Sluggish Housing Market Blamed for Drop in Title Insurance Volume

Sluggish Housing Market Blamed for Drop in Title Insurance Volume. Image courtesy of Stuart Miles / FreeDigitalPhotos.net

Title insurance premium volume has fallen 16.6 percent during the second quarter of this year compared to last year, according to the American Land Title Association.

“A lackluster spring home buying season that was weaker than anticipated, coupled with a substantial decline in refinance activity, resulted in the drop in title insurance premium volume,” says Michelle Korsmo, ALTA’s CEO. “Despite the lull in the housing market, the title insurance industry remains in a strong financial position posting more than $90 million in net income this quarter. … For more than a century, title insurance companies have protected the interests of home buyers through a process that has given Americans a sense of security in what is almost always their most significant investment – their homes.”

During the second quarter of 2014, the title insurance industry generated $2.7 billion in title insurance premiums, compared with $3.3 billion during the second quarter of 2013, according to ALTA.

The title insurance companies that have the largest market share in the industry are Fidelity Family (34%); First American Family (27%), and Old Republic Family (14%).

Meanwhile, the following states generated the most title insurance premiums in the second quarter of 2014:

• Texas: $430 million, down 1.5% from the second quarter of 2013
• California: $354 million, down 21.5%
• Florida: $264 million, down 10%
• New York: $225 million, down 0.6%
• Illinois: $101 million, up 2.9%

Source: American Land Title Association

Millennials and Boomers Trading Places

Millennials and Boomers Trading Places. Image courtesy of stockimages / FreeDigitalPhotos.net

As the economy improves, Millennials and Baby Boomers are on the move, but they’re heading in opposite directions, according to a new analysis by real estate data firm RealtyTrac.

Each year, 17 million Americans (or about 6 percent of the population) move into a different county, according to Census Bureau data. RealtyTrac’s analysis found Millennials (considered born between 1977 to 1992, in this survey) to be the most mobile generation, moving away from counties with populations of 178,000 or fewer and moving into counties with larger populations (500,000-plus).

“The Millennial generation is generally moving from lower-priced to higher-priced markets for both buying and renting, with the tradeoff being more jobs (lower unemployment) and higher median incomes in the markets they are moving to,” the report revealed.

On the other hand, Baby Boomers (defined as being born between 1945 to 1964) are moving away from higher-priced markets with large populations to lower-priced markets in smaller counties. Baby Boomers are gearing up for retirement and are less concerned about the job market and more concerned with living in an affordable place, the report says.

According to RealtyTrac’s analysis, here’s where Millennials are heading:

1. Fayette, Ga. (Atlanta)
2. Citrus, Fla. (Homosassa Springs)
3. El Dorado, Calif. (Sacramento)
4. Yavapai, Ariz. (Prescott)
5. St. Clair, Mich. (Detroit)
6. Livingston, Mich. (Detroit)
7. DeKalb, Ill. (Chicago)

RealtyTrac’s analysis shows Baby Boomers are moving away from at the fastest rates:

1. Fulton, Ga. (Atlanta)
2. Arlington, Va. (Washington, D.C.)
3. DeKalb, Ga. (Atlanta)
4. Wayne, Mich. (Detroit)
5. Clayton, Ga. (Atlanta)
6. Alexandria, Va. (Washington, D.C.)
7. Milwaukee, Wis. (Milwaukee)

Where are the Boomers heading then? The highest percentage of Baby Boomers are moving to Florida, near Punta Gorda, Orlando, and Cape Coral, according to the report. Also, a high percentage of Boomers are heading to counties near Prescott and Phoenix, Ariz., and Hilton Head, S.C., according to the report.

Source: “10 Places Boomers and Millennials Are Escaping From the Fastest,” The Wall Street Journal (Aug. 17, 2014)

FHFA Seeks to Expand Mortgage Access

FHFA Seeks to Expand Mortgage Access. Image courtesy of Danilo Rizzuti / FreeDigitalPhotos.net

The Federal Housing Finance Agency announced that it wants housing finance giants Fannie Mae and Freddie Mac to provide greater support to low-income mortgage borrowers and refinancers.

FHFA, which is the regulator for Fannie Mae and Freddie Mac, outlined goals for 2015-2017 aimed at advancing that goal. It wants to ensure that low-income families account for 23 percent of the GSE’s purchases of single-family home mortgages. Also, the agency seeks to ensure that the firms raise the share of their purchases that back mortgages in low-income areas with large minority populations. FHFA has charged the firms with raising the share of their mortgage refinance operations that target low-income Americans, Reuters reports.

More specifically, FHFA has charged Freddie Mac with gradually expanding the number of loans it backs for low-income multifamily buildings, such as apartment buildings. It wants Freddie Mac to expand such loans to 230,000 by 2017; currently it’s target for this year is 200,000.

Some lawmakers may view FHFA’s move as controversial, with critics saying that boosting the support of mortgage access for low-income borrowers is what led to the housing bubble that burst in 2006, Reuters reports.

Source: “U.S. Housing Regulator Seeks More Support for Poor Borrowers,” Reuters (Aug. 29, 2014)

Suburbanites Are Happiest Home Owners

Suburbanites Are Happiest Home Owners. Image courtesy of imagerymajestic / FreeDigitalPhotos.net

City centers and down towns may be growing in demand among millennials and retiring baby boomers, but a new poll says residents are still happiest in the suburbs.

Americans who live in suburban areas are the most satisfied with the place they live, according to the Atlantic Media/Siemens State of City Poll. Eighty-four percent of suburbanites rated their community as “excellent” or “good” compared to 75 percent of urban dwellers and 78 percent of rural residents, according to the poll of more than 1,600 U.S. adults.

The survey revealed some racial, economic, and generational differences in community satisfaction. For example, in urban areas, whites were significantly more likely than minorities to say they were happy with their communities as places to live. Also, younger adults in general were less likely to rate their communities as “excellent” or “good” compared to their older counterparts. Older respondents tended to hold more favorable views of the place where they live.

Home ownership also appeared to be a major predictor for how satisfied residents were with their community. In urban areas, 44 percent of home owners rated their community as “excellent” compared to 22 percent of urban renters. Among non-urban home owners, 46 percent rated their community as “excellent” compared to 31 percent of non-urban renters, the poll found.

“These findings are striking to the extent that they appear to reinforce decades-old notions of how American society is organized: an overall preference for the suburbs; a concentration of less educated, less satisfied minorities in urban areas; the classic American dream of home ownership associated so strongly with perceptions of high-quality communities,” reports The Atlantic CityLab about the survey results.

Source: “Overall, Americans in the Suburbs Are Still the Happiest,” The Atlantic CityLab (Aug. 25, 2014)

3 Tricks for Finding the Perfect Asking Price

Tricks for Finding the Perfect Asking Price. Image courtesy of fotographic1980 / FreeDigitalPhotos.net

Determining the perfect asking price involves psychological reasons as much as practical reasons, The Wall Street Journal reports.

“When you set a list price, you’re sending a signal to the market,” says Michael Seiler, professor of real estate and finance at The College of William & Mary in Williamsburg, Va.

But pricing a home can be a “delicate balance,” says Mike McCann, a real estate professional with Berkshire Hathaway HomeServices, Fox & Roach in Philadelphia. You have to balance the comparables with sellers’ unrealistic expectations about what their home is really worth. Sellers often want to price a home higher than what the market can bare. On the other hand, some sellers or agents may be tempted to set the asking price low in the hopes of generating a buyer frenzy and quick sale.

What strategy works? Research offers a few insights into setting the right asking price.

1. Getting too precise means you won’t budge. Pricing research suggests that setting an exact asking price — such as $795,475 — sends the message to buyers that the price is less negotiable than, say, a round number like $800,000. “Those using precise pricing show confidence in the price,” Seiler says.
2. The number nine can be a big influence. Pricing a property at $499,900 rather than $500,000 can subconsciously influence a home buyer. The home “seems way cheaper,” Seiler says. Even if the home winds up selling above the asking price, the buyer will feel like they got a great deal with the initial lower asking price, Seiler says. “The goal is to make it stick in their head that you’re getting a bargain,” Seiler says. “It’s the way our brain looks at numbers.”
3. Going low doesn’t always mean a higher selling price. While setting a lower asking price may generate a frenzy of offers, it won’t necessarily translate into a higher sales price. “It creates a havoc that doesn’t serve anyone well,” Rebecca Walter, a real estate professional with Redfin in Portland, Ore., told The Wall Street Journal. The lower price won’t necessarily increase what a buyer will offer, since some buyers may compete in other ways, like paying in all cash or waiving the inspection to produce a quicker sale, Walter says.

Source: “Strategies for Setting a Price for Your Home,” The Wall Street Journal (Aug. 21, 2014)

Friendly Neighborhoods Reduce Risk of Heart Attack

Friendly Neighborhoods Reduce Risk of Heart Attack. Image courtesy of digitalart / FreeDigitalPhotos.net

Knowing your neighbors may be good for your heart — and not just emotionally — according to a new study by psychologists at the University of Michigan. The more social connections you have in your neighborhood, the less likely you are to die from a heart attack, according to the study, which was published in the Journal of Epidemiology and Community Health.

The study is based on assessments of social connectedness for more than 5,000 adults in urban, suburban, and rural areas over a four-year period. By the end of the four years, 148 of the more than 5,000 adults had heart attacks.

“Each unit of increase in neighborhood social cohesion was associated with a 17 percent reduced risk of heart attacks,” says lead author Eric Kim, a psychologist and doctoral student at University of Michigan. “If you compare the people who had the most versus the least neighborhood social cohesion, they had a 67 percent reduced risk of heart attack.”

The researchers controlled for factors like optimism, age, race, income, marital status, education, mental health, and known risk factors for heart attacks such as diabetes, obesity, and high blood pressure.

Kim says that maintaining friendly neighbor relations could be good for your health because neighbors may be more likely to check in on one another and notice any potential health problems, share any health-related information, lend money, or share resources. “I also really believe in how helpful emotional support can be in buffering against toxic effects of stress,” Kim says.

While Kim’s team focused on the positive elements of a neighborhood that “might perhaps be protective or even enhancing of health,” past studies have mostly focused on how negative factors in a neighborhood — such as density of nearby fast food outlets, violence, noise, and poor air quality — can impact health. For example, a 2003 study in the American Journal of Public Health found that “boarded-up housing” often correlated to higher rates of gonorrhea in a neighborhood and premature death due to cancer or complications of diabetes. A study from University of Pennsylvania researchers found that abandoned buildings in an area could lead to isolation and hamper social relationships and feelings of mutual trust in an area, which also could lead to poor physical health of residents who live nearby.

Source: “Always Talk to Strangers,” The Atlantic (Aug. 19, 2014)