Category: Real Estate

Where Utility Costs Are Most, Least Expensive | Realtor Magazine

Utility bills can add up, especially in a pandemic that has forced people to spend more time at home. On average, renters are spending between $100 to $150 per month on utilities, whereas homeowners are paying an average of $400 per month, according to Move.org.

Home shoppers would be wise to inquire about the average utility costs of homes they’re looking at to help avoid sticker shock when they get their first bill. Move.org provides the following breakdown of national averages on monthly utility costs in the U.S.

• Electricity: $110.76
• Natural gas: $72.10
• Water: $70.39
• Cable TV: $85
• Internet: $60
• Trash/recycling: $14
• Total cost: $398.24

Meanwhile, the following states have the most expensive utilities:

1. Hawaii: $587.79/month

2. Florida: $459.40

3. South Carolina: $450.51

4. Alabama: $448.73

5. Georgia: $441.10

On the other hand, these states are seeing some of the least expensive utility costs:

1. New Mexico: $344.55/month

2. Utah: $345.03

3. Colorado: $348.43

4. Montana: $352.74

5. Idaho: $357.53

July Home Sales Show Recovery Is Sticking | Realtor Magazine

Existing-home sales soared 24.7% in July, outpacing their record growth of 20.7% in June, when the nation’s economic reopening ignited homebuying activity, the National Association of REALTORS® reported Friday. Now 8.7% higher year over year, the strong rise in existing-home sales—including single-family homes, townhomes, condominiums, and co-ops—is fueling optimism in the real estate market through the rest of the year.

“The housing market is well past the recovery phase and is now booming with higher home sales compared to the pre-pandemic days,” says NAR Chief Economist Lawrence Yun. “With the sizable shift in remote work, current homeowners are looking for larger homes—and this will lead to a secondary level of demand, even into 2021.”

Home prices, too, are reaching new all-time highs, with the national median existing-home price hitting $304,100 in July—the first time it’s ever broken $300,000, according to NAR. However, low inventory stands to limit gains moving forward. Total housing inventory at the end of July totaled 1.5 million units, down 21.1% year over year. “The number of new listings is increasing, but they are quickly taken out of the market from heavy buyer competition,” Yun says. “More homes need to be built.”

 

 

 

Other important findings from NAR’s July housing report include:

• Properties are selling fast. Sold homes in July typically spent 22 days on the market, down from 24 in June.
• Fewer first-timers are in the market. The share of first-time buyers was 34%, down slightly from 35% in June.
• Investors are holding steady. The share of all-cash sales was 16%, unchanged from June.
• Distressed sales are down. Foreclosures and short sales represented less than 1% of total sales, falling from 3% in June.
• Condo prices are increasing. The median existing condo price was $270,100 in July, an increase of 6.4% from a year ago.

“Luxury homes in the suburbs are attracting buyers after having lagged the broader market for the past couple of years,” Yun says. “Single-family homes are continuing to outperform condominium units, suggesting a preference shift for a larger home—including an extra room for a home office.”

Regional Breakdown

July marked the second consecutive month that year-over-year sales and median home prices grew in each of the four major regions of the country, NAR reported.

• Northeast: Sales up 30.6%, median home price ($317,800) up 4%.
• Midwest: Sales up 27.5%, median home price ($244,500) up 8%.
• South: Sales up 19.4%, median home price ($268,500), up 9.9%.
• West: Sales up 30.5%, median home price ($453,800) up 11.3%.

NAR: Slight Rise in Mortgage Rates Won’t Hurt Buyers | Realtor Magazine

 

 

Mortgage rates inched up this week, but the 30-year fixed-rate mortgage continues to hover near its record low. The uptick isn’t expected to have any impact on homebuying activity, according to the National Association of REALTORS®.

The 30-year fixed-rate mortgage averaged 2.99% this week after hitting an all-time low of 2.88% at the beginning of the month, Freddie Mac reports. Home buyer demand continues to accelerate and is providing support to an otherwise stagnant economy, says Sam Khater, Freddie Mac’s chief economist. Further, a surge in home sales has led to a rapid increase in demand for remodeling and home furnishings as consumers look to renovate during the COVID-19 pandemic.

Mortgage rates will likely move lower over the coming weeks, too. “Going forward, rates could still come down due to the super-accommodating monetary policy that has kept the benchmark Treasury yields at under 1%,” NAR says. Freddie Mac reports the following national averages with mortgage rates for the week ending:

• 30-year fixed-rate mortgages: averaged 2.99%, with an average 0.8 point, rising from last week’s 2.96% average. A year ago, 30-year rates averaged 3.55%.
• 15-year fixed-rate mortgages: averaged 2.54%, with an average 0.7 point, increasing from last week’s 2.46% average. A year ago, 15-year rates averaged 3.03%.
• 5-year hybrid adjustable-rate mortgages: averaged 2.91%, with an average 0.3 point, increasing from last week’s 2.90% average. A year ago, 5-year ARMs averaged 3.32%.

As Competition Increases, How Long Will Bidding Wars Last? | Realtor Magazine

Bidding wars continue to heat up across the country as buyers scramble through low inventories and high competition to land a home during the pandemic. The real estate brokerage Redfin reports that more than half of its home offers—or 54%–faced competition in July—the third consecutive month.

Salt Lake City came in as the most competitive market, with 75% of offers encountering competition. Also, San Francisco and San Jose, Calif., saw a high level of multiple offers at 67% in July.

Home buyers may be wondering how long they will likely continue to face this heightened competition for properties. “Bidding wars may slow down if interest rates tick up again, which could happen if we get good news about a coronavirus vaccine or more clarity around the outcome of the upcoming U.S. presidential election,” says Darly Fairweather, Redfin’s chief economist. “At the same time, we may still be in the early innings of the pandemic migration wave. If coronavirus cases continue to climb, more employers will likely make flexible remote work policies standard procedure, which will drive further migration out of large, expansive cities.”

If that’s the case, bidding wars could gain even more traction in suburban areas and small towns, Fairweather says.

Singe-family homes are the most likely to see a bidding wars in July (56%), followed by townhouses (54%), according to Redfin’s data. In comparison, condos faced less competition at 42%.

Also, homes priced between $400,000 and $500,000 are most likely to face bidding wars.

“If you price your home right and you haven’t Crayola crayoned all over the wall, you’re going to get at least a handful of offers,” says Brian Walsh, a real estate professional with Redfin in Tampa, Fla.

 

 

 

 

The Most Popular Home Updates During the Pandemic | Realtor Magazine

Many Americans turned their attention to their homes during the pandemic. Home improvement big-box retailers reported a swarm of traffic as homeowners looked to spruce up their nests while sheltering in.

What were homeowners working on?

Outdoor spaces were fueling much of the demand, according to Houzz, an online home remodeling platform. For example, new decks or patios, pools, and fences have gotten a lot of attention.

Homeowner Justin Sullivan shared with CNBC his feelings about his pool, home gym, and sauna projects. “When you’re not able to go out, your house is an enjoyable space where you can live bunker-style and still be active, still feel comfortable, and still enjoy,” Sullivan says. “The kids will have spaces to make sure they can work from home, and when it gets really hot in the summertime, they’ll have a place where they can cool off.”

Houzz reports a 58% annual increase in project leads for home professionals in June as homeowners looked to update their spaces. Searches for pool and spa professionals tripled this summer compared to a year ago, Houzz reports. Deck and patio professionals saw more than double the demand.

Also, demand for interest in fence installation and repairs jumped 166%, Houzz notes.

The desire for more space has been common for homeowners during the pandemic. That may explain why Houzz has seen a 52% increase in professionals being called in for home extensions and additions.

Kitchen and bath remodels also have been popular, seeing a 40% jump in demand in June compared to a year ago, Houzz reports.

Homeowners have seen record high amounts of home equity during the pandemic, which may be one motivating factor to tackle more house projects. More than 15 million residential properties—or 27.5% of all mortgaged homes–were considered equity-rich in the second quarter, according to ATTOM Data Solutions. (That means the mortgages on those properties is 50% or less than the value of the home.)

Homeowners don’t appear to be done sprucing up their nests. More than three-quarters of homeowners recently surveyed say they plan to tackle a new house project over the next 12 months, according to Porch.com, a home remodeling website. Their top motivators were “finally having time,” “adding value to the home,” and a desire to make their home “feel more cozy.”

Home Prices Continue to Accelerate | Realtor Magazine

Nearly every major metro area across the country saw home prices continue to escalate in the second quarter. Median single-family home prices increased year over year in 96% of measured markets—or 174 out of 181—during the quarter, according to the latest report from the National Association of REALTORS®. That percentage matches the metro areas in the first quarter that saw price gains.

“Home prices have held up well, largely due to the combination of very strong demand for housing and a limited supply of homes for sale,” says Lawrence Yun, NAR’s chief economist. “Historically low inventory continues to reinforce and even increase prices in some areas.”

The national median existing single-family home price in the second quarter was $291,300—up 4.2% annually. That is, however, a slower pace of appreciation compared to the pre-pandemic growth rate of 7.7% that was recorded in the first quarter, NAR reports.

Fifteen metros saw double-digit increases in price growth in the second quarter, led by Huntsville, Ala. (13.5%); Memphis, Tenn. (13.4%); Boise, Idaho (12.6%); Spokane-Spokane Valley, Wash. (11.8%); Indianapolis (10.8%); and Phoenix (10.2%).

San Jose, Calif., remained the most expensive metro areas in the second quarter at $1.38 million, up 3.8% from a year ago. San Francisco followed at $1.05 million, along with Anaheim, Calif. ($859,000), urban Honolulu ($815,700), and San Diego ($670,000).

Inventory Constraints Push on Prices

Home prices continue to rise as buyer demand remains high and a limited number of homes are for sale. At the end of the second quarter, 1.57 million existing homes were available for sale, which is 18.2% lower than total inventory from a year ago.

But fewer choices aren’t holding back buyers. Low mortgage rates, which have recently dipped below 3% for the first time, likely will attract more buyers into the market, Yun says. Those lower rates can make a difference in monthly payments. “Although housing prices have consistently moved higher, when the favorable mortgage rates are factored in, an overall home purchase was more affordable in 2020’s second quarter compared to one year ago,” Yun says.

For example, a household with a median family income of $82,471 spent 14.8% of their income on mortgage payments in the second quarter—that is less than the 16.4% figure of a year ago.

While low mortgage rates may be incentive to buy, “unless an increasing number of new homes are constructed, some buyers could miss out on the opportunity to purchase a home or have the opportunity delayed,” Yun says. “In the meantime, prices show no signs of decreasing.”

3 Ways to Improve Chances of a Favorable Appraisal | Realtor Magazine

Appraisal issues can be common hangups in a real estate transaction. In June, appraisal issues were blamed for causing delays in 18% of transactions (the second highest reason behind issues related to obtaining financing) and for terminating 9% of contracts, according to the REALTORS® Confidence Index.

While appraisal issues may be unavoidable if home prices are escalating too quickly and not matching offers, homeowners can still prepare for an appraisal to help ensure their home is presented in its best possible light.

Forbes.com emphasizes three main areas of a home in preparing for an appraisal: the kitchen, bathroom, and curb appeal.

Indeed, curb appeal counts. In a new study in the Journal of Real Estate Finance and Economics, researchers found that properties with top-notch curb appeal tended to sell for 7% more than similar properties in the same area that had poor curb appeal.

“Expand your hardscape,” Mike Fitzpatrick, vice president of U.S. Lawns, told Forbes.com. “If it’s within your budget, create an additional living space outside by expanding your stone or brick patio. However, be sure to consider if the higher valuation will exceed the added investment.”

Lower-cost ways to boost curb appeal: Mulch around trees, shrubs, and plants and add pops of color, such as flower pots at the door. The key is to set the right first impression that the house is well cared for, from the outside in.

Inside, mid-range to upscale bathroom remodels tend to recoup around 60% return on investment, according to Leah Tuttleman, interior designer for Re-Bath. A bathroom redo may not be in the budget, but even simple projects can make a difference to the appearance. First off, address any caulking or other glaring problems before cosmetic issues. While appraisers won’t be judging your decor, you can show that the house is well-cared for and up-to-date. For example, update vanity lights and faucets so that they match; matte black and brass are trending. Also, Tuttleman told Forbes.com that light, neutral-colored bathrooms can help make spaces feel larger and calming. Also, a simple fix: Replace low-wattage bulbs with a higher watt LED bulb and use dimmers if possible, she suggests.

Kitchen remodels can be costly, but they can get you around 77.6% return on investment, says Lisa Seeger, design trend expert at N-Hance Wood Finishing. “Sometimes all it takes to revamp the entire kitchen is a simple cabinet color change,” Seeger told Forbes.com. “Some trending looks include all-white cabinets, black cabinetry, jewel-toned, two-toned cabinets, and gray.” Updated hardware on the cabinets and lighting can go a long way in upgrading a space too.

FTC: Beware of Scammers Eyeing Mortgage Assistance | Realtor Magazine

Americans have lost about $106 million to fraud related to COVID-19 so far this year, the Federal Trade Commission warned on Tuesday. That prompted the commission to issue an alert for consumers to be cautious about solicitations asking them to pay for access to certain financial assistance, such as stimulus checks, job opportunities, and mortgages.

The FTC warns that some scammers are duping homeowners to make them believe they need to pay up front for mortgage help. “It’s illegal for companies to charge you before they help you with your mortgage—but that doesn’t stop scammers from trying,” the FTC warns.

Homeowners who fall behind on mortgage payments should speak with their mortgage servicer to discuss their options. Those struggling to make their mortgage or rent, who may face a foreclosure or eviction, may want to consult with a legal services organization.

Stimulus checks have been another growing area of fraud, the FTC warns. Congress is debating issuing more stimulus checks, which could open the door to more fraud. Just like last time, if there is another stimulus payment, you won’t have to pay to get it, the FTC says. “Nobody will call to ask for your Social Security, bank account, or credit card number,” to access your payment, the FTC reports.

Also, real estate professionals should continue to remain vigilant against wire fraud scams in real estate transactions and warn their clients, particularly as more areas of a transaction are conducted remotely. Down payment scams and others that target different points of a real estate transaction can put your clients at risk. Access resources from the National Association of REALTORS® on how to keep you and your clients safe from wire fraud.

New Refinancing Fee Could Roil Mortgage Market | Realtor Magazine

The Federal Housing Finance Agency has announced a new mortgage refinancing fee that could cost homeowners about $1,500 extra on a $300,000 loan. The fee will apply to loans delivered to Fannie Mae and Freddie Mac starting Sept. 1, which means it could impact current refinancing applications.

The fee is “the absolute wrong policy at the wrong time,” Vince Malta, president of the National Association of REALTORS®, said in a statement Thursday. “It directly contravenes the administration’s own directives for federal agencies to do no harm to homeowners during the coronavirus crisis. It is especially troubling, since the GSEs use their profits from refinances to support home buyers in underserved markets—meaning those communities already suffering the most will be harmed the most by this action. Home values and residential real estate are a rock for the American economy right now. We should do everything we can to lower costs for households during this crisis, not make homeownership more expensive.”

The FHFA, which regulates Fannie and Freddie, has implemented a new price adjustment for refinance transactions of 0.5% of the loan amount. The new fee, which does not affect mortgage applications for home purchases, was added “in light of market and economic uncertainty,” a bulletin from Freddie Mac notes.

As mortgage rates dip to new lows, homeowners continue to rush to refinance, accounting for 65.7% of total mortgage applications. The Sept. 1 enactment date of the new fee means some refinancings already being processed may be affected. If the refinance application is already locked in, lenders will be unable to adjust and will have to absorb the fee themselves. However, if the refinance application isn’t locked, the consumer likely will have to pay the fee, HousingWire reports.

Bob Broeksmit, CEO and president of the Mortgage Bankers Association, urged the FHFA to withdraw its “ill-timed” directive. “The housing market has been able to withstand many of the most severe effects of the COVID-19 pandemic,” Broeksmit said in a statement. “The recent refinance activity has not only helped homeowners lower their monthly payments, but it is also reducing risk to the GSEs and taxpayers. This announcement is bad for our nation’s homeowners and the nascent economic recovery.”

America Has a Surprising New Favorite Room in the House | Realtor Magazine

The family room has long been the favorite room in the house—it’s where homeowners get to spend quality time with other family members. However, as the significant increase in time spent at home during the pandemic has changed preferences, homeowners now favor quieter and more private areas in the home.

In a survey of more than 2,000 Americans, the new favorite room in the home: the master bedroom. In the survey, conducted by Ally Home, some respondents said it’s their new favorite spot because it’s where “they can hide from family members.”

Here are the five favorite rooms in the house, according to the Ally Home survey:

1. Master bedroom: 27%
2. Family room: 14%
3. Kitchen: 10%
4. Master bath: 9%
5. Man or woman cave: 7%

Spending so much time at home over the last few months has also sparked a wave of house projects among many homeowners. Eighty-eight percent of the 2,000 homeowners surveyed say they’re considering improvements to their homes to make it more “staycation-ready.” The most popular projects center on the outdoors:

• 38% are considering installing an in-ground or above-ground pool or spa.
• 35% are considering building an outdoor athletic court.
• 29% are considering improvements to their porch, deck or patio.