Best Seasons to Sell a Home

Best Seasons to Sell a Home. Image courtesy of panuruangjan / FreeDigitalPhotos.net

Spring is traditionally considered the best season to list a home, but it doesn’t inch out the other seasons by much, according to a new analysis by the real estate brokerage Redfin.

Redfin’s research team analyzed 7 million homes listed from 2010 through 2014 to gauge how important the season is in listing a home. It examined how many of the homes went under contract within 30 days and how often they sold for more than their list price.

Here’s how the seasons stacked up:

• 39% of the homes listed in the spring (between March 21 and June 20) in the past five years went under contract within 30 days, and 15 percent sold for more than the list price.
• 38% of homes listed in the winter (Dec. 21 – March 20) sold within 30 days and 14 percent sold for more than the list price.
• 36% of homes listed in the summer (June 21 – Sept. 20) were under contract within 30 days and 12 percent sold above the list price.
• 34% of homes listed in the fall (Sept. 21 – Dec. 20) went under contract within 30 days and 11 percent sold at a premium.

“Just as buyer demand follows a seasonal pattern, so do home prices,” says Nela Richardson, Redfin’s chief economist. “Over the past five years prices have increased by an average of 3 percent month over month in the spring and ticked down by about 1 percent each month during the fall. To get the best of both worlds, sellers need be informed on both local buyer demand and recent sale prices in their neighborhoods before deciding when to list their homes and for what price.”

Regardless, the report noted that there doesn’t appear to be a huge advantage or disadvantage to listing in any season, since the variance in prices is only by a few percentage points.

Also, the best season to sell can vary greatly by market. For example, in Los Angeles, Orange County, San Diego, and San Francisco, spring and winter were tied for the best home-selling performance. In Sacramento, Calif., winter beat out spring with 10 percent of listings in the winter under contract within 30 days compared to 8 percent in the spring months. On the other hand, in Seattle, 18 percent of the listings were under contract within 30 days in the spring, compared to 16 percent in the winter and 14 percent in the summer and fall months.

Source: “Should I Wait Until Spring to List My Home? Not Necessarily,” Redfin Research Center (Feb. 5, 2015)

Mortgage Rates Fall Again make a splash!

Mortgage Rates Fall Again make a splash! Image courtesy of Idea go / FreeDigitalPhotos.net

Average fixed-rate mortgages once again fell back to near 20-month lows. After rising slightly last week, mortgage rates reversed course this week, sending borrowing costs lower and allowing home buyers and refinancers to lock in rates that haven’t been this low since May 23, 2013, Freddie Mac reports in its weekly mortgage market survey.

Freddie Mac reports the following national averages with mortgage rates for the week ending Feb. 5:

• 30-year fixed-rate mortgages: averaged 3.59 percent, with an average 0.7 point, dropping from last week’s 3.66 percent average. A year ago, 30-year rates averaged 4.32 percent.
• 15-year fixed-rate mortgages: averaged 2.92 percent, with an average 0.6 point, dropping from last week’s 2.98 percent average. Last year at this time, 15-year rates averaged 3.40 percent.
• 5-year hybrid adjustable-rate mortgages: averaged 2.82 percent, with an average 0.4 point, dropping from last week’s 2.86 percent average. A year ago, 5-year ARMs averaged 3.12 percent.
• 1-year ARMs: averaged 2.39 percent, with an average 0.4 point, rising slightly from last week’s 2.38 percent average. Last year at this time, 1-year ARMs averaged 2.55 percent.

Source: Freddie Mac

87% of Homes Qualify for Down Payment Aid

87% of Homes Qualify for Down Payment Aid. Image courtesy of Stuart Miles / FreeDigitalPhotos.net

More prospective home buyers would likely qualify for down payment assistance than they think. Indeed, more than 68 million single-family and condo households – or about 87 percent — would qualify for a down payment program available in the county where they are located, according to a new study by Down Payment Resource and RealtyTrac in an analysis that included a look at nearly 2,300 down payment programs nationwide.

“Many home buyers, especially Millennials, haven’t fully investigated their home financing options because they are pessimistic about qualifying for a mortgage,” says Rob Chrane, president and CEO of Down Payment Resource. “Our Home ownership Program Index highlights the wide range and availability of down payment programs available to today’s home buyers. In fact, 91 percent of the 2,290 programs in our registry have funds available to lend to eligible buyers. Plus, income limits vary depending on the market and programs extend beyond just first-time home buyers. It’s important for buyers to research down payment programs as part of their loan shopping process.”

Here are some findings from the report:

• The average amount of down payment assistance across all counties is $11,565.
• More than half of the available down payment programs are known as Community Seconds, a second mortgage issued by an HFA (or Housing Finance Agencies) or nonprofit organization with a very low or no interest rate. The program could reduce the amount of cash needed to close from $20,000 to $200. Other major down payment programs include first mortgage loans with below-mark interest rates or 100 percent financing or Mortgage Credit Certificates (MCCs), which provide up to $2,000 in annual tax credits for the life of the loan. Neighborhood Stabilization Program loans and grants are also often available that aim to revitalize communities suffering from a large number of foreclosures, high unemployment, or other concerns. Many of these programs can be combined with other programs too, such as VA and FHA home loans.
• The South leads the nation in the total number of available home buyer down payment programs, followed by the West.
• The states with the greatest number of down payment programs are located in California, Florida, Texas, Maryland, New York, Georgia, Pennsylvania, Massachusetts, Illinois, and Colorado.

“Down payment assistance tends to suffer from lack of awareness,” says Mark Hughes, COO at First Team Real Estate in the Southern California market. “Guidelines and specifics tend to change with economic swings. Agents typically don’t keep up with the changing requirements and many buyers that depend on their guidance may be unaware of the opportunities.” At First Team, Hughes says they constantly update lending opportunities and requirements and circulate them weekly to keep their buyers aware of the opportunities available.

Where Down Payment Assistance Can Help the Most

The study showed the following 10 counties have the most homes qualifying for down payment assistance:

1. Wayne County, Mich.: 94.37% or 653,221 homes qualify for down payment assistance there
2. Dallas County, Texas: 92.81% or 533,518 homes
3. Harris County, Texas: 92.67% or 961,957 homes
4. Clark County, Nev.: 92.20% or 558,411 homes
5. San Diego County, Calif.: 86.18% or 618,050 homes
6. Maricopa County, Ariz.: 85.79% or 1,052,746 homes
7. Cook County, Ill.: 84.80% or 1,163,913 homes
8. Broward County, Fla.: 83.89% or 523,178 homes
9. Miami-Dade County, Fla.: 82.25% or 589,683 homes
10. Los Angeles County, Calif.: 78.18% or 1,377,813

For a view of available down payment programs by area, visit downpaymentresource.com.

Source: “87 Percent of U.S. Homes Qualify for Down Payment Help According to RealtyTrac and Down Payment Resource Analysis,” RealtyTrac (Feb. 3, 2015)

Where Investors Are Targeting with Rentals

Where Investors Are Targeting with Rentals. Image courtesy of hyena reality / FreeDigitalPhotos.net

Where are the biggest increases in rental rates likely to occur this year? Georgia, Maryland, Virginia, and Michigan may offer some of the highest returns for investors, according to a new analysis by RealtyTrac, which recently analyzed the markets most likely to offer the best returns in buying residential rental properties in the first quarter of 2015.

“With home ownership rates at their lowest level in 20 years, historically low levels of housing starts and relatively low home prices in many parts of the country, there is still plenty of opportunity in the U.S. housing market for single family rental investors employing a variety of investing strategies,” says Daren Blomquist, vice president at RealtyTrac. “Whether focusing on markets where home ownership-shy Millennials are migrating, markets where recovering Gen X home owners-turned-renters are prevalent, or markets Baby Boomers are testing for retirement, investors can find good options with solid potential rental returns.”

Best Markets for Overall Rental Returns

RealtyTrac analyzed median sales prices for single-family homes and condos and average fair market rents for three-bedroom properties, along with unemployment rates and demographic trends, among 516 U.S. counties. RealtyTrac found the following markets had the highest overall potential rental returns for the first quarter of this year:

1. Clayton County, Ga. (Atlanta metro area)
2. Bibb County, Ga. (Macon, Ga. metro)
3. Baltimore City, Md. (Baltimore-Towson, Md. area)
4. Richmond City, Va.
5. Wayne County, Mich.

Best Markets for Renting to Millennials

RealtyTrac analyzed where the millennial share of the population was above the national average and where potential annual returns on residential properties were 9 percent or higher. It identified the following millennial markets as having the highest annual rental returns:

1. Baltimore City, Md.
2. Richmond City, Va.
3. Philadelphia County, Pa.
4. Wyandotte County, Kan.
5. Richmond County, Ga.

Best Markets for Renting to GenXers

1. Atlanta
2. Chicago
3. Jacksonville, Fla.
4. Little Rock, Ark.
5. Orlando

Best Counties for Renting to Baby Boomers

1. Tampa, Fla.
2. Ocala, Fla.
3. East Stroudsburg, Penn.
4. Homosassa Springs, N.Y.
5. Binghamton, N.Y.

Source: “RealtyTrac Ranks Best U.S. Markets for Buying Residential Rental Properties in First Quarter of 2015,” RealtyTrac (Jan. 29, 2015)

Does Starbucks Brew Higher Home Values?

Does Starbucks Brew Higher Home Values? Image courtesy of marin / FreeDigitalPhotos.net

The arrival of Starbucks’ coffee shops may help indicate where higher home values will soon surface, asserts a new analysis by Quartz, a digital business publication of the Atlantic Media Company. In fact, Quartz claims that “Starbucks equates with venti-sized home-value appreciation. Moreover, Starbucks seems to be fueling – not following these higher home values.”

The company compared a database of Starbucks locations with Zillow housing data, tracking home values within a quarter mile of Starbucks to houses slightly farther away over a five-year period of when a Starbucks location opened.

Homes closest to Starbucks appreciated a little more than 21 percent over five years, while the homes slightly farther away only appreciated just less than 17 percent.

Could it just be a coffeehouse effect? Homes near Dunk Donuts reflect a similar trend, but they don’t tend to appreciate as fast as properties a quarter-mile from a Starbucks, Quartz notes. Between 1997 and 2012, homes located near Starbucks and Dunkin’ Donuts followed similar trends in rising home value appreciation. But during the recent housing recovery, homes near Dunkin’ Donuts have appreciated 80 percent since 1997, whereas homes near Starbucks have appreciated 96 percent, nearly doubling their value.

“Although some may scoff that the predictive value of a given retail chain doesn’t mean much, locations near Starbucks are, indisputably, highly lucrative,” Quartz argues from its analysis. “True, properties near Starbucks locations tend to start out more expensive. … Maybe Starbucks and Dunkin’ Donuts are just waiting for a neighborhood’s property values to heat up before moving in and setting up shop. What’s to say that Starbucks is the cause, rather than a consequence, of higher home values?”

But Quartz maintains from its study’s findings that homes near Starbucks tend to appreciate at a faster rate than U.S. housing on a whole, and are recovering much more quickly from the housing bust.

Arthur Rubinfeld, who oversees Starbucks’ location selection process, says that the company has about 20 analytics experts around the world scouring maps and geographic information systems data to assess an area’s traffic patterns and businesses.

“The beauty of Starbucks is our understanding of real-estate site locationing,” Arthur told Quartz. “It’s an art and a science.”

Source: “Are Starbucks Fueling America’s Increasing Home Prices?” HousingWire (Jan. 30, 2015) and “Confirmed: Starbucks Knows the Next Hot Neighborhood Before Everybody Else Does,” Quartz.com (Jan. 28, 2015)

Cutting-Edge Design Trends for 2015

Cutting-Edge Design Trends for 2015. Image courtesy of renjith krishnan / FreeDigitalPhotos.net

Innovative marketing techniques, an emphasis on renewable features, and using big data to meet clients’ needs are just a few of the architectural trends that are set to influence real estate in 2015, according to a recent blog post from MIPIM, an organization that hosts a conference that attracts upwards of 20,000 international property professionals. Here are the design trends they think you need to keep an eye on in 2015.

3D Printing: In 2014, the construction firm WinSun Decoration Design Engineering created 10 one-room houses in just 24 hours using 3D printing. This year they topped themselves by constructing a five-story apartment building using recycled materials and a 150-meter printer. The low cost of 3D printing and the emphasis on using sustainable resources has makes it an appealing option for creating affordable housing. For example, a company in Italy recently used 3D printing to build low-cost structures made with mud. Construction firm Skanska took it up a notch and collaborated with architectural firm Foster + Partners to create a 3D concreate printing robot.

Sustainable and Efficient Design: This year will bring continued interest in energy-efficient and passive design. The passive design movement sets a high standard for ultra-low energy buildings, with a focus on airtight insulation, solar power, and water-saving techniques.

Glass:  According to MIPIM, “Glass from floor to ceiling on the outside of buildings and in between offices has never been more popular. The material transmits natural light, natural heat, is aesthetically pleasing, and creates comfortable living and working conditions.” A recent design report from Gensler echoes the importance of using solar energy by championing the use of glass on the inside and outside of buildings. According to them, glass brings a feeling of community to the workforce, makes offices feel less stodgy, and is not only cost-efficient but also good for the environment.

Treat Yourself:  In residential design, clients are requesting features that focus on relaxation and stress-free living. Spa-like bathtubs, luxurious bathrooms, outdoor kitchens and patios, hot-tubs, and fire-pits are all in-demand right now.  The rise in “boomerang kids” living at home with their parents post-college and elderly family members moving back in with their kids suggests that residential design in the future will have to be flexible.

Big Data: Big data is impacting just about everything these days, and architectural design is no exception. Data can help architecture firms better understand the needs of their clients and can help them build more efficient properties by treating buildings more like living organisms that can be monitored and changed with the evolution of the needs of the clients.

Sources: “5 Innovative Architectural Trends to Watch for in 2015,” MIPIM Wordblog (Jan. 26, 2015), “China Has Built a Giant Apartment With a 3D Printer,” Curbed (Jan. 29, 2015), “