3 Things to Do When Your Neighbors List Their Home for Sale

By Brendon DeSimone on 31 Oct 2016 Know-How The sign just went up next door. How does your neighbor's impending sale affect you? Most people think their real estate concerns end once they’ve closed on and moved into their new homes. But given the constant access to information and the changing nature of society today, smart homeowners know that their real estate awareness should continue after the closing. When a neighbor’s house goes on the market, there can be some important implications for you. Here are some tips for staying real estate aware. Document important disclosure items For the most part, good fences make good neighbors. But sometimes the folks on the other side of the fence don’t cooperate, and unresolved neighbor conflicts tend to arise when one of the homes goes on the market. Have a property line dispute or an issue with a broken fence and want to make sure that the new buyer knows about it? While sellers in most states have a duty to disclose issues to potential buyers, not all areas require this. Do your new neighbor-to-be a favor and alert the seller’s agent to anything the buyer needs to know about your neighbor’s property. See things differently Open houses allow buyers to spend some time exploring a home, but these events also present you with a chance to see your home from your neighbor’s perspective. Once, at a busy open house in San Francisco’s Noe Valley neighborhood, an open house visitor made a somewhat obvious beeline for the back of the house. He immediately got on the phone, and was clearly communicating with someone about where he was standing, and giving orders to move left and right. It turned out this visitor lived in the home behind, and was checking to see the neighbor’s view into his home. The open house is your chance to check your home’s paint job from the neighbor’s yard or simply to see your home from a different perspective. Know and learn the market in real time Typical sellers claim and save their home online, but also keep searches going after the fact. Why? To keep tabs on the market, see the comps and have a real-time sense of what’s happening nearby. Just like when you were a buyer, knowing about the area and types of homes in the market is a good move for any homeowner. Take a neighboring home for sale as an opportunity to see what the market bears. You can also learn about the latest trends in home design. Speaking to a real estate agent can help inform you of changes to property taxes, or how assessments are changing in your town. A smart real estate agent, working their listing, will be an incredible resource to would-be clients down the road. Leverage their experience when your neighbor sells. Take note when your neighbor goes to sell their home. It’s not just a time to nose around, but to document, inspect or learn from the home sale. Some homes get listed once in a lifetime. Take advantage of the opportunity.

First-Time, Single Women Homebuyers Resurface in Real Estate

First-Time, Single Women Homebuyers Resurface in Real Estate First-time and single women homebuyers have resurfaced in the real estate market, contributing to a significant share of transactions in a year marked by full-steam-ahead sales, according to the National Association of REALTORS® (NAR) 2016 Profile of Home Buyers and Sellers survey. First-time homebuyer sales rose to a share of 35 percent, the survey found; single women homebuyer sales rose to 17 percent. “Young adults are settling down and deciding to buy a home after what was likely a turbulent beginning to their adult life and career following the Great Recession,” says Lawrence Yun, NAR chief economist. “Demand increased over the past year because of a robust job market for those with a college degree and renter fatigue at a time when homeowners continue to see their equity rise. These factors were why more first-time buyers (67 percent) said a desire to own a home of their own was the primary reason for their purchase (64 percent in 2015; 53 percent in 2014). “Despite having a much lower income ($55,300) than single male buyers ($69,600), female buyers made up over double the amount of men (7 percent),” Yun adds. “Single women for years have indicated a strong desire to own a home of their own, as well as an inclination to live closer to friends and family. With job growth holding steady and credit conditions becoming somewhat less stringent than in past years, the willingness and opportunity to buy is becoming more feasible for many single women.” Though the growth among new homeowners is encouraging, their overall share of the market is still subpar, according to Yun. The lack of affordable new and existing inventory, the outpacing of home prices to wages, and the difficulty in saving for a down payment is why the homeownership rate for 18- to 35-year-olds is currently hovering near its historical low. “First-timers’ ability to enter the market more convincingly over the next year greatly depends on supply improvements at the lower end of the market and if wages can finally awaken from their sluggish pace of growth,” says Yun. Notably, 90 percent of respondents to NAR’s survey worked with a real estate agent to buy or sell a home, compared to 8 percent of for-sale-by-owner listings (FSBOs)—an all-time low. Single Women Buyers on the Mend, Age of First-Time Buyers on the Rise As in years past, married couples once again made up the largest share of buyers (66 percent) and had the highest income ($99,200), according to the survey; however, single women made up more of the buyer pie than in recent years. After falling to 15 percent of buyers a year ago, single women represented 17 percent of total purchases (highest since 2011 at 18 percent). The median age of first-time buyers in this year’s survey was 32, matching the all-time high last set back in 2006, and up from 31 the past five years. The typical first-time buyer had a higher household income ($72,000) than last year ($69,400) and purchased a slightly larger home (1,650 square feet; 1,620 square feet in 2015) that was more expensive ($182,500; $170,000 in 2015). The typical repeat buyer was 52 years old (53 in 2015), earned $98,000 ($98,700 in 2015) and purchased a 2,000-square-foot home (2,020 square feet in 2015) costing $250,000 ($246,400 in 2015). Buyers Carrying More Student Debt; Difficulty Obtaining Mortgage on the Decline Down payment sizes have roughly stayed the same in recent years—in this year’s survey, it was 6 percent for first-time buyers and 14 percent for repeat buyers. Fifty-nine percent of buyers financed their purchase with a conventional mortgage, and 33 percent of first-time buyers took out a low down payment Federal Housing Administration (FHA)-backed mortgage. “Fewer first-time buyers (40 percent) compared to a year ago (45 percent) indicated that the mortgage application and approval process was somewhat or much more difficult than they expected,” says NAR President Tom Salomone, broker/owner of Real Estate II Inc. in Coral Springs, Fla. “Those with healthy credit scores and manageable or little debt should talk to a lender to see if they qualify. They’ll likely discover that obtaining a mortgage isn’t quite the confusing and tiring inquisition it was in the years immediately after the downturn.” Personal savings ranked first for both first-time buyers and repeat buyers as the primary source of their down payment. The second most popular source for first-timers was a gift from a friend or relative (24 percent; 27 percent in 2015), and for repeat buyers it was the sales proceeds from their previous residence. Respondents reported that debt (all types) delayed saving for a down payment for a median of three years. For first-time buyers, 40 percent indicated they’re carrying student debt, with a typical amount of $26,000 ($25,000 in 2015). Furthermore, of the 26 percent of first-time buyers who said saving for a down payment was the most difficult task in the buying process, 55 percent said student debt delayed saving. “As NAR survey findings discovered earlier this year, even those financially able to make on-time payments on their student loans are struggling to save for a down payment, and many expect to be delayed from buying a home by over five years,” says Yun. “Repaying student debt could slow the path to homeownership even more for those living in markets with steep rents and home prices.” Buyers Rely on Internet and Agents; Single-Family Homes Top Choice This year’s survey proved once again that the two most popular resources for homebuyers remain the internet (95 percent) and real estate agents (92 percent). Despite a record-high 51 percent of buyers saying they found the home they purchased online, most buyers who used the internet still ended up purchasing their home through an agent (90 percent). Mobile devices and tablets are increasingly becoming a resource for buyers. Their usage lifted to 72 percent in this year’s survey, which is up from 61 percent a year ago. Furthermore, 58 percent of buyers indicated they found the home they purchased on a mobile app. “Regardless of the plethora of online resources readily available at the click of a mouse or the swipe of a thumb, consumers serious about buying a home continue to seek the expertise and market insights that only a Realtor® can provide,” says Salomone. “Given the numerous competitive markets with minimal supply, it’s no surprise that both first-time and repeat buyers sought an agent for assistance finding the right home and negotiating the terms of the sale.” The most common housing type continues to be a detached single-family home (83 percent for second straight year) and one in a suburban area (54 percent; 52 percent in 2015). Meanwhile, purchases of townhouses or row houses remained at 7 percent for the third straight year; only 4 percent of buyers purchased a condo. Overall, the typical home bought was built in 1991 and had three bedrooms and two bathrooms. The share of buyers who purchased new home was at an all-time survey low of 14 percent. Seller Use of Agent Remains High; Desire for Bigger House Primary Reason for Listing For the second straight year, 89 percent of sellers sold their home with an agent. This in turn—also for the second year in a row—kept for-sale-by-owner sales to their lowest share (8 percent) since the survey’s 1981 inception and below 10 percent since 2012. “Although the imbalance of supply in relation to demand in recent years continues to put many sellers in the driver’s seat, they’re still looking for a Realtor® now more than ever to price their home competitively, market their home to the widest number of eyes possible and ultimately help close the deal within a given timeframe,” says Salomone. The typical seller over the past year was 54 years old (unchanged since 2014), had a household income of $100,700 ($104,100 in 2015), and was in the home for 10 years before selling—a year longer than 2015 and matching the all-time high in 2014. Fewer sellers indicated they wanted to sell earlier but were stalled because their home had been worth less than their mortgage (12 percent versus 14 percent a year ago); the figure was 17 percent in 2014. Sellers realized a median equity gain of $43,100 ($40,000 in 2015)—a 24 percent increase (23 percent last year) over the original purchase price. Homes sold after 21 years of ownership had the largest equity gain (124 percent or $127,600); underlining the volatility during the downturn, equity gains fell to 3 percent for owners who bought between eight and 10 years ago. With tight inventory conditions gripping most markets once again over the past year, sellers were considerably more successful finding a buyer in a shorter amount of time, with homes typically on the market for only a month. A tad more sellers traded up (44 percent) compared to last year (42 percent) and slightly more, at 32 percent, traded down (31 percent in 2015). Sellers moved a median distance of 20 miles—72 percent stayed in the same state—and the most popular reason given for selling their home was it being too small (18 percent). Feedback from sellers underscored once again that referrals and repeat business remain a large source of new opportunities for real estate agents. Nearly two-thirds of responding sellers either found their real estate agent through a referral by a friend, neighbor or relative, or used their agent from a previous transaction. Additionally, 85 percent of sellers indicated that they would definitely or probably use their agent again or recommend him or her to others. For more information, please visit www.realtor.org.

Millennials: Ready to Buy a Second Home and Rent Out Your First?

By Sarah Pike on 31 Oct 2016 Know-How You're ready to move on, but that doesn't mean you have to let go of your first property. There comes a time in many homeowners’ lives when it’s just time to move on to the next home. Maybe it’s because of a job change, the arrival of a kid (or more kids), a marriage or divorce, or you just don’t like where you live anymore. Many millennial homeowners — who represent half of all home buyers these days, according to the Zillow Group Consumer Housing Trends Report — are ready for that next home purchase. Maybe that describes you. So, now you have a decision to make: Do you sell your first home, or hang on to it and rent it out? Kate Currett, a millennial homeowner, rented out her first home in Utah for three years while living in her second home in Ohio. Her goal, like most who rent out a property, was to earn additional income. Sounds simple enough, but there are many factors that you should weigh when making this big decision. Financial perks and considerations In addition to having the potential to make some money on renting a house, buying a second home and renting the first is one way to build a real estate investment portfolio. Millennials, in particular, are typically in a good position to do this: You can convert your primary residence into a rental and “leave your owner-occupied mortgage intact, which was likely (and hopefully) obtained with a down payment and the most favorable mortgage interest rate, as low as 3.5 percent,” says Kelly Hannah, a certified residential specialist at Eightline Real Estate. Purchasing a non-owner-occupied property (that is, a house that you’re purchasing specifically to rent out) generally requires a 20- to 25-percent down payment and has an interest rate .375 percent to .75 percent higher than you’d get for an owner-occupied property. Bottom line, it will likely cost less to convert the house you live in now into a rental and buy a second home to use as your primary residence than to purchase a second home to use as a rental property. The financial hurdle you will have to leap is qualifying for a second mortgage. “In the beginning, [it was difficult] making sure we could qualify for a dual loan,” Currett admits. But if you have a lease in place on your first home prior to closing on your second home, “your lender may allow a portion of those future rents to count as income in their calculation of your debt-to-income ratios,” Hannah says. However, lenders “prefer to see that you have property management experience in order to count those future rents as income,” he warns. Tax advantages As for tax advantages to renting out one of your properties, Leigh Anne Bernal, a property consultant with cityhomeCOLLECTIVE, advises making it a priority to speak with an accountant, as tax rules can be complicated when renting out a property. Generally, “the most substantial tax advantages to converting your current home into a rental come in the form of depreciating that property, the deduction of maintenance expenses, and the deduction of your mortgage interest,” Hannah explains. The ideal rental property Before you make any moves toward converting your home into a rental, you need to assess whether or not your home is rentable. Generally speaking, a “one- to three-bedroom home is going to be easier [to rent] than a larger home,” Bernal notes. She suggests researching who the renters are in your city and the types of properties they rent. “The broader the appeal, the more luck you will have,” Bernal says. Hannah adds that the best way to determine whether your home is an ideal rental property is to meet with a professional and “create a comprehensive strategy tailored to your individual situation and specific market.” How to assess rental fees Needless to say, rental rates vary greatly, “especially with respect to single-family homes and condominiums,” Hannah says, as rental rates for privately owned homes are not easily tracked. Currett agrees, and notes that a tough part of owning a home while renting out another was balancing having a competitive rental rate and still making a profit. However, a reliable way to determine the rent for your first home is to search the rental market for homes similar to yours. “This will allow you to see what rental rates are in real time and space, and price your rental competitively,” Hannah notes. “Do your homework,” Bernal says. “Take all of the costs into consideration, including property taxes and insurance.” Perhaps the most difficult aspect of renting a property is being a landlord for the first time. Costs can come at you from all sides, from repairs to late or unpaid rent from tenants to property damage. Go in planning on incurring expenses beyond the mortgage payment. “Some of this can be handled with a property management company, but that comes at a price, so make sure you have that included in your math,” Bernal advises. Words of wisdom When it comes to renting out your extra home, “Do it,” is Hannah’s advice. “Buy and hold is almost always a good idea.” But Bernal recommends really analyzing your situation before making a leap: “If you’re in a seller’s market, that can make it tougher to get into your new home without cashing out the equity in your first home. You may be able to refinance your first home to get some of that equity out.” Get more Landlord Resources or check out our Guide to Rental Property Management.

What’s Next in Real Estate? Markets, Trends to Watch in 2017

By Suzanne De Vita What’s Next in Real Estate? Markets, Trends to Watch in 2017 Real estate in 2017 is to be shaped by cities that meet not only the economic standards of a sustainable market, but also the demand for distinct neighborhoods within those markets. This is according to the Urban Land Institute’s (ULI) and PwC’s latest report, “Emerging Trends in Real Estate® 2017,” which analyzes trends-to-come in both the U.S and Canada housing markets. Ten “gateway” markets, as defined in the report—those with both a diverse economy and “niche” neighborhoods—will stand above the rest: Austin, Texas Dallas/Fort Worth, Texas Portland, Ore. Seattle, Wash. Los Angeles, Calif. Nashville, Tenn. Raleigh-Durham, N.C. Orange County, Calif. Charlotte, N.C. San Francisco, Calif. Dominating the report’s list are markets in California, North Carolina and Texas, which have become ideal investment areas in both the commercial and residential sectors. “Viewed as a fluke when it hit the study’s top 10 list five years ago, Austin’s rise to the top of the list signals the durability of the city’s long-term appeal to investors,” says Mitchell Roschelle, real estate research leader and PwC partner. “Austin, along with many of this year’s top 10 cities, boasts attractive, niche neighborhoods and a vibrant, diverse economy.” Five up-and-coming markets, in addition to the top 10, are also on the rise, according to the report: Columbus, Ohio Richmond, Va. Pittsburgh, Pa. Charleston, S.C. Salt Lake City, Utah Market-based trends aside, 2017 will also be marked by construction labor shortages tightening affordable housing inventory—a trend that can be reversed if all real estate-related constituents contribute to a solution, the report’s authors, Alan Billingsley, Hugh Kelly, Anita Kramer and Andrew Warren, state. “This is a real opportunity for the real estate industry to lead a way toward solutions. Real estate in all its guises—construction, property management, brokerage, and even finance—offer ample opportunities to create entry-level jobs that are not ‘dead-end jobs,’ but the first step on a career path.” Municipalities that have begun to address affordable housing shortages have set the example to follow in 2017, as well, according to the report. Many have resorted to a conventional standby: inclusionary zoning. “The most widely used approach by far…is an old idea that has roared back to life: inclusionary zoning,” the report’s authors state. “Through such zoning, cities require or encourage developers to create below-market-rate rental apartments or for-sale homes in connection with the local approval of a proposed market-rate development project.” “Optionality,” in addition—the ability for both landlords and tenants to determine the use of a space—will be a trend next year, according to the report. “Both on the investor side and the user side of the market, optionality—not just one use, not just one user, not just one user profile—may be gaining favor as a way to navigate the cross-currents of volatile markets,” the report’s authors state. “Optionality from a user standpoint allows for the adjustment of space needs to vary in terms of size, location, and use on an as-needed basis.” Advancements in real estate-related technology will also occur, furthering the accuracy, speed and transparency involved in real estate transactions—“an ‘auto-correcting’ real estate cycle.” View the full report here. For more information, please visit ULI.org.

Make Moving With Pets Easier

Americans are big pet owners. About 65 percent of all U.S. households — 79.7 million households — own pets, according to the American Pet Product Manufacturers Association’s 2015–2016 survey. In 2015, Americans spent more than $60.6 billion on their pets. Read more: The Power of Pets in Real Estate About 10.7 million people move with their pets every year. To make those moves easier, some real estate professionals are stepping in to help their clients make Fido’s move less stressful too, by offering up a list of nearby dog parks or pet resources, such as groomers, pet sitters, and vets. Florida real estate pro Rhona Sutter created the Pet Friendly Resource Directory, which offers a list of pet-friendly services to pet owners moving to a new area of town or to a new city. Along with a list of vets and pet sitters, the directory also includes handyman, cleaning services, and interior decorators that present themselves as being pet-friendly. It includes a list of real estate professionals as well. The directory includes 45 categories, such as pet-friendly hotels, pet relocation services, assisted living for seniors, pet supplies, and more. “Moving is traumatic enough, whether your move is across the street, across the city, or across the country,” says Sutter, owner of the Pet Realty Network. “Our goal is to include all different types of services in all areas for when a pet owner is searching for businesses and services that understand their pet-friendly requirements.” Ease pets’ move with this customer handout: How to Move with Pets

Think All Millennials Live in Their Parent’s Basement? Think Again!

Think All Millennials Live in Their Parent's Basement? Think Again! | Keeping Current Matters According to the Census Bureau, millennials have overtaken baby boomers as the largest generation in U.S. History. Millennials, or America's youth born between 1982-2000, now represent more than one quarter of the nation’s population, totaling 83.1 million. There has been a lot of talk about how, as a generation, millennials have ‘failed to launch’ into adulthood and have delayed moving out of their family’s home. Some experts have even questioned whether or not millennials want to move out. The great news is that not only do millennials want to move out… they are moving out! The National Association of Realtors (NAR) recently released their 2016 Profile of Home Buyers and Sellers in which they revealed that 61% of all first-time homebuyers were millennials in 2015! The median age of all first-time buyers in 2015 was 31 years old. Here is chart showing the breakdown by age: Think All Millennials Live in Their Parent's Basement? Think Again! | Keeping Current Matters Many social factors have contributed to millennials waiting to buy their first home. The latest Census results show that the median age of Americans at the time of their first marriage has increased significantly over the last 60 years, from 23 for men & 20 for women in 1955, to 29 & 27, respectively, in 2015. Those who went to college and took out student loans are finally paying them off, as the terms on traditional student loans are 10 years. This means that a large portion of the generation is making its last loan payments and is working toward saving for a first home. As a whole, the first-time homebuyer share increased to 35% of all buyers, up from 32% in 2014. Not all millennials are first-time buyers, they also made up 12% of all repeat buyers! Bottom Line Millennials will continue to drive the housing market next year, as well as in the years to come. As more and more realize that owning a home is within their grasp, they will flock to own their piece of the American Dream. Are you ready to buy your first or even second home?

Mortgage Rates Rise on Hints of Inflation

By Glenn McCullom November 3, 2016 Mortgage rates increased 7 basis points to their highest level since late June, the largest one-week gain in more than six months, according to Freddie Mac. The 30-year fixed-rate mortgage averaged 3.54% for the week ending Nov. 3, up from last week when it averaged 3.47%. A year ago at this time, the 30-year fixed-rate mortgage averaged 3.87%. "A jump last week in the PCE (personal consumption expenditures) — the price index tracked most closely by the Fed — raised the prospect that inflation might not be completely dead after all. Investors reacted by driving the yield on the 10-year Treasury to its highest point since June," said Sean Becketti, chief economist at Freddie Mac. The 15-year fixed-rate mortgage averaged 2.84%, up from last week when it averaged 2.78%. A year ago at this time, the 15-year averaged 3.09%. The five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 2.87%, up from last week when it averaged 2.84%, while a year ago it averaged 2.96%.

Report: 60K more housing units needed on Peninsula

November 04, 2016, 05:00 AM By Keith Burbank Bay City The San Francisco Bay Area’s Peninsula region is short tens of thousands of housing units because of strong job and population growth over the last nine years, according to an economic report released Thursday. The report by the Joint Venture Silicon Valley’s Institute for Regional Studies said the region including San Francisco, Santa Clara and San Mateo counties is short 60,000 housing units, a problem exacerbated in the last year by the addition of 65,600 jobs and 39,800 residents. The unemployment rate in the region has also declined, according to the report. In September in San Mateo County, the unemployment rate was 3.1 percent, well below the state and nationwide averages of 5.5 and 5 percent. The rates in both San Francisco and Santa Clara counties are also below the state and nationwide averages. “With no end to job growth soon, the region needs to address housing and transportation challenges as soon as possible,” said Stephen Levy, director of the institute’s Center for Continuing Study of the California Economy. The shortage of housing relative to population growth is also causing an increase in housing prices and gentrification, which is driving out the middle class, Levy said. The growth is also causing long commutes, which is a problem for businesses and people. It’s hard for businesses to attract workers because commutes are so long and workers cannot afford to live in the area where the jobs are, Levy said. The problems may be alleviated somewhat if Santa Clara County residents approve Measures A and B. Measure A would provide money for low-income housing and other housing projects, while Measure B would provide funding for improvements to Caltrain, BART, roads and bicycle infrastructure. The full report is available online at jointventure.org/images/stories/pdf/update-2016-11.pdf.