Yajnesh Rai

More Buyers Gamble With Sight-Unseen Offers | Realtor Magazine

Thirty-five percent of home buyers who purchased a home in November and December said they made an offer on the home without seeing it first in person, according to a newly released survey of more than 1,500 home purchasers conducted by the real estate brokerage Redfin. That is up from 33 percent in May 2017 and from 19 percent in June 2016.

Sight-Unseen Offers

The following lists the percentage of buyers by metro area who said they made an offer on a home they hadn’t seen first in person:

• Los Angeles: 57%
• San Diego: 46%
• San Francisco: 44%
• Chicago: 38%
• Austin: 35%
• Denver: 33%
• Washington, D.C.: 32%
• Phoenix: 31%
• Portland: 30%
• Sacramento: 30%
• Baltimore: 28%
• Dallas: 27%
• Boston: 25%
• Seattle: 19%

Source: Redfin

By age group, millennial home buyers are the most likely to make an offer on a home without visiting it first, at 45 percent, researchers found. Younger adults may be more comfortable with relying on information they find online about properties for sale and the neighborhoods, researchers note.

For buyers who can’t see the property in person first, some real estate professionals are relying on FaceTime video call tours or 3-D virtual tour programs to give them a better idea of the interiors. Angela Hunter, a real estate professional in Omaha, recalls helping a family expecting a child to relocate from Jacksonville, Fla., to Bellevue, Neb. She used video tours to show them properties in the area.

“While conducting video tours with them, I was very careful to explain things that they would not be able to experience virtually, like the sounds, smells, and textures,” Hunter says. “I pointed out flaws that are hard to detect through video so that nothing would be a surprise to them once they visited in person. It’s not the easiest way to shop for a home, but together we found the perfect match.”

 

Styling Tips to ‘Wow’ Spring-Time Home Buyers

The new year and the upcoming spring season brings with it a fresh outlook and new beginnings. What will prospective home buyers be thinking about while searching for their new “happy place”? For sellers preparing their homes to sell this spring, that means engaging buyers by showcasing a warm, welcoming and cheerful property that others can easily envision living in. The following are our spring décor styling tips to help sellers prepare their property to stand out among the sea of new listings.

Natural Elements Paired with Metallics

One of our favorite trends is plants of all shapes and sizes–succulents, trees or plants in baskets and colorful planters, and fresh or synthetic garden flowers in vases and wreaths. Since metallic accents continue to be on-trend, we love pairing the two together for an elegant touch to appeal to today’s buyers who like to feel close to nature.

Pops of Bright Accents

Pair bold pops of colorful accessories such as accent pillows, throws, artwork, glass bowls filled with fruit, and fluffy bathroom towels against a neutral backdrop to give any room a boost of energy and warmth. Mix and match different textures and patterns for added depth and a modern style.

Update Paint Colors

Whether you repaint an entire room or an accent wall, a fresh coat of paint works wonders to instantly brighten and open a space to make it appear larger. To spruce up your curb appeal, try a fresh coat of a trending spring color such as Benjamin Moore’s Caliente for your front door to create a welcoming first impression.

Fresh Bedding

To create a spring-like oasis in the bedroom, switch out winter bedding and replace it with fluffy duvets in white, or on-trend floral patterns paired with a soft, cozy throw and accent pillows in different sizes, colors, and textures.  To complete the look, add soothing nature-inspired wall art in complementary colors.

8 Hot Markets for Millennials, Gen X, Boomers | Realtor Magazine

Because millennials, Generation X members, and baby boomers are in different stages of their lives, they are seeking different types of real estate markets that meet their specific needs. Realtor.com® found the hottest locations for each age cohort based on migration data for each of the major U.S. metros, home-search activity on realtor.com®, and the percentage of positive change in homeownership for each city from 2016 to 2018. The research shows that millennials are lured to places with strong technology and cultural centers, Gen Xers favor more affordable markets, and baby boomers are heading to the Sun Belt.

Millennials

Booming job markets are important to millennials, as are cultural and nightlife amenities. Realtor.com® found that the hottest millennial markets are:

1. San Francisco
2. Seattle
3. Houston
4. Dallas
5. Washington, D.C.
6. Denver
7. Boston
8. Ann Arbor, Mich.

Generation X

“Generation X is looking for housing affordability, where they can meet the needs of growing families,” Chris Porter, chief demographer at John Burns Real Estate Consulting, told realtor.com®. They tend to prefer warmer weather and more business-friendly states, which may explain why “Texas has been one of the fastest-growing regions in the country for a while,” Porter added. The hottest markets for Generation X are:

1. Houston
2. Miami
3. Dallas
4. Washington, D.C.
5. Riverside, Calif.
6. Austin, Texas
7. Odessa, Texas
8. San Antonio

Baby Boomers

“A lot of [baby boomers] are looking to downsize,” says Lori Corwin, a real estate professional at Realty Executives in Phoenix. They may be looking for homes that require little maintenance, including in 55-plus communities. The hottest markets for baby boomers are:

1. Phoenix
2. North Port, Fla.
3. Miami
4. The Villages, Fla.
5. Punta Gorda, Fla.
6. Austin, Texas
7. Riverside, Calif.
8. Cape Coral, Fla.

IRS: HELOCs Still Deductible for Renovations | Realtor Magazine

Taxpayers can continue to deduct the interest they pay on home equity loans when the funds are used for home improvements, the IRS confirmed in a statement on Wednesday. The status of home equity deductions has been in question following the limits on the mortgage interest deduction included in recent tax reform legislation. The IRS says it has been fielding more questions from taxpayers and tax professionals on whether the interest on home equity loans, home equity lines of credit, or second mortgages can still be deducted.

In its statement, the IRS said despite the restrictions on mortgages, taxpayers can, in most cases, still deduct interest on home equity loans, a home equity line of credit, or a second mortgage.

The tax law, passed in December, suspends from 2018 until 2026 the deduction for interest paid on home equity loans and lines of credit unless the funds are used to buy, build, or substantially improve the taxpayer’s home, the IRS notes. As such, the interest on a home equity loan used for building an addition to an existing home would generally be deductible, Accounting Today explains. But interest on the same loan used to pay personal living expenses, like credit card debt, would not be.

Under the new tax reform, a limit has been placed on mortgages qualifying for the home mortgage interest deduction. Starting in 2018, taxpayers can only deduct interest on $750,000 of qualified residence loans, or $375,000 for a married taxpayer filing a separate return—down from $1 million or $500,000 for a married taxpayer, respectively.

The IRS offered the following scenario in describing how the new tax law works when it comes to home equity loans:

“In January 2018, a taxpayer gets a $500,000 mortgage to buy a main home with a fair market value of $800,000. The following month, the taxpayer takes out a $250,000 home equity loan to put an addition on the main home. Both loans are secured by the main home and the total doesn’t exceed the home’s cost. Because the total amount of both loans doesn’t exceed $750,000, all the interest paid on the loans is deductible. But if the taxpayer used the home equity loan proceeds for personal expenses, such as paying off student loans and credit cards, then the interest on the home equity loan wouldn’t be deductible.”

The National Association of REALTORS® welcomed the IRS  announcement Wednesday to clarify that tax deductions for home equity loans or home equity lines of credit can still be taken if used on home improvements.

“The National Association of REALTORS® is pleased with the IRS announcement clarifying and confirming that under the new tax law owners can continue to deduct the interest on a home equity loan, line of credit or second mortgage when the proceeds are used to substantially improve their residence,” said NAR President Elizabeth Mendenhall. “There has been much confusion on this issue, and the continued deductibility will bring real benefits to those who choose to take on remodeling projects to bring more resale value to their home or gain equity that may have been lost during the downturn.”

Townhouse Starts Indicate Sturdy Market | Realtor Magazine

Townhouse construction continues to post gains. Over 2017, townhome starts totaled 104,000, a 7 percent increase over 2016, according to an analysis of U.S. Census Bureau data by the National Association of Home Builders.

Further, townhouses or single-family attached housing numbered 29,000 of the starts during the fourth quarter of 2017, which is 21 percent higher than a year ago.

The market share of new townhouses accounts for 12.4 percent of all single-family housing starts. For comparison, over the past two decades, townhouse construction peaked in the first quarter of 2008 at 14.6 percent of total single-family construction.

“After a soft patch, the market share is rising again,” Robert Dietz, chief economist of the NAHB, notes on its Eye on Housing blog. “I expect future gains as townhouses are a useful bridge from rentership from homeownership for younger prospective home buyers in high-cost markets, among other market opportunities. … The long-run prospects for townhouse construction are positive given large numbers of home buyers looking for medium density residential neighborhoods, such as urban villages that offer walkable environments and other amenities.”

Higher Rates Offset Loan Demand | Realtor Magazine

Home buyers and homeowners may be getting spooked by higher mortgage rates. Mortgage applications for both home purchases and refinancings plummeted 6.6 percent last week on a seasonally adjusted basis compared to the previous week, the Mortgage Bankers Association reported Wednesday.

Volume is now just 3.5 percent higher than a year ago, with annual increases continuing to shrink week to week.

Applications to refinance dropped 7 percent last week but are still 2.8 percent higher than a year ago. Applications to purchase a home dropped 6 percent last week and are 3 percent higher than a year ago.

Affordability is weakening as home prices continue to rise. Mortgage rates also are now more than half a percentage point higher than at the start of the year.

“The drumbeat continues,” says Mike Fratantoni, the MBA’s chief economist. “Inflation is increasing, as are deficits, and the economy and job market continue to look strong, and rates are higher as a result. This upward move in rates is coming right at the start of the spring buying season and is a headwind.”

The 30-year fixed-rate mortgage averaged 4.64 percent last week, the highest level since January 2014, the MBA reports.

More borrowers are turning to adjustable-rate mortgages, which tend to have lower initial rates than the 30-year fixed-rate mortgage. However, the lower rates from an ARM can be risky since the rates are locked in for a shorter term. ARM applications rose to 6.4 percent of total applications last week

Mortgage Rates Still Climbing, Not Fading | Realtor Magazine

 

 

The 30-year fixed-rate mortgage shows little signs of stopping its gradual move upwards week to week. This marks the seventh consecutive week for higher mortgage rates, and rates continue to be at a four-year high.

“Fixed mortgage rates increased for the seventh consecutive week, with the 30-year fixed mortgage rate reaching 4.40 percent in this week’s survey; the highest since April of 2014,” says Len Kiefer, Freddie Mac’s chief economist. “Mortgage rates have followed U.S. Treasury’s higher in anticipation of higher rates of inflation and further monetary tightening by the Federal Reserve. Following the close of our survey, the release of the [Federal Open Market Committee] minutes for February 21, 2018, sent the 10-year Treasury above 2.9 percent. If those increases stick, we will likely see mortgage rates continue to trend higher.”

Freddie Mac reports the following national averages with mortgage rates for the week ending Feb. 22:

• 30-year fixed-rate mortgages: averaged 4.40 percent, with an average 0.5 point, rising from last week’s 4.38 percent average. Last year at this time, 30-year rates averaged 4.16 percent.
• 15-year fixed-rate mortgages: averaged 3.85 percent, with an average 0.5 point, increasing from last week’s 3.84 percent average. A year ago, 15-year rates averaged 3.37 percent.
• 5-year hybrid adjustable-rate mortgages: averaged 3.65 percent, with an average 0.4 point, rising from last week’s 3.63 percent average. A year ago, 5-year ARMs averaged 3.16 percent.

How Buyers Misjudge the Mortgage Process | Realtor Magazine

Many home buyers find the mortgage process “stressful” or “complicated,” recent surveys show. As such, they may go through it and make some mistakes they later regret. Realtor.com® recently highlighted some of consumers’ most common pitfalls when getting a mortgage, including:

Failing to shop around.

About half of home buyers say they meet with only one mortgage lender before signing up for a mortgage, according to the Consumer Financial Protection Bureau. Lenders’ interest rates and offers can vary. Failing to talk with more than one mortgage lender may mean buyers miss out on some savings. Rates among lenders can vary by more than a half percentage, according to the CFPB. For example, getting a 4 percent rate on a 30-year fixed-rate mortgage compared to a 4.5 percent rate on a $200,000 loan could mean a savings of about $60 per month or $3,500 over the first five years. Housing experts recommend meeting with at least three mortgage lenders before selecting one.

Waiting for a 20 percent down payment.

A 20 percent down payment can help home buyers avoid having to pay the extra fees of private mortgage insurance. But mortgage rates are currently still at historical lows and waiting for a 20 percent down payment could mean buyers miss a chance to lock in a lower mortgage rate.

Getting prequalified instead of preapproved.

Prequalification is a basic overview a lender does of a borrower’s ability to get a loan. Buyers receive a general estimate of the size of loan they can afford. But it’s not a guarantee they can actually get approved for a home loan. That’s what makes a mortgage preapproval more ideal for home shoppers. It’s a more critical analysis by a lender of a buyer’s credit and assets. Lenders will then issue a letter of preapproval, which is a written commitment for financing up to a certain loan amount.

Shuffling money around accounts.

Buyers can run into delays when they start moving their money around from account to account. Lenders will check to see if finances have remained the same. Shuffling money around can be a huge red flag, says Casey Fleming, mortgage adviser and author of The Loan Guide: How to Get the Best Possible Mortgage. Buyers who are under contract for a home need to make sure their money stays put.

Home Maintenance Can Cost Up to $2K a Year | Realtor Magazine

Homeowners may be surprised at how some extra costs really add up. A new survey by Bankrate.com shows that the average homeowner spends an average of $2,000 per year on maintenance services.

Sixty-three percent of more than 2,200 respondents recently surveyed say they use at least one recurring maintenance provider. Thirty-five percent say they use two or more.

The most common services and their average monthly costs for homeowners are:

• Housekeeping: $285
• Homeowners’ association dues: $210
• Landscaping: $144
• Home security system: $130
• Pool care: $123
• Snow removal: $84
• Septic service: $67
• Private trash/recycling collection: $55

Further, researchers found that usage of such home maintenance services tends to increase with age and income.

“These figures illustrate the hidden costs of homeownership, and it’s important to note they don’t include repairs such as a broken refrigerator, washing machine, or air conditioner,” says Taylor Tepper, a Bankrate.com analyst. “These are just ongoing, routine tasks like keeping your house and yard clean. Make sure to factor these costs into your new budget when you buy a house. Or do them yourself to save thousands of dollars each year.”

The U.S. States With The Highest Rates Of Burglary [Infographic]

In most parts of the United States, the long, dark and freezing winter nights are finally starting to let up. Winter is a time when people are particularly vigilant about the threat of home invasion but in actual fact, burglars prefer daylight. Break-ins become more common in the U.S. when the evenings get longer, spiking ten percent in June, July and August in particular. There is a belief that people leave their guard down, perhaps even becoming complacent, as the stretch in the evenings grows longer. While it’s true that some burglars use the darkness of night as cover, the chance of people being home during a winter break-in is higher. People leave their homes more often during bright weather spells and 60 percent of burglaries happen between 6am and 6pm, according to the FBI.

In 2016, 278,600 break-ins occurred at night with 486,006 happening during the day with $2,361 stolen on average. With spring on the horizon, which areas in the U.S. have to cope with the most serious burglary threat? The most recent FBI data shows that the South-Central states are worst affected with New Mexico experiencing the highest rate in 2016. It had 830.4 instances per 100,000 inhabitants, something that isn’t too surprising to many experts, considering how the Mexican drug trade passes through the state, especially Albuquerque. Arkansas came second on the FBI’s list with 795.5 burglaries per 100,000 inhabitants while Mississippi was third with 781.4. New York had the lowest rate of burglary per 100,000 inhabitants in 2016 with 201.7.

 

Statista

Burglary rate per 100,000 in 2016