Showing posts with label http://www.clarketeam.com/WebArticle.aspx?ID=15596&webPageID=15&webCategoryContentID=94. Show all posts
Showing posts with label http://www.clarketeam.com/WebArticle.aspx?ID=15596&webPageID=15&webCategoryContentID=94. Show all posts
Tuesday, November 3, 2015
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Friday, October 30, 2015
New-Home Sales at Highest Level Since 2008
Daily Real Estate News |
Friday, September 25, 2015
Sales of newly built single-family homes increased nearly 6 percent in August, reaching a seasonally adjusted annual rate of 552,000 units, the Commerce Department reported Thursday. That is the best monthly figure in new-home sales since February 2008. However, the number does still remain far off from the 706,000 unit-pace that is considered the 30-year historic average in new-home sales.
"We continue to hear from our members that more serious home buyers are returning to the market," says Tom Woods, chairman of the National Association of Home Builders. "Builders are gradually adding inventory to meet future demand as they handle shortages of lots and labor."
The Northeast posted the highest gains of any other region in the U.S., with new-home sales surging 24.1 percent in August. The South also posted a 7.4 percent month-over-month increase and the West saw a 5.4 percent increase in new-home sales. The Midwest was the only region in the U.S. to see new-home sales drop in August, falling 9.1 percent.
Overall, the inventory of new homes for-sale reached 216,000 units in August, a 4.7-month supply at the current sales pace.
"Today's report indicates the release of pent-up housing demand as the overall economy strengthens, consumer confidence grows and mortgage interest rates remain low," says David Crowe, NAHB's chief economist. "The housing market should continue to move forward at a modest but more persistent pace throughout the rest of 2015."
Source: National Association of Home Builders and "New Home Sales Highest Since 2008," CNNMoney (Sept. 24, 2015)
Sales of newly built single-family homes increased nearly 6 percent in August, reaching a seasonally adjusted annual rate of 552,000 units, the Commerce Department reported Thursday. That is the best monthly figure in new-home sales since February 2008. However, the number does still remain far off from the 706,000 unit-pace that is considered the 30-year historic average in new-home sales.
"We continue to hear from our members that more serious home buyers are returning to the market," says Tom Woods, chairman of the National Association of Home Builders. "Builders are gradually adding inventory to meet future demand as they handle shortages of lots and labor."
The Northeast posted the highest gains of any other region in the U.S., with new-home sales surging 24.1 percent in August. The South also posted a 7.4 percent month-over-month increase and the West saw a 5.4 percent increase in new-home sales. The Midwest was the only region in the U.S. to see new-home sales drop in August, falling 9.1 percent.
Overall, the inventory of new homes for-sale reached 216,000 units in August, a 4.7-month supply at the current sales pace.
"Today's report indicates the release of pent-up housing demand as the overall economy strengthens, consumer confidence grows and mortgage interest rates remain low," says David Crowe, NAHB's chief economist. "The housing market should continue to move forward at a modest but more persistent pace throughout the rest of 2015."
Source: National Association of Home Builders and "New Home Sales Highest Since 2008," CNNMoney (Sept. 24, 2015)
Tuesday, October 27, 2015
Property Taxes Are on the Rise
Daily Real Estate News |
Friday, September 25, 2015
Property tax collections have increased nearly $13 billion or by nearly 3 percent over the past year, according to a new analysis by the National Association of Home Builders.
Property tax collections – including commercial real property taxes and personal property taxes – totaled more than $503 billion over the last year. Property taxes are critical to communities' financials, making up 38.9 percent of state and local tax receipts.
"Gains for state and local non-property tax collections have outpaced increases in property tax receipts in recent years because such non-property taxes experienced the greatest declines during the recession," NAHB notes on its blog, Eye on Housing. "The impact pushed the property tax share of total receipts from the four major sources from a high of 44.9 percent in the third quarter of 2010 to just below 39 percent for the second quarter of 2015."
NAHB economists point out that the current share is close to the pre-housing boom (2001-2003) average of 38 percent.
Source: "Property Tax Collections Increase," National Association of Home Builders' Eye on Housing blog (Sept. 22, 2015)
Property tax collections have increased nearly $13 billion or by nearly 3 percent over the past year, according to a new analysis by the National Association of Home Builders.
Property tax collections – including commercial real property taxes and personal property taxes – totaled more than $503 billion over the last year. Property taxes are critical to communities' financials, making up 38.9 percent of state and local tax receipts.
"Gains for state and local non-property tax collections have outpaced increases in property tax receipts in recent years because such non-property taxes experienced the greatest declines during the recession," NAHB notes on its blog, Eye on Housing. "The impact pushed the property tax share of total receipts from the four major sources from a high of 44.9 percent in the third quarter of 2010 to just below 39 percent for the second quarter of 2015."
NAHB economists point out that the current share is close to the pre-housing boom (2001-2003) average of 38 percent.
Source: "Property Tax Collections Increase," National Association of Home Builders' Eye on Housing blog (Sept. 22, 2015)
Friday, October 23, 2015
Multigenerational Homes
By Andrea Murad
“Family dynamics can add a whole new set of variables to the equation,” says Craig Brimhall, vice president of Wealth Strategies at Ameriprise Financial (AMP). “In these types of circumstances, communication really is the key to relearning how to live with your relatives.”
Along with setting expectations, you’ll also need to figure out how everyone will physically fit into your existing home and who will pay for any needed renovations or moving costs.
Living in a multigenerational home requires compromise and understanding from all parties. “You’ve got to talk about your relationship if there are issues,” says Brimhall. “When someone’s going to live with you, the money is important, but what’s more important is if the relationship will survive or get worse. Money is just a piece of life.”
Before everyone moves in, experts have suggestions for what to consider to make this transition as seamless as possible.
Communication
“If you sit down and get everything out in the open, it goes a lot better than if you ignore issues and aren’t straightforward about the new living situation and how everyone will interact together,” says Danny Lipford, home improvement expert and host of "Today's Homeowner with Danny Lipford."
Discuss rules and expectations upfront and be as transparent as you can to avoid any misunderstandings. “These are ongoing conversations, but many times, these have to do about independence,” says John Diehl, senior vice president of Strategic Markets at Hartford Funds. Try to understand what everyone needs as much as possible, which may range from individual pantry spaces or an area to entertain friends.
Setting boundaries is important too.
“Part of it may be having frank conversations about rearing children or activities, making sure everyone is on the same page about an area to be discussed and what should be approached with caution,” says Diehl. “You’re taking people who haven’t lived together for many years and combining them back in [under one roof] — their routines and interests are different.”
Finances
Having more people under one roof adds to monthly household expenses and may require expensive renovations so everyone can fit into the home. Who pays for this can become a source of contention between family members.
“It’s a reasonable conversation to have within the family about Mom and Dad contributing to modifications to your home,” says Diehl. “[Mom and Dad] may have an existing home that they may not need any longer, but the question of how much should be used to modify that living space is legitimate because, unless that child wasn’t taking their parents in, they wouldn’t make these modifications.”
Also consider everyone’s long-term plans. Expensive renovations for a Millennial who plans to live with you temporarily may not make economic sense, experts say, but this may change the longer they live with you and if they have children.
An elderly parent, however, who plans to stay with you for anywhere from a few years to several decades may need special accommodations from the start. If you have to borrow money to make these renovations for a parent who’s unable to live independently, Brimhall suggests diverting funds that would have been used to pay for assisted living towards a loan instead. “It’s very reasonable to ask parents to pay for this if they have the extra income to pay for it,” he says.
Experts suggest having this discussion with all siblings to avoid any inheritance issues in the future, but if Mom and Dad have assets, then they are the ones who make the ultimate decision. “The parents will have a controlling say and should come to the table with an understanding that it’s a significant change for the child they’re living with,” says Diehl. Ignoring these financial issues will create other problems later on.
“To expect the same child to provide the caregiving and perhaps step away from their job to do that and have their parents be with them 24-7, to put them further into debt to upgrade their house is asking a lot,” says Diehl. “It has to be a family conversation to the extent it can be.”
Home Layout
Trendy open floor plans aren’t always best for a multigenerational home. “Coming back into a family home with an open floor plan, you’re forced to do everything together because of the space and design of the home,” says Lipford, “and it’s more successful if people have at least a place where they can retreat.”
Certain rooms are always shared though, such as kitchens and utility rooms, but setting up bedrooms to be more of a suite will help someone maintain their independence. Add an area where they can have meals in private if they choose, along with an entertainment space.
“For the sanity of everyone and the longevity of the situation, it’s always better to have that bit of separation,” says Lipford. “Certainly you have that shared space, but it’s having that option to have your own sitting area.”
Adding doors can help provide a private space within the home too, and a separate entrance helps your new housemates maintain their social life and privacy.
Lipford advises making modifications for safety if necessary, like adding grab bars, walk-in showers, tubs with seats, anti-skid surfaces, faucets with levers and lever doorknobs. Consider separate heating and cooling controls, as well as redesigning the kitchen so everyone can access countertops and microwaves.
Move or renovate?
Since bringing new people into your family home is disruptive enough, start with the cost to retrofit your home. “Then you can have a larger conversation about whether that’s the right thing to do or if you should search for another larger home in a different location that can accommodate your needs,” says Diehl.
If renovation costs are high and you’re short on time, a good option may be to rent a home with a layout that’s better suited for multigenerational use.
Tuesday, October 20, 2015
Energy Sector Fueled More Economies in 2014
Texas led the nation in having the
fastest-growing economies in 2014. Half of the 16 metro areas where the
economy grew at a 6 percent rate or more last year were located in the
Lone Star state, the Commerce Department reported this week.
Midland, Texas, a city known for its energy-rich sector, led the nation with a 24.1 percent advance in gross domestic product. Other Texas places high on the list included San Angelo, Texas, with an 11.4 percent growth, and Dallas with an 8.5 percent increase. Lake Charles, La., was No. 3 with a 10.3 percent growth, and Greely, Colo., landed at No. 4 with a 9.9 percent uptick.
The best performing economies tended to have a booming energy sector, The Wall Street Journal reports. "Natural resources and mining, which includes oil and gas extraction, was a relatively small contributor to growth, on average, in U.S. metro areas," WSJ reports. "But for areas leading overall growth, it was among the biggest drivers."
In Greely, Colo., natural resources and mining account for more than a third of that area's total economic growth.
Recent drops in oil prices over the last year likely will cause the economies in many of these fastest-growing areas to slow, WSJ reports. In Odessa, Texas, for example, the economy increased 6.3 percent in 2014 but the town has seen its unemployment rate rise to 4.5 percent in July 2015, up from 3.8 percent one year earlier.
Source: "Texas Towns Led the Country in Economic Growth in 2014," The Wall Street Journal (Sept. 23, 2015)
Fastest-Growing Economies in 2014Overall, the Commerce Department reports that economies rose in 282 of the nation's 381 metro areas last year.
- Midland, Texas
- San Angelo, Texas
- Lake Charles, La.
- Greeley, Colo.
- Wheeling, W.Va.-Ohio
- Dallas-Fort Worth-Arlington, Texas
- Bismarck, N.D.
- Victoria, Texas
- San Jose-Sunnyvale-Santa Clara, Calif.
- Corpus Christi, Texas
- Charleston, W.Va.
- Odessa, Texas
Midland, Texas, a city known for its energy-rich sector, led the nation with a 24.1 percent advance in gross domestic product. Other Texas places high on the list included San Angelo, Texas, with an 11.4 percent growth, and Dallas with an 8.5 percent increase. Lake Charles, La., was No. 3 with a 10.3 percent growth, and Greely, Colo., landed at No. 4 with a 9.9 percent uptick.
The best performing economies tended to have a booming energy sector, The Wall Street Journal reports. "Natural resources and mining, which includes oil and gas extraction, was a relatively small contributor to growth, on average, in U.S. metro areas," WSJ reports. "But for areas leading overall growth, it was among the biggest drivers."
In Greely, Colo., natural resources and mining account for more than a third of that area's total economic growth.
Recent drops in oil prices over the last year likely will cause the economies in many of these fastest-growing areas to slow, WSJ reports. In Odessa, Texas, for example, the economy increased 6.3 percent in 2014 but the town has seen its unemployment rate rise to 4.5 percent in July 2015, up from 3.8 percent one year earlier.
Source: "Texas Towns Led the Country in Economic Growth in 2014," The Wall Street Journal (Sept. 23, 2015)
Friday, October 16, 2015
'Secret' Money-Saving Home Insurance Option?
A new article at realtor.com® is
warning home owners about an influx of storm-chasing contractors who may
be indirectly pushing up home insurance prices in their area. These
contractors may knock on home owners' doors and say they need a new roof
or siding due to wind and hail damage – all cosmetic damage repairs
that may not be necessary.
Home insurance companies often classify dents, dimples, and dings in roof vents, shingles, or aluminum siding as "cosmetic damage" to a property, says Billy Van Jura, an insurance broker in Poughkeepsie, N.Y.
"When several claims for this type of work are submitted in a single region, the price everyone pays (including those who haven’t filed a claim) can increase because the insurer sees the region as having greater risk of additional claims," the article at realtor.com® cautions. "There's nothing you can do about a widespread storm that damages several homes in your area and ultimately raises everyone's rates. But you can help curb your own annual home insurance costs with a little-known option called 'cosmetic damage exclusion.'"
The American Association of Insurance Services created the cosmetic damage exclusion in 2013 – available in nearly all states – that aims at protecting consumers from scammers and tries keep home insurance rates more affordable. It makes cosmetic damage coverage optional. Home owners can then decide if they want to pay for cosmetic-only wind and hail damage. If the damage impacts the safety or structural functionality of the home, the home insurance policy will kick in.
By adding this exclusion to cosmetic damage, home owners stand to save money on their annual premiums – anywhere from $100 to $200 or more, says Troy Thompson, an independent insurance broker with Pinnacle Insurance Agency in Coon Rapids, Minn.
Hail and wind damage claims alone contribute to about 40 percent of all home insurance claims in the last five years, according to the Insurance Information Institute. And many of those claims may be for minor cosmetic repairs, such as a few nicks in the siding that home owners may be made to believe are more urgent than they actually are.
Home owners may choose to submit a claim for cosmetic damage covered by their home insurance policy, but they need to be aware that they may then be responsible for paying any applicable deductibles, insurance agents say.
Source: "The Money-Saving Home Insurance Option No One Will Ever Tell You About," realtor.com® (Sept. 23, 2015)
Home insurance companies often classify dents, dimples, and dings in roof vents, shingles, or aluminum siding as "cosmetic damage" to a property, says Billy Van Jura, an insurance broker in Poughkeepsie, N.Y.
"When several claims for this type of work are submitted in a single region, the price everyone pays (including those who haven’t filed a claim) can increase because the insurer sees the region as having greater risk of additional claims," the article at realtor.com® cautions. "There's nothing you can do about a widespread storm that damages several homes in your area and ultimately raises everyone's rates. But you can help curb your own annual home insurance costs with a little-known option called 'cosmetic damage exclusion.'"
The American Association of Insurance Services created the cosmetic damage exclusion in 2013 – available in nearly all states – that aims at protecting consumers from scammers and tries keep home insurance rates more affordable. It makes cosmetic damage coverage optional. Home owners can then decide if they want to pay for cosmetic-only wind and hail damage. If the damage impacts the safety or structural functionality of the home, the home insurance policy will kick in.
By adding this exclusion to cosmetic damage, home owners stand to save money on their annual premiums – anywhere from $100 to $200 or more, says Troy Thompson, an independent insurance broker with Pinnacle Insurance Agency in Coon Rapids, Minn.
Hail and wind damage claims alone contribute to about 40 percent of all home insurance claims in the last five years, according to the Insurance Information Institute. And many of those claims may be for minor cosmetic repairs, such as a few nicks in the siding that home owners may be made to believe are more urgent than they actually are.
Home owners may choose to submit a claim for cosmetic damage covered by their home insurance policy, but they need to be aware that they may then be responsible for paying any applicable deductibles, insurance agents say.
Source: "The Money-Saving Home Insurance Option No One Will Ever Tell You About," realtor.com® (Sept. 23, 2015)
Tuesday, October 13, 2015
4 Costly Mistakes When Building New
When building a new home, home
buyers may quickly find themselves over-budget and over-stressed. U.S.
News & World Report recently highlighted some of the most common
financial mistakes when building a new home:
1. Don't overbuild. "I meet potential clients in my office almost weekly who tell me, 'We built a 6,000 square-foot home, but now we're dying to downsize to something smaller,'" says Andy Stauffer, owner of Stauffer and Sons Construction, a homebuilder in Colorado Springs. "Most families don't even need 5,000 square feet, and a home as small as 2,500 or 3,000 square feet won't feel small if it's designed properly. A larger house is just more expensive and harder to maintain and clean. According to the National Association of Home Builders, a custom home in the U.S. costs an average of $105 per square foot to build. That means by eliminating even 500 square feet in a home that you don't need, you'll save over $50,000."
2. Consider the resale value at the beginning. "It's simply a fact of life. Most of us don't know for sure where we'll be in 10 or 15 years, as much as we'd like to think we do," Stauffer says. "I recently spoke to a real estate agent who had some clients that built a five-story custom home. They loved it, but when it was time to sell, they had to drop the price by tens of thousands of dollars and sell at a significant loss because nobody wanted to buy a five-story home and walk up and down the stairs all day long. So build your dream home, but don't make it a nightmare for someone else."
3. Weigh the upgrades. Buyers may have to teeter on too conservative or not conservative enough when choosing their extras. "You will be surprised at how quickly a $200,000 home becomes $400,000 in upgrades," Joan Fradella, a family mediator in West Palm Beach, Fla., who built a new home in 1998 told U.S. News & World Report.
Brian Brunhofter, president of Meritus Custom Builders in Chicago, says buyers need to carefully consider what upgrades are must haves. "For example, carpet can always be switched out to hardwood floors later, but a full basement is something you should decide on now," he says. That said, some buyers may want to do some of those upgrades now while lending is relatively inexpensive at the moment. As long as you don't go overboard, it may "be much more economic to stretch and plan for those features in your budget now," he says.
4. Monitor the progress. "Visit the site during construction," advises Nicole Cannon, a resident architect in Los Angeles. "Make sure things are matching your expectations and ask questions if they don’t. The worst option is to remain quiet and end up with something that you are unhappy with or have to pay to fix after the fact."
Source: "8 Financial Mistakes to Avoid When Building a New Home," U.S. News & World Report (Sept. 25, 2015)
1. Don't overbuild. "I meet potential clients in my office almost weekly who tell me, 'We built a 6,000 square-foot home, but now we're dying to downsize to something smaller,'" says Andy Stauffer, owner of Stauffer and Sons Construction, a homebuilder in Colorado Springs. "Most families don't even need 5,000 square feet, and a home as small as 2,500 or 3,000 square feet won't feel small if it's designed properly. A larger house is just more expensive and harder to maintain and clean. According to the National Association of Home Builders, a custom home in the U.S. costs an average of $105 per square foot to build. That means by eliminating even 500 square feet in a home that you don't need, you'll save over $50,000."
2. Consider the resale value at the beginning. "It's simply a fact of life. Most of us don't know for sure where we'll be in 10 or 15 years, as much as we'd like to think we do," Stauffer says. "I recently spoke to a real estate agent who had some clients that built a five-story custom home. They loved it, but when it was time to sell, they had to drop the price by tens of thousands of dollars and sell at a significant loss because nobody wanted to buy a five-story home and walk up and down the stairs all day long. So build your dream home, but don't make it a nightmare for someone else."
3. Weigh the upgrades. Buyers may have to teeter on too conservative or not conservative enough when choosing their extras. "You will be surprised at how quickly a $200,000 home becomes $400,000 in upgrades," Joan Fradella, a family mediator in West Palm Beach, Fla., who built a new home in 1998 told U.S. News & World Report.
Brian Brunhofter, president of Meritus Custom Builders in Chicago, says buyers need to carefully consider what upgrades are must haves. "For example, carpet can always be switched out to hardwood floors later, but a full basement is something you should decide on now," he says. That said, some buyers may want to do some of those upgrades now while lending is relatively inexpensive at the moment. As long as you don't go overboard, it may "be much more economic to stretch and plan for those features in your budget now," he says.
4. Monitor the progress. "Visit the site during construction," advises Nicole Cannon, a resident architect in Los Angeles. "Make sure things are matching your expectations and ask questions if they don’t. The worst option is to remain quiet and end up with something that you are unhappy with or have to pay to fix after the fact."
Source: "8 Financial Mistakes to Avoid When Building a New Home," U.S. News & World Report (Sept. 25, 2015)
Friday, October 9, 2015
The Top Exterior Finishes for New Homes Are…
Vinyl is the clear champ when it
comes to the most widely used exterior on new homes, shows Census
Bureau's Survey of Construction and an analysis by the National
Association of Home Builders.
In 2014, the latest data available, vinyl (including vinyl-covered aluminum) was the most commonly used wall material at 29 percent, followed by stucco and brick or brick veneer at 23 percent each, and fiber cement siding at 18 percent.
Vinyl siding is the most popular exterior material in five out of the nine Census divisions, with the Middle Atlantic and New England areas having the highest prevalence at 76 percent and 72 percent, respectively. In the East and North West Central divisions, vinyl accounted for more than 50 percent. In the South Atlantic, however, vinyl was used in 36 percent of new single-family homes started in 2014.
But other exterior materials can be more common in different regions of the U.S. For example, stucco was the most popular exterior wall material in the Mountain and Pacific divisions at 55 percent and 52 percent, respectively. About 40 percent of homes started in the Pacific used fiber cement siding. In the East and West South Central divisions, brick or brick veneer were popular choices, with at least 59 percent of new single-family homes started in 2014 using it as the primary exterior material.
Source: "Vinyl Is the Most Widely Used Exterior for New Homes," National Association of Home Builders Eye on Housing blog (Sept. 23, 2015)
In 2014, the latest data available, vinyl (including vinyl-covered aluminum) was the most commonly used wall material at 29 percent, followed by stucco and brick or brick veneer at 23 percent each, and fiber cement siding at 18 percent.
Vinyl siding is the most popular exterior material in five out of the nine Census divisions, with the Middle Atlantic and New England areas having the highest prevalence at 76 percent and 72 percent, respectively. In the East and North West Central divisions, vinyl accounted for more than 50 percent. In the South Atlantic, however, vinyl was used in 36 percent of new single-family homes started in 2014.
But other exterior materials can be more common in different regions of the U.S. For example, stucco was the most popular exterior wall material in the Mountain and Pacific divisions at 55 percent and 52 percent, respectively. About 40 percent of homes started in the Pacific used fiber cement siding. In the East and West South Central divisions, brick or brick veneer were popular choices, with at least 59 percent of new single-family homes started in 2014 using it as the primary exterior material.
Source: "Vinyl Is the Most Widely Used Exterior for New Homes," National Association of Home Builders Eye on Housing blog (Sept. 23, 2015)
Tuesday, March 17, 2015
After Baby Boomers, What’s Next for Housing?
As baby boomers age, the decline of
this mammoth generation will have a “dampening effect on household
growth,” according to a new report by Harvard’s Joint Center for Housing
Studies. However, this decline in growth will occur over several
decades and may be offset by the millennial generation starting
households of their own.
But the big question is whether the housing left by baby boomers will be desirable to younger generations?
“Many homes vacated by aging seniors will not be in demand by tomorrow’s young adults, being in the wrong part of the country or otherwise unsuitable,” according to JCHS researchers. “Some will be simply too expensive. Some ‘affordable’ vacated homes in desirable locations will be torn down and replaced by larger and more energy efficient/amenity rich houses targeted to older buyers. Many houses will sit on the market for long periods of time before sellers are willing to recognize that they are overpriced. Some homes in declining communities will become abandoned.”
As such between now and 2030, new construction will be needed to meet the housing demand from the large number of those under the age of 30 that are currently in the pipeline – which will be even further escalated due to future immigration trends, researchers note.
Later this decade, the adult population growth is expect to turn sharply, according to recent Census Bureau population projections. Growth in the population age 20 and older is expected to see a 40 percent decline, gradually falling to about 1.5 million per year by 2050.
“Despite their improving life expectancies, the oldest baby boomers will soon turn 70, and begin to die off in ever-greater numbers,” notes JCHS’ report. “Today, there are about 2.6 million deaths every year, but this number will rise to over 4 million a year by 2050.”
Baby boomers have long had a thirst for real estate. As they aged, the share heading an independent household rose from 53.4 percent in 1990; 56.1 percent in 2000; and 58.5 percent in 2010.
On the other hand, younger age groups have been slower to enter the housing market. “Higher minority shares and delayed marriage have had a negative effect on headship rates, as has the Great Recession’s impact on employment and income,” JCHS researchers note.
So what does this mean for the future of housing?
“Projected declining adult population growth because of increasing deaths will have several effects on housing markets,” JCHS researchers predict. “But it will not have an immediate and proportional impact on household growth for a variety of reasons. First, many initial baby boomer deaths will occur to married couples, leaving the surviving spouse to continue to head a household. Many deaths will also occur to people who do not head a household, but rather live in a household headed by children or other relatives, or in institutional settings (assisted living or nursing facilities).”
The decline in household growth due to the aging baby boomers will occur over many decades. By then, aging millennials could cause “the changing age structure effect to be more positive, similar to what baby boomers exerted as they passed into middle age, offsetting the effects of declining adult population growth.”
Source: “What Will Happen to Housing When Baby Boomers Are Gone?” Harvard Joint Center for Housing Studies’ Housing Perspectives Blog (Feb. 17, 2015)
But the big question is whether the housing left by baby boomers will be desirable to younger generations?
“Many homes vacated by aging seniors will not be in demand by tomorrow’s young adults, being in the wrong part of the country or otherwise unsuitable,” according to JCHS researchers. “Some will be simply too expensive. Some ‘affordable’ vacated homes in desirable locations will be torn down and replaced by larger and more energy efficient/amenity rich houses targeted to older buyers. Many houses will sit on the market for long periods of time before sellers are willing to recognize that they are overpriced. Some homes in declining communities will become abandoned.”
As such between now and 2030, new construction will be needed to meet the housing demand from the large number of those under the age of 30 that are currently in the pipeline – which will be even further escalated due to future immigration trends, researchers note.
Later this decade, the adult population growth is expect to turn sharply, according to recent Census Bureau population projections. Growth in the population age 20 and older is expected to see a 40 percent decline, gradually falling to about 1.5 million per year by 2050.
“Despite their improving life expectancies, the oldest baby boomers will soon turn 70, and begin to die off in ever-greater numbers,” notes JCHS’ report. “Today, there are about 2.6 million deaths every year, but this number will rise to over 4 million a year by 2050.”
Baby boomers have long had a thirst for real estate. As they aged, the share heading an independent household rose from 53.4 percent in 1990; 56.1 percent in 2000; and 58.5 percent in 2010.
On the other hand, younger age groups have been slower to enter the housing market. “Higher minority shares and delayed marriage have had a negative effect on headship rates, as has the Great Recession’s impact on employment and income,” JCHS researchers note.
So what does this mean for the future of housing?
“Projected declining adult population growth because of increasing deaths will have several effects on housing markets,” JCHS researchers predict. “But it will not have an immediate and proportional impact on household growth for a variety of reasons. First, many initial baby boomer deaths will occur to married couples, leaving the surviving spouse to continue to head a household. Many deaths will also occur to people who do not head a household, but rather live in a household headed by children or other relatives, or in institutional settings (assisted living or nursing facilities).”
The decline in household growth due to the aging baby boomers will occur over many decades. By then, aging millennials could cause “the changing age structure effect to be more positive, similar to what baby boomers exerted as they passed into middle age, offsetting the effects of declining adult population growth.”
Source: “What Will Happen to Housing When Baby Boomers Are Gone?” Harvard Joint Center for Housing Studies’ Housing Perspectives Blog (Feb. 17, 2015)
Friday, March 13, 2015
The Hottest Winter Home Markets
While most of the United States is
currently under a deep freeze, real estate markets in many cities across
the country are heating up, according to the recent Hotness Index
compiled by realtor.com®.
Not surprisingly, warm locations continue to be hot spots for winter buyers. Miami, Las Vegas, Phoenix, Raleigh, and San Diego rank highest on the Hotness Index, and see busy Spring level home-buying activity earlier than other cities across the country.
To compile the Hotness Index rankings, economists from realtor.com® looked at 2014 monthly search volume on realtor.com®, adjusted for population, and combined climate data from the National Oceanic and Atmospheric Administration.
"The correlation between warmer metropolitan areas and more January searches makes sense, as it’s easier to get out and go house hunting in these cities," said Jonathan Smoke, Chief Economist for realtor.com®. "In these markets, looking for a home in November or January makes as much sense as August."
Winter home-buying activity isn't just booming in cities with balmy climates. Chicago is a surprisingly hot real estate market in the winter months, according to the Hottest Index. Despite Chicago's frigid temperatures, their prime buying season actually begins in January and home showings during snowstorms are the norm.
Some suggest that what's driving this push towards an earlier Spring buying season is the lack of inventory in many metropolitan areas.
"Prices are appreciating and homes are selling more quickly," Smoke said. "These are the criteria that we use to define a healthy market. When inventory is growing as well, the hot market can keep its momentum, which benefits both sellers and buyers."
Not surprisingly, warm locations continue to be hot spots for winter buyers. Miami, Las Vegas, Phoenix, Raleigh, and San Diego rank highest on the Hotness Index, and see busy Spring level home-buying activity earlier than other cities across the country.
To compile the Hotness Index rankings, economists from realtor.com® looked at 2014 monthly search volume on realtor.com®, adjusted for population, and combined climate data from the National Oceanic and Atmospheric Administration.
"The correlation between warmer metropolitan areas and more January searches makes sense, as it’s easier to get out and go house hunting in these cities," said Jonathan Smoke, Chief Economist for realtor.com®. "In these markets, looking for a home in November or January makes as much sense as August."
Winter home-buying activity isn't just booming in cities with balmy climates. Chicago is a surprisingly hot real estate market in the winter months, according to the Hottest Index. Despite Chicago's frigid temperatures, their prime buying season actually begins in January and home showings during snowstorms are the norm.
Some suggest that what's driving this push towards an earlier Spring buying season is the lack of inventory in many metropolitan areas.
"Prices are appreciating and homes are selling more quickly," Smoke said. "These are the criteria that we use to define a healthy market. When inventory is growing as well, the hot market can keep its momentum, which benefits both sellers and buyers."
Friday, March 6, 2015
House Flipping Gains Traction for Investors
Investors bidding on property online
and at live events are showing a preference for flipping over a
hold-to-rent strategy, even as demand for rental housing continues to
surge in many markets, according to the January 2015 Real Estate
Investor Activity Report from Auction.com.
“Considering recent reports that have sggested a shortage of rental units in some metropolitan areas, we'd expect to see more investors starting to move toward a buy-and-hold strategy to address this market opportunity,” says Rick Sharga, executive vice president at Auction.com. “We know anecdotally that some flippers purchase homes specifically to sell them to other investors who repurpose the properties as rental units. But, it will be interesting to see if more investors move away from flipping and towards rental strategies over the next few months if demand for rental housing continues to rise.”
Investors bidding at live auction events showed more propensity toward flipping properties purchased than those who purchased properties online. The trend was evident across states Auction.com looked at, except in two states where hold-to-renting strategies prevailed at live auctions – Georgia and Missouri.
Also, investors who were making a one-time purchase at an auction tended to prefer a hold-to-rent strategy, while those who identified themselves as full-time “real estate investors” tended to say they were working on behalf of another investor who favored flipping.
Source: “Real Estate Investor Activity Report,” Auction.com (Jan. 22, 2015)
“Considering recent reports that have sggested a shortage of rental units in some metropolitan areas, we'd expect to see more investors starting to move toward a buy-and-hold strategy to address this market opportunity,” says Rick Sharga, executive vice president at Auction.com. “We know anecdotally that some flippers purchase homes specifically to sell them to other investors who repurpose the properties as rental units. But, it will be interesting to see if more investors move away from flipping and towards rental strategies over the next few months if demand for rental housing continues to rise.”
Investors bidding at live auction events showed more propensity toward flipping properties purchased than those who purchased properties online. The trend was evident across states Auction.com looked at, except in two states where hold-to-renting strategies prevailed at live auctions – Georgia and Missouri.
Also, investors who were making a one-time purchase at an auction tended to prefer a hold-to-rent strategy, while those who identified themselves as full-time “real estate investors” tended to say they were working on behalf of another investor who favored flipping.
Source: “Real Estate Investor Activity Report,” Auction.com (Jan. 22, 2015)
Tuesday, March 3, 2015
What Has 63.5 Bathrooms and Costs $205.5 Million? The 5 Most Expensive Homes for Sale in California
1. $49.5 million
- 2431 Riviera Drive, Laguna Beach
- 6 bedroom, 8 bathrooms, 10,000 square feet
2. $42.5 million
- 9904 Kip Drive, Beverly Hills
- 10 bedrooms, 22 bathrooms, 24,260 square feet
3. $39.5 million
- 2936 Ocean Front, Del Mar
- 5 bedrooms, 6.5 bathrooms, 8,925 square feet
4. $39 million
- 2701 Broadway St., San Francisco
- 7 bedrooms, 7 bathrooms, 4 half-baths, 16,400 square feet
5. $35 million
- 10771 Bellagio Road, Los Angeles
- 11 bedrooms, 18 bathrooms, 20,866 square feet
Monday, March 2, 2015
House Flipping Gains Traction for Investors
Investors bidding on property online
and at live events are showing a preference for flipping over a
hold-to-rent strategy, even as demand for rental housing continues to
surge in many markets, according to the January 2015 Real Estate
Investor Activity Report from Auction.com.
“Considering recent reports that have suggested a shortage of rental units in some metropolitan areas, we'd expect to see more investors starting to move toward a buy-and-hold strategy to address this market opportunity,” says Rick Sharga, executive vice president at Auction.com. “We know anecdotally that some flippers purchase homes specifically to sell them to other investors who repurpose the properties as rental units. But, it will be interesting to see if more investors move away from flipping and towards rental strategies over the next few months if demand for rental housing continues to rise.”
Investors bidding at live auction events showed more propensity toward flipping properties purchased than those who purchased properties online. The trend was evident across states Auction.com looked at, except in two states where hold-to-renting strategies prevailed at live auctions – Georgia and Missouri.
Also, investors who were making a one-time purchase at an auction tended to prefer a hold-to-rent strategy, while those who identified themselves as full-time “real estate investors” tended to say they were working on behalf of another investor who favored flipping.
Source: “Real Estate Investor Activity Report,” Auction.com (Jan. 22, 2015)
“Considering recent reports that have suggested a shortage of rental units in some metropolitan areas, we'd expect to see more investors starting to move toward a buy-and-hold strategy to address this market opportunity,” says Rick Sharga, executive vice president at Auction.com. “We know anecdotally that some flippers purchase homes specifically to sell them to other investors who repurpose the properties as rental units. But, it will be interesting to see if more investors move away from flipping and towards rental strategies over the next few months if demand for rental housing continues to rise.”
Investors bidding at live auction events showed more propensity toward flipping properties purchased than those who purchased properties online. The trend was evident across states Auction.com looked at, except in two states where hold-to-renting strategies prevailed at live auctions – Georgia and Missouri.
Also, investors who were making a one-time purchase at an auction tended to prefer a hold-to-rent strategy, while those who identified themselves as full-time “real estate investors” tended to say they were working on behalf of another investor who favored flipping.
Source: “Real Estate Investor Activity Report,” Auction.com (Jan. 22, 2015)
Monday, February 16, 2015
Watch this for new government loan requirement info 2015
What's the new CFPB?
Click the link for more info:
http://analytics.baynet.com/trk.ashx/getMessage/6bc42871db3946d7b533e65497c755a7?eu=k8CSEz4JcyY%3D
Click the link for more info:
http://analytics.baynet.com/trk.ashx/getMessage/6bc42871db3946d7b533e65497c755a7?eu=k8CSEz4JcyY%3D
Friday, January 30, 2015
Renters: Are You Ready to Buy a Home?
While you save up your down payment, take these 5 steps to get you closer to closing.
For renters planning to buy a home, preliminary steps like creating a budget and saving for a down payment are obvious. Here are five more advanced steps toward moving out of your rental and into a dream home of your own.
Together, principal and interest comprise your monthly mortgage payment, with the principal paying down your loan balance each month, and the interest paying your fee for borrowing the money. Use a mortgage calculator to determine how much of your payment goes toward principal versus interest each month.
Taxes refer to property taxes, which are assessed by the county you live in. They average 1.2 percent of your home’s value each year.
Insurance — paid to a homeowner’s insurance company of your choice — is required when you have a mortgage. Lenders require that your insurance cover the cost of rebuilding the home if it is ruined by fire or other disaster. This “replacement cost” is determined by your insurer, and must be agreed to by your lender. Insurance will typically cost $700 to $1,200 per year for a single family home.
For condo owners, there’s a fifth monthly cost category: homeowners association (HOA) dues. These fees cover common area amenities, landscaping, ongoing upkeep and reserves for future maintenance like roof replacement or exterior painting. These monthly dues range from $100 for cheaper condos to $1,000 or more for luxury condos.
Single family home buyers can take a useful cue from HOA budgets, which generally require that at least 10 percent of dues go toward reserves. Even if you’re not buying a condo, it’s a good idea to set up a similar savings plan for future maintenance like replacing a roof or major appliances.
These deductions significantly lower your cost of homeownership. For example, for a $300,000 home with 20 percent down and a 30-year fixed mortgage at 4 percent, monthly P.I.T.I. is about $1,545. Tax deductions reduce this total housing cost to about $1,215.
Using the example above of a $300,000 home that costs $1,215 per month after taxes, you could compare this residence to a home that rents for about $1,200. If the $300,000 home was more spacious or in a more desirable area, the math would seem to favor buying — but don’t forget this example requires a $60,000 down payment.
Your monthly P.I.T.I. (which includes mortgage insurance) is about $1,995 on a $300,000 home with 3 percent down and a 30-year fixed mortgage at 4 percent. After tax deductions, this total housing cost drops to about $1,614. And you’d only need $9,000 for the down payment.
You can also lower your rate and P.I.T.I. with a shorter-term loan like a 5-year ARM, but rates on these loans will adjust in 5 years, so you risk having a much higher payment if you plan to stay in the home longer than that.
More credit accounts are better, so renters with only one credit card should consider obtaining more credit. Just note that your credit score can drop 5 to 15 points when you first open a new account, then will come back up when you’ve established a good payment history.
For renters planning to buy a home, preliminary steps like creating a budget and saving for a down payment are obvious. Here are five more advanced steps toward moving out of your rental and into a dream home of your own.
Understand the full cost of homeownership
As a renter, a single rental fee covers your monthly housing payment. But as a homeowner, four main factors go into your monthly housing payment: principal, interest, taxes and insurance (P.I.T.I.). Understanding these costs will help you determine how much house you can afford.Together, principal and interest comprise your monthly mortgage payment, with the principal paying down your loan balance each month, and the interest paying your fee for borrowing the money. Use a mortgage calculator to determine how much of your payment goes toward principal versus interest each month.
Taxes refer to property taxes, which are assessed by the county you live in. They average 1.2 percent of your home’s value each year.
Insurance — paid to a homeowner’s insurance company of your choice — is required when you have a mortgage. Lenders require that your insurance cover the cost of rebuilding the home if it is ruined by fire or other disaster. This “replacement cost” is determined by your insurer, and must be agreed to by your lender. Insurance will typically cost $700 to $1,200 per year for a single family home.
For condo owners, there’s a fifth monthly cost category: homeowners association (HOA) dues. These fees cover common area amenities, landscaping, ongoing upkeep and reserves for future maintenance like roof replacement or exterior painting. These monthly dues range from $100 for cheaper condos to $1,000 or more for luxury condos.
Single family home buyers can take a useful cue from HOA budgets, which generally require that at least 10 percent of dues go toward reserves. Even if you’re not buying a condo, it’s a good idea to set up a similar savings plan for future maintenance like replacing a roof or major appliances.
Know your homeowner tax benefits
Mortgage interest and property taxes are deductible when you file your annual tax returns, and reduce taxable income.These deductions significantly lower your cost of homeownership. For example, for a $300,000 home with 20 percent down and a 30-year fixed mortgage at 4 percent, monthly P.I.T.I. is about $1,545. Tax deductions reduce this total housing cost to about $1,215.
Study rent-vs.-buy math
Often, people judge the cost of renting vs. buying by comparing P.I.T.I. to a rental payment. But to get an apples-to-apples comparison, you actually have to look at after-tax-benefit homeownership costs and rent costs.Using the example above of a $300,000 home that costs $1,215 per month after taxes, you could compare this residence to a home that rents for about $1,200. If the $300,000 home was more spacious or in a more desirable area, the math would seem to favor buying — but don’t forget this example requires a $60,000 down payment.
Identify mortgages that fit your budget and timeline
If you don’t have 20 percent to put down, you can still get a mortgage with as little as 3 percent down. However, if your down payment is less than 20 percent, you’ll have to pay mortgage insurance, which is about .85 percent of your loan amount, and isn’t tax deductible.Your monthly P.I.T.I. (which includes mortgage insurance) is about $1,995 on a $300,000 home with 3 percent down and a 30-year fixed mortgage at 4 percent. After tax deductions, this total housing cost drops to about $1,614. And you’d only need $9,000 for the down payment.
You can also lower your rate and P.I.T.I. with a shorter-term loan like a 5-year ARM, but rates on these loans will adjust in 5 years, so you risk having a much higher payment if you plan to stay in the home longer than that.
Start preparing your credit score now
Credit scores are critical for getting the best mortgages with the lowest rates. Lenders want reliable on-time payment history as well as credit depth.More credit accounts are better, so renters with only one credit card should consider obtaining more credit. Just note that your credit score can drop 5 to 15 points when you first open a new account, then will come back up when you’ve established a good payment history.
Friday, January 23, 2015
4 Financial Trends for 2015
Tired of renting? Uncertain about retirement? You’re not alone. Here’s a look at four major financial issues facing Americans.
Here are four of the trends and expectations that could affect you — and your wallet — in the new year.
Others will be putting their pride aside and getting roommates to share the costs. This trend has been escalating for several years. Zillow analysis shows that the percentage of Americans living with someone other than a spouse or partner hit 32 percent in 2012 — up from 26 percent in 2000. It will continue to gain momentum in 2015, particularly since rents are projected to continue to grow around 3 percent this year.
While for some workers this arrangement is a choice, companies are ultimately driving the trend. After all, temp workers and consultants are often cheaper because companies don’t have to pay them benefits.
For example, some of the biggest beneficiaries of lower oil prices could be low-end retailers, which specialize in staples. A strengthening greenback favors companies that derive the bulk of their sales here at home.
The bottom line: retiring at age 65 is passé. While this personal decision to delay a long-awaited period of relaxation may involve many different factors, for many Americans, it boils down to needing the money — especially since everyday costs are rising and we’re living longer.
Related:
Here are four of the trends and expectations that could affect you — and your wallet — in the new year.
Housing
With rents rising faster than most Americans’ paychecks, many consumers are stuck between a rock and a hard place when it comes to housing. With rent costs so high — and mortgage rates low — more millennials who have postponed homeownership in favor of renting will be buying homes in 2015, according to Zillow.Others will be putting their pride aside and getting roommates to share the costs. This trend has been escalating for several years. Zillow analysis shows that the percentage of Americans living with someone other than a spouse or partner hit 32 percent in 2012 — up from 26 percent in 2000. It will continue to gain momentum in 2015, particularly since rents are projected to continue to grow around 3 percent this year.
Work
A recent study by Freelancers Union and Elance-odesk shows that 53 million Americans are currently working as freelancers. That’s a whopping 34 percent of the workforce.While for some workers this arrangement is a choice, companies are ultimately driving the trend. After all, temp workers and consultants are often cheaper because companies don’t have to pay them benefits.
Investing
Experts are predicting another good year for stocks in 2015. While it is expected to be a bumpier, more volatile ride than last year, there will be plenty of opportunities if you know where to look.For example, some of the biggest beneficiaries of lower oil prices could be low-end retailers, which specialize in staples. A strengthening greenback favors companies that derive the bulk of their sales here at home.
Retirement
Americans are still putting retirement on the back burner, delaying it for as long as possible. In 1991, 11 percent of workers expected to retire after age 65. In 2013, 36 percent expected to wait until after age 65, and 7 percent said they didn’t plan to retire at all.The bottom line: retiring at age 65 is passé. While this personal decision to delay a long-awaited period of relaxation may involve many different factors, for many Americans, it boils down to needing the money — especially since everyday costs are rising and we’re living longer.
Related:
- Renters: Are You Ready to Buy a Home?
- Braving the Wilds as a Self-Employed Borrower
- 5 Tips for Millennial Home Buyers
Tuesday, December 16, 2014
Holiday Tradition in San Carlos
It's that time of year again! Time for the glorious
decorations on Eucalyptus Ave. between Orange and Tamarack in San Carlos to
shine like the stars for Christmas. If you haven't experienced driving down
this street at night during the holidays - don't miss out! It is truly
breathtaking and a lot of fun.
Check out some of the homes at:
http://www.lightsofthevalley.com/Properties/San_Carlos.asp
http://www.lightsofthevalley.com/Properties/San_Carlos.asp
Thursday, October 30, 2014
Google seals massive Sunnyvale, Redwood City deals
Google Inc. has cemented a pair of massive real
estate deals in Sunnyvale and Redwood City that boost the company's
Silicon Valley footprint by 2.8 million square feet – about the size of
the Empire State Building and enough room for more than 10,000 workers.
Even by Google standards, the latest transactions are blockbusters: In one deal, Google has agreed to lease all of Jay Paul Co.'s Moffett Place, a 1.9 million square foot office campus currently under construction in Sunnyvale. It's a contender for the largest office lease ever signed in Silicon Valley and perhaps the state of California.
In a separate but no less notable deal, Mountain View-based Google completed the purchase of six buildings from Blackstone Group and Starwood Capital totaling about 934,000 square feet at Redwood City's Pacific Shores office park. It's Google's first entry into that city and a potential game changer for that commercial real estate market.
"Google is obviously a very strong company and they are in hyper growth mode," said Amber Schiada, director of research for real estate services firm JLL.
Google confirmed the closing of both deals — both of which I previously reported were in the works — but declined to comment further. Blackstone didn't return inquiries. Jay Paul's longtime broker Phil Mahoney of Newmark Cornish & Carey, said Moffett Place is off the market.
Google's expansion on the Peninsula has been the biggest real estate story since the 2008 Great Recession as the world's biggest Web-search advertising company has bought and leased building after building, radiating out from its Mountain View headquarters. Its real estate growth dwarfs even that of Cisco Systems Inc.'s expansion during the 1990s.
Terms of the latest deals were not disclosed, but sources estimated the Redwood City sale at around $625 per square foot, or $583.75 million. That would make it perhaps Google's single largest real estate acquisition by footprint and dollar amount ever in Silicon Valley. In an Oct. 23 filing with the Securities and Exchange Commission, Google said it completed a purchase of land and office buildings for $585 million this month.
"I welcome them to our city and I look forward to working with them," said Redwood City Mayor Jeffrey Gee in an interview this afternoon. "For a long time I would go around and say, 'Redwood City is one of the best kept secrets in the Bay Area. With Google and everything going on, we're not a secret anymore.'"
Aside from sheer size, the deals are notable for several reasons. First, they showcase Google's incredibly ambitious growth plans as the company enters new business sectors such as wearable computing, self-driving cars and robotics — all of which could be huge space users on their own.
Google has not even moved into much of the space it has leased or bought over the last several years. Yet the company continues to bank more elbow room for future expansion, suggesting it is thinking far down the line in terms of its space needs. Google counted 55,030 employees globally as of Sept. 30, according to its most recent quarterly report, up 18 percent — or 8,600 Googlers — from a year ago.
The transactions also alter the marketplace dynamics in two cities by taking available space off the table. Schiada noted that Moffett Place was the largest speculatively built project under construction in Silicon Valley. In Redwood City's Pacific Shores, which is more than 90 percent leased, I'm told Google will honor all current tenants' leases for now, but will evaluate moving into spaces as they become available in the years ahead.
"A big question is what does this leave for tenants," Schiada said, speaking specifically about the Moffett Place deal. "It also increases rates, because the supply becomes more limited."
Still, that could actually be a good thing for tenants down the line by pushing developers to build more product, she added.
"This deal essentially eliminates a significant portion of new development, which could prompt more developers to move forward," she said.
Office space vacancy in Silicon Valley decreased to 14.1 percent in the third quarter, down from 15.4 percent a year earlier, JLL research showed. That's down from a recession-era peak of 26.4 percent in 2009. Researchers concur that Google is playing a substantive role in soaking up supply.
Jim Beeger, a veteran broker with Colliers International, said in the short term, the Sunnyvale deal could also push tenants back into the market.
The transaction could "cause tenants of all sizes to realize they should have more of a sense of urgency in their search for a new site," he said. "Moffett Place will be difficult to replicate, and those who lingered no longer have this option."
Sethena Leiker, senior analyst for Cushman & Wakefield's Silicon Valley office, agreed.
"There's not a lot of spec development coming," she said. "If you want to take any new space, you're going to have to take something that's proposed."
One result, Beeger said, could be a "trickle-down effect" of growing tenants moving to other areas of Santa Clara County that have available sites.
Score for Sunnyvale
Google's lease at Moffett Place is a huge win for San Francisco-based Jay Paul Co., if one that's not entirely unexpected. Jay Paul already leased 949,000 square feet to Google in Sunnyvale at a nearby campus called Technology Corners, making Google a natural prospect for the new development.
And while Google has not yet started moving into Technology Corners, the company has also been growing elsewhere in Sunnyvale this year, snapping up the old Juniper Networks headquarters (424,000 square feet) and former head office of Palm Computing Inc. (285,000 square feet). And it's rumored that a fund, CBRE Global Investors, that's buying up land all around Sunnyvale's Moffett Park business district is actually acting on behalf of Google.
Yet landing Google wasn't guaranteed when Jay Paul started building Moffett Place earlier this year on spec. Other major tech tenants were also making offers on the property, according to sources. The rent Google is paying isn't known, but Jay Paul was asking $3.75 per square foot on a triple-net basis, or not including utilities, taxes and fees.
Moffett Place is located on 55 acres near the intersection of Highway 237 and N. Mathilda Ave. Currently, the first phase is under construction with three buildings totaling about 900,000 square feet. Google is still a couple of years away from moving in there. In addition to the office buildings, the DES Architects + Engineers-designed project includes an amenities building with outdoor pool and a living roof — which Jay Paul calls the "high garden" — on top of a parking garage.
Redwood City action
In Redwood City, Google picks a up a major chunk one of Silicon Valley's marquee office campuses. The 10-building, 1.7-million-square-foot project was built by Jay Paul Co. in the early 2000s and gained notice for its sleek design and swanky amenities including pools, a rock-climbing wall, day spa and baseball diamonds. The company is taking Blackstone and Starwood's buildings at 1200, 1300, 1600, 1700, 1800 and 1900 Seaport Blvd.
Starwood bought the campus in 2006 for about $833 million, and immediately sold two buildings to Shorenstein, the San Francisco-based landlord. Blackstone came into the picture after acquiring the junior debt on the property a couple of years ago. Informatica also acquired two buildings out of the 10 in 2012 for $525 per square foot. Google's acquisition this week is only for the six Blackstone/Starwood buildings.
As I reported earlier this month, a new owner could build even more office space at Pacific Shores. New zoning approved about a year ago could allow total build-out of up to 3 million square feet.
Google — which like many expanding tech companies is focused on reducing its car and shuttle trips as traffic worsens during the current boom — may have been attracted to the project partly for its water transit possibilities beyond freeways.
Pacific Shores is a half mile from the Port of Redwood City, where a Google pilot project earlier this year tested running ferries from San Francisco and Alameda to the port.
Mayor Gee said the city would be happy to work with Google on such a plan, should the search company decide to go in that direction.
"One of the things that's always a challenge with new forms of transportation is, is there enough there there," he said. "With Google, that potentially brings the there there."
The changes Google is bringing to Silicon Valley's commercial real estate scene, its transportation system and its market for technology talent are a local reflection of the company's global dominance in Web search advertising, which subsidizes all its other business and tech forays.
Google is sitting on a horde of $61.2 billion in cash, cash equivalents and marketable securities as of Sept. 30, according to an Oct. 23 filing with the Securities Exchange Commission. While the company's earnings for the most recent quarter disappointed, sending the shares down when they were reported Oct. 16, the stock has bumped higher since then.
Today the shares fell $4.93, just less than one percent, to $539.05 at 8:23 a.m. West Coast. That gives the company a market capitalization of $365.5 billion.
Even by Google standards, the latest transactions are blockbusters: In one deal, Google has agreed to lease all of Jay Paul Co.'s Moffett Place, a 1.9 million square foot office campus currently under construction in Sunnyvale. It's a contender for the largest office lease ever signed in Silicon Valley and perhaps the state of California.
In a separate but no less notable deal, Mountain View-based Google completed the purchase of six buildings from Blackstone Group and Starwood Capital totaling about 934,000 square feet at Redwood City's Pacific Shores office park. It's Google's first entry into that city and a potential game changer for that commercial real estate market.
"Google is obviously a very strong company and they are in hyper growth mode," said Amber Schiada, director of research for real estate services firm JLL.
Google confirmed the closing of both deals — both of which I previously reported were in the works — but declined to comment further. Blackstone didn't return inquiries. Jay Paul's longtime broker Phil Mahoney of Newmark Cornish & Carey, said Moffett Place is off the market.
Google's expansion on the Peninsula has been the biggest real estate story since the 2008 Great Recession as the world's biggest Web-search advertising company has bought and leased building after building, radiating out from its Mountain View headquarters. Its real estate growth dwarfs even that of Cisco Systems Inc.'s expansion during the 1990s.
Terms of the latest deals were not disclosed, but sources estimated the Redwood City sale at around $625 per square foot, or $583.75 million. That would make it perhaps Google's single largest real estate acquisition by footprint and dollar amount ever in Silicon Valley. In an Oct. 23 filing with the Securities and Exchange Commission, Google said it completed a purchase of land and office buildings for $585 million this month.
"I welcome them to our city and I look forward to working with them," said Redwood City Mayor Jeffrey Gee in an interview this afternoon. "For a long time I would go around and say, 'Redwood City is one of the best kept secrets in the Bay Area. With Google and everything going on, we're not a secret anymore.'"
Aside from sheer size, the deals are notable for several reasons. First, they showcase Google's incredibly ambitious growth plans as the company enters new business sectors such as wearable computing, self-driving cars and robotics — all of which could be huge space users on their own.
Google has not even moved into much of the space it has leased or bought over the last several years. Yet the company continues to bank more elbow room for future expansion, suggesting it is thinking far down the line in terms of its space needs. Google counted 55,030 employees globally as of Sept. 30, according to its most recent quarterly report, up 18 percent — or 8,600 Googlers — from a year ago.
The transactions also alter the marketplace dynamics in two cities by taking available space off the table. Schiada noted that Moffett Place was the largest speculatively built project under construction in Silicon Valley. In Redwood City's Pacific Shores, which is more than 90 percent leased, I'm told Google will honor all current tenants' leases for now, but will evaluate moving into spaces as they become available in the years ahead.
"A big question is what does this leave for tenants," Schiada said, speaking specifically about the Moffett Place deal. "It also increases rates, because the supply becomes more limited."
Still, that could actually be a good thing for tenants down the line by pushing developers to build more product, she added.
"This deal essentially eliminates a significant portion of new development, which could prompt more developers to move forward," she said.
Office space vacancy in Silicon Valley decreased to 14.1 percent in the third quarter, down from 15.4 percent a year earlier, JLL research showed. That's down from a recession-era peak of 26.4 percent in 2009. Researchers concur that Google is playing a substantive role in soaking up supply.
Jim Beeger, a veteran broker with Colliers International, said in the short term, the Sunnyvale deal could also push tenants back into the market.
The transaction could "cause tenants of all sizes to realize they should have more of a sense of urgency in their search for a new site," he said. "Moffett Place will be difficult to replicate, and those who lingered no longer have this option."
Sethena Leiker, senior analyst for Cushman & Wakefield's Silicon Valley office, agreed.
"There's not a lot of spec development coming," she said. "If you want to take any new space, you're going to have to take something that's proposed."
One result, Beeger said, could be a "trickle-down effect" of growing tenants moving to other areas of Santa Clara County that have available sites.
Score for Sunnyvale
Google's lease at Moffett Place is a huge win for San Francisco-based Jay Paul Co., if one that's not entirely unexpected. Jay Paul already leased 949,000 square feet to Google in Sunnyvale at a nearby campus called Technology Corners, making Google a natural prospect for the new development.
And while Google has not yet started moving into Technology Corners, the company has also been growing elsewhere in Sunnyvale this year, snapping up the old Juniper Networks headquarters (424,000 square feet) and former head office of Palm Computing Inc. (285,000 square feet). And it's rumored that a fund, CBRE Global Investors, that's buying up land all around Sunnyvale's Moffett Park business district is actually acting on behalf of Google.
Yet landing Google wasn't guaranteed when Jay Paul started building Moffett Place earlier this year on spec. Other major tech tenants were also making offers on the property, according to sources. The rent Google is paying isn't known, but Jay Paul was asking $3.75 per square foot on a triple-net basis, or not including utilities, taxes and fees.
Moffett Place is located on 55 acres near the intersection of Highway 237 and N. Mathilda Ave. Currently, the first phase is under construction with three buildings totaling about 900,000 square feet. Google is still a couple of years away from moving in there. In addition to the office buildings, the DES Architects + Engineers-designed project includes an amenities building with outdoor pool and a living roof — which Jay Paul calls the "high garden" — on top of a parking garage.
Redwood City action
In Redwood City, Google picks a up a major chunk one of Silicon Valley's marquee office campuses. The 10-building, 1.7-million-square-foot project was built by Jay Paul Co. in the early 2000s and gained notice for its sleek design and swanky amenities including pools, a rock-climbing wall, day spa and baseball diamonds. The company is taking Blackstone and Starwood's buildings at 1200, 1300, 1600, 1700, 1800 and 1900 Seaport Blvd.
Starwood bought the campus in 2006 for about $833 million, and immediately sold two buildings to Shorenstein, the San Francisco-based landlord. Blackstone came into the picture after acquiring the junior debt on the property a couple of years ago. Informatica also acquired two buildings out of the 10 in 2012 for $525 per square foot. Google's acquisition this week is only for the six Blackstone/Starwood buildings.
As I reported earlier this month, a new owner could build even more office space at Pacific Shores. New zoning approved about a year ago could allow total build-out of up to 3 million square feet.
Google — which like many expanding tech companies is focused on reducing its car and shuttle trips as traffic worsens during the current boom — may have been attracted to the project partly for its water transit possibilities beyond freeways.
Pacific Shores is a half mile from the Port of Redwood City, where a Google pilot project earlier this year tested running ferries from San Francisco and Alameda to the port.
Mayor Gee said the city would be happy to work with Google on such a plan, should the search company decide to go in that direction.
"One of the things that's always a challenge with new forms of transportation is, is there enough there there," he said. "With Google, that potentially brings the there there."
The changes Google is bringing to Silicon Valley's commercial real estate scene, its transportation system and its market for technology talent are a local reflection of the company's global dominance in Web search advertising, which subsidizes all its other business and tech forays.
Google is sitting on a horde of $61.2 billion in cash, cash equivalents and marketable securities as of Sept. 30, according to an Oct. 23 filing with the Securities Exchange Commission. While the company's earnings for the most recent quarter disappointed, sending the shares down when they were reported Oct. 16, the stock has bumped higher since then.
Today the shares fell $4.93, just less than one percent, to $539.05 at 8:23 a.m. West Coast. That gives the company a market capitalization of $365.5 billion.
Tuesday, October 28, 2014
The Ultimate Question: Rent or Buy?
The biggest benefit of buying a home is longevity — chances are,
you’ll be in the same abode 10 or 20 years later. Unfortunately, that’s
also one of buying’s biggest inconveniences.
Renting is a good idea for someone who thinks they might be moving in the near future, but in the long-term, it’s still more expensive than owning a home.
The New York Times constructed a calculator to determine whether renting or owning a home would be more expensive. According to the calculator, if you can find a place to rent for less than $961 a month, you’re better off renting. But it’s a tough call, at least in financial terms, when the average rent is $1,083.
How can you figure out which is right for you? It’s largely a question of how long you’re planning to stick around.
Renting is a good idea for someone who thinks they might be moving in the near future, but in the long-term, it’s still more expensive than owning a home.
The New York Times constructed a calculator to determine whether renting or owning a home would be more expensive. According to the calculator, if you can find a place to rent for less than $961 a month, you’re better off renting. But it’s a tough call, at least in financial terms, when the average rent is $1,083.
How can you figure out which is right for you? It’s largely a question of how long you’re planning to stick around.
- How long you will stay: Time magazine says that any amount of time less than five to seven years could cost you.
- How stable your job is: not only because you might want to move for your job, but also because many mortgages require steady employment.
- How much is it worth (besides dollars): Neil Irwin at the New York Times pointed out that if you own a home, you don’t have to worry that the landlord will sell or raise rents without your knowledge.
Friday, October 24, 2014
3 Reasons Fall is the Best Season to Buy or Sell a Home
Spring has long been considered the best time of year for real estate, but home purchases also pick up during fall,
according to an ERA Real Estate Survey.
The survey found that 40 percent of brokers and sales professionals
attribute a new focus on real estate to the end of the vacation season.
They also asked their brokers why:
1. Home for the Holidays: “As vacations wind down after Labor Day and people become more focused, the desire to be in a new home for the holidays is a historically strong driver of fall home sales,” said Charlie Young, president and CEO of ERA Real Estate.
2. Back-to-School Mentality: As Labor Day passes and kids go back to school, home buyers get down to business. The official end of summer also means the end of vacation season for many people, which means they’re refreshed and ready to refocus.
3. Tax Benefits: 10 percent of survey respondents found that their buyers want to have access to homeowner’s tax benefits before the new year. Homeowners can claim mortgage interest, residential energy efficiency and casualty losses, among other pay-backs.
Take advantage of the season by checking out Zillow’s listings and Open Houses near you.
1. Home for the Holidays: “As vacations wind down after Labor Day and people become more focused, the desire to be in a new home for the holidays is a historically strong driver of fall home sales,” said Charlie Young, president and CEO of ERA Real Estate.
2. Back-to-School Mentality: As Labor Day passes and kids go back to school, home buyers get down to business. The official end of summer also means the end of vacation season for many people, which means they’re refreshed and ready to refocus.
3. Tax Benefits: 10 percent of survey respondents found that their buyers want to have access to homeowner’s tax benefits before the new year. Homeowners can claim mortgage interest, residential energy efficiency and casualty losses, among other pay-backs.
Take advantage of the season by checking out Zillow’s listings and Open Houses near you.
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