Foreign buyers pulling back…..

MIAMI – March 9, 2016 – Rising home prices have undermined foreign buyers’ demand for U.S. residential real estate, according to the National Association of Realtors® (NAR).

Many foreign buyers have been pulling back because they’ve been priced out of many of the cities they favor, including New York and San Francisco. A strong U.S. dollar has also played a role.
In January, the median price of existing U.S. homes had increased 67 percent for a buyer from Brazil once the monetary exchange rate is factored into the equation compared to January 2015. For a buyer from Canada, the median price increased 27 percent year-to-year, and 14 percent for a Chinese buyer.
Foreign buyers remain a small chunk of America’s housing market. However, pullback could have a disproportionate effect on demand for high-end condominiums in such markets as Miami and Manhattan.
On the other hand, falling foreign demand could help make residences more affordable for U.S. buyers. “Given that the U.S. currently has a housing shortage, any demand pullback helps,” says Lawrence Yun, NAR’s chief economist.
Source: Wall Street Journal (03/08/16) Kusisto, Laura
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Does homebuyer education really help?

WASHINGTON – March 8, 2016 – Mortgage giants like Fannie Mae and Freddie Mac believe that educating homebuyers about the homeownership process will help prevent lending mistakes– but new studies question the effectiveness of homebuyer education efforts.
“There is widespread agreement in the industry that homebuyer counseling can help prevent some of the mistakes made during the housing boom,” Freddie Mac officials state in their publication Insight and Outlook the month. “However, early studies of the impact of counseling produced sometimes conflicting or inconclusive results and raised questions about the effectiveness of borrower education and counseling.”
A study of 40,000 participants in Freddie Mac’s Affordable Gold Loans Program, for example, found that borrowers who underwent classroom and home study counseling had lower rates of serious delinquency by 26 percent and 21 percent, respectively. Individual counseling to borrowers was found to reduce serious delinquency by 34 percent.
But critics question whether the reductions are linked to the education.
“Perhaps the borrowers who received counseling also were more high-educated than the borrowers in the other group,” Freddie Mac’s article notes. “Maybe they had a greater disposition or ability to apply the information provided by the education course. Maybe they had higher credit scores than the other borrowers.”
A 2014 study by the Federal Reserve Bank of Philadelphia evaluated first-time homebuyers who received prior counseling to purchase a home over a five-year period. The counseling included one-on-one instruction on budgeting and the home buying process, as well as a two-hour pre-purchase workshop that included information about applying for a mortgage, shopping for a home and closing. The buyers raised their credit scores an average of 16.2 points after the training, the study found.
Source: “Does Homeownership Counseling Make a Difference?” Mortgage News Daily (March 2, 2016)
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Study: Renters moving from cities to suburbs

NEW YORK (AP) – March 8, 2016 – In the American imagination, suburbs are places to buy a house and put down roots. But a growing percentage of suburbanites rent, according to a new study.
About 29 percent of suburbanites living outside the nation’s 11 most populous cities were renters in 2014, up from 23 percent in 2006, according to a report being released by New York University’s Furman Center real estate think tank and the bank Capital One.
The finances of homeownership since the mortgage meltdown might be a lead reason for the change, but the cost of renting also is rising in most of the biggest metropolitan areas, the study found.
Adding to data showing a national rise in renters in the past decade, the report zooms in on Atlanta, Boston, Chicago, Dallas, Houston, Los Angeles, Miami, New York, Philadelphia, San Francisco, Washington and their suburbs. For a national benchmark, the researchers also looked at all metropolitan areas encompassing a city of at least 50,000 people.
“It’s the extensiveness of the affordability problem that is notable,” Laura Bailey, Capital One’s managing vice president of community development, told The Associated Press before the report’s release.
Still, the study shows some of the nation’s biggest rental markets have become more, not less, affordable to their typical tenants. Some findings:
At home – with renting – in the suburbs
Renting is still more common in big cities than their suburbs. In Miami and New York, about two-thirds of residents rent. But the gap is narrowing.
In the Atlanta area, the increase in the suburban rental population between 2006 and 2014 was twice the size of the entire tenant population in the city itself. Eighty percent of the growth in Dallas-area renters happened outside the city limits. Nearly half of residents outside the city of Los Angeles are tenants.
Nationwide, 37 percent of all households nationwide now rent, the highest level since the mid-1960s, Harvard University’s Joint Center for Housing Studies noted in December.
Making the rent
Typical tenants could afford fewer than half the rental homes available in metro areas nationwide in 2014, under officials’ traditional definition of affordability: spending under 30 percent of income on rent and utilities. (Government-ese for people who spend more: “rent-burdened.”)
But the picture differs from city to city, depending on the interplay of median rents and incomes. The percentage of rent-burdened tenants actually declined moderately between 2006 and 2014 in Boston and Houston, while staying flat in Chicago and San Francisco and rising elsewhere.
Where do renters have it the hardest?
That depends how you measure it. The Washington and San Francisco metro areas had 2014 median rents topping $1,500 a month but also the highest median tenant incomes: $57,000 for San Francisco and $58,200 for Washington. That made them relatively affordable: Half of San Francisco-area tenants and 49 percent of Washington-area ones were rent-burdened. (The national metro-area average was 53 percent.)
Contrast that with about two-thirds of tenants in the Miami area, where the median renter made $34,300 a year while paying $1,150 a month.
… and the easiest?
The Houston and Dallas areas boast the lowest big-metro median rents (around $950 in 2014). With median incomes around $38,000 a year, fewer than half of tenants are rent-burdened.
Why is this happening?
Experts attribute the renter surge partly to the foreclosures, financial struggles, stagnant incomes and tighter credit that followed the mortgage meltdown. Researchers also note the wave of young adults – often renters – in the large, so-called millennial generation, though the Harvard study in December noted a majority of U.S. renters now are 40 and older.
AP Logo Copyright 2016 The Associated Press, Jennifer Peltz. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.  

Credit score is key when applying for a mortgage

ORLANDO, Fla. – Feb. 26, 2016 – Your credit score comes from several pieces of information about you, including whether you make payments on time and how much you spend.

Nowadays just about everyone, from landlords to lenders, judges you based on your credit score. In part because credit companies, like banks, have been so inundated during the past few years, far too many of us have mistakes buried deep within our credit reports.

If you happen to be one of those unlucky folks, mistakes made by the credit company may be costing you hard earned money. For example, the difference between a 698 and a 700 credit score on a $150,000 mortgage could cost you $10,000.00 in extra interest.

Because your credit score is so important to your wallet and your prosperity, Congress passed the Credit Accountability, Responsibility Disclosure Act (CARD). Now you have the legal right to get your credit report FOR FREE at http://www.annualcreditreport.com. And, when you report a mistake, the credit companies are legally required to promptly fix it.

“… consumers should check their credit reports regularly. If they don’t they are potentially putting their pocketbooks at risk.” – Howard Shelanski, Director of the FTC’s Bureau of Economics

Practice reviewing your credit report at the same time you file your tax returns each year as a simple way to remind yourself to do it.

© National Association of Realtors®

Make ‘em an offer they can’t refuse

CHICAGO – Feb. 29, 2016 – To make an offer that sellers cannot refuse, homebuyers need to learn the sellers’ motivations.

While money tends to be a top motivation, other ones include a rush to move and emotional attachment to the home. Even sellers will non-cash motivations care about the money, but that focus then overlaps with the other motivations.

Real estate agents should try to give buyers an idea of a seller’s motivation, though that depends on how much the listing agent discloses.

If money primarily motivates sellers, buyers should submit the highest reasonable offer to get the home, and consider the listing price only a starting point in competitive markets.

If sellers are motivated by terms, buyers may have to give up some contingencies to speed the process.

If sellers are motivated by emotions, buyers should write a personal letter that is genuine and emotional to explain why they want the home.

In any case, it’s important to submit an offer as soon as possible after figuring out how to approach it. In general, however, buyers should avoid submitting lowball offers merely to see how the seller will react.

Source: Realtor.com (02/03/16) Colley, Angela

© Copyright 2016 INFORMATION, INC. Bethesda, MD (301) 215-4688

A top reason renters decide to buy? The rent

NEW YORK – March 1, 2016 – According to a February survey of 750 homebuyers by Redfin, one in four respondents wants to buy a home because their rent is too high.

That number continues to go up. In November, it was one in five renters looking at ownership because the rent was too high; in August, it was one in eight.

The only choice cited more frequently than “rising rents” as a reason to buy was “major life event,” like marriage or the birth of a child.

Meanwhile, another recent report suggests that rent appreciation is expected to slow this year, which “will provide some relief for renters who’ve been seeing their rents rise dramatically every single year for the past few years. However, the situation remains tough on the ground: rents are still rising and renters are struggling to keep up,” says Zillow chief economist Svenja Gudell.

Source: HousingWire (02/25/16) Swanson, Brena

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Florida city homes too expensive for most young buyers

MIAMI – March 1, 2016 – Millennials are approaching home-buying age, and they’re right on time. The housing market is stable, interest rates are low and studies have shown that buying is cheaper than renting.

But South Florida is nonetheless out of reach, a study by consumer finance site Nerdwallet shows.

At No. 53, Edgewater just north of downtown Miami is the most affordable area of South Florida. Notably more affordable are dozens of Florida towns you may have never heard of, like East Milton (on the Florida panhandle); Lady Lake (an hour’s drive from downtown Orlando); and Navarre (located on the Gulf Coast).

“The idea of buying your first home in your mid-20s or early 30s, that’s increasingly unattainable, especially in the context of South Florida,” said Ali Bustamante, economics professor with Florida International University’s (FIU) Center for Labor Research Studies. “For those interested in purchasing a home here, there are a lot of sacrifices to be made.”

Bustamante said it’s likely Edgewater landed at No. 53 because of a concentration of relatively affordable but otherwise undesirable homes. Even that neighborhood is undergoing transition as developers demolish single-family homes in favor of high rises.

Nerdwallet’s study assumes a first-time homebuyer in Florida earns about $50,000 per year, the 2014 state median for households headed by residents 25 to 44 years old, and has a personal annual savings rate of 4.8 percent, based on the 10-year average measured by the United States Federal Reserve.

It then calculated how many years it would take that person to save for a 20-percent downpayment, assuming his bank account is empty from the get-go.

Following the Consumer Financial Protection Bureau’s rule of thumb that homeowners should set aside no more than 30 percent of their monthly income for housing costs, the study found a first-time homebuyer in Florida could afford to spend $1,179 a month on his mortgage and other homeowner costs.

That magic number may not apply to the population of South Floridians, whose median income ranges from $42,926 in Miami-Dade and $51,608 in Broward. Rising rents make saving all the more elusive.

“The savings rate as would be imagined and is recommended are very difficult to obtain,” Bustamante said. “It takes much longer to save that 20-percent downpayment that is often required.”

A study conducted by Trulia, an online real-estate company, found that it takes a college-educated person about 12 years to save for a downpayment for a Miami home. For those without a college degree, it could take as long as 17 years.

Copyright © 2016 Miami Herald. Debora Lima. Distributed by Tribune Content Agency, LLC.

Minority homeownership rates rising

NEW YORK – March 1, 2016 – Minority homeownership rates show signs of improvement for the first time since 2007, and the trend should continue as minorities will probably see significant growth in the coming decades.

Some forecasters predict that more than three-quarters of household growth from 2010 to 2020 will be from minorities. From 2020 to 2030, 88 percent of the growth may be attributed to minorities.

Experts think Hispanics will drive most of that growth, and the Hispanic homeownership rate has increased to its highest level since the third quarter of 2012.

Of the 22 million new households formed between 2010 and 2030, nine million are expected to be homeowners – and more than half of those new homeowners are likely to be Hispanic, while 11 percent will be black and 29 percent will be other races.

Meanwhile, white-only homeownership, which right now trends about 20 to 30 points higher than minorities, ended 2015 lower than it’s been in years.

Source: “Is Minority Homeownership on the Rise?” Total Mortgage (Feb. 25, 2016)

© Copyright 2016 INFORMATION, INC. Bethesda, MD (301) 215-4688

What type of home sells fastest?

CHICAGO – March 1, 2016 – Which home features are considered “best” when it comes to helping a home sell the fastest?

To sort out high-demand features, realtor.com researchers analyzed millions of listing records over the past three months to pinpoint the number of days each home stayed on the market and the number of page views each listing received. From there, researchers narrowed their list to the homes that generated the most interest and sold the fastest. They then compared selling speed to listings’ architectural style and amenities.

Based on some of the patterns that emerged, here are the home styles, views, specifications and amenities that buyers crave right now.

Best housing style: Spanish-style

Spanish-style homes spent a median of 47 days on the market, half the national average of 93 days. This home style is found mostly in California coastal cities, and comprises just 1 percent of for-sale listings, yet it proves popular with buyers.

Spanish: 47 days; $550,000
Traditional: 84 days; $233,000
Ranch: 95 days; $179,000
Craftsman: 103 days; $350,000
Victorian: 122 days; $259,000
Best view: City skylines

A home with a view often attracts buyers, but homes with an urban view may offer the best option of all. Homes with urban views spent 83 days on the market – less than other views studied. Ocean views have a much heftier median list price at $749,000, but they spend about 98 days on the market.

City views: 83 days; $420,000
Golf course views: 90 days; $412,000
Lake view: 95 days; $359,000
Mountain view: 96 days; $365,000
Ocean view: 98 days; $749,000
Best home amenity: Stainless steel

Certain interior features help speed up home sales, and homes with stainless steel appliances tend to sell 15 percent faster than other homes. The popularity of fireplaces, on the other hand, may show some signs of waning.

Stainless steel: 79 days: $300,000
Granite counter: 82 days; $320,000
Open kitchen: 83 days; $269,000
Finished basement: 89 days; $260,000
Fireplace: 94 days; $290,000
Best location: Next to a good school

Location is a big part of real estate, and homes near good schools tended to sell the fastest than homes that promoted they were near other things, like shopping or the hospital.

Good school: 76 days; $330,000
Stadium: 77 days; $250,000
Shopping: 79 days; $217,000
Transportation: 88 days; $280,000
Hospital: 95 days; $192,000
Best price range: $200,000-$250,000

Lower-priced homes have the most fans. Homes listed in the $200,000 to $250,000 price range sold in a median of 83 days – much faster than other price points.

$200,000-$250,000: 83 days
$150,000-$200,000: 86 days
$250,000-$300,000: 89 days
$1 million-$2 million: 118 days
$2 million-$5 million: 133 days
Best size: 1,500 to 2,000 square feet

Move over McMansion, smaller homes are showing more market popularity right now. While 8,000-square-foot mansions capture about 30 percent more page views on realtor.com than 1,000-square-foot homes, the smaller home trumps when it comes to selling faster. Here’s the breakdown:

1,500-2,000 square feet: 86 days; $194,000
2,000-2,500 square feet: 90 days; $260,000
3,000-3,500 square feet: 101 days; $400,000
5,000-5,500 square feet: 127 days; $2 million
>100,000 square feet: 173 days; $3.45 million
Source: “The Features That Help a Home Sell Fastest – and the Ones That Don’t,” realtor.com® (Feb. 29, 2016)

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Miami Down Payment Assistance!

MIAMI – March 2, 2016 – A Wells Fargo partnership with NeighborWorks America has allocated downpayment grants to homeowners in 40 communities throughout the U.S. through its LIFT program, with plans to expand further. So far, the program has helped more than 11,000 homeowners with downpayment assistance.

In Florida, four metro areas are part of the pilot downpayment program: Jacksonville, Miami, Orlando and Tampa. A list of the 40 cities and the local nonprofits that participate is posted online. The Neighborhood LIFT program also will be introduced in San Diego County from March 4 through 5 and in Philadelphia from April 1 to 2.

Wells Fargo says that it paid $300 million in LIFT programs that provide downpayment assistance grants, program support and homebuyer education. The program was first launched in 2012 to boost sustainable homeownership and further advance neighborhood revitalization.

“The reaction we receive from home buyers receiving a downpayment assistance grant is true excitement,” says Kim Smith-Moore, LIFT programs national manager with Wells Fargo Home Mortgage. “Having completed homebuyer education, these 11,000 families and individuals are better prepared to be successful and sustainable homeowners over time.”

Source: “Wells Fargo LIFT Programs Help More Than 11,000 Home Owners Get Down Payments,” HousingWire (Feb. 29, 2016)

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