too quickly. Sellers usually have 24 to 48 hours to accept an offer.

“Literally eight hours of sleep could net you an extra $30,000,” Matt Curtis, owner of Matt Curtis Real Estate in Huntsville, Ala., told realtor.com®.

Hot Housing Market Likely Won’t Cool in Winter | Realtor Magazine

While winter may be typically a slow season in real estate, economists predict it isn’t likely to happen this year. Lawrence Yun, chief economist of the National Association of REALTORS®, says “it will be one of the best winter sales years ever.”

Low inventories combined with high demand due to record-low mortgage rates is sending buyers to the market in a flurry. Many home buyers are looking to upsize their homes as they work from home and their children attend school at home. Also, as remote work remains an option for many and some employers make it a permanent situation for office workers, some house hunters are looking farther away from city limits in search of bigger homes and greater affordability.

“We currently see buyers sticking around in the housing market much later than we usually do this fall,” says Danielle Hale, realtor.com®’s chief economist. “If that trend continues, we will see more buyers in the market this winter, too. So this winter is likely to be a good time to sell.”

Shelby McDaniels, channel director of corporate home lending for Chase, told realtor.com® that the company is expecting an extended home purchase season in 2020 that stretches well into 2021.

Inventories are way lower than in years past. The national housing inventory has shown some recent improvment, but it still has dropped 39% since last year, according to realtor.com®’s Monthly Housing Market Trends Report. High buyer demand mixed with low inventory is an advantage to sellers, says Yun. (Read more: More New Listings Are Finally Emerging.)

Hale says that even as more homes gradually hit the market, there are still few homes available for sale. “That will keep upward pressure on home prices and help ensure that homes continue to sell quickly,” Hale says.

Seventy-one percent of homes sold in September were on the market for less than a month, according to NAR data. Properties typically stayed on the market for just 21 days in September—an all-time low. That is down from 32 days a year ago.

Tracy Jones, a real estate professional with RE/MAX Platinum Realty in Sarasota, Fla., told realtor.com® that buyers are facing increased competition and have been forced to make quick decisions or risk losing a home they want. “The buyers I have worked with this year only had a handful of homes to look at,” Jones told realtor.com®. “They had no time to wait and talk about it, and they had to fight other buyers if they wanted to buy them.”

Metros Where Homeownership Wealth Gains Are Highest | Realtor Magazine

Homeownership accounts for 90% of total wealth, according to data from the 2019 Survey of Consumer Finance. Owners in areas with rapid price appreciation are filling their pockets the fastest. “Housing wealth accumulation takes time and is built up by paying off the mortgage debt and by price appreciation,” Scholastica “Gay” Cororaton, a research economist at the National Association of REALTORS®, writes on the association’s Economists’ Outlook blog. “And while home prices can fall, home prices tend to recover and go up over the longer term. As of September 2020, the median sales price of existing-home sales was $311,800, a 35% gain since July 2006 when prices peaked at $230,000.”

People who purchased a home 30 years ago would typically have gained an average of $283,000 as of the second quarter of 2020, according to NAR.

Ninety percent of the metro areas with the largest housing wealth gains over a 10-year period were on the West Coast. The 10 metros with the largest wealth gains in the past decade are:

1. San Jose-Sunnyvale-Santa Clara, Calif.
2. San Francisco-Oakland-Hayward, Calif.
3. Anaheim-Santa Ana-Irvine, Calif.
4. San Diego-Carlsbad, Calif.
5. Los-Angeles-Long Beach-Glendale, Calif.
6. Seattle-Tacoma-Bellevue, Wash.
7. Boulder, Colo.
8. Honolulu
9. Denver-Aurora-Lakewood, Colo.
10. Naples-Immokalee-Marco Island, Fla.

5 Ways to Make Your Home Office Work (Even if It’s Your Kitchen) – Stay Informed and Inspired

With social distancing mandates in effect across much of the country, many people working in industries deemed “non-essential” are doing their work from home. And while the constant stream of COVID-19 news, in addition to caretaking or homeschooling responsibilities, can make it hard to stay focused on work, modifying your space can help. An organized and visually appealing work area can help you feel more productive — and more relaxed.

Here are five tips for elevating your home workspace.

Commit to your space

For those of us who don’t have a home office — which is a lot of people — work-from-home routines can easily get derailed. Designating an area for work, even if that place is the bill-paying area in your kitchen, is a way to stay in your routine and get yourself in the work mindset. Whatever spot you choose, just make sure it feels like a dedicated and functional work area. That means adequate lighting, a comfortable chair — the right height for typing without strain — a seamless tech setup that allows you to take and make video calls without having to fiddle with plugs or wires, and an overall lack of clutter on your desk and the surrounding area.

Declutter

This seems obvious, but let’s level with ourselves: When do we really get around to cleaning our desks? Well, now’s the time. Decluttering requires some commitment, but it feels great when you’re done. Toss anything that needs to be thrown out, pair like items with like, contain those stray pens in one nice decorative cup, and make sure you have all your workday essentials close at hand and non-essential items moved elsewhere.

Curate an inspiration board

Now that you’ve set the stage, it’s time to look ahead. And that wall you’re looking at beyond your laptop should inspire you. This is as good a time as ever to put together an inspiration board and fill it with what makes you happy, from images of your favorite people and pets, to pics of your goals (like that fabulous vacation you are going to take once we’ve all gotten through this tough time!). And yes, you can put your to-dos and important reminders up there too — but keep the focus on the positive and uplifting, and keep it right in your line of sight.

Do a background check

If video calls are part of your new day-to-day, think about what your colleagues are seeing behind you — like that pile of laundry or those mostly empty wine glasses. Keep things clean and uncluttered. And if you have the space, show off your style. Some good background options might be your favorite art piece, interesting souvenirs or a not-overly-stuffed bookcase. Lastly, remember lighting: Your space should be adequately lit, or it’ll look like you’re dialing in from a submarine.

Set the mood

Never got your dream office? This is your moment to create an inspiring space. We bet scented candles aren’t allowed in your regular workspace, but you get to make the rules at home. Aromatherapy diffusers are another option if you’re worried about curious kids or pets. And now your playlist can softly waft overhead rather than through earphones. Similarly, set out some healthy snacks to avoid refrigerator trips, and nosh away. It’s OK for your home office to feel like your home, and especially now, it’s important to take time to indulge yourself with some creature comforts that feed your soul and make you feel calm and inspired.

 

More New Listings Are Finally Emerging | Realtor Magazine

Buyers may finally be getting more housing choices. The number of newly listed homes is showing the most improvement since March. Realtor.com® says its data shows the housing market is gradually moving toward a more balanced one when it comes to inventory. Plus, an overdue seasonal slowdown may be starting to take hold.

Still, the number of homes for sale remains at record lows. Homes are selling 14 days faster than a year ago as demand stays high. However, glimmers of hope for buyers are emerging as more listings hit the market.

“The number of buyers in the market remains well above the seasonal norm, but this week’s data shows sellers may be losing some of their grip when it comes to having the upper hand,” says Javier Vivas, director of economic research for realtor.com®. “For the first time since June, we saw an unseasonably large share of price reductions and a slight softening in buyer demand. Months of double-digit price gains and a record low number of homes for sale may finally be translating into buyer fatigue in many markets. If this continues, we may see price reductions ramp up and quick home sales ease through the end of the year.”

Realtor.com®’s newly released Weekly Housing Report, reflecting data from the week ending Oct. 24, shows a significant increase in the number of new listings over the previous week. Despite the total number of homes available for sale continuing to be down 38% year over year, the housing market has now experienced six consecutive weeks of steady improvements, realtor.com® says.

Although buyer demand for housing still surpasses supply, realtor.com® says its data shows that the U.S. housing market is shifting toward a “more normal buyer/seller balance, which is good news for home shoppers.”

Buyer Demand Strong Even as Pending Home Sales Cool Slightly | Realtor Magazine

Following four consecutive months of gains, pending home sales receded in September, but it isn’t any indication of a pullback in demand from home buyers.

The National Association of REALTORS® reported Thursday that pending home sales—a forward-looking indicator based on contract signings—dipped 2.2% in September month over month. But contract signings are still up 20.5% compared to a year ago, which shows the fall housing market continues to be unseasonably hot this year amid the pandemic.

All four major regions of the U.S. posted double-digit year-over-year gains in pending home sales activity, led by the Northeast with a 27.7% annual increase.

“The demand for home buying remains super strong, even with a slight monthly pullback in September, and we’re still likely to end the year with more homes sold overall in 2020 than in 2019,” says Lawrence Yun, NAR’s chief economist. “With persistent low mortgage rates and some degree of continuing jobs recovery, more contract signings are expected in the near future.”

Yun predicts a second wave of home sales on the horizon as homeowners who had not considered moving prior to the pandemic begin to enter the market. “A number of these owners are contemplating moving into larger homes in less densely populated areas in light of newfound work-from-home flexibility,” he says.

Realtor.com®’s Housing Market Recovery Index shows that the metro areas that have recovered to their pre-pandemic levels or even above (as of Oct. 10) are Seattle-Tacoma-Bellevue, Wash.; Boston-Cambridge-Newton, Mass.-N.H.; Los Angeles-Long Beach-Anaheim, Calif.; Las Vegas-Henderson-Paradise, Nev.; and San Jose-Sunnyvale-Santa Clara, Calif.

NAR’s Pending Home Sales Index showed the following year-over-year gains in September broken down by region:

• Northeast: +27.7%
• Midwest: +18.5%
• South: +19.6%
• West: +19.3%