Yajnesh Rai

Predictions Roll in: 2017 Housing Forecasts | Realtor Magazine

We can expect a hot year for home sales in 2017, according to recent forecasts from the National Association of REALTORS®, the Mortgage Bankers’ Association, Freddie Mac and Fannie Mae, and more.

NAR is predicting existing-home sales to reach 6 million in 2017, higher than its 5.8 million forecast for this year. But other entities are even more bullish. MBA is predicting home sales to eclipse 6.5 million next year, while Fannie Mae and Freddie Mac are both predicting 6.2 million.

A huge wave of Generation Yers, who have delayed home buying, are emerging into their key buying years. They are predicted to keep home sales and condo sales strong well into 2020, according to economists.

The top markets for price appreciation likely will be in Seattle, Wash.; Portland, Ore.; Denver, Colo.; and Boston, predicts Eric Fox, vice president of statistical and economic modeling at VeroForecast. These markets’ robust economies have growing populations but a tight supply of homes for sale on the market that will likely lead to some of the largest price increases across the country.

Meanwhile, new-home construction starts likely will tick up to about 1.5 million per year to 2024, predicts Forisk Research.

Home builders likely will continue to be more subdued, despite calls for more inventory.

“Home builders behavior likely is a continuing echo of their experience during the crash,” Pantheon Macro Chief Economist Ian Shepherdson told MarketWatch. “No one wants to be caught with excess inventory during a sudden downshift in demand. In this cycle, the pursuit of market share and volumes is less important than profitability and balance sheet resistance.”

5 Insurance Tips for Home Renovation Projects | Realtor Magazine

A home renovation can be an overwhelming experience with high stakes for your clients. There’s creating the overall vision of the project, gauging its financial feasibility, finding a reliable contractor, and hoping for a smooth construction process. But an important consideration that often falls by the wayside is making sure the project is adequately insured.

Whatever a home remodel entails, it’s important that all the players involved are insured—from the homeowner, to the general contractor, to any subcontractors involved, says Mark Komiskey, Director of Homeowners Products at Esurance. He recently shared five insurance tips that you can pass on to your clients to help keep them financially sound as they consider a home renovation.

1. Notify the insurance company before the renovation.

Home remodels, big or small, typically increase the value of the home and the risk borne by it—and the homeowners insurance policy should reflect this. Advise your clients that if they fail to notify the insurer and don’t reconsider coverage offerings for the home, they could be surprised by more than the “big reveal.”

Once the project’s completed, homeowners should make sure that their policy aligns with the home’s new replacement value. They should also account for any new items purchased for the renovation, like appliances or furniture.

Moreover, it’ll likely be necessary to increase the liability coverage limit for the duration of the project. If, for instance, a neighbor is injured on the worksite, the homeowner could be exposed to unforeseen legal and medical fees.

2. Confirm the general contractor is licensed and bonded.

Before your clients greenlight a project, advise them to check that the general contractor is licensed and carries a surety bond. If the contractor fails to complete the project per the contracted agreement, the surety bond could cover the financial losses incurred as a result. The agreement should also mandate the compliance of building codes and proper permits.

Additionally, it’s critical that a contractor carries workers’ compensation and liability insurance, and that your clients ask to see both certificates. The contractor should be responsible for not only property damage, but also negligent workmanship and injuries sustained on the job.

Like every insurance policy, a general contractor’s coverage has limits, and, therefore, shouldn’t preclude increasing the limits on a homeowners policy.

3. Confirm coverage for any subcontracted workers.

For many home renovations, general contractors will subcontract builders, electricians and plumbers. Because these employees don’t work for the contractor full-time, they’re typically not included in their workers’ compensation policy. As with a contractor, a homeowner should verify that subcontractors have liability insurance.

4. Consider purchasing builder’s risk insurance.

Building materials and equipment belonging to the contractor or subcontractors aren’t covered by homeowners insurance.

A builder’s risk insurance policy, however, extends coverage to equipment or building materials that have yet to be installed or transported to the work area on the property. It’s not uncommon for thieves to target construction sites, particularly if there are valuable materials, like copper plumbing pipe. In addition, builder’s risk coverage offers financial protection for the portion of property undergoing construction.

5. Confirm the contractor has completed operations insurance.

Completed operations insurance offers a safety net for things that go awry once the project is considered complete. Say your clients had an overhead door installed, and one day the door malfunctions and closes on top of their car. If carried by the contractor, completed operations insurance could help pay to repair or replace damaged property resulting from faulty work.

Home improvement projects invoke a multitude of insurance concerns, but keeping the homeowners insurance company in the loop—and being proactive from start to finish—can do much to close coverage gaps and turn your clients’ long-coveted dream home into a reality.

The Hot List: 20 Markets Soaring in September | Realtor Magazine

September is shaping up to be the hottest fall in the last decade, according to realtor.com®’s latest housing report. Homes for sale in September are moving 4 percent more quickly than last year, despite prices zooming to record highs.

The median home price was $250,000 in September, about 9 percent higher than a year ago and marking a new high for September, realtor.com® reports.

“The fundamental trends we have been seeing all year remain solidly in place as we enter the slower time of the year,” says Jonathan Smoke, realtor.com’s chief economist. A shortage of homes for sale on the market mixed with high demand is triggering price increases across many markets, he says.

So, which housing markets in September stood out the most? Realtor.com®’s data team factored in the number of days homes are spending on the market and the number of views that listings received at its site.

They pinpoints these cities as the hottest real estate markets in the nation in September — those in which inventories are moving 23 to 43 days more quickly than the national average, and listings are garnering 1.4 to 3.7 more views.

1. San Francisco
2. Vallejo, Calif.
3. Denver
4. Dallas
5. San Diego
6. Stockton, Calif.
7. Fort Wayne, Ind.
8. Sacramento, Calif.
9. San Jose, Calif.
10. Waco, Texas
11. Modesto, Calif.
12. Columbus, Ohio
13. Yuba City, Calif.
14. Detroit
15. Santa Rosa, Calif.
16. Colorado Springs, Colo.
17. Santa Cruz, Calif.
18. Kennewick, Wash.
19. Nashville
20. Grand Rapids, Mich.

Silicon Valley is now the richest part of the US – Business Insider

In the never-ending battle for riches, influence and cultural domination, Silicon Valley now has the upper hand over Washington, DC.

The two metros have consistently been atop rankings of the most affluent urban areas in recent years, at least according to Census data on median household incomes.

(Median income—the point at which half the area’s households are above and half are below—is considered a good measure of how a typical household is faring economically.)

During the Great Recession which began in late 2007, Silicon Valley’s fortunes briefly faltered, sending its income numbers below those of the capital area. DC was a bright spot during the recession thanks to the stability of the Federal government and an influx of lobbying aimed at defanging the regulatory reaction to the financial crisis. But since economy returned to growth in 2009, Silicon Valley surged. And the California region continues to set the pace.

US Bureau of Labor Statistics

The Census Bureau published its annual update on the country’s demographic development Thursday. And the numbers showed that incomes rose 2.3% in Washington, DC and its affluent environs. The typical DC metro-area household pulled in $93,294 in 2015. Not bad.

But not as good as Silicon Valley. The sprawling area south of San Francisco known as the San Jose-Sunnyvale-Santa-Clara metro area is usually used as a proxy for Silicon Valley as a whole. Incomes in the valley jumped a whopping 5.7% to nearly $102,000 in 2015, making it the area with the highest median income in the country.

And that helps explain why both Hillary Clinton and Donald Trump have been finding time in their busy schedules for California fundraising swings recently.

Sales Contracts Surge to Highest Rate in 10 Years | Realtor Magazine

Pending home sales were up in most areas of the country in July, reaching the second highest reading in more than a decade, according to the National Association of REALTORS®’ Pending Home Sales Index. Last month the Midwest was the only region of the U.S. to see a drop in pending sales.

The index increased 1.3 percent in July to a reading of 111.3. Pending home sales are now 1.4 percent higher than a year ago.

“Amidst tight inventory conditions that have lingered the entire summer, contract activity last month was able to pick up at least modestly in a majority of areas,” says Lawrence Yun, NAR’s chief economist. “More home shoppers having success is good news for the housing market heading into the fall, but buyers still have few choices and little time before deciding to make an offer on a home available for sale. There’s little doubt there’d be more sales activity right now if there were more affordable listings on the market.”

Notably, the West saw the highest jump in pending home sales, with contract signings up to the highest rate in more than three years. Yun attributed the rise to stronger labor market conditions in the region.

“If home building increases in the region to tame price growth and alleviate the ongoing affordability concerns, the healthy rate of job gains should support more sales,” Yun says.

Builders may be showing signs of focusing more on the middle and lower price tiers. They’ve been mostly focused on building larger, pricier homes for the upper end of the market for the last few years.

“REALTORS® in several high-cost areas have been saying for quite a while there is robust demand for single-family starter homes and townhomes at an affordable price point for young buyers,” Yun says. “The home ownership rate won’t move up from its over 50-year low without a meaningful boost from first-time buyers, whose participating has yet to noticeably increase so far this year despite mortgage rates near all-time lows.”

NAR predicts that existing-home sales will reach about 5.38 million this year, a 2.8 percent increase over 2015. That also would mark the highest annual pace since 2006 (when sales were at 6.48 million). Price growth of existing homes will likely moderate to around 4 percent this year, after a 6.8 percent jump a year ago, NAR forecasts.

How to Avoid Getting Sued When Selling Your Home – 24/7 Wall St.

Selling your house can be stressful, especially if you want to sell it quickly. You may even be tempted not to reveal certain things about the house that may slow down or even blow the sale. Bad idea.

Failing to disclose even a minor problem with the property may lead to nasty confrontation in front of a judge. In general, the National Association of Realtors (NAR) recommends that if you are in doubt about whether or not to reveal an issue, take a deep breath and disclose the problem.

Kansas real estate attorney Rick Davis puts it bluntly:

Most sellers think it is in their best interest to disclose as little as possible. I completely disagree with this sentiment. In the vast majority of cases, disclosing the additional information (especially if it is something that was previously repaired), will not cause a buyer to back out or ask for a price reduction.

 

Why disclose a repair you’ve already made? Because if the buyer later discovers that the repair job was incorrectly done, the seller could be liable for additional repair costs.

Sellers should disclose everything they can think of, according to Adam Buck, an Arizona-based real estate specialist. The more you disclose, the less important the disclosures might seem to a potential buyer.

The good news for sellers is that you do not have to disclose something you are unaware of. That may seem obvious. If you provide a potential buyer with copies of any inspection reports you have (no matter how old), and a list of what you know to be issues, then if something goes wrong with the house after the sale, the burden falls to the buyer who may have failed to do their own inspections and due diligence prior to the sale.

The NAR points out a common area of dispute: just how big is the house? There is no single standard for measuring the square footage of a house. That could lead to several different measurements and it is always a bad idea for a seller either to pick one or compute an average or come up with some other way to answer the question. Far better is to say you don’t know. Then add a clause to the purchase contract that states that any square foot measurement is an approximation and if the buyers really wants an accurate measurement they need to get it for themselves.

Adam Buck sums it up neatly, “It is much better to lose a buyer by clearly disclosing all known issues than it is to spend two years and tens of thousands of dollars in litigation.”

National Mortgage News – Affordability Improved in July in Most Markets: First American

Income gains and lower mortgage rates contributed to an uptick in affordability in July across most major markets in the country, First American Financial Corp. said Monday.

First American’s Real House Price Index, which measures the change in the price of single-family homes against the impact of income and interest rate changes that affect consumers’ buying power, fell 2.1% from June and 4.8% year-over-year. Declines occurred across 37 of 43 metropolitan areas analyzed by First American.

“Rising household incomes and low mortgage rates continue to foster meaningful growth in consumer house-buying power across of the majority of major metropolitan markets in July , which were sufficient to more than offset unadjusted price appreciation,” First American chief economist Mark Fleming said in a news release.

“A rise in estimated median household incomes is also playing a large role in certain key markets that otherwise seem expensive when just considering nominal house prices, and not factoring in the boost in buying power provided by increased income levels in those markets.”

The cities with the largest declines in so-called real home prices, which signifies an increase in affordability, were Virginia Beach, Va., Washington, D.C., Cleveland, Oklahoma City and San Francisco. All of these cities experienced real house price declines of 6% or more, with Washington and San Francisco in particular seeing the benefit of higher income growth.

Study: Outdoor Projects Pay Back at Resale | Realtor Magazine

Home owners may want to focus more of their remodeling dollars on boosting curb appeal. Outdoor remodeling projects not only offer some of the highest returns at resale, they can also increase the happiness of home owners who are staying put in their homes, according to the 2016 Remodeling Impact Report: Outdoor Features, which was released Tuesday by the National Association of REALTORS® and National Association of Landscape Professionals.

Taking care of the home’s lawn can bring some of the biggest bang for your buck. The Remodeling Impact Report found reveals that REALTORS® find projects like seeding the lawn, implementing a standard lawn care program, and updating a landscape with sod lawn can have some of the highest returns at resale.

“REALTORS® understand the importance of curb appeal-from flower beds to fire pits- because when it is time to sell, a home’s exterior is its first impression to potential buyers,” says NAR President Tom Salomone. “REALTORS® also know that these projects can bring home owners who have no plans to sell even more enjoyment and satisfaction in their home.”

REALTORS® ranked the following outdoor remodeling projects as the most likely to add value to a home at resale (listed from highest to lowest):

• Landscape upgrade
• New patio
• New wood deck
• Standard lawn care
• Sod lawn
• Softscape
• Seed lawn
• Outdoor fireplace
• Outdoor firepit
• New pool

For home owners in search of more happiness, they may want to consider a pool. The study found that a new pool comes in number one in the enjoyment home owners gain from an outdoor remodeling project. Ninety-five percent of home owners who completed a pool project said they have a greater desire to be home; 90 percent feel a major sense of accomplishment; and 80 percent say they have an increased sense of enjoyment when they are at home, the study finds.

But home owners shouldn’t bank on recouping the full cost of the pool at resale. REALTORS® estimate that home owners likely will only recoup 50 percent of the cost of the pool at resale.

Other outdoor remodeling projects that scored high on bringing “joy” to home owners was an overall landscape upgrade, followed by a new wood deck.

“Home owners looking to take on large, expensive outdoor projects should do so for themselves, for the enjoyment they and their family will gain from the finished results, and not only to improve the value of their home for when they sell,” Salomone says. “Smaller projects will bring potential sellers the most value back upon resale – and have the benefit of costing less up front.

Study: Real Estate Cheapest in Fall, Winter | Realtor Magazine

Your home buyers likely won’t want to shy away from the fall or winter months. They may score the best deals.

Home sales prices in the nation’s largest metros typically peak during the summer but drop in the fall and are lowest in the winter, according to a new study from NerdWallet, in which researchers analyzed sales and listings over the past two years in the 50 largest metros using realtor.com® data.

Home sale prices tend to peak in June and July, according to the analysis. Buyers will find the most inventory or home choices during those months but there is also more competition from other buyers that they will have to contend with.

The market tends to slow in the fall and sales prices start to dip. Sales prices drop nearly 3 percent, on average – a fall of $8,300 on the median home – from summer (June through August) to fall (September through November).

Home sale prices tend to be cheapest in the winter. In January or February, for example, homes could potentially cost 8.45 percent less on average than in June through August.

January had the lowest sales prices in 29 of the 50 metro areas analyzed; February had the cheapest in 19 areas.

“If your circumstances give you the freedom to be able to choose the best time to look to sign a contract on a new home, there’s no question that the market dynamics favor you the most to do that in the dead of winter, ideally in January or February, right before the activity starts to heat up,” says Jonathan Smoke, realtor.com®’s chief economist.

4 Home Maintenance Tasks to Tackle Now | Realtor Magazine

Autumn is the ideal time for your clients to make little home improvements that could make a big difference once winter hits. RISMedia’s Housecall blog recently offered advice on what maintenance tasks home owners should tackle first.

Get the furnace ready. A clean furnace is a happy furnace, which is why it’s important for owners to have it checked out and cleaned before it’s used. A well-maintained furnace will also help keep costs down and make the home’s air quality better. With furnace weather on the horizon for much of the country, your clients will also want to make sure their smoke and carbon monoxide detectors are functioning correctly.

Improve air quality. No one wants to be cooped up in colder weather in a house full of dust and allergens, and owners can improve a home’s air quality by giving baseboards, ceiling fans, and vents a good wipe down.

Raise the roof. It’s important to check out the state of a home’s roof before winter, which can be done by owners or by a certified inspector. The key things to look for are cracked or damaged shingles, caulking issues, and if the roof is deteriorating due to moss, Housecall suggests.

Just say no to mold. Mold thrives in the summer in poorly ventilated areas like a home’s basement or around leaky pipes, and fall is the perfect time to send it packing. Getting rid of mold is definitely something owners will want to have done by a professional, however.