Selling a home in the winter can pose some challenges. Lawns aren’t as green and tidy, and the chilly weather can make it more of a trek for buyers to view homes for sale.
HomeLight, a real estate referral company, surveyed 500 real estate professionals in the fourth quarter of 2019 to find out their top advice when prepping a home to show during the winter months.
Nearly 30% of agents advised always making sure driveways and sidewalks were clear prior to showing appointments. Twenty-four percent said let as much natural light flow inside to warm up interiors, and 18% stressed the importance to amp up the coziness factor during wintertime showings.
To help make the home feel more cozy, some real estate pros suggest turning up the heat during showings. “You don’t want buyers getting chilly, or have them commenting on how drafty your house feels at every turn,” HomeLight says in its study.
Also, protect the house by making a space for buyers to hang wet coats and to place their shoes, such as with a boot tray beside the door to protect any wood floors, real estate pros suggest.
Lower mortgage rates are what first-time home buyers most want from the government in addressing real estate needs, according to a new survey of about 600 first-time home buyers conducted by the real estate brokerage Redfin. Mortgage rates are hovering near historic lows, yet 66% of first-time home buyers surveyed say they want rates to head even lower.
Besides lower interest rates, first-time buyers also want the government to provide tax credits and ease lending standards in helping to make home buying more affordable in the short-term, the survey finds.
First-time home buyers did not appear to be as concerned about the government’s action on longer-term solutions to challenges posed in the housing market, such as in addressing housing shortages. For example, only a quarter of respondents said they’d like the government to take steps that would urge more home construction, which has been pointed to as a solution for easing inventory woes.
Young adults may be eager to buy, but 75% of first-time home buyers say they’re overwhelmed about the purchase process, according to TD Bank’s First-Time Homebuyer Pulse of more than 850 millennial buyers between the ages of 23 to 38.
Many have not taken the first step to talk with a lender before they start actively looking. Only 30% of respondents say they have spoken to a mortgage lender before starting their house hunt. “To put the cart before the horse is to pursue a significant life decision with possibly incomplete or inaccurate information,” says Rick Bechtel, head of U.S. residential lending at TD Bank.
Young adults have a lot on their mind. They’re concerned about their job stability (51%) and the stability of their relationship with their significant other (35%). They’re also concerned about the economy (57%) and potential changes in policies due to the 2020 election (47%).
The housing crisis still lingers in their minds too. Forty-seven percent of respondents say that growing up during the housing crisis has made them more nervous to buy a home. After all, more than half—55%—say that their family or a family they knew had lost their house during the housing crisis.
Borrowing costs dropped to their second-lowest levels in three years, offering home shoppers an opportunity to lock in lower monthly mortgage payments.
The lower rates are “supporting homebuyer demand and leading to higher refinancing activity,” says Sam Khater, Freddie Mac’s chief economist. “Borrowers who take advantage of these low rates can improve their cash flow by lowering their monthly mortgage payments, giving them more money to spend or save.”
Low mortgage rates likely will stick around. The Federal Reserve on Wednesday voted to leave its benchmark rate unchanged. The Fed’s short-term rate does not have a direct effect on mortgage rates but does often influence them. “If the Fed is on hold, we are at least on hold with lower interest rates,” Greg McBride, chief financial analyst at Bankrate.com, told CNBC.
Freddie Mac reports the following national averages with mortgage rates for the week ending Jan. 30:
30-year fixed-rate mortgages: averaged 3.51%, with an average 0.7 point, dropping from a 3.60% last week. A year ago, 30-year rates averaged 4.46%.
15-year fixed-rate mortgages: averaged 3%, with an average 0.7 point, falling from last week’s 3.04% average. A year ago, 15-year rates averaged 3.89%.
5-year hybrid adjustable-rate mortgages: averaged 3.24%, with an average 0.3 point, falling from last week’s 3.28% average. A year ago, 5-year ARMs averaged 3.96%.
uilders are feeling bullish. They’re quick to brush off the modest 0.4% dip in sales of newly built single-family homes on a monthly basis in December. Instead, they’re focusing on how sales are still 23% higher than a year ago.
“High levels of home builder confidence, coupled with an insufficient existing housing supply to meet current demand, suggest growth ahead for new home sales this year,” says Dean Mon, chairman of the National Association of Home Builders.
Lower mortgage rates helped to accelerate new-home sales during the second half of the year, making it the best year for new-home sales since the recession, adds NAHB Chief Economist Robert Dietz.
The housing industry has long called on home builders to boost construction to meet increasing buyer demand and help cities respond to housing shortages. Inventory of homes for sale nationwide has plunged to the lowest level in 20 years, according to a recent report from the National Association of REALTORS®. NAR’s data shows that, at the end of December, there was a three-month supply of homes on the market, the lowest in NAR records spanning two decades.
Inventory levels of new-home sales are showing signs of improvement. Inventory now stands at a 5.7-month supply and 327,000 new single-family homes are for sale. Just 78,000 of that total are completed and ready to occupy.
“Extremely tight supply conditions continue to hold sales down and are driving more home buyers to the new-home market,” Ben Ayers, Nationwide’s senior economist, and economist Daniel Vielhaber wrote in a research note.
The median sales price was $331,400 in December, the U.S. Department of Housing and Urban Development and the U.S. Census Bureau reported Monday. Sales prices are up compared to a year ago when it was $329,700.
On an annual basis, new-home sales are up the most in the West—31% higher than a year ago, followed by the Midwest, up 10.1%. Sales are down by 15.4% in the South and by 11.8% in the Northeast.
First-time and repeat buyers say they’d rather have a smaller home with high-quality amenities than a bigger property with fewer such features, according to a survey the National Association of Home Builders released during the International Builders’ Show last week in Las Vegas. The NAHB’s report, titled “What Home Buyers Really Want,” identified the following features as being most desired by both segments of buyers.
Laundry rooms
Energy Star–rated windows
Hardwood flooring
Walk-in pantries
Patios
Ceiling fans
Kitchen double sink
Builders reported that designers are including flexible spaces that add greater functionality to laundry rooms. They’re also creating more outdoor spaces to seamlessly integrate indoor and outdoor living.
The survey also uncovered the most likely features that single-family homebuilders say is becoming standard in most new homes built today, including: walk-in master closets, low-emissivity (low-e) windows, and laundry rooms. Also, builders say they’re more likely to add energy efficient features, such as lighting, programmable thermostats, and Energy Star–rated appliances. The open design concept, along with great rooms and 9-plus-foot ceilings on the first floor, is also becoming common in newly built homes, the survey finds.
In expensive housing markets where inventories are tight, some buyers are finding it more affordable to invest in a multifamily property rather than purchase a single-family home, The Washington Post reports. The buyers can live in one of the units in the building while renting out the others to defray some mortgage costs and build equity.
Lenders are offering incentives for such multifamily investments, including competitive interest rates and lower down payment requirements than a single-family home. “I didn’t want to be sitting on the sidelines and playing this waiting game to own a home,” Frantz Jacques, 25, told the Post about purchasing a multifamily property in the Chicago area. He says he became interested in a multifamily investment after losing out in several bidding wars on single-family homes. “It feels like the longer I wait, the more out of reach homeownership would become,” Jacques says.
The share of home sales purchased by investors eclipsed 11.3% last year, marking a two-decade high, according to data from CoreLogic. The uptick is being driven by small investors looking to get into real estate for the first time. Low interest rates may also be driving multifamily investments. The share of borrowers taking out multifamily mortgages increased 24% in the third quarter of 2019 compared to a year prior, according to data from the Mortgage Bankers Association.
Younger buyers in particular are coming “to realize that they can’t afford the kind of home they want in the area of the city they want to live in,” says Leslie White, a Redfin agent in Washington, D.C. She’s seeing more clients consider multifamily investments instead, particularly drawn to three-unit rowhouses priced from $750,000 to $1.5 million. “They’re mostly young couples that could never afford to buy a single-family home in these areas, and they like the idea of having tenants help pay their mortgage,” White says.
But becoming a landlord isn’t for everyone, housing experts warn. “Homeowners need to know that it’s not just about collecting rent,” Susan Bishop, a broker with Four Seasons Sotheby’s International Realty in Rutland, Vt., told the Post. “Occasionally, dealing with late-night repairs and quick fixes around the house should be expected.”
Homes with high curb appeal tend to sell for an average of 7% more than similar houses with an uninviting exterior, according to a joint study by the University of Alabama and the University of Texas at Arlington. Further, the premium rises to as high as 14% in slower real estate markets with greater housing inventory, shows the study, which was published in the Journal of Real Estate Finance and Economics.
Researchers examined Google Street View photos and sales data from 88,980 properties in the Denver metro area to find how much curb appeal matters to a home’s value. The researchers found that the curb appeal of neighboring properties also has an impact on a home’s value. The appearance of the yard next door accounts for about a third of a home’s overall premium, the study notes.
It’s common knowledge that curb appeal affects a home’s value, but quantifying the financial impact is a challenge, Sriram Villupuram, a senior author of the study and an associate professor at UT Arlington, told The Wall Street Journal. “It’s observable, but not quantifiable,” Villupuram says. The researchers manually scored a set of properties using Google Street View on a scale of one to four (one indicates lowest curb appeal; four indicates highest).
Researchers considered homes to have low curb appeal if the property includes blemishes like a broken pavement or overgrown grass. Homes were considered to have high curb appeal if they included features like well-kept lawns and professional landscaping.
Many appraisers evaluate a home based on interior features like the number of bedrooms and bathrooms, square footage, and home improvements. But Villupuram told the Journal that the study’s ultimate goal is to create an algorithm that could be used to automate assessments of curb appeal. Villupuram says that could make it easier for large investors, banks, and institutions to include such assessments in their property appraisals.
As rents increase, more people may take on roommates to try to curb costs. At least one in three adults live with at least one adult roommate who isn’t their romantic partner or a college student, according to a 2018 Pew Research Center study.
But who makes up the perfect roommate? Apartment Guide surveyed more than 1,000 Americans to find the perfect—or not-so-perfect—traits.
In general, researchers found that people who had more than one roommate tended to be less satisfied with their living situation than those who just had one roommate. Those living with their friends, family (32%), and co-workers (about 30%) were the most likely to be happy with their roommates.
The top tension points between roommates seems to be mostly centered around cleanliness of a space, rent, and communication, the Apartment Guide study finds.
Home sellers nationwide felt richer at resale in 2019. The average seller saw a home price gain of $65,500 on a typical sale, which is up from $58,100 the year prior, ATTOM Data Solutions reports in a new study. This marks the highest level since 2006.
That also represents a 34% average return on their investment compared to the original purchase price, which is also the highest average home seller ROI since 2006.
“The nation’s housing boom kept roaring along in 2019 as prices hit a new record, returning ever-higher profits to home sellers and posing even greater challenges for buyers seeking bargains,” says Todd Teta, chief product officer at ATTOM Data Solutions. “But there were signs that the market was losing some steam last year, as profits and profit margins increased at the slowest pace since 2011. While low mortgage rates are propping up prices, the declining progress suggests some uncertainty going into the 2020 buying season.”
Homeowners in western states continued to see the highest returns. ATTOM Data Solutions’ researchers found that the metros with the highest home seller ROIs were in the following areas:
San Jose, Calif.: 82.8%
San Francisco: 72.8%
Seattle: 65.6%
Merced, Calif.: 63.2%
Salem, Ore.: 62.1%
Meanwhile, overall home prices continued to rise in 2019. The biggest year-over-year increases in median home prices in 2019 were: South Bend, Ind. (up 18.4%); Boise City, Idaho (up 12.6%); Spokane, Wash. (up 10.9%); Atlantic City, N.J. (up 10.6%); and Salt Lake City (up 9.6%).
