What do today’s buyers want in a home?

NEW YORK – Aug. 5, 2015 – What building materials are trending in new-home construction? The latest Annual Builder Practices Survey, conducted by Home Innovation, reveals what buyers can expect to see in the new-home market.

1. Garages: The garage door is getting more enhancements, including windows, insulated doors, and doors made of composite or plastic materials. In 2014, 32 percent of all new single-family homes had bays for three or more cars – the most ever recorded in this study’s history.

2. Flooring: Carpeting continues to be the most popular flooring option for new construction, included in about 83 percent of all new-home bedroom installations. However, only about 40 percent of living rooms now have carpet. Hardwood flooring – both solid and engineered– is the second most popular type of flooring included in 27 percent of all new-home installations. Ceramic tile (which appears in 72 percent of all bathroom floor installation) follows in third place, making up 20 percent of all new-home floor installations.

3. Countertops: For kitchen countertops, granite continues to reign in two out of three homes (64 percent of new-home installations). Quartz/engineered stone is gaining popularity while laminate, solid surfacing and ceramic tile are losing appeal.

4. Appliances: Cooktops and wall oven combinations are gaining in popularity and make up about 24 percent of the market, compared to freestanding ovens (45 percent). Freezer-on-bottom refrigerators are gaining in popularity at 19 percent, while side-by-side has fallen to 28 percent of the share.

5. Kitchen sinks: More buyers are paying attention to their kitchen sink, with the single basin kitchen sink making a comeback, growing from 5 percent to 20 percent of all new single-family homes in the past decade. Also growing in popularity are granite/stone kitchen sinks (at 8 percent). One-piece cultured marble lavatories are continuing to decline in demand.

Source: “Material World: The Hottest Trends From the 2015 Builder Practices Survey,” BUILDER Online (July 29, 2015)

© Copyright 2015 INFORMATION, INC. Bethesda, MD (301) 215-4688

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Homeownership rate drops but probably hit bottom

 WASHINGTON – Aug. 3, 2015 – The U.S. homeownership rate continued to fall in the second quarter, reaching a 35-year low, according to a new Commerce Department report.
The seasonally adjusted homeownership rate dropped to 63.5 percent, falling from its 2004 peak at 69.4 percent.
However, economists are upbeat that change is on the horizon.
“The trend (of fewer and fewer homeowners) is not going to continue,” says Andres Carbacho-Burgos, a senior economist at Moody’s Analytics. “We think that the homeownership rate is close to bottoming out, but we don’t expect it to start rising substantially before 2017.”
Carbacho-Burgos credits a tightened labor market as one major reason for optimism, with the unemployment rate at a seven-year low of 5.3 percent and nearing the 5 percent range that most economists consider full employment.
The improvement in the job market will help boost wages, which will then have the trickle effect of bringing more first-time buyers into the housing market.
The job market has already helped to lift household formation, but most of that has been centered in the rental market. The residential rental vacancy rate dropped to 6.8 percent in the second quarter, the lowest since 1985.
The homeownership rate in the second quarter rose among Americans aged 35 years and younger. However, the rate fell for every other age group.
“As the millennials age, it’s expected they will start buying more homes and hopefully this is a sign that this trend is beginning,” says Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pa.
Source: “U.S. Home Ownership Hits 35-Year Low, Renting in Vogue,” Reuters (July 28, 2015)
© Copyright 2015 INFORMATION, INC. Bethesda, MD (301) 215-4688

4 Florida cities tops for seriously underwater homes

IRVINE, Calif. — July 30, 2015 — RealtyTrac released its second quarter (Q2) 2015 U.S. Home Equity & Underwater Report, which listed four Florida cities at the top of the list for homes seriously underwater – properties where the homeowners owe at least 25 percent more than the home’s current market worth.

Areas (population greater than 500,000) with the highest percentage of seriously underwater properties included Florida markets such as Lakeland (28.5 percent), Cleveland, Ohio (28.2 percent), Las Vegas (27.9 percent), Akron, Ohio (27.3 percent), Orlando (26.1 percent), Tampa (24.8 percent), Chicago (24.8 percent), Palm Bay(24.4 percent) and Toledo, Ohio (24.3 percent).

In addition, RealtyTrac looked at underwater homes that are also in the foreclosure process.

In the same Florida cities, over half of the homeowners going through foreclosure were seriously underwater:Lakeland (54.8 percent of foreclosures seriously underwater), Tampa (51.7 percent), Palm Bay (51.5 percent) and Orlando (51.2 percent).

Statewide, 23.6 percent Florida of homeowners with a mortgage were seriously underwater in the Q2 2015 – a drop from 23.8 percent in the first quarter and 30.3 percent year-to-year.

On the flipside, RealtyTrac found that 17.6 percent of Florida owners with a mortgage were “equity rich” with at least 50 percent equity. That’s a slight drop for the first quarter’s 17.8 percent but an increase from 15.9 percent year-to-year.

Looking only at homes in foreclosure, 62.8 percent in Florida were seriously underwater, while 18.6 percent, even though going through foreclosure, were equity rich.

“Strong South Florida price increases over the past few years have moved many homeowners from negative to positive equity. We would encourage the remaining distressed homeowners to ask for a Broker Price Opinion (BPO) regarding the value of their property – many may be surprised at their improving value,” says Mike Pappas, CEO and president of Keyes Company in South Florida.

National numbers

Nationwide, 13.3 percent of all properties with a mortgage were seriously underwater in Q2, an increase from 13.2 percent of all homes in the first quarter. However, they dropped from 17.2 percent year-to-year. At the peak of the foreclosure crisis in 2012, the percentage was 28.6 percent.

“Slowing home price appreciation in 2015 has resulted in the share of seriously underwater properties plateauing at about 13 percent of all properties with a mortgage,” says Daren Blomquist, vice president at RealtyTrac.

“However, the share of homeowners with the double-whammy of seriously underwater properties also in foreclosure is continuing to decrease and is now at the lowest level we’ve seen since we began tracking that metric in the first quarter of 2012,” he adds.

© 2015 Florida Realtors®

Flagler Village – Related Group sells downtown Fort Lauderdale apartment complex for $149MJul 16, 2015, 1:24pm EDT

The Related Group’s expansion into the luxury apartment market paid off big as it sold the Manor at Flagler Village in Fort Lauderdale for $148.89 million.RD Flagler Village, an affiliate of the Miami-based developer best known for its condo projects, sold the 382-unit complex at 501 N. Federal Highway to T-C The Manor at Flagler Village, an affiliate of TIAA-CREF. That equates to $389,764 a unit for the property, built in 2014.

With units ranging from one to three bedrooms, the Manor at Flagler Village totals 734,444 square feet on 5.3 acres. Amenities include a pool, summer kitchen, club room, fitness center and private dog park.

It’s part of the recent apartment boom in downtown Fort Lauderdale. Related Group also built New River Yacht Club, and will build a second phase of that project. Icon Las Olas is currently under construction.

TIAA-CREF is big on Broward rentals, as it paid $52.1 million in October for the Veranda Apartments in Plantation.

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Are bidding wars here to stay?

WASHINGTON – March 12, 2015 – The housing bubble was known for bidding wars as buyers with a limited number of for-sale homes sent prices soaring over list prices.

Even though the housing meltdown is in the rearview mirror, however, bidding wars have not returned to pre-recession levels. They haven’t disappeared in some markets – and they aren’t likely to go away anytime soon, new research suggests.

Before the housing bubble, about 3 to 4 percent of U.S. homes sold through a bidding war, according to new research published in the journal Real Estate Economics. In the study, researchers evaluated National Association of Realtors® data dating back to the 1980s.

During the peak of the housing bubble, they found, nearly 30 percent of homes in metro Washington, D.C. sold via bidding wars – the highest share of any other metro analyzed. In Los Angeles, 26 percent of homes sold via bidding wars during this time; 23 percent in Las Vegas; and 22 percent in Baltimore and Norfolk, according to the study.

Since the housing crisis, the percentages have dropped considerably, but they remain elevated, according to the analysis.

“The persistence of this suggests that people have decided that this is a good way to think about selling these kinds of goods, selling houses in a more auction-like way,” says William Strange, an economist at the University of Toronto’s Rotman School of Management, and a co-author of the study.

Today’s bidding wars don’t take place in only areas with limited inventories of for-sale homes, researchers note. They suggest that real estate professionals may be strategically listing homes below their value to spur bidding wars.

“With the rise of bidding wars, we shouldn’t think that the housing market – like other markets – is just going to keep doing things in the old traditional ways forever and ever,” Strange told The Washington Post. “There are going to be changes.”

Source: “A Legacy of the Housing Bubble That Won’t Go Away: Bidding Wars,” The Washington Post (March 10, 2015)

© Copyright 2015 INFORMATION, INC. Bethesda, MD (301) 215-4688

Consumers say getting a mortgage is easy

McLEAN, Va. – March 12, 2015 – Fifty-four percent of Americans say that they believe getting a mortgage is easy – a record high number for Fannie Mae’s National Housing Survey, which is a monthly poll of about 1,000 Americans’ attitudes toward the housing market.

The February 2015 survey cites a strengthening employment sector and consumers’ growing economic confidence as key to their improved attitudes about the housing market.

“Continuing improvements in consumer attitudes in this month’s National Housing Survey lend support to our expectation that 2015 will be a year of the economy dragging housing upward,” says Doug Duncan, chief economist at Fannie Mae. “The share of consumers who think the economy is on the right track rose to a record high since the inception of the survey nearly five years ago, and for the first time exceeded the share who believe it’s on the wrong track.”

Duncan says consumer confidence is getting a big boost from employment growth, which also leads to increasing optimism over the ease of getting a mortgage.

“We continue to see strength in attitudes about the current home buying and selling environment and consistently high shares of consumers saying they expect to buy a home on their next move,” Duncan notes. “At the same time, we still need to see further growth in consumer optimism toward personal finances and income for more robust improvement in housing market attitudes.”

Additional findings from February’s survey

The average 12-month home price change expectation remained at 2.5 percent.
The share of respondents that says home prices will go up in the next 12 months declined to 46 percent, while the share that says home prices will go down dropped to 6 percent.
The share of respondents surveyed that say mortgage rates will rise in the next 12 months returned to 48 percent.
The number of those surveyed that say it’s a good time to buy a home remained at 67 percent in February; the number that say it’s a good time to sell fell by 4 percentage points to 40 percent.
The percentage of respondents that expect their personal financial situation to improve over the next 12 months dropped to 46 percent.
The percentage that says their household income is significantly higher than it was 12 months ago dropped 5 percentage points to 24 percent.
Source: “Consumer Optimism Toward the Economy Reaches New All-Time Survey High,” Fannie Mae (March 9, 2015)

© Copyright 2015 INFORMATION, INC. Bethesda, MD (301) 215-4688