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Buying a Home with a Pet Suite?

Sure, your buyers like the house they’re considering, but do their pets? It’s a question that’s coming up more frequently, and it’s causing builders to put the needs of their clients’ four-legged friends front and center. From designing homes with amenities including ‘smart’ pet doors and elaborate washing and grooming areas, to creating separate living spaces for pets, it’s clear that pets are an important factor when helping clients buy or remodel a home.

Standard Pacific Homes was one of the first builders to make pet comfort a priority. Last year they built model homes that offered a pet suite as an optional amenity. These suites included 170 square feet of pet housing, wash and water stations, automated feeders, comfortable bedding, cabinets for pet toys and food, and access for a puppy run.

Since then, more buyers are seeking out homes that keep their pets’ needs on the forefront, and with 79.8 million pet-owning households throughout the country, the demand for pet-friendly homes could grow significantly. Now other builders are seeing the importance in designing a home that is a perfect fit for pets.

“We are finding that pet owners are growing more aware of the benefits of designing homes with pets in mind,” says Rhyse Altman, an architect designer with Visbeen Architects in Grand Rapids, Mich. “What we are most concerned with is making it easier for their pets to eat, sleep, play, etcetera, on their own terms with as much independence as possible. The last thing a pet owner wants is to be tripping over food dishes, staring at a kennel in the middle of the living room, smelling the litter box or getting up in the middle of the night to let the dog out.”

Source: The Washington Post

The Number are in! People Want to be Homeowners!

A vast majority of Americans believe that buying a home is a solid financial decision, and most believe they could sell their home for at least its initial purchase price, according to a new survey from the National Association of Realtors (NAR) in the 2015 National Housing Pulse Survey. The Survey also found that a preponderance of Americans think that now is a good to buy a home. 

The Survey, which measures consumers’ attitudes and concerns about housing issues in the nation’s 50 largest metropolitan statistical areas, found that

  • more than eight in 10 Americans believe that purchasing a home is a good financial decision, and 68 percent believe that now is a good time to buy a home.
  • 71% believe they could sell their house for what they paid for it, a jump of 16 percentage points from 2013.

When asked for reasons about why homeownership matters to them, respondents’ answers did not change significantly from past years.

  • Building equity,
  • wanting a stable and safe environment,
  • and having the freedom to choose their neighborhood remain the top three reasons to own a home. 

The number of renters who are now thinking about purchasing a home has increased since the last survey in 2013, up from 36 percent to 39 percent.

61% of renters stated that owning a home is a priority for their future. 

Source: NAR

5 reasons people move

One in three U.S. households say they plan to move in the next five years, according to a survey conducted by the Demand Institute of 10,000 households’ current living situations. And it’s the location of the home that will be driving most of those moving decisions — more so than the physical home itself. 

Seventy-five percent of the households surveyed cited one or more location-related reasons for why they were moving. The top reasons were:

  • the desire for a safer neighborhood (30%);
  • being closer to family (27%);
  • a change of climate (26%);
  • being closer to work (25%), and
  • moving for a new job (23%).

More than half — 59% — of households say they don’t plan to go too far, with most indicating a move within 30 miles of their current home.

For those seeking a location for climate reasons, the Western and Southern U.S. continue to be the top destinations. Many movers say they’re eyeing more walkable communities. Indeed, walkable communities have been reporting stronger home-price growth compared to less walkable communities, according to the Demand Institute’s report. Those who reside in walkable communities also are more likely to report that their quality of life has improved in the past few years due to their change in residence. Source: Demand Institute

Do Buyers Prefer Lower Rates or Lower Down Payments?

Changes in down payment requirements have more influence over home buyers’ willingness to buy than changes in rates, according to a new study published by economists at the New York Federal Reserve. The Fed’s survey of buyers and renters found that the impact of interest rates may be overrated compared to even the smallest changes in down payment requirements.

The study found that dropping the required down payment from 20 percent to 5 percent increases the willingness to purchase, on average, by 15 percent among buyers and 40 percent among renters. On the other hand, decreasing the interest rate on a 30-year fixed-rate loan raised the willingness to purchase a home by only 5 percent, on average.

Buyers showed more influence by down payment changes even though the rate change could save them more money than the lower down payment. “A key takeaway is that the effect of a change in down payment requirements on housing demand strongly depends on households’ financial situation,” says economists Andreas Fuster and Basit Zafar of the New York Federal Reserve. “For instance, a loosening of down payment requirements will have little effect on the willingness to purchase for a new home of current owners with substantial equity, or of renters with substantial liquid savings. The results also imply that measures such as a loan-to-value (LTV) cap may predominantly affect the lower end of the housing market, and that the effect on house prices will depend on the state of the economy and other asset markets.”

Source: Real Estate Economy Watch

Can Flattery be the key to your next home?

Flattery is a tried-and-true negotiating strategy, but homebuyers in hot markets are making a bizarre art form out of kissing up. In hot markets, it’s common for homebuyers to include a personal appeal along with their offer paperwork and financing details. Usually that means a letter, to introduce the seller to the buyer’s family and wax on about what the buyer loves about the house.

But buyers are stepping up their games: Recent personal entreaties have included YouTube videos and baked goods, says Andrew Vallejo, a Redfin agent.

“After they toured the property, they left a note for the seller on the kitchen counter about how much they loved the house,” he says of one recent couple. “The next day they came back and hand-delivered cookies to the seller and to five or six of the seller’s neighbors.” Cookies might be new, but the offer letter is an old staple of hot markets. 

There’s plenty of anecdotal evidence to indicate that the strategy works, though only in certain regions. The Internet, meanwhile, is awash with advice for prospective homebuyers. So there’s a good chance that a house-hunter attempting to sweet-talk will be going up against another one with the same strategy, which usually involves a variation on a common theme.

The first step is flattery: “I love those drapes! I won’t change a thing!” The second step is more flattery, by way of aspiration: “Your lovely home is key to the life I want for my family.” These can be powerful sentiments but probably less compelling if the seller is receiving several letters that all say the same thing.

Redfin numbers show that during the first six months of 2015, letter-writers were 14 percent more likely to have an offer accepted than would-be buyers who didn’t send a note. Source: Bloomberg News

Home Owners are Happier

Home ownership can lead to higher levels of well-being, according to data from the OECD Better Life Index, which gauges the quality of life worldwide by factoring in such things like housing, jobs, civic engagement, health and safety.

The heightened sense of happiness that comes from home ownership may be more than just getting a new home, but more closely tied to the basic need for shelter, says Aida Caldera Sanchez and Caroline Tassot, authors of an analysis about the index.

Also, home ownership can lead to status and independence – qualities that often are linked to happiness, their analysis shows.

Source: RIS Media

Many Retirees Upsize thanks to the “Freedom Threshold”

By age 61, the majority of people feel free to choose where they most want to live, according to a new study by Merrill Lynch, “Home in Retirement: More Freedom, New Choices.”

“Throughout most of people’s lives, where they live is determined by their responsibilities,” according to the report. “Most careers demand that people live within a reasonable commuting distance from where they and/or their spouse work. However, as people enter their 50s and 60s, they begin to cross what this study reveals to be the ‘Freedom Threshold.'”

That’s the age when people say they can finally choose where they want to live, according to the survey of more than 3,600 retirees.

Indeed, two-thirds of the retirees surveyed say they are now living in the best home of their lives. Most retirees move at least once during retirement. But surprisingly, only half choose to downsize into a smaller home.

Three in ten of retirees decide to upsize into a larger home. The top reason to upsize: They want to have a home that’s comfortable enough for family members to visit and stay with them, according to the survey.

“Retirees often find their homes become places for family to come together and reconnect, particularly during holidays or summer vacations,” according to the report. Some choose to upsize so that family members can live with them too.

Source: Merrill Lynch 

It’s more affordable to buy a home today than 15 years ago!

It’s more affordable to buy a home now in most U.S. metros than it was 15 years ago, even for millennials putting down less money on a home, according to a Zillow analysis of third-quarter income and home value data.

Renters, however, continue to pay an increasing share of their income to their landlords as rents soar and incomes remain flat.

On average, homebuyers making the nation’s median income and purchasing the typical U.S. home spend 15.3% of their income on their monthly house payment, down from the historical norm of 22.1% during the pre-bubble period from 1985 to 1999. In contrast, renters spent 29.9% of their monthly income on rent in the third quarter of 2014, up from 24.9% historically. Younger buyers, earning less money in many areas and making smaller down payments on a home, should expect to spend slightly more of their income on mortgage payments – 17.4%.

Homes for younger buyers remain affordable thanks to continued low mortgage interest rates and their tendency to shop for less expensive homes. Continuously rising rents across the country could drive more people into the home-buying market, but they also make it more difficult for first-time buyers to save for a down payment.

“Despite rising home values, homeownership remains very accessible for buyers that can scrape together a down payment – even if that down payment is relatively modest – find a home to buy and secure financing,” said Zillow Chief Economist Stan Humphries. “But what keeps me up at night is the fact that it still remains so difficult for so many potential buyers to make those particular stars align, largely because renting is so unaffordable these days. It’s very difficult to come up with a down payment when so much of your monthly paycheck – especially on an entry-level salary – is going to your landlord instead of into your savings. Buying conditions are getting better every day, and in time the allure of fixed housing payments and building wealth through home equity will draw more buyers out of rentals and into homeownership.”

Source: HousingWire

Homeowners’ Children Make More Money!

Home prices can influence a home owner’s child’s future income, according to a new study by the Federal Reserve Bank of Boston.

Researchers found that when households included a 17-year-old, they saw a 1 percent rise in home prices that year that led to about 0.9 percent higher annual income for that child later in life if the parents owned the home, according to the study published in the Journal of Urban Economics. On the other hand, if the parents were renters, a 1 percent rise in home prices resulted in 1.5 percent lower annual income for the child.

“If home prices are rising, parents who are home owners may have additional resources to finance a child’s higher education, either because they feel richer or they can borrow against the home’s equity,” Maria Jose Luengo-Prado, a senior economist at the Federal Reserve Bank of Boston, says about the report. “This may allow their children to attend college or attend a higher-ranked [more expensive] school. On the other hand, the effect of rising house prices for parents who are renters is the opposite. Rising housing prices often mean higher housing costs. Rents go up. They may also need to save more money for a down payment to buy a house in the future.”

Source: The Wall Street Journal

Housing Market Update for November 4

Can you still do a short-term house flip using federally insured, low-down payment housing finance money? That’s an important question for buyers, sellers, investors and realty agents who’ve taken part in a nationwide wave of renovations and quick resales using Federal Housing Administration-backed loans during the last four years. The answer is yes — you can still flip and finance short term. But get your rehabs done soon. The federal agency whose policy change in 2010 made tens of thousands of quick flips possible — and helped large numbers of first-time and minority buyers with moderate incomes acquire a home — is about to shut down the program, FHA officials have confirmed. In an effort to stimulate repairs and sales in neighborhoods hard hit by the housing crisis and recession, the FHA waived its standard prohibition against financing short-term house flips. Before the policy change, if you were an investor or property rehab specialist, you had to own a house for at least 90 days before reselling — flipping it — to a new buyer at a higher price using FHA financing. Under the waiver of the rule, you could buy a house, fix it up and resell it as quickly as possible to a buyer using an FHA residential loan — provided that you followed guidelines designed to protect consumers. Since then, according to FHA estimates, about 102,000 homes have been renovated and resold using the waiver.

The reason for the upcoming termination? The program has done its job, stimulated billions of dollars of investments, stabilized prices and provided homes for families who were often newcomers to ownership. However, even though the waiver program has functioned well, officials say, inherent dangers exist when there are no minimum ownership periods for flippers. In the 1990s, the FHA witnessed this firsthand when teams of con artists began buying run-down houses, slapped a little paint on the exterior and resold them within days — using fraudulent appraisals. Their buyers, who obtained FHA-backed loans, often couldn’t afford the payments and defaulted. For these reasons, officials say, it’s time to revert to the more restrictive anti-quick-flip rules that prevailed before the waiver: The 90-day standard will come back into effect after Dec. 31. Paul Wylie, a member of an investor group in the Los Angeles area, says he sees “more harm than good by not extending the waiver. There are protections built into the program that have served [the FHA] well,” he said in an email, “Entry-level consumers will be harmed unnecessarily.” Bottom line: Whether fix-up investors like it or not, the FHA seems dead set on reverting to its pre-bust flipping restrictions. Financing will still be available, but selling prices of the end product — rehabbed houses for moderate-income buyers — are almost certain to be more expensive. Source: Ken Harney, The Nation’s Housing

Existing-home sales bounced back in September, surging to the highest annual pace of the year, according to the latest report from the National Association of Realtors®. Low interest rates and price gains holding steady led to September’s healthy increase, even with investor activity remaining on par with last month’s marked decline,” says Lawrence Yun, NAR’s chief economist. “Traditional buyers are entering a less competitive market with fewer investors searching for available homes, but may also face a slight decline of choices due to the fact that inventory generally falls heading into winter.” Existing-home sales rose 2.4 percent in September, reaching an annual rate of 5.17 million. Sales are at the highest pace of 2014 but remain 1.7 percent below the 5.26 million reported last September, NAR reports. Here is a snapshot of housing indicators for September:

  • Home prices: The median existing-home price was $209,700 in September, 5.6 percent higher than a year ago. It is the 31st consecutive month for year-over-year price gains.
  • Days on market: Homes stayed on the market longer in September — 56 days, compared with 53 days in August. Short sales remained on the market for a median 116 days in September, while foreclosures sold in 59 days. About 35 percent of homes sold in September were on the market for less than a month.
  • Inventory: Total housing inventory dropped 1.3 percent to 2.30 million existing-homes for-sale, representing a 5.3-month supply at the current sales pace. Unsold inventory is 6 percent higher than a year ago.
  • All-cash sales: Sales involving all cash made up 24 percent of transactions in September, down from 33 percent compared to a year prior.
  • Distressed homes: Foreclosures and short sales rose slightly in September to 10 percent, from 8 percent in August. Distressed sales, however, are down from 14 percent a year ago. Foreclosures and short sales in September sold for an average discount of 14 percent below market value. Source: National Association of Realtors

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