Solo Home Buyers Re-emerge.

Solo Home Buyers Re-emerge. Image courtesy of phanlop88 / FreeDigitalPhotos.net

Individual home buyers comprised a quarter of all house purchases last year, according to National Association of REALTORS® data. Single women purchase homes at double the rate of single men, according to the data.

However, solo buyers can face particular challenges in qualifying for a mortgage. During and following the recession, banks tightened their underwriting standards, which also made it more difficult for single home buyers without dual incomes to qualify for a loan.

Between 2010 and 2012, home purchases made by singles dropped 7 percent — unprecedented, according to NAR. Low mortgage rates and high home affordability have drawn more singles back to home buying.

Home purchases are often a means of self-expression for singles, Jennifer De Vivo, a real estate professional in Orlando, Fla., told MSN Real Estate. “It’s a way for singles to express their lifestyles and values,” De Vivo says. “They are able to focus on the exact communities, home styles, and features that cater to their individuality with much less compromise.”

For single buyers who outgrow their first homes, some experts encourage them to keep the properties as investments.

“I always counsel them to try to keep their current home as an investment property and rent it out. It’s a big step toward helping them create long-term financial security,” De Vivo says.

Source: “Solo Homebuyer? You’re not Alone,” MSN Real Estate (May 2013)

10 Cities With the Worst Traffic Congestion

10 Cities With the Worst Traffic Congestion. Image courtesy of Salvatore Vuono / FreeDigitalPhotos.net

The average American spent a total of 28 hours sitting in traffic last year, according to INRIX, a traffic information group. But residents in some of the nation’s most congested cities spent nearly double that—an average of 42 hours a year—sitting in traffic.

In its 2012 Traffic Scorecard, INRIX compared the average of the drivers’ actual speed on the road during peak hours with the average speed of drivers when there was no congestion.

Here are the 10 cities with the worst traffic, according to the study:

1. Los Angeles

Congestion score: 28.8

Average commute time: 28.6 minutes (15th highest)

2. Honolulu

Congestion score: 26

Average commute time: 27 minutes (the 27th highest)

3. San Francisco

Congestion score: 23.5

Average commute time: 29.2 minutes (tied for 10th highest)

4. Austin

Congestion score: 20.7

Average commute time: 25.8 minutes (45th highest)

5. New York

Congestion score: 19.9

Average commute time: 34.9 minutes (the highest)

6. Bridgeport, Conn.

Congestion score: 19.1

Average commute time: 28.3 minutes (18th highest)

7. San Jose, Calif.

Congestion score: 17.6

Average commute time: 24.8 minutes (65th highest)

8. Seattle

Congestion score: 17.6

Average commute time: 27.6 minutes (22nd highest)

9. Washington, D.C.

Congestion score: 16.4

Average commute time: 34.5 minutes (2nd highest)

10. Boston

Congestion score: 14.7

Average commute time: 29.2 minutes (tied for 10th highest)

Source: “10 Cities With the Worst Traffic,” USA Today (May 4, 2013)

Are Underpriced Homes Fueling Bidding Wars?

Are Underpriced Homes Fueling Bidding Wars? Image courtesy of satit_srihin / FreeDigitalPhotos.net

The number of homes for sale is at the lowest point in more than 10 years, but with buyer demand still high, many markets are seeing bidding wars. A TIME magazine article recently asked: “Are buyers being manipulated into overbidding for the relatively few attractive homes on the market?”

Some real estate professionals say that homes are being underpriced in order to ignite a bidding war.

“Most people are not pricing at market value,” a real estate professional told the San Francisco Chronicle. “Even in this market, you don’t want to overprice.”

For example, the San Francisco-based agent said a two-bedroom townhouse in the area was priced at $659,000  recently, even after a similar townhome had sold a year ago for $675,000.

“We priced it intentionally to get multiple offers and sell quickly,” the agent says. The townhouse attracted nine offers and sold for 15 percent above the asking price — $755,000.

Bidding wars have become commonplace in markets like Denver, where half of the new homes on the market are selling in less than 30 days. In Northern and Southern California nine in 10 homes are attracting bidding wars, as well as two-thirds of the homes for sale in Boston, New York City, Seattle, and Washington, D.C., the TIME magazine article notes.

“The only question is not whether a new listing will get multiple bids but how many it will get,” says a Sacramento, Calif.-based real estate professional.

Source: “Forget Lowballing: Bidding Wars Return in Hot Housing Markets,” TIME (April 30, 2013)

More Americans Optimistic About Housing Recovery.

More Americans Optimistic About Housing Recovery. Image courtesy of imagerymajestic / FreeDigitalPhotos.net

More than half of Americans — 51 percent — now say they expect home prices to increase within the next year, according to a survey by mortgage giant Fannie Mae of about 1,000 Americans’ attitudes toward housing.

“For the first time in the survey’s three-year history, the majority of Americans surveyed now expect home prices to increase,” says Doug Duncan, senior vice president and chief economist at Fannie Mae. “Crossing the 50 percent threshold marks a significant milestone as most Americans believe a housing recovery is truly occurring throughout the country.”

Last year at this time, only 32 percent said they expected home prices to increase.

More Americans in April also said now is a good time to sell, climbing four percentage points to 30 percent last month compared to 15 percent one year ago.

The number of respondents who expect mortgage rates to rise dropped 3 percentage points to 43 percent in April, while 7 percent said they expect rates to drop fell slightly to 7 percent, according to the survey.

Source: “Survey: Over 50% of Americans Expect Home Prices to Rise,” The Wall Street Journal (May 7, 2013)

Improving Market List Drops Slightly in May.

Improving Market List Drops Slightly in May. Image courtesy of Zuzzuillo / FreeDigitalPhotos.net

The Improving Markets Index fell to 258 metros in May from 273 in April, but continues to reflect metros from every state as well as the District of Columbia, according to the National Association of Home Builders and First American.

The Improving Markets Index identifies the metro areas that have shown improvement in housing permits, employment, and housing prices for at least six consecutive months.

Nineteen metros dropped from May’s index, but NAHB Chief Economist David Crowe says that this is similar to what happened with the index last year, as softer prices are usually seen in the winter months.

Meanwhile, four new markets were added to this month’s index: Dothan, Ala.; Elizabethtown, Ky.; Salisbury, Md.; and Salem, Ore.

“The fact that over 70 percent of all U.S. metros are holding onto their spots on the improving list is definitely good news, and representative of the generally brightening outlook for housing markets nationwide,” says NAHB Chairman Rick Judson. “That said, our industry’s progress on the road to recovery is being slowed by rising challenges related to the availability of credit, building materials, labor, and lots for development.”

To view a complete list of the 258 metros on the index, visit www.nahb.org/imi.

Source: National Association of Home Builders

Big Job Boom Expected in Homebuilding.

Big Job Boom Expected in Homebuilding. Image courtesy of healingdream / FreeDigitalPhotos.net

Between 2006 and 2011, residential construction jobs saw a 41 percent drop, as the new-home market faced steep losses.

However, a big rebound is expected to be on the horizon in homebuilding. Housing starts are expected to return to normal levels by 2016, and with that prediction residential construction employment will likely rise to nearly 2.5 million jobs, according to Fannie Mae’s Housing Insights report, which looks at the historical relationship between housing starts and construction jobs.

According to Fannie’s forecast, residential construction employment will surge by 412,000 jobs between 2012 and 2016.

“This 20 percent rise in homebuilding employment will nearly triple the forecasted pace of total job growth during this time period,” HousingWire reports.

Despite the expected surge in homebuilding jobs, Fannie says that the increase still will not reflect all the homebuilding jobs that had been lost during the housing crisis. By 2016, the number of residential construction jobs is forecasted to be nearly 1 million below the peaks reached during the housing boom.

Source: “Fannie Mae: Homebuilding jobs far from normal,” HousingWire (May 6, 2013)

4 Threats That Remain in Housing Recovery.

4 Threats That Remain in Housing Recovery. Image courtesy of Simon Howden / FreeDigitalPhotos.net

The housing recovery appears to be on track and growing stronger. Home sales and prices are up after reaching bottom in 2010, foreclosures and mortgage delinquencies are dropping, yet housing affordability still remains high.

So why are some analysts and economists concerned?

At a recent Milken Institute Global Conference in Beverly Hills, Calif., panelists said that threats to the housing recovery still remain. The biggest threats they pointed to included:

1. Land scarcity: Real estate developers are struggling to find desirable land to start new projects, which is limiting the supply of new homes. A few years ago, banks took ownership of land after developers had foreclosed on some projects. The land is worth less than its original price so banks are reluctant to write off additional losses by selling it too cheaply. Plus, lenders remain cautious about issuing loans for new land purchases.
2. House flippers should be cautious: Housing affordability is high mostly due to super low mortgage rates, and investors are taking advantage with intentions of flipping homes for profit. “No doubt you can buy a house today and get a really good price and a low-interest loan,” says Jeff Greene, president of Florida Sunshine Investments. “But if you want to sell that house to somebody two or three years later and rates go up to 5 or 6 percent, how much is he going to pay for that house?”
3. Foreign buyers potentially inflating prices: In some markets, strong demand by foreign buyers has helped home prices recover, which has made homes more expensive for Americans in some areas. Some analysts fear that it could even lead to another housing bubble if interest rates started rising quickly as well. Markets like Miami, Los Angeles, and New York are seeing strong demand among foreign buyers. Some say this is a good thing, because it reflects a strong faith in the U.S. market.
4. A ‘patchy’ recovery: Some markets are seeing rapid increases with bidding wars, rising prices, and low inventories, while other markets are still at a standstill. For example, Miami’s housing market is “on fire” while 80 miles north in Palm Beach County there’s a “huge glut of housing,” says Greene.

Source: “5 Reasons the Housing Recovery Remains Wobbly,” U.S. News & World Report (May 3, 2013)

Squatters Cite Laws to Stay in Homes for Free.

Squatters Cite Laws to Stay in Homes for Free. Image courtesy of Victor Habbick / FreeDigitalPhotos.net

With the number of vacant homes dwindling, house squatters are getting bolder. They’re moving into homes and staying for free, citing adverse possession law in some states, which allows a person to claim title to an abandoned property after occupying it for a certain amount of time.

The law has become “an excuse for squatting in foreclosed homes,” AOL Real Estate reports. And squatters are moving into homes and citing the law more frequently. For example, in Miami-Dade County in Florida, adverse possession claims are on the rise, increasing from 30 in 2011 to 70 in 2012. In the first three months of 2013, squatters had already filed 52 applications.

But not all squatters are winning rights to these homes.

For example, Cherie Fields, 25, and her husband Owen Fields, 27, moved into a foreclosed home worth $160,000 in Florida, expecting to stay for free. They even changed the home’s locks, turned on the home’s utilities, and moved in their belongings, AOL Real Estate reports.

The couple filed for “adverse possession,” but they weren’t so lucky: A judge ordered them out and charged them with burglary of a residence, grand theft, and scheming to defraud. The couple’s attempt at citing adverse possession failed because they hadn’t occupied the home for the required seven years.

“Entire communities have been taken over by squatters who claim they’re acting under rights of adverse possession,” AOL Real Estate reports. “In Tarrant County, Texas, squatters have been claiming and looting vacant homes in Fort Worth and nearby suburbs—properties with a total value exceeding $8 million. The properties that have been left by owners who recently died, or by owners absent because of job duties or illness, appear to be most at risk of squatters, and some property owners have returned home to find their houses trashed or looted.”

Source: “Squatting in Foreclosed Homes on the Rise?” AOL Real Estate (May 3, 2013)

Latest Real Estate Scam Has Agents on Alert.

Latest Real Estate Scam Has Agents on Alert. Image courtesy of David Castillo Dominici / FreeDigitalPhotos.net

Scammers are scraping rental listings off the Internet and using real estate agents’ identity from the listings to dupe would-be clients.

Practitioners may not even discover it until the clients confront them, demanding keys for a property they believed they rented and had already mailed a deposit check to the individual they believed was the agent.

Scammers are reportedly taking rental listings off Web sites and reposting them at a lower rent than the original listing. The renter than corresponds with the scammer, often through e-mail. Scammers will create e-mail addresses that reflect the listing agent’s name to dupe clients. Scammers will also use a phone number with the agent’s same area code.

The latest scam involved a Pocono Lake, Pa., real estate broker who had a client confront him over a rental listing. The scammer reposted a fraudulent listing of the rental property on the site Zillow, which also feeds it to HotPads.

The chairman of the Pocono Mountains Association of REALTORS®’ MLS, Malcolm Waring, told Inman News that after hearing about the scam, he’s considering even barring Zillow from posting the MLS’ rental listings, fearing that Zillow may be more vulnerable to these types of scams.

Zillow promptly removed the fake listing at Waring’s request so he has decided not to pursue the threat, Inman reports. But he told Inman that if he learns of a similar scam on Zillow or HotPads, he’s prepared to end the listing agreement.

Zillow assured Waring and others that after hearing about the real estate scam they are beefing up their security measures.

“We take these scams very seriously and we’re always analyzing and exploring new ways to stay ahead of this,” Cynthia Nowak, a Zillow spokesperson, told Inman News.

Source: “Sophisticated Zillow Scam Puts NAR and MLS on Alert,” Inman News (May 2, 2013)

8 Best Markets for Flipping Houses.

8 Best Markets for Flipping Houses. Image courtesy of adamr / FreeDigitalPhotos.net

More investors are rehabilitating homes and looking to sell them for profit, a move known as flipping houses.

RealtyTrac recently evaluated more than 600 metro areas to find where flipping single-family homes offers some of the highest returns based on the investor’s gross profit. The top eight metros for house-flipping are:

Orlando

Average purchase price: $103,701

Average flipped price: $168,677

Gross profit percent: 63 percent

Las Vegas

Average purchase price: $133,198

Average flipped price: $203,945

Gross profit percent: 53 percent

Phoenix

Average purchase price: $146,528

Average flipped price: $210,290

Gross profit percent: 44 percent

Tampa, Fla.

Average purchase price: $79,538

Average flipped price: $113,676

Gross profit percent: 43 percent

Memphis, Tenn.

Average purchase price: $68,318

Average flipped price: $96,870

Gross profit percent: 42 percent

Miami 

Average purchase price: $138,064

Average flipped price: $189,291

Gross profit percent: 37 percent

Lakeland, Fla.

Average purchase price: $68,444

Average flipped price: $93,715

Gross profit percent: 37 percent

Nashville, Tenn.

Average purchase price: $108,851

Average flipped price: $146,872

Gross profit percent: 35 percent

Source: “Best Markets for Flipping Homes,” HousingWire (May 2, 2013)

Loan Demand Rises as Rates Fall

Loan Demand Rises as Rates Fall. Image courtesy of Stuart Miles / FreeDigitalPhotos.net

Mortgage applications climbed 2 percent last week as several key interest rates dropped, the Mortgage Bankers Association reports.

Mortgage applications for refinancings, which make up the biggest bulk of MBA’s index, rose 3 percent for the week ending April 26, reaching its highest level since January. Meanwhile, mortgage applications for home purchases fell last week by 1.4 percent compared to a week earlier.

“Low interest rates have attracted new buyers and persuaded many home owners to refinance their mortgages,” Dow Jones reports. “However, tightened credit restrictions still bar many borrowers from filing loan applications.”

The 30-year fixed-rate mortgage averaged 3.6 percent last week, its lowest rate since December, MBA reports.

Source: “U.S. Mortgage Applications Up 2%,” Dow Jones Newswires (May 1, 2013)

Housing Price Surge ‘Simply Supply and Demand’.

Housing Price Surge ‘Simply Supply and Demand’. Strongest Job Markets Have Biggest Home Price Rises. Image courtesy of ddpavumba / FreeDigitalPhotos.net

Home prices are rising at the fastest rate in years, with some areas even seeing double-digit increases.

“Nobody that I’m aware of anticipated the kind of price growth that we’ve had,” says Budge Huskey, chief executive of Coldwell Banker Real Estate LLC. “It’s simple supply and demand.”

“Supplies have dwindled as banks have pushed fewer homes through foreclosure and because many home owners are either unable or unwilling to sell due to a variety of factors related to the housing-crash hangover,” The Wall Street Journal reports. “Meanwhile, demand has picked up as the economy has added jobs, which has boosted household formation. Rising rents and falling mortgage rates have made ownership more attractive.”

Home ownership remains highly affordable, mostly due to ultra low mortgage rates. In fact, if mortgage rates continue to remain near 3.5 percent, home values would need to increase by 32 percent nationwide for housing affordability to return to its long-run average, and by up to 48 percent in markets across the Midwest and north Florida, according to a study by John Burns Real Estate Consulting in Irvine, Calif.

Despite recent home price increases, “in many instances, owning still beats renting,” says Joseph LaVorgna, chief U.S. economist at Deutsche Bank. “I don’t think this is bubble-like at all.”

Source: “Housing Market Accelerates,” The Wall Street Journal (April 30, 2013)