7 Most, Least Affordable College Towns

Daily Real Estate News | Wednesday, August 26, 2015

College towns are often viewed as stable real estate investments, but how far your money goes can fluctuate greatly in some areas. Realtor.com® recently ranked more than 300 college towns by median home price to come up with the most expensive and least expensive places to live. Realtor.com® considered a “college town” where student residents number more than 5,000 and make up more than 20 percent of the town’s total population.
Realtor.com® found the following markets to be the most affordable college towns:
1. Munice, Ind.
Median home price: $77,900

Learn how to help parents—or yourself—tackle rising college costs by investing in real estate.

2. Charleston, Ill.
Median home price: $81,500
3. Macomb, Ill.
Median home price: $100,900
4. Kirksville, Mo.
Median home price: $109,900
5. Big Rapids, Mich.
Median home price: $114,000
6. Kalamazoo, Mich.
Median home price: $117,900
7. Cortland, N.Y.
Median home price: $120,950
On the other hand, the following college towns topped realtor.com®’s rankings as the most expensive:
1. Berkley, Calif.
Median home price: $849,000
2. Santa Cruz, Calif.
Median home price: $814,000
3. Boulder, Colo.
Median home price: $789,000
4. San Luis Obispo, Calif.
Median home price: $690,000
5. Cambridge, Mass.
Median home price: $685,000
6. Claremont, Calif.
Median home price: $675,000
7. Princeton, N.J.
Median home price: $650,000
Source: “America’s Most and Least Expensive College Towns,” realtor.com® (Aug. 25, 2015)

Should I Wait to Put Down a Bigger Down Payment?

by The KCM Crew on August 26, 2015 in Down Payments, For Buyers, Interest Rates, Pricing 

Some experts are advising that first time and move-up buyers wait until they save up 20% before they move forward with their decision to purchase a home. One of the main reasons they suggest waiting is that a buyer must purchase private mortgage insurance if they have less than the 20%. That increases the monthly payment the buyer will be responsible for.
In a recent article, Freddie Mac explained what this would mean for a $200,000 house:

However, we must look at other aspects of the purchase to see if it truly makes sense to wait.

Are you actually saving money by waiting?

CoreLogic has recently projected that home values will increase by 4.3% over the next 12 months. Let’s compare the extra cost of PMI against the projected appreciation:

If you decide to wait until you have saved up a 20% down payment, the money you would have saved by avoiding the PMI payment could be surpassed by the additional price you eventually pay for the home. Prices are expected to increase by more than 3% each of the next five years.
Saving will also be more difficult if you are renting, as rents are also projected to increase over the next several years. Zillow Chief Economist Dr. Svenja Gudell explained in a recent report:

"Our research found that unaffordable rents are making it hard for people to save for a down payment ... There are good reasons to rent temporarily – when you move to a new city, for example – but from an affordability perspective, rents are crazy right now. If you can possibly come up with a down payment, then it's a good time to buy a home and start putting your money toward a mortgage."

Laura Kusisto of the Wall Street Journal recently agreed with Dr. Gudell:

“For some renters there may be a way out: Buy a house. Mortgages remain very affordable.”

Mortgage rates are expected to rise…

Freddie Mac is projecting that mortgage interest rates will increase by almost a full percentage point over the next 12 months. That will also impact your mortgage payment if you wait.

Bottom Line

Sit with a real estate or mortgage professional to truly understand whether you should buy now or wait until you save the 20%.

The Affordability Squeeze

Freddie: ‘Housing Market Strongest in Years’

Daily Real Estate News | Thursday, August 27, 2015


The housing market is gradually showing signs of stabilizing, as two additional states – Arkansas and Tennessee – as well as four additional metro areas are added to Freddie Mac’s latest Multi-Indicator Market Index reading. The added metros are Omaha, Neb.; Scranton, Pa.; Chattanooga, Tenn.; and Madison, Wis.

Read more: A 10-Year Housing Surge on the Horizon?

The MiMi measures the stability of the nation’s housing market by comparing its long-term stable range to current ratios in home purchase applications, debt-to-income ratios, on-time mortgage payments, and employment.
Since hitting an all-time low in October 2010, the national MiMi has rebounded 35 percent. However, it remains significantly off from its high of 121.7. It’s currently at a value of 80.3, a housing market considered mostly in a stable range.
"Housing markets are the strongest they've been in years with the National MiMi above 80 for the first time since 2008,” says Len Kiefer, Freddie Mac’s deputy chief economist. “Nationally, all MiMi indicators are heading in the right direction. Robust home buyer demand has put total home sales on pace for the best year since 2007 and look for that trend to continue as the MiMi purchase applications indicator remains on the upswing. The West has been especially strong, with many markets posting double-digit growth in their MiMi purchase applications indicator compared to a year ago."
Still, home prices are about 7 percent below peak values nationally, Kiefer notes. However, home prices in many markets are soaring to all-time highs, and that along with low interest rates, are helping to support home buyer affordability, he says.
Also, "mortgage delinquencies are coming down rapidly, but are still high in many markets,” Kiefer says. “Those markets hardest hit by the Great Recession, including many in Florida, are rebounding but they still need to improve to get delinquencies back in line with their benchmark historic averages. The key driver of all this recovery has been solid job growth, with 96 out of 100 metros and all states within range of their benchmark historic average unemployment rate."
Freddie Mac’s latest MiMi reading showed that 28 of the 50 states, as well as the District of Columbia, have values in a stable range. The top five are: Washington, D.C.; North Dakota; Montana; Hawaii; and California and Utah (tied).
What’s more, 42 of the 100 metro areas have MiMi values in a stable range. Ranking in the top five are: Fresno, Calif.; Austin, Texas; Honolulu; Salt Lake City; and Los Angeles.
Source: Freddie Mac

52% Likely to Buy in the Next 5 Years!! Are You?

by The KCM Crew on August 27, 2015 in First Time Homebuyers, For Buyers, For Sellers, Move-Up Buyers 

According to the recently released BMO Harris Bank Home Buying Report, 52% of Americans say they are likely to buy a home in the next five years. Americans surveyed for the report said they would be willing to pay an average of $296,000 for a home and would average a 21% down payment. The report also had other interesting revelations.

Those Looking to Buy

• 74% of those looking to buy a new home will consult a real estate agent
• 59% said they will visit online real estate websites
• 37% will seek recommendations from friends and family
• 78% plan to get pre-approved before seriously searching for a home

Those Who Already Own

• 75% of current home owners set a budget before looking for a home. 16% ended up spending less while 13% went over their budget.
• 63% of American homeowners spent under six months looking for a new home before they made a purchase.
• 8% bought their home without participating in an active real estate search - or even any plan to buy at all - because a specific property caught their attention.

The last point is very interesting: Of those that purchased a home, 8% bought “without any plan to buy at all”. A property caught their attention and they acted on it.

Why are More People not Planning their Next Move?

Why are people that are considering a move not putting their home search to a plan, and instead, buying only when a property catches their attention? A recent article by Fannie Mae may give us that answer, there is evidence that a large numbers of homeowners are dramatically underestimating the equity they have in their current home. The report explains:

“Homeowners may be underestimating their home equity. In particular, if homeowners believe that large down payments are now required to purchase a home, then widespread, large underestimates of their home equity could be deterring them from applying for mortgages, selling their homes, and buying different homes.”

Bottom Line

Perhaps it is time to sit with a real estate professional to determine the actual equity you have in your house and take a look at the opportunities that currently exist in the real estate market. This may be the perfect time to move-up, move-down or buy that vacation home your family has always wanted.

El Niño: 5 tips for preparing for a wet winter

After four years of drought, Californians could soon be contending with a wet winter as one of the strongest El Niños on record is brewing in the Pacific Ocean. Here are five tips for preparing for the possibility of a season of heavy storms:

1) Have any trees that appear weakened by drought inspected by an arborist. In high winds, downed trees and branches can knock out power or seriously damage homes and vehicles.

2) Have roof repairs made and other leaks fixed before it starts to rain.

3) Make sure gutters are clear of leaves and other debris.

4) Consider flood insurance. Homeowners policies typically do not cover flood damage. Most flood policies require a 30-day waiting period.

Jonathan Castillo, a roofer with Town and County Roofing and Solar, installs a roof on a home in Alamo, Calif., on Wednesday, Sept. 2, 2015. The prospect of a heavy winter deluge from El Nino-driven rain has homeowners scrambling to get the roofs on their homes buttoned up and roofers say business is the best it's been in years. (Anda Chu/Bay Area News Group) ( ANDA CHU )

5) In case of flooding, mudslides or other storm-related natural disasters, have an emergency plan in place for your family, and a dry place for storm supplies.

Contact Bruce Newman at 408-920-5004. Follow him at Twitter.com/BruceNewmanT

Texas Dominates Healthiest Markets List

Daily Real Estate News | Thursday, August 27, 2015


Six of the top 10 healthiest housing markets are in Texas, according to new rankings released by WalletHub, which compared 300 U.S. areas across 14 key metrics to find the nation’s top performers. WalletHub factored in median home price appreciation, home prices as percentage of income, job growth, and more to reach its rankings.
Many small cities – those with fewer than 150,000 people – topped the list.
Take a look at the top 15 “healthiest” housing markets, according to WalletHub.

Source: WalletHub

Rental Satisfaction Drives Buying Decisions

Daily Real Estate News | Thursday, August 27, 2015


Satisfaction over the rental experience is a major factor in deciding whether a renter will decide to purchase a home, according to Freddie Mac research.
Renters who are the most satisfied with their rental experience were found to be more likely to continue renting (68%) than to purchase a home (32%), the study showed.

Read more: Why Renters May Be in Trouble

"As we gather data each quarter, we are finding the old perception that renting is something people do until they buy is not always true,” says David Brickman, executive vice president of Freddie Mac Multifamily. “The trend shows that satisfied renters are more likely to continue renting, even as we are seeing rising rents in the market. Dissatisfaction may drive renters to buy, and we are seeing a slight decrease in satisfaction among single-family renters. We will continue to monitor this for stronger indicators and trends, but for now, the single-family rental home market may be a good place to look to find potential home buyers."
The number of U.S. renter households is up again for the tenth consecutive year, according to the U.S. Census Bureau. More households of all sizes, income levels, and age ranges now rent their homes. Renters are leading household formation, which is expected to keep climbing due to the improving economy, millennials continuing into adulthood, and immigration, Brickman says.
The study also found that single-family renters are significantly more likely to say they expect to buy than multifamily renters (53% vs 36%) when asked about their plans in the next three years. In the U.S. about 15 million households rent a single-family house and 25 million rent an apartment, according to U.S. Census Data. Sixty-seven percent of apartment renters report being satisfied compared to 60% of single-family property renters.
Source: “Dissatisfaction Will Make Buyers of Multifamily Renters,” CoStar Group (Aug. 26, 2015)

Foreclosures, Cash Sales Continue to Recede

Daily Real Estate News | Thursday, August 27, 2015


The number of properties in-foreclosure as well as cash sales fell to multiyear lows in July while overall home sales continued to perform strongly, according to RealtyTrac’s July 2015 U.S. Home Sales Report, released Thursday.

NAR's Latest Report: 6 Key Housing Stats to Gauge the Market

The sale of homes sold while in the foreclosure process – excluding bank-owned properties – comprised 6.4 percent of all single-family and condo sales in July, the lowest monthly share since RealtyTrac began tracking in January 2000.
The National Association of REALTORS® reported last week that its data showed foreclosures and short sales in July dropped to the lowest share since it began tracking such data in October 2008. In July, foreclosures sold, on average, for a discount of 17 percent below market value while short sales sold for an average discount of 12 percent, according to NAR.
The percentage of all-cash sales is also dropping year over year. NAR reported the percentage of all-cash sales was 23 percent of transactions in July, down from 29 percent a year ago. The number of cash sales is falling as the share of individual investors – who tend to account for the biggest bulk of cash sales – is falling to 13 percent of the market, down from 16 percent a year ago.
RealtyTrac’s data also showed all-cash buyers at about 23 percent of all single-family home and condo sales in July, marking the lowest percentage of cash sales in a month since July 2008, RealtyTrac reports.
“While the stock market may be on a roller coaster as of late, the housing market is still on solid ground, with the eight-year low in cash sales combined with the eight-year high in overall sales volume in the first half of the year evidence that housing is successfully transitioning from an investor-driven recovery to one that is drawing in traditional buyers as a good foundation for sustainable growth going forward,” says Daren Blomquist, vice president at RealtyTrac. “That’s not to say there are no cracks in the foundation of this recovery, the top three of which are housing affordability — or lack thereof in some high-flying markets — along with overdependence on capricious cash buyers — both foreign and domestic — in some markets, and the persistent overhang of underwater home owners who continue to represent heightened default risk given any future economic shockwaves.”
The following metros had the highest share of in-foreclosure properties in July, according to RealtyTrac, were:

1. Salisbury, N.C.: 23.6%
2. Rockford, Ill.: 17.1%
3. Morehead City, N.C.: 16.3%
4. Baltimore: 16.1%
5. Toledo, Ohio: 15.2%
6. Chicago: 14.7%

Meanwhile, the metros with the highest percentage of cash sales in July included:

1. New York: 43.2%
2. Orlando, Fla.: 37.6%
3. Tampa, Fla.: 35.3%
4. Las Vegas: 32.6%
5. Rochester, N.Y.: 32.6%
6. Detroit: 31.9%

Source: RealtyTrac

3534 Casanova, San Mateo

3534 Casanova, San Mateo - helped this buyer that relocated from Seattle find the perfect new home on the Peninsula.  If you or anyone you know is looking to buy or sell on the Peninsula, we'll be happy to help them as well!

 

Tiny Houses Create Expanding Niche

Daily Real Estate News | Thursday, August 27, 2015


Whether it's for a starter home or a second home, some buyers take the idea of a "little place of their own" seriously — looking for entire houses that may be smaller than some living rooms. Five of the most interesting tiny houses were recently featured by housing news site Curbed.com.

Thinking Small
Hot Trend Watch: Tiny Homes
Will Seattle's 'Tiny House' Be Overpowered?
Help Your Clients' Tiny Space Feel Bigger

The five featured build-to-order homes — many of which come on wheels — range in size from a cozy 140 square feet to an expansive 269 square feet. The colorful Toy Box Tiny House, for example, can be had for as little as $35,000 and features a "sliding glass door, built-in planters, reconfigurable storage/seating cubes, floating cabinet for cooking ingredients, [and a] loft big enough for a king-size bed," reports Curbed's Jenny Xie.
Because of the tight space of these floor plans, most units come with at least some custom amenities. But if your buyers want even more minimalism, Monarch Tiny Homes can supply a 170-square-foot "half and half" for only $22,000 with no interior furnishings. The structure, says Xie, includes "plywood flooring, recycled siding, self-contained composting toilet, LED lighting, [and] mostly bare interiors ready for your own vision."
And those wanting a tiny home with serious elbow room can investigate customizable options from Tiny Heirloom Homes. Options include "personalized exterior and interior design choices," and the base model includes "granite countertops, real-wood or bamboo flooring, stainless steel appliances, [and a] washer/dryer combo."
See the other tiny homes with photos and details of their options at Curbed.com.
Source: "5 Impressive Tiny Houses You Can Order Right Now," Curbed.com

54 Madera , San Carlos

54 Madera , San Carlos - helped this family that was relocating from the east coast secure their dream home in San Carlos! If you or anyone you know is looking to buy or sell on the Peninsula, we'll be happy to help them as well!

 

Where Americans Are Moving To

Daily Real Estate News | Thursday, August 27, 2015


About 18 percent of people who moved last year – or 8.5 million – moved from one large metro area to another. But also a growing number moved to a smaller city that was not too far away from their prior residence, U.S. Census Bureau data shows.
The top destination of movers continues to be Los Angeles, which had nearly 245,000 people relocating from other metro areas. Other top moving destinations included New York and Washington, D.C.
However, these large cities appear to be losing more residents than they’re gaining. For example, nearly 400,000 people moved out of New York last year and 340,000 left Los Angeles.
On the other hand, smaller cities like Austin, Texas, and Riverside, Calif., are gaining more residents – more people are moving in than out.
Realtor.com® reports the following are the top 10 city-to-city mitigation paths from 2009 to 2013:

1. Los Angeles, Calif. to Riverside, Calif.: 90,494
2. Riverside, Calif. to Los Angeles, Calif.: 54,711
3. New York, N.Y. to Philadelphia, Pa.: 26,957
4. San Jose, Calif. to San Francisco, Calif.: 24,536
5. Washington, D.C. to Baltimore, Md.: 22,944
6. New York, N.Y. to Miami, Fla.: 22,226
7. Baltimore, Md. to Washington, D.C.: 21,457
8. San Diego, Calif. to Riverside, Calif.: 19,667
9. Philadelphia, Pa. to New York, N.Y.: 19,336
10. San Francisco, Calif. to San Jose, Calif.: 18,680

Source: “Bright Lights, Not-So-Big Cities: Where Americans Are Moving,” realtor.com® (Aug. 26, 2015)