Studies Suggest Buyers Prepared to Hit the Ground Running

May 22, 2020
Google and realtor.com report a big uptick in buyer activity – time spent searching for homes, viewing specific listings and sharing homes with friends – and two Fla. cities rank near the top for increased buyer interest: No. 3 Jacksonville (up 96.08%) and No. 4 Miami (up 81.82%).

ORLANDO, Fla. – While listing inventory remains a wild card, realtor.com and Google Searches released data that suggests a lot of buyers see the pandemic as a pitstop on the way to homeownership rather than an end-point.

According to realtor.com, “listing visits, saves and shares are all up significantly since the first wave of shelter-in-place orders took effect on March 16 – especially for those listings with virtual tours.”

Google Searches compared a metro area’s lowest day of home searches during 2020 to home searches at the end of April to measure improvement. Out of 50 cities listed, two Florida cities ranked in the top 10. At No. 3, the Jacksonville metro area had 96.08% more home searches at the end of April than it had on its slowest day of 2020 so far. And at No. 4, Miami had 81.82% more searches at the end of last month.

Tampa ranked as No. 35 with a 44.26% increase in buyer interest, and Orlando ranked No. 39 with a 34.92% increase. Tucson, Arizona was number one for home search increases with 164.71%; Indianapolis bottomed out at No. 50 on Google’s list, but home search activity still was up 8.62%.

Realtor.com listed the increased use by home-search function on its website:

  • Up 30%: Listing views for single family homes and condos
  • Up 76%: Saved homes
  • Up 95%: Sharing home listings with other users
  • Up 14%: Time spent per unique user

“Data suggests that home shoppers who had paused their search are now picking it back up, and the spring homebuying season won’t be lost, but merely pushed into the summer months,” says Danielle Hale, chief economist at realtor.com. “Tools such as virtual tours and Livestream Open Houses are enabling consumers to safely continue their home search while maintaining social distancing guidelines.”

“There are probably people who think there are going to be bargains in the marketplace,” says Tendayi Kapfidze, LendingTree’s chief economist. “They might be anticipating … fewer buyers competing because many people have had a disruption to their incomes or are uncertain about the outlook for their jobs. The low interest rates also make it an attractive time.”

Since shelter-in-place orders began, the growth rate for listing visits to homes that offer virtual tours has been twice as high as those without virtual tours. User visits were also 29% higher for listings featuring virtual tours, with increased engagement and a greater likelihood of a consumer connecting with an agent. According to realtor.com:

  • Two thirds (64%) of its users took a virtual tour, and of those, 45% prefer listings that offer virtual tours
  • 65% of home buyers believe virtual tours will continue to be a great resource in their home shopping process even after the pandemic
  • An additional 8% think virtual tours can be a replacement for in-person tours
  • When asked what they like about virtual tours, top responses include: They help me eliminate homes that aren’t for me (52%); they help me see the details of a home without having to step inside (43%); they help me create a shortlist of homes I want to see in person (38%); and they allow me to see more homes quickly without having to drive around to open houses (30%)

By Kerry Smith

© 2020 Florida Realtors®


Thinking of Moving Up or Listing Your Home?

March 10, 2017

NEW YORK – March 9, 2017 – Borrowers are getting spooked by rising mortgage rates and, as a result, rushing to lock in rates before any further increases. That, in turn, is pushing mortgage application volume higher – increasing a seasonally adjusted 3.3 percent week over week, the Mortgage Bankers Association reported Wednesday.

More buyers are also turning to adjustable-rate mortgages (ARMs) to try to get more savings in their monthly payments too.

“Mortgage rates increased last week as remarks by several key Federal Reserve officials strongly signaled a March rate increase,” says Joel Kan, an MBA economist. “This was further supported by a few solid economic data releases, including GDP, inflation and manufacturing gauges.”

The 30-year fixed-rate mortgage increased to 4.36 percent from 4.30 percent the previous week, the MBA reports; and the share of ARMs reached its highest level of mortgage applications since 2014. The average loan size for purchase applications also reached a survey high of $313,000.

Refinance volume was up 5 percent last week. Applications for home purchases rose 2 percent higher for the week and, and they’re about 4 percent higher than a year ago.

The MBA says mortgage volume remains 18 percent lower compared to the same week a year ago. Volume is mostly lower from a year ago due to a significant decrease in refinance applications from a year ago when interest rates were lower. Refinance volume is down 34 percent annually.

Source: “Borrowers Rush to Beat Rising Rates, Pushing Mortgage Volume 3.3% Higher,” CNBC (March 8, 2017)

© Copyright 2017 INFORMATION, INC. Bethesda, MD


Five fixes that can raise a home’s value

September 9, 2016

STAMFORD, Conn. – Sept. 8, 2016 – For homeowners looking to spruce up their home before listing it, there’s plenty they can do to attract more buyers and potentially boost the value of their home too.

Veteran real estate professionals recently weighed in at This Old House on some of the best home improvement projects they believe can help a home show better. Here are a few of their ideas:

1. Open up the space.

Create more space, whether that’s even removing a kitchen island or knocking out a non-structural wall. “Right now buyers want a wide open floor plan, the living room right off the kitchen.

2. Light it up.

Keep the home bright: Have windows open to let the natural light flow in, consider lights that use motion detectors to turn themselves off, or install sun tubes, a reflective material that funnels natural light from a hole cut in a rooftop down through a ceiling fixture in a room.

3. Enhance the front door.

“Don’t underestimate the power of a front door,” Willens says. “People make up their minds in the first seven seconds of entering a house.”

Remember to follow the guidelines of your HOA!

4. Pay attention to the floors.

Spend some money on the floors, suggests the real estate professionals surveyed by This Old House. Get a carpenter or handyman to eliminate distracting squeaks from floors, repair any broken tiles, patch damaged floorboards, and remove wall-to-wall carpeting, they suggest.

5. Tackle easy bathroom upgrades.

Bathroom upgrades can quickly get pricey but a few upgrades can still make a big difference. For example, swap frosted glass for clear glass, remove any rust stains, apply fresh caulk, update doorknobs and cabinet pulls, replace faucets, buy a new toilet seat, or install a low-flush toilet.

Source: “Brokers Tell All: 10 Ways to Boost Home Value,” This Old House (September 2016)

© Copyright 2016 INFORMATION, INC. Bethesda, MD


Real Estate better than stocks

September 7, 2016

NORWALK, Conn. – Sept. 6, 2016 – Despite recent gains in the stock market, Americans have more confidence investing in real estate. About a quarter of Americans surveyed said real estate was their top choice for long-term investing, according to a new national survey released by Bankrate.

Consumers selected real estate as the top pick to invest money they wouldn’t need for more than 10 years, followed by cash investments (e.g. certificates of deposit and savings accounts). Then, coming in a distant third was the stock market.

 

Americans are feeling more bullish about their sense of financial well-being, according to the Bankrate Financial Security Index, which is based on survey questions of how consumers feel about their debt, savings, net worth and job security.

Source: “Real Estate Top Investing Choice, Survey Finds,” RISMedia (July 24, 2016)

© Copyright 2016 INFORMATION, INC. Bethesda, MD


Existing-Home Sales Stumble in July

August 25, 2016
Call today to get more information on the market in Celebration. 321-939-1300. Kathy can do a free market analysis of your home if you are thinking of selling.
Slowed by frustratingly low inventory levels in many parts of the country, existing-home sales lost momentum in July and decreased year-over-year for the first time since November 2015, according to the National Association of REALTORS®. Only the West region saw a monthly increase in closings in July.
Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, fell 3.2 percent to a seasonally adjusted annual rate of 5.39 million in July from 5.57 million in June. For only the second time in the last 21 months, sales are now below (1.6 percent) a year ago (5.48 million).
Lawrence Yun, NAR chief economist, says existing sales fell off track in July after steadily climbing the last four months. “Severely restrained inventory and the tightening grip it’s putting on affordability is the primary culprit for the considerable sales slump throughout much of the country last month,” he says. “Realtors® are reporting diminished buyer traffic because of the scarce number of affordable homes on the market, and the lack of supply is stifling the efforts of many prospective buyers attempting to purchase while mortgage rates hover at historical lows.”
 
Home sales are still expected to finish the year at their strongest pace since the downturn, thanks to a very strong spring,
 
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage dropped from 3.57 percent in June to 3.44 percent in July. Mortgage rates have now fallen five straight months and in July were the lowest since January 2013 (3.41 percent). The average commitment rate for all of 2015 was 3.85 percent.

Baby boomers chart new direction in housing

August 23, 2016

NEW YORK – Aug. 22, 2016 – Economists are having a tough time figuring out what housing market moves baby boomers will make next. Americans over the age of 55 are veering from previous generations, opting not to retire but instead launching second or even third careers. They are shunning the traditional patterns of retirement, and that could have a big impact on their housing choices, according to a Freddie Mac Insight report.

Baby boomers are a critical piece to the housing market puzzle. Americans over the age of 55 make up a quarter of the population and control about two-thirds of the single-family home equity in the nation. Sixty-five-year olds who, on average purchased a home 35 years ago now tend to have a home value that is likely 3.7 times the purchase price.

Nearly a quarter of baby boomers recently surveyed by Freddie Mac say they need major renovations in their current home in order to stay there as they age – and many say they face financial constraints to take on those remodels. And some of the baby boomers may be underestimating the financial costs of outfitting their home with age-in-place features, says Sean Becketti, Freddie Mac’s chief economist.

As a result, about 18 million homeowners over the age of 55 may be shopping for another house in the next few years, according to the Insights Report.

Unlike earlier generations, however, baby boomers’ main reasons to move aren’t due to downsizing. Instead, the survey showed the key influences making these generations move are: Affordability of the community, the need for retirement amenities and a home with less maintenance.

Bottom line, the authors note: The 55-plus population is likely to be an active part of the housing economy for years to come still.

Source: “Boomers Ignoring Conventional Housing Wisdom,” Mortgage News Daily (July 19, 2016)

© Copyright 2016 INFORMATION, INC. Bethesda, MD


2016 International Profile

August 23, 2016

International Homebuyers


Most in U.S. say it’s a good time to buy

July 14, 2016

WASHINGTON – July 13, 2016 – Despite lackluster economic growth and stark home-price appreciation in several parts of the country in recent months, roughly three-quarters of surveyed households still believe it’s a good time to buy a home – but there’s a considerable morale gap between homeowners and renters, according to the latest installment of the National Association of Realtors® (NAR) Housing Opportunities and Market Experience (HOME) survey.

The survey also found that roughly half of young adults with student debt are uncomfortable about taking on a mortgage.

In NAR’s second quarter HOME consumer survey, respondents were asked about their confidence in the U.S. economy and various questions about their housing expectations, including whether student debt is tempering their ability and appetite to take on mortgage debt.

NAR’s survey found that the share of homeowners and renters who believe it’s a good time to buy a home has held steady so far this year, with 80 percent of homeowners (82 percent in March) and 62 percent of renters (unchanged from last quarter) saying it’s a good time to buy. However, the share of renters who think so is down from 68 percent in December 2015, and those under 35 were the least confident.

Lawrence Yun, NAR chief economist, says the survey brings to focus the ongoing disparity in buyer confidence between current homeowners and renters.

“Existing-home prices surpassed their all-time peak this spring and have climbed on average over 5 percent nationally through the first five months of the year, and even faster in areas with severe supply shortages,” he says. “Most homeowners appear to realize that if they’re ready to sell, they’ll likely find a buyer rather quickly and be able to use the sizeable equity they’ve accumulated in recent years towards their next home purchase. Meanwhile, renters interested in buying continue to face minimal choices, strong competition and home prices growing faster than their incomes.

This HOME survey also found that student debt is causing many potential homebuyers to be uneasy about taking on additional debt: Roughly two-thirds of non-homeowners and half of respondents under 35 with student debt said they aren’t comfortable also having a mortgage. Furthermore, of those with student debt, non-homeowners and younger adults were less likely to believe they’d be able to qualify for a mortgage if they applied.

“It’s becoming very evident from this survey and our research released last month that the financial and emotional impact of repaying student debt is contributing to a delay in purchasing a home for many would-be buyers,” adds Yun. “At a time of quickly rising rents, mortgage rates at all-time lows and increasing housing wealth, a lot of young adults in their prime buying years are struggling to enter the market and are ultimately missing out on the stability and wealth accumulation that owning a home can provide.”

Attitudes about U.S. economy, personal finances outlook mostly unchanged

About half of all households surveyed believe the economy is improving (49 percent), which is mostly unchanged since the inaugural HOME survey in December 2015. Renters, respondents living in urban areas, and those in the West were the most optimistic.

When asked if they thought their personal financial situation would be better in six months, the latest survey reflected a little less optimism. The survey’s monthly Personal Financial Outlook Index of all households decreased slightly (to 57.7 in June) month-to-month (58.1 in March), but it’s unchanged from June 2015.On the other hand, nearly two-thirds of those living in rural areas don’t believe the economy is improving.

More believe it’s a good time to sell

With strong price growth prevalent in most of the country and homes selling at a quickened pace, more current homeowners (61 percent) believe it’s a good time to sell compared to the first quarter of this year (56 percent). Respondents in the West were again the most likely to think now is a good time to sell, but they’re also least likely to think it’s a good time to buy.

“More homeowners acknowledging this pent-up demand may perhaps mean we begin to see more supply come online in the near future,” adds Yun.

When asked about their outlook for home prices in their community in the next six months, almost all believe that prices will stay the same or rise (93 percent), which is consistent with last quarter (91 percent). Respondents from the West, those living in urban areas and renters are most likely to believe prices will go up in their communities.

© 2016 Florida Realtors®


Brexit spurs international interest in U.S. Commercial Real Estate

July 13, 2016

NEW YORK – July 12, 2016 – As the fallout from Brexit continues to stir market volatility, many international investors seek the security and economic stability of the U.S. commercial real estate market. Coupled with low interest rates for loans, brokers who belong to the CCIM (Certified Commercial Investment Member) Institute are seeing an increase in global activity in commercial real estate investments from primary gateway cities to tertiary markets.

The CCIM Institute is one of the largest international networks of commercial real estate professionals.

“The trend of Foreign Direct Investment (FDI) net inflows of capital toward the U.S. commercial real estate market will remain strong and the Brexit initial ripple effect for demand in the U.S. will initially increase as investors seek security,” says Kamil Homsi, CCIM, president of Global Realty Capital LLC in New York City. “Additionally, I see the demand increasing constantly to acquire senior and student housing, self-storage portfolios, and medical facilities across all regions.”

Interest rates in the U.S. are likely to remain low, and U.S. benchmark yields hit record lows last week. According to the U.S. Department of the Treasury, the 30-year Treasury yield plunged to a record low of 2.098 percent before recovering to 2.12 percent. And the 10-year Treasury closed below 1.4 percent for the first time, falling to 1.367 percent.

The continuing European market uncertainty, declining British pound and strengthening of U.S. dollar make it less likely that the Federal Reserve will move rates up or take other tightening measures this year. That has far reaching implications for U.S. commercial real estate markets.

“Commercial office space is often the preferred investment for overseas investors,” says Ernest Brown IV, CCIM, broker at Rohde Ottmers Siegel Realty in San Antonio, Texas. “But we also are seeing an increase in demand for well-located newer industrial assets for warehousing, distribution and service.”

The historic stability and low volatility, even within the presence of low cap rate markets, will continue to drive foreign investment into the U.S. commercial real estate market. This will drive up prices and lower cap rates for commercial buildings in several cities according to Reis Analytics. Primary gateway cities including New York City, Los Angeles, San Francisco and Boston will see the most impact, but secondary and tertiary markets also stand to see increased activity because investors have yet to drive up prices.

“Shortly after Brexit, I received several calls from international investors seeking more information about Texas commercial real estate,” says Jim Young, CCIM, broker at Longbow Real Estate Group in Austin, Texas. “In addition, several U.K. investors tell me that they see U.S. commercial real estate as a safe haven. Given low interest rates on commercial real estate loans and commercial rental rates in Central Texas that continue to rise, there will be even more of an uptick in European and global investor activity.”

While some U.S. assets may be sold to shore up assets held in Great Britain and elsewhere by foreign investors, the long-term goal is the safety of the investment. Historically, foreign investors rarely take their capital out of the U.S. commercial real estate market unless there is a major drop in valuation within European gateway cities. This is unlikely due to limited available inventory, time needed and European Union exit tax complexities.

Brexit further complicates the matter with increased uncertainty.

“Investments in the U.S. will only get stronger as a result of these factors,” says Eric Rutherford, CCIM, broker at Wright Kingdom in Boulder, Colo. “Individuals in the European market may take a risk and reinvest, but I just received word from a group of investors pouring $10 million into the U.S.”

The U.S. has always been a safe haven for global investors. With the continued repercussions of Brexit yet to be fully realized, many foreign investors actively seek to reposition their assets to a stable economy. The increased activity in U.S. commercial real estate properties by global investors looks to continue.

© 2016 Florida Realtors®

 


Home sales and taxes: How much will you owe?

June 22, 2016

NEW YORK – June 21, 2016 – One of the questions readers ask most often is how much of their gain will go to Uncle Sam if they sell their home. Tax rules are highly favorable for homeowners. Most sellers wind up owing no capital-gains tax on their profits, according to a spokesman for the National Association of Realtors.

However, there are important exceptions, such as for those with exceptionally large gains who live in high-tax areas.

Married couples filing jointly typically can exclude as much as $500,000 of the gain on the sale of their primary residence. Singles can exclude up to $250,000. In most cases, they can qualify for the maximum exclusion amount if they have owned their home – and used it as their main home – for at least two of the five years before the sale date.

Sellers who do not qualify for the maximum exclusion still may be eligible for major relief depending on several factors, such as why they sold – like a work-related move, health reason or unforeseeable events.

Source: Wall Street Journal (06/12/16) Herman, Tom

© Copyright 2016 INFORMATION, INC. Bethesda, MD