Yajnesh Rai

Consumers: Agents Are as Valuable as Therapists | Realtor Magazine

Home sellers and buyers really like and trust their real estate agents. Seventy-three percent of home sellers agree that their agent was as valuable as a therapist. Sixty-four percent of home buyers agree their agent knows them better than their next-door neighbor, according to a new consumer survey conducted by Century 21 Real Estate.

But with all that weight placed on the agent’s value and importance, the survey also found that consumers tended to be in a rush to commit to an agent. They interviewed two agents, on average, before deciding on whom to hire.

“We’re seeing a real disconnect within the real estate industry today where home buyers and sellers are extremely invested in the outcome of their transaction, yet they seem to be shortchanging themselves on the front end by rushing the vetting process to find the right agent to help them navigate what for most is the biggest emotional and financial decision in their life,” says Mike Miedler, president and CEO of Century 21 Real Estate LLC. “Defying the mediocrity that still exists in the real estate industry is a major part of our mission, and every potential home buyer or seller should be extremely selective in whom they entrust to shepherd them through this complicated process.”

Those who rush to commit to an agent may risk aligning themselves with a person who makes them less satisfied with the level of service. A survey of 500 home buyers and sellers conducted by Wakefield Research found that 34% of recent buyers were not very likely to rehire their real estate pro.

Some consumers also expressed feeling abandoned by their real estate pro. Since closing on a home, nearly a quarter—23%—of consumers said their real estate agent had not reached out to make contact with them, the Century 21 survey showed.

Additional findings from the survey:

• Greatest life achievement: Nearly three-fourths of surveyed consumers—or 70%—ranked buying a home as one of their top three greatest life achievements. Buying a home was second only to getting married (76%).
• How agents added value: Home buyers surveyed said the top ways their agent added value to the transaction was by providing information about the market (23%) and navigating the overall process (22%). Home sellers said their agent most added value with their knowledge of the market (73%), advice and counsel (72%), their assistance navigating the stress (53%).
• Couples don’t see eye-to-eye: Only 17% of couples in a relationship said they were perfectly matched on which real estate agent to use. 

Islands Continue to Be Main Draw in Kitchen Design | Realtor Magazine

Make sure that kitchen island shines because home buyers may increasingly be sizing it up. Large islands are a prominent feature in kitchen design today, and most remodeling homeowners are putting high importance on this central kitchen spot.

In a survey of nearly 2,600 homeowners conducted by Houzz, a home remodeling website, one third of homeowners said they added an island during renovations and nearly a quarter of owners said they upgraded their current one.

Islands are getting bigger. A third of remodelers had kitchen islands that measured seven feet long, while another 39% had one that was six to seven feet long.

For the finish of the island, two in five renovating homeowners added or upgraded their island cabinets for a contrasting shade to their main cabinets. Gray was the most popular choice for that at 26%, followed by blue (19%) and black (11%).

Contrasting the countertop colors of the island was also common among remodelers. The most popular choices for contrasting the island was white (23%) and medium wood (21%).

Remodelers also made sure their island had storage features too. Further, more than half—or 52%—featured built-in appliances, such as microwaves, dishwashers, garbage disposals, cook tops, and beverage refrigerators.

© Jessica Cain / Houzz

The Houzz survey found that of major kitchen remodels completed in mid-2019, homeowners spent an average of $35,000—which is up 17% from a year ago. Houzz considered a “major kitchen remodel” as one that included at least all cabinets and appliances being replaced. While spending is up, fewer homeowners this year, however, opted to upgrade countertops or sinks as well as tackling structural changes, like opening the kitchen to other interior rooms.

“It is remarkable to see median spend on kitchen remodels grow by double digits for the third year in a row,” says Nino Sitchinava, Houzz principal economist. “Combined with a two-year decline in the scope of kitchen remodels, spend increases confirm our findings of significant price inflation in the home remodeling industry due to changes in international trade policy. Homeowners are dealing with increasing product prices by substituting materials, as indicated by slower growth in the use of engineered quartz and a decline in the popularity of engineered flooring materials, highly impacted by tariffs on imported materials from China.”

Some additional kitchen trends that emerged from the Houzz survey:

• Taller backsplashes: More backsplashes in the kitchen were installed that stretched all the way to the ceiling. Or, homeowners installed tile from their counter to their upper cabinets or range hood. The most popular colors for backsplashes: white (35%), multi-colored (20%), and gray (15%).
• Vinyl flooring: Vinyl flooring is becominga trendier choice for renovated kitchens. This hardwood alternative has climbed in popularity from 10% in 2018 to 14% in 2020 among remodelers.
• White shaker cabinets: White continues to be the most popular cabinet color (45%), followed by medium wood (11%) and gray (10%). Shaker cabinet door styles are by far the most popular choice among remodelers.
• Recessed lights: The most popular light fixture upgrade among remodelers is adding recessed lights, at 69%, followed by under-cabinet and pendants lights (65% and 56%, respectively). Ninety-two percent of homeowners upgrading their kitchen island also chose to install new lighting above the island.

Some Buyers Purchase a Second Home First | Realtor Magazine

Some first-time buyers are opting to buy the vacation home before their first home. They’re being priced out of their current area—such as in cities like New York and San Francisco—so they’re opting to buy a vacation home in more affordable towns.

“I’m seeing this more and more,” Svetlin Krastev, an investment advisor with Black Sea Gold Advisors in Kingston, N.Y., told CNN.com. “People want to have exposure to real estate, but it would take all of their assets to get a residence in the city.”

For example, Bart Higgins rents a four-bedroom converted warehouse in Brooklyn, N.Y., with his wife and twin five-year-old children. They pay $5,300 a month. The property would cost between $2 million to $3 million to buy. So the couple purchased a vacation home near Kingston, N.Y., a unit with three buildings on 33 acres with a lake. They bought it for $300,000.

“We bought our first home as a second home as a way to relieve the pressure and buy us some time,” Higgins told CNN. They use Airbnb to offer short-term rentals of the property to help supplement expenses when they’re not there.

Financial planners, however, warn that buying a second home first could take up all of a person’s assets and delay them from being able to purchase a “first” home or a main residence. “Having a loan commitment on a second home will make it that much more difficult to buy what will be used as a first home,” JP Geisbauer, a certified financial planner at Centerpoint Financial Management, told CNN.

Others disagree and say that for urban professionals, it can pay off buying the second home first. A smaller mortgage on a vacation home may be more manageable than a larger mortgage in the city. Also, “the ability to rent out the property easily on home sharing sites makes it a more affordable way to grow equity,” Malissa Marshall, a certified financial planner with Soaring Wealth, told CNN.

Iran Conflict Influences Drop in Mortgage Rates | Realtor Magazine

© REALTOR® MAGAZINE

 

The 30-year fixed-rate mortgage averaged 3.64% this week, the lowest level in thirteen weeks. Sam Khater, Freddie Mac’s chief economist, says rates dropped as investors sought the safety of the U.S. Treasury’s fixed-income markets in light of the U.S.’s escalating turmoil with Iran. That said, “the drop in mortgage rates, combined with the strong labor market, should propel a continued rise in home buyer demand,” Khater says.

Freddie Mac reports the following national averages with mortgage rates for the week ending Jan. 9:

• 30-year fixed-rate mortgages: averaged 3.64%, with an average 0.7 point, falling from last week’s 3.72% average. Last year at this time, 30-year rates averaged 4.45%.
• 15-year fixed-rate mortgages: averaged 3.07%, with an average 0.7 point, falling from last week’s 3.16% average. A year ago, 15-year rates averaged 3.89%.
• 5-year hybrid adjustable-rate mortgages: averaged 3.30%, with an average 0.3 point, falling from last week’s 3.46% average. A year ago, 5-year ARMs averaged 3.83%.

Mortgage Rates Fall Further, and Buyers Are Swooping In | Realtor Magazine

The first open houses of the year are drawing out the crowds, real estate pros report. Low mortgage rates—which dipped even further this week—may be driving some of that activity.

An open house in the Atlanta area last Sunday for a newly renovated, three-bedroom, two-bath house for $335,000 drew a crowd of about 34 people during a two-hour time span. Listing agent Melissa Fuentes says she’s conducting two second showings this week and expects an offer by the end of the week.

The home attracted homeowners and investors alike. “With the market value the way it is right now, there’s a lot of people jumping on the same kind of real estate that I’m looking to invest in,” Michael Tartly, who is looking for an income property in the Atlanta area, told CNBC.

Economists have already predicted thatJanuary could be a hot selling month this yearacross the country and lower mortgage rates are certainly helping to kick off a winter selling season, they say.

The average rate on the 30-year fixed-rate mortgage dropped to its lowest level since October this week, at 3.69%, Mortgage News Daily reports.

The continued strength in consumer sentiment about the housing market “attests to the intention among consumers to purchase homes,” says Doug Duncan, Fannie Mae’s chief economist. Fannie Mae’s housing sentiment index, a survey of consumers, remained near an all-time high in 2019, fueled by a 16 percentage point annual increase in the share of consumers who believe it is a good time to buy.

A decline in mortgage rates—down by more than 1 percentage point for fixed-rate loans compared to November 2018—is buoying higher sales activity, says Frank Nothaft, chief economist at CoreLogic. Nothaft adds that any slowdown in home prices in early 2019 likely ended in late summer. He predicts prices to rise well into 2020.

Home Features That Spark Bickering Among Couples | Realtor Magazine

Couples can bicker when trying to decide on a home to purchase. A certain level of compromise is usually required in finding the right one. As a real estate pro, you may find yourself a mediator to these disputes.

Nearly one in four homeowners say their current home does not have all the features their partner considered important, according to a survey of more than 980 homeowners conducted by Porch.com, a home remodeling website.

So what features inspire the most spats during a house hunt? Wood-burning fireplaces, in-ground pools, and hardwood flooring, according to the survey. For example, with a pool, couples may not see eye-to-eye whether the maintenance costs and upkeep is worth the hassle of having one, the study notes.

“Not all features are bound to cause a struggle though,” Porch.com’s study notes. “Couples were often quick to agree on energy-efficient appliances, newly renovated bedrooms, and freshly upgraded bathrooms.”

 

 

 

 

Higher Conforming Loan Limits Take Effect | Realtor Magazine

The Federal Housing Finance Agency’s new loan limits for 2020 have gone into effect; Fannie Mae and Freddie Mac, which are operated by the FHFA, began backing larger loans last week when the new year started. The cap on Fannie and Freddie loans has increased to $510,400 from 2019’s $484,350 limit.

This is the fourth consecutive year that the FHFA has raised conforming loan limits, which can stretch even higher in areas with expensive median home values. High-cost areas will be capped at $765,600, or 150% of the $510,400 limit. The maximum conforming loan limit is higher in 2020 for all except 43 counties in the U.S.

View a breakdown of loan limits by county for Fannie and Freddie.

The Federal Housing Administration also increased its loan limit to $331,760, which is a $17,000 increase from 2019. In about 70 designated high-cost counties, the FHA’s 2020 loan limit has climbed to $765,600, a $40,000 increase from 2019. Alaska, Hawaii, Guam, and the U.S. Virgin Islands have higher limit ceilings than the rest of the country because of higher construction costs, the FHA says. Those areas have a 2020 FHA loan limit of $1,148,400.

January Expected to Be Hot for Home Shoppers | Realtor Magazine

The busy home-shopping season will start early in January this year, according to forecasters. The month of January in recent years has tended to have the second-most listing views across the year (just 1% below February), according to realtor.com® data.

With sub-4% mortgage rates, low unemployment, and higher wages, industry insiders are expecting a bustling winter real estate season.

“The shift to January’s newfound popularity does not mean that the other prime spring months have become less competitive,” says Nicolas Bedo, an economic data analyst for realtor.com®. “Realtor.com® data shows that views per listing used to ramp up into spring, but now competition starts high in January and stays high … What used to be a lopsided bias for April is now a feverish search starting in January, staying consistently competitive across the first four months of the year as hopeful home buyers look for just the right home.”

Seattle may be the busiest in January. The metro area saw the biggest jump in January home shopping with a 32% increase over its next highest month in listing views, according to realtor.com®. McAllen, Texas, landed at number two with a 14.9% increase.

“Although it lagged February, January saw a surge, ranking as the top month in 20 of the 100 largest metro areas, including New York, Los Angeles, Chicago, Dallas, Houston, Seattle, San Francisco, Atlanta, San Jose, California, and Denver,” Bedo says. For comparison, “in 2018, that was true for just three of the top 100 metros.”

10 Home Features That Are Most In Demand | Realtor Magazine

A back porch or deck, newly renovated kitchen, and hardwood flooring are among the top home features house hunters say they want most, according to a new survey by Porch.com, a home remodeling site. Further, buyers are willing to pay between $2,500 and $4,500 more for a home with these features, shows the survey of more than 980 recent home shoppers.

Consumers are embracing outdoor space, as a back porch or deck was the feature Americans most wanted in their home, according to the survey. Some buyers are willing to sacrifice square footage for greater access to outdoor space, Porch.com researchers note.

 

@ Porch.com

Solar Mandate Takes Effect in California | Realtor Magazine

Starting Jan. 1, all newly constructed homes and low-rise apartment buildings in California are required to have rooftop solar panels. The state is the first in the nation to carry such a mandate.

The law also requires better insulation and air filtration for new homes. Some areas also are seeing mandates on the use of natural gas. For example, in the Bay Area, new homes in Berkeley, San Mateo, Menlo Park, San Jose, or Marin County will not be able to install gas appliances or will have to be more energy-efficient to do so.

The rules for energy use are intended to help alleviate the state’s greenhouse gas emissions. The new laws apply only to newly constructed homes.

To comply, some home builders are buying rooftop panels to install or leasing them from solar providers. Some developers of new-home communities are also hoping the state energy commission will approve fulfilling the solar requirement with community panels, a collection of panels that can provide energy to several homes.

The California Energy Commission estimates that the solar mandate and additional building code changes could add $9,500 per home in construction costs. However, they say the changes will save homeowners $19,000 in energy and maintenance costs over 30 years.

The California Building Industry Association estimates the new mandates will add between $8,000 to $13,500 to the price of a new-construction home. It says the costs will be passed on to home buyers.

The California Energy Commission says that 26% of the state’s greenhouse gas emissions come from buildings. “There’s no way to meet carbon or clean energy goals without electrifying the building sector,” Panama Bartholomy, director of the Building Decarbonization Coalition.