Housing Crunch to Hold in Most Price Ranges

Posted on February 17, 2017 by Debbie Prosser

Daily Real Estate News | Friday, February 17, 2017

Home buyers at many income levels likely will see an inadequate amount of homes for sale in their price range in the coming months, according to a new housing affordability model created by the National Association of REALTORS® and realtor.com®.

The new Affordability Distribution Curve—which culls data from mortgages, state-level income, and listings on realtor.com®—examines how many listings are affordable to those in a particular income percentile. In January, it was below the equality line, and the gap was generally wider at lower incomes, which indicates tight supply conditions. For example, a household in the 35th percentile could afford 28 percent of all listings, while a household in the 50th percentile could afford 46 percent. A household in the 75th percentile could afford 74 percent of active listings.

“Consistently strong job gains and a growing share of millennials entering their prime buying years is laying the foundation for robust buyer demand in 2017,” says Jonathan Smoke, chief economist at realtor.com®. “However, buyers with a lower maximum affordable price are seeing heavy competition for the fewer listings they can afford. At a time of higher borrowing costs, this situation could affect affordability even more as buyers battle for a smaller pool of homes and bid prices upward.”

NAR and realtor.com®’s Affordability Score also accentuates the disjointed rate of accessible supply on the market across the country. Increasing price growth and higher mortgage rates caused January’s Affordability Score to shrink from a year ago, nationally as well as in many states.

“Home prices have ascended far past wage growth in much of the country in recent years because not enough homeowners are selling, and home builders have not boosted production enough to meet rising demand,” says NAR chief economist Lawrence Yun. “NAR and realtor.com®’s new affordability measure confirms that buyers aren’t exaggerating about the imbalance. Amidst higher home prices and now mortgage rates, households with lower incomes have been able to afford less of all homes on the market last year and so far in 2017.”

The following states last month had the highest Affordability Scores (a metric which ranges from zero to 2): Indiana (1.23), Ohio (1.22), Iowa (1.18), Kansas (1.17), and Michigan and Missouri (both at 1.14). The states with the lowest Affordability Score were Hawaii (0.52), California (0.60), District of Columbia (0.65), and Montana and Oregon (both at 0.67).

“This shortfall of inventory at a time of healthy job gains in most states is one of the biggest reasons for the depressed share of first-time buyers and the inability for the homeownership rate to rise above its near-record low,” says Yun. “The only prescription to reversing this adverse situation is to build more entry-level and mid-market housing that aligns with current household incomes.”

Source: National Association of REALTORS®

“Copyright National Association of REALTORS®. Reprinted with permission.”

 

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The Big Down Payment Myth

Posted on February 15, 2017 by Debbie Prosser

Daily Real Estate News | Wednesday, February 15, 2017

Having the spare capital to put 20 percent down on a home purchase is great, but it’s certainly not the norm. Still, many people think it is and that belief may be holding some would-be home buyers back, particularly young adults.

Indeed, 39 percent of non-owners say they believe they need more than 20 percent for a down payment on a home purchase. Twenty-six percent believe they need to put down 15 to 20 percent, and 22 percent say they need a down payment of 10 percent to 14 percent to buy, according to the National Association of REALTORS®’ 2017 Aspiring Home Buyers Profile report.

But now for the reality: The average down payment on a purchase mortgage was just 11 percent in 2016. And that’s just the average; often times down payments are much lower. For borrowers under the age of 35, the average down payment was just under 8 percent, according to NAR’s survey.

As such, “aspiring first-time buyers think it takes twice as much to buy a home than it really does,” writes Jonathan Smoke, realtor.com®’s chief economist, in his latest column.

How much a person truly needs for a down payment depends on their situation. Their financial circumstances, home location, and the price of the home are important factors.

But there are many mortgage options that offer the opportunity to make low or even no down payments. For example, the Department of Veterans Affairs and the U.S. Department of Agriculture offer no-money down loans to those who are eligible. In 2016, 16 percent of buyers under the age of 35 put no money down on their home purchase.

Further, the largest share of loans for buyers under age 35 last year were for people putting down less than 5 percent on a home purchase (or about $3,500). The 3 percent down payment programs backed by Fannie Mae and Freddie Mac, and the 3.5 percent FHA mortgage that primarily targets first-time buyers, are both helpful programs to consider. These loan programs don’t require unblemished credit either. The average FICO score was 713, but realtor.com® notes borrowers with a 639 were still getting approved.

As such, Smoke says the millennial dreaming about homeownership needs to get this message: They need a FICO score of at least 639 and enough for a 5 percent down payment (that is, if they don’t qualify for the other programs with lower payment options). In that case, they’ll need to save about $3,500 to buy in the typical American town.

Source: “Attention First-Time Buyers: Here’s the Key Stuff You Don’t Know About Mortgages,” realtor.com® (Feb. 9, 2017)

“Copyright National Association of REALTORS®. Reprinted with permission.”

 

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These Doors Can Modernize Your Listing’s Look

Posted on February 13, 2017 by Debbie Prosser

January 2017 | By Melissa Dittmann Tracey

Consider these simple yet elegant options for dividing a space that increase its functionality while scoring design points.

A front door with pizzazz has always had a starring role in a home’s curb appeal. But lately, the doors inside a home are getting a closer look for their ability to add style and address design challenges. Strategically placed doors can offer privacy in open floor plan environments or increase the usability of cramped spaces.

Real estate pros Helene Bonello-Strauss and Malte Strauss with Trust International Real Estate LLC in Orlando, Fla., who also manage the staging blog idesigntosell.com, have used barn doors hung on sliding tracks above door frames and pocket doors, which tuck inside a wall, in several remodel and staging projects. “We use [barn doors] all the time in master bathrooms where there is a vanity area that is separate from the tub [and] commode area,” says Bonello-Strauss, also a home stager. In some older homes, vanities are located in the master bedroom rather than in the bathroom, a style that quickly can date a home. “Now we just close those off with a barn door, and buyers love that solution.”

She also recently used two barn doors hanging from each side of an open door frame to solve an open floor plan’s privacy issue. The homeowners had built an addition off the living area that could be used as a guest bedroom, but they never installed a door to separate the bedroom from the main area. Bonello-Strauss added the double barn doors so the space could be used as a guest bedroom or opened to expand the living area when not in use by a visitor. “It truly makes the room and provides an architectural interest to an otherwise bland wall,” she says.

But don’t be thrown off by the word “barn.” Your listing doesn’t have to be country chic to benefit from this space saver. The concept works in many styles, from walnut barn doors for traditional homes to galvanized metal doors for urban lofts, says Lynn MacMillan, with Gem Home Staging & Designs in St. Catharines, Ontario. Pocket doors vary widely too, from all glass to all wood and from designs that stretch to the ceiling to those that are only waist-high. Sliding doors can attach to a kitchen island and can be used to close off areas to pets or children when needed.

“I prefer using sliding doors in all my projects,” says designer and architect Lilian Weinreich in New York. Sliding glazed doors, she says, help create enlarged, obstruction-free bathrooms and walk-in dressing areas.

Homeowners needn’t break the bank on these door styles. Costs vary, but barn doors start around $400 (with do-it-yourself installation). A pocket door can run about $550 (including installation and labor), according to the site homewyse.com.

But designers also point out the need for caution. “You don’t want overkill with this trend. A barn door is a statement piece. It’s artwork. You wouldn’t use it in every room,” says MacMillan. But in moderation, barn and double-pocket doors “instantly elevate a home’s style in a way that will make others take notice.”

“Copyright National Association of REALTORS®. Reprinted with permission.”

 

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Swift Gains in Fourth Quarter Push Home Prices to Peak Levels in Majority of Metro Areas

Posted on February 9, 2017 by Debbie Prosser

WASHINGTON (February 9, 2017) — The best quarterly sales pace of the year pushed available housing supply to record lows and caused price appreciation to slightly speed up in the final three months of 2016, according to the latest quarterly report by the National Association of Realtors®. The report also revealed that sales prices in over half of measured markets since 2005 are now at or above their previous peak level.

The median existing single-family home price increased in 89 percent of measured markets, with 158 out of 178 metropolitan statistical areas 1 (MSAs) showing sales price gains in the fourth quarter of 2016 compared with the fourth quarter of 2015. Twenty areas (11 percent) recorded lower median prices from a year earlier.

There were more rising markets in the fourth quarter compared to the third quarter of 2016, when price gains were recorded in 87 percent of metro areas. Thirty-one metro areas in the fourth quarter (17 percent) experienced double-digit increases — an increase from 14 percent in the third quarter.

For all of 2016, an average of 87 percent of measured markets saw increasing home prices, up from the averages in 2015 (86 percent) and 2014 (75 percent). Of the 150 markets NAR has tracked since 2005, 78 (52 percent) now have a median sales price at or above their previous all-time high.

Lawrence Yun, NAR chief economist, says home-price gains showed little evidence of letting up through all of 2016. “Buyer interest stayed elevated in most areas thanks to mortgage rates under 4 percent for most of the year and the creation of 1.7 million new jobs edging the job market closer to full employment,” he said. “At the same time, the inability for supply to catch up with this demand drove prices higher and continued to put a tight affordability squeeze on those trying to reach the market.”

Added Yun, “Depressed new and existing inventory conditions led to several of the largest metro areas seeing near or above double-digit appreciation, which has pushed home values to record highs in a slight majority of markets. The exception for the most part is in the Northeast, where price growth is flatter because of healthier supply conditions.”

The national median existing single-family home price in the fourth quarter of 2016 was $235,000, which is up 5.7 percent from the fourth quarter of 2015 ($222,300). The median price during the third quarter of 2016 increased 5.4 percent from the third quarter of 2015.

At the end of the fourth quarter, there were 1.65 million existing homes available for sale 2, which was 6.3 percent below the 1.76 million homes for sale at the end of the fourth quarter in 2015 and the lowest level since NAR began tracking the supply of all housing types in 1999. The average supply during the fourth quarter was 3.9 months — down from 4.6 months a year ago.

NAR President William E. Brown, a Realtor® from Alamo, California, says prospective buyers will likely see competition in their market increase even more this spring. “The prospect of higher mortgage rates and more home shoppers in coming months should be enough of an incentive for those serious about buying to start their search now,” he said. “There are fewer listings on the market, but also a little less competition than what’s expected this spring. Buyers may find just the home they’re looking for at a good price and without the possibility of having to outbid others.”

Total existing-home sales 3, including single family and condos, rose 3.3 percent to a seasonally adjusted annual rate of 5.57 million in the fourth quarter from 5.39 million in the third quarter of 2016, and are 7.1 percent higher than the 5.20 million pace during the fourth quarter of 2015.

Despite a meaningful increase in the national family median income ($70,831) 4, rising prices and the boost in mortgage rates at the end of the year slightly weakened affordability compared to a year ago. To purchase a single-family home at the national median price, a buyer making a 5 percent down payment would need an income of $51,017, a 10 percent down payment would require an income of $48,332, and $42,962 would be needed for a 20 percent down payment.

“Even a pick-up in wage growth may be insufficient to compensate the impact of higher mortgage rates and home prices. Increased homebuilding will be crucial to alleviate supply shortages and stave off the affordability hit,” added Yun.

Metro area condominium and cooperative prices — covering changes in 61 metro areas — showed the national median existing-condo price was $222,000 in the fourth quarter, up 6.1 percent from the fourth quarter of 2015 ($209,300). Nearly all metro areas (93 percent) showed gains in their median condo price from a year ago.

The five most expensive housing markets in the fourth quarter were the San Jose, California, metro area, where the median existing single-family price was $1,005,000; San Francisco, $837,500; Anaheim-Santa Ana, California, $745,200; urban Honolulu, $740,200; and San Diego, $593,000.

The five lowest-cost metro areas in the fourth quarter were Youngstown-Warren-Boardman, Ohio, $87,600; Decatur, Illinois, $92,400; Cumberland, Maryland, $94,000; Rockford, Illinois, $109,500, and Binghamton, New York, $109,700.

Regional Breakdown

Total existing-home sales in the Northeast jumped 10.5 percent in the fourth quarter and are now 6.4 percent above the fourth quarter of 2015. The median existing single-family home price in the Northeast was $254,100 in the fourth quarter, slightly lower (0.2 percent) from a year ago.

In the Midwest, existing-home sales climbed 2.3 percent in the fourth quarter and are 8.8 percent above a year ago. The median existing single-family home price in the Midwest increased 5.7 percent to $181,100 in the fourth quarter from the same quarter a year ago.

Existing-home sales in the South increased 2.6 percent in the fourth quarter and are 5.4 percent higher than the fourth quarter of 2015. The median existing single-family home price in the South was $210,500 in the fourth quarter, 7.9 percent above a year earlier.

In the West, existing-home sales rose 1.6 percent in the fourth quarter and are 9.1 percent above a year ago. The median existing single-family home price in the West increased 7.8 percent to $348,800 in the fourth quarter from the fourth quarter of 2015.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing over 1.1 million members involved in all aspects of the residential and commercial real estate industries.

NOTE:  NAR releases quarterly median single-family price data for approximately 175 Metropolitan Statistical Areas (MSAs). In some cases the MSA prices may not coincide with data released by state and local Realtor® associations. Any discrepancy may be due to differences in geographic coverage, product mix, and timing. In the event of discrepancies, Realtors® are advised that for business purposes, local data from their association may be more relevant.

Data tables for MSA home prices (single family and condo) are posted at https://www.nar.realtor/topics/metropolitan-median-area-prices-and-affordability. If insufficient data is reported for a MSA in particular quarter, it is listed as N/A. For areas not covered in the tables, please contact the local association of Realtors®.

1 Areas are generally metropolitan statistical areas as defined by the U.S. Office of Management and Budget. NAR adheres to the OMB definitions, although in some areas an exact match is not possible from the available data. A list of counties included in MSA definitions is available at:  http://www.census.gov/population/estimates/metro-city/List4.txt (link is external).

Regional median home prices are from a separate sampling that includes rural areas and portions of some smaller metros that are not included in this report; the regional percentage changes do not necessarily parallel changes in the larger metro areas. The only valid comparisons for median prices are with the same period a year earlier due to seasonality in buying patterns. Quarter-to-quarter comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns.

Median price measurement reflects the types of homes that are selling during the quarter and can be skewed at times by changes in the sales mix. For example, changes in the level of distressed sales, which are heavily discounted, can vary notably in given markets and may affect percentage comparisons. Annual price measures generally smooth out any quarterly swings.

NAR began tracking of metropolitan area median single-family home prices in 1979; the metro area condo price series dates back to 1989.

Because there is a concentration of condos in high-cost metro areas, the national median condo price often is higher than the median single-family price. In a given market area, condos typically cost less than single-family homes. As the reporting sample expands in the future, additional areas will be included in the condo price report.

2 Total inventory and month’s supply data are available back through 1999, while single-family inventory and month’s supply are available back to 1982 (prior to 1999, single-family sales accounted for more than 90 percent of transactions and condos were measured only on a quarterly basis).

3 The seasonally adjusted annual rate for a particular quarter represents what the total number of actual sales for a year would be if the relative sales pace for that quarter was maintained for four consecutive quarters. Total home sales include single family, townhomes, condominiums and co-operative housing.

Seasonally adjusted rates are used in reporting quarterly data to factor out seasonal variations in resale activity. For example, sales volume normally is higher in the summer and relatively light in winter, primarily because of differences in the weather and household buying patterns.

4 Income figures are rounded to the nearest hundred, based on NAR modeling of Census data. Qualifying income requirements are determined using several scenarios on downpayment percentages and assume 25 percent of gross income devoted to mortgage principal and interest at a mortgage interest rate of 4.0%.

“Copyright National Association of REALTORS®. Reprinted with permission.”

 

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10 Budget-Friendly Home Improvements for This Winter

Posted on February 6, 2017 by Debbie Prosser

Posted in Remodeling Adviser, by on January 30, 2017

While a lot of people use the New Year as a way to make improvements to their health or personal life, this is also a great time of year to make improvements to your home as well. The cold months of the year mean you’re spending more time indoors — perfect for tackling several areas of your home to make it healthier, happier, and more organized.

Take on these 10 budget-friendly home improvements to find a whole new look for your home this year.

1. Declutter

The first step to getting organized and discovering the potential in your home is to get rid of the clutter and junk that may be hiding in your closets and shelves. Out with the old. That is a frequent cry in the new year so it makes sense to take this time to declutter your home and either donate useable items or have a junk removal service come by to haul it away. Once you’re done, you’ll be in a better place to assess your home and what else needs to be done.

  • Cost: Some charities will remove old items for free, otherwise, junk removal services cost around $165 to $215 for a medium sized load.
  • Make the Most of the Job: Tackle this job first, before others. Then, you can really assess your home and see its true potential. Always call about donations before you begin so you can schedule a timely pick-up and a tax write-off for next year.

2. Deep Clean

Nothing feels quite as good as a freshly cleaned house. A clean home is also easier to maintain than one that’s accumulated dirt and disrepair over the years. Start the new year off right by hiring a cleaning service for a deep clean. You can have the whole house done, or just focus on those areas that really need it. A deep clean can help you determine if more work needs to be done, or if a good sprucing was all that was required.

  • Cost: The average cost of a single cleaning visit is $100 to $150.
  • Make the Most of the Job: Declutter first so the cleaning crew can tackle all areas of your home. Take this time to look at things like paint and woodwork to determine if it needs more help than a single cleaning.

3. Apply Some Paint

A fresh coat of paint can give new life to any room of your home, and the winter months are the perfect time to have this done. The low humidity in the air helps the paint dry more quickly, keeps odors down, and, therefore, helps to speed up the job. If a cleaning hasn’t saved the walls of your home, apply a few coat of paint to cover up the stains from last year.

  • Cost: The cost to paint a living room is between $370 and $950 depending on how high your walls are and the type of paint being used.
  •  Make the Most of the Job: DIY this job to save. While you’re at it, consider painting your old cabinets to dress them up at the same time and save even more.

4. Remove a Popcorn Ceiling

Nothing says you’re stuck in the past more than a popcorn ceiling. While popular 30 years ago, this textured ceiling now dates any room it’s in, lowering your home’s value and its aesthetics. Removing a popcorn ceiling is easy to do and can dramatically update the rooms of your home. Just make sure to have your ceiling first tested for asbestos before you begin to make sure it is removed safely.

  • Cost: The average cost to remove a popcorn ceiling is around $700 to $1,500 including finishing.
  •  Make the Most of the Job: If you have a spray bottle, a putty knife, and some patience, you can remove the old popcorn yourself for less than $50. 

5. Have Asbestos Removed

Many older homes have asbestos lurking in floors, pipes, ceilings, and siding. While harmless if you leave it alone, any damage to or work on these areas could release harmful asbestos fibers into the air. The best way to deal with this problem is professional abatement services. If you suspect asbestos in your home, make sure proper testing and abatement is done before you begin any home improvements.

  • Cost: The average cost of asbestos removal is $200 to $400 an hour.
  • Make the Most of the Job: Sometimes asbestos can be encapsulated beneath another material. If you find flooring or ceilings with asbestos, consider having a floating floor or acoustic ceiling installed over it to reduce the hazard.

6. Insulate Your Attic

The winter months can be brutal if your home doesn’t have enough insulation. Many homes lack adequate insulation in crucial areas like the attic. It can help prevent the energy you’re using to heat your home from flying right out the door. Attic insulation currently gets a return on investment of 110 percent, making this a fantastic improvement for the new year to improve your home’s value as well as your comfort level this winter.

  • Cost: The average cost to insulate an attic is around $400.
  • Make the Most of the Job: While you insulate your attic, take the time to insulate below your roof deck as well. This will help extend the longevity of your roof, while lowering energy bills at the same time.

7. Clean Your Ducts

During the winter months, your air ducts get a lot of work, pushing hot air through your home to warm it. Unfortunately, they could also be blowing dust, pollutants, and allergens through your home at the same time if your ductwork is dirty. Dirty ducts can also mean that your furnace is working harder, which could be raising your energy bills at the same time. Your ducts should also be cleaned right after any other home construction, as the dust has a tendency to collect there.

  • Cost: The average cost of a duct cleaning is $300 to $500.
  • Make the Most of the Job: Have your ducts inspected for leaks at the same time; leaky ducts can raise your energy bills by as much as 20 percent; having them fixed can lower your bills by the same amount. 

8. Install Some Crown Molding

There’s nothing quite like crown molding to make any room in your home look polished and complete. So if you’ve been feeling as though your home needs a little style boost, consider installing some crown molding this winter. Interior projects like this are best done during the colder months when carpenters and handymen aren’t as busy outdoors, and, of course, when you’re spending more time indoors yourself where you can admire them.

  • Cost: The average cost of installing crown molding is around $900 for professional installation.
  • Make the Most of the Job: If you have access to the right tools, install the crown molding yourself to save. Paint your walls at the same time to give each room a whole new look.

9. Install an Electric Fireplace

Fireplaces can have an immediate impact on many aspects of your home from aesthetics to value to comfort. This winter, install an electric fireplace to any of the rooms you spend the most time in. Electric fireplaces can help lower your energy bills by heating the room you’re in, rather than the whole house. They can also be placed anywhere, whether or not there is an existing fireplace in the room. You can add instant warmth and charm to any location.

  • Cost: The average cost of an electric fireplace is around $300.
  • Make the Most of the Job: Include a mantel in your design to give your room a focal point and additional style as well.

10. Refinish Your Floors

Winter takes a hard toll on hardwood flooring. The sand and salt used to make roads safer can wear away the finish on your flooring as well. Give your hardwood new life by having a stain applied to cover up old scuffs and stains from the previous years. Many new finishes don’t require sanding unless your floor is in very bad shape, so you can often get a whole new look in just a few days.

  • Cost: The average cost to restain a hardwood floor is around $535.
  • Make the Most of the Job: Look into durable, acrylic sealants with the stain that will hold up longer to the typical wear and tear of a hardwood floor, giving your floor

This post was contributed exclusively for REALTOR® Magazine.

“Copyright National Association of REALTORS®. Reprinted with permission.”

 

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Pending Home Sales Bounce Back in December

Posted on January 31, 2017 by Debbie Prosser

WASHINGTON (January 30, 2017) — Pending home sales picked up in December as solid increases in the South and West offset weakening activity in the Northeast and Midwest, according to the National Association of Realtors®.

The Pending Home Sales Index,* a forward-looking indicator based on contract signings, increased 1.6 percent to 109.0 in December from 107.3 in November. With last month’s uptick in activity, the index is now 0.3 percent above last December (108.7).

Lawrence Yun, NAR chief economist, says contract activity was mixed throughout the country in December but ultimately ended on a high note to close out 2016. “Pending sales rebounded last month as enough buyers fended off rising mortgage rates and alarmingly low inventory levels1 to sign a contract,” he said. “The main storyline in the early months of 2017 will be if supply can meaningfully increase to keep price growth at a moderate enough level for households to absorb higher borrowing costs. Sales will struggle to build on last year’s strong pace if inventory conditions don’t improve.”

According to Yun, a large portion of overall supply right now is at the upper end of the market. This is evident by looking at December data on the year-over-year change in single-family sales by price range. Last month, sales were up around 10 percent compared to December 2015 for homes sold at or above $250,000, while homes sold between $100,000 and $250,000 only increased 2.3 percent. Meanwhile, sales of homes under $100,000 were down 11.6 percent compared to a year ago.

“The dismal number of listings in the affordable price range is squeezing prospective first-time buyers the most,” said Yun. “As a result, young households are missing out on the wealth gains most homeowners have accrued from the 41 percent cumulative rise in existing home prices since 2011.”

Existing-home sales are forecast to be around 5.54 million this year, an increase of 1.7 percent from 2016, which was the best year of sales since 2006. The national median existing-home price in 2017 is expected to increase around 4 percent. In 2016, existing sales increased 3.8 percent and prices rose 5.2 percent.

Yun expects housing starts – which for another year undershot overall demand – to jump to around 1.26 million units, an increase of 7.9 percent from 2016 (1.16 million).

“Especially if construction-related regulations are relaxed, all eyes will be on the homebuilding industry this year to see if they can finally start making up lost ground on the severe housing shortages impacting much of the country,” added Yun.

The PHSI in the Northeast declined 1.6 percent to 96.4 in December, and is now 1.2 percent below a year ago. In the Midwest the index decreased 0.8 percent to 102.7 in December, and is now 3.4 percent lower than December 2015.

Pending home sales in the South rose 2.4 percent to an index of 121.3 in December and are now 0.5 percent above last December. The index in the West jumped 5.0 percent in December to 106.1, and is now 5.0 percent higher than a year ago.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

* The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.

The index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity parallels the level of closed existing-home sales in the following two months.

An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined. By coincidence, the volume of existing-home sales in 2001 fell within the range of 5.0 to 5.5 million, which is considered normal for the current U.S. population.

“Copyright National Association of REALTORS®. Reprinted with permission.”

 

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5 Staging Props You Need to Stop Using … Now!

Posted on January 27, 2017 by Debbie Prosser

By Justin M. Riordan, Spade and Archer Design Agency

There is good staging. There is bad staging. I mean, like really bad staging. In an industry with no regulations, no standardized accreditation system, and tons of “hobbyist professionals”, one gets what one pays for. The problem here is not if that inexperienced or bargain basement stager will do a good job, rather if they’ll actually stop your house from selling, dead in its tracks.

It’s true; good, thoughtful staging can most certainly help a house sell for more money and in less time. Bad staging can bring the selling momentum of a great house to a screeching halt. The absolute best way for bad staging to kibosh your sale is to have it offend potential buyers.

Here are five potentially offensive staging props that could threaten your sale:

J_alcohol1. Alcohol. Alcohol is a common thing found in many homes. It can raise both positive and negative emotions in buyers. We aren’t too worried about the positive emotions on this one as nobody is going to walk into your house and say, “They drink Chablis, I drink Chablis, let’s buy this house!” That being said, a potential buyer may very well be uncomfortable or even offended by alcohol for various reasons.  They could be in recovery or alcohol could be prohibited by their religion. For any reason, a buyer could be offended by alcohol sitting in the living room, on the counter, or next to the bathtub (tacky) in what could potentially be their new home. Even worse is staging with two-buck-chuck and offending the connoisseurs.

J_tipi22. The tipi (also spelled teepee or tepee). Cultural appropriation is a hot button topic these days. I’ve noticed a good number of home stagers using tipis in kids rooms and play areas.  I spoke to a friend who happens to be a Plains Native American to help me understand why the use of a tipi in home staging could be offensive. He explained that the tipi is a very sacred structure used for ceremonies and rites of passage and to use that sacred piece of somebody else’s culture to sell a house is less than thoughtful. It would be like using the pages of a King James Bible to wallpaper a bathroom, pretty but disrespectful. Whether you agree that using tipis is offensive or not, it’s important to understand that it may raise questions and emotions that are not related to “buy this house”.

J_animalparts23. Dead animal parts. These items are going-to-town, off-the-charts popular. Walking into staged homes all over the county is not unlike walking into an animal autopsy. There are pieces of the beast strewn on the table, tossed over the chair, laid out on the floor and even hung on the wall. Whether it is antlers, hide rugs, fur throws or pillows, these are all clearly recognizable parts of animals that were once alive and are now dead.  Don’t get me wrong, I love me some creepy dead animal decoration, but I know that I am not in the majority. Truly, it’s a very popular trend right now, but many of us are offended by it. A potential buyer might be vegetarian or vegan, an animal rights activist, or even just have a weak stomach. Needless to say, if your potential buyers are any one of these things and need to walk over the ripped-off epidermis of a recently murdered bovine, they might think twice about buying the house they actually love but can’t stomach the though of purchasing.

J_blowup4. Blow-up mattresses. Did you hear that? It was the sound of a blow-up mattress deflating. Or perhaps it was the sound of somebody crashing to the ground after sitting on a blow-up mattress, which was in-turn sitting on top of four 5-gallon buckets. It sounds an awful lot like a lawsuit, doesn’t it? Not only do blow-up mattress look like blow-up mattress (i.e. horrendous), they are unpredictable at best and dangerous at worst.  It’s a stager’s responsibility to demonstrate that a real mattress and box spring can get up the staircase and into that perfect bedroom your buyer had in mind.

J_woodart25. Word art. Do you really need a 3-foot tall E-A-T sign to get a buyer to understand that this room is the dining room? Shouldn’t the dining table surrounded by eight chairs tell that story that this is, in fact a dining room, designed for the specific purpose of E-A-T-I-N-G? Word art is fun, isn’t it? I always love to add one extra word or phrase to each one I see like “Life, Love, Family… Barf”. Ultimately, the staging should tell the story of how happy, successful, and fulfilled one could be if they bought the house. Word art is simply a lazy way to ineffectively send your message. (P.S. My favorite one so far? A big pink canvas that said “Dream Big” next to at toilet, with the lid up nonetheless. Ugh.)

When it comes to home staging, we all make choices. You can choose to simply pick the latest trends that you love and take the chance offending your potentially buyer. Or, you can make thoughtful selections that keep your buyer paying attention to the house and not the staging. Choices, darling… choices.

This post was contributed exclusively for REALTOR® Magazine.

“Copyright National Association of REALTORS®. Reprinted with permission.”

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5 Home Design Needs for Your Boomer Clients

Posted on January 25, 2017 by Debbie Prosser

Daily Real Estate News | Wednesday, January 11, 2017

The number of home buyers ages 55 and older is expected to grow over the next decade, and builders across the country are ramping up to serve them. At the International Builders’ Show in Orlando, Fla., this week, the National Association of Home Builders is educating attendees about how to support the industry’s efforts to cater to this segment of the market.

In one session, Deryl Patterson, president of Housing Design Matters in Jacksonville, Fla., offered ideas of how to design, remodel, and market spaces so that they’ll be more appealing to older home buyers. She says one important element is to avoid treating baby boomer clients as if they’ve suddenly developed a whole new set of living preferences. Patterson told attendees it makes more sense to think of boomers as “mature” in the sense that they are experienced buyers who know what they want. She described their mindset about their home purchase as: “I’m going to do it right this time, finally.”

Here are some home features you can be on the lookout for when working with buyers in the 55-and-over age group, or items you can emphasize if you’re trying to ensure your listing appeals to them.

  1. Rethink the laundry room. After the kids move out, many home owners spend less time in the laundry room, but that doesn’t mean they want to ditch it entirely. As the house becomes less chore-centric, Patterson says, home owners are more prone to focus on fun. Try carving out a space for crafts or pet care if a huge laundry room feels like a waste of space to buyers.
  2. Boost the light. Patterson noted that as people age, the lens of the eye thickens and lets in less light. This means a 60-year-old needs six times as much light as a 20-year-old. Look for inexpensive ways to add light in unexpected places, such as inside drawers and cabinets.
  3. Be subtle about accessible features. Everyone wants to be able to age in place, but few want to think of a time when they’ll be physically limited. Thankfully, many features that make a home more navigable and safer for those with mobility issues aren’t very obvious, such as even, level surfaces that make it easier for those using wheelchairs, canes, or walkers. Patterson also noted that many bathroom product manufacturers are now making grab bars that look more like shelves and towel racks than institutional-style safety features.
  4. Point out low-maintenance features. Patterson said one of the first things that comes to mind when people are looking for a low-maintenance home is the size of the lawn, but she noted that there’s much more to taking care of a home than that. “I want you to think beyond yard maintenance,” she told attendees. She noted that stain-resistant quartz countertops and roofs that don’t have nooks where leaves can collect can be important qualities of a listing.
  5. Examine where the stairs lead. Steps can be problematic for those with mobility issues, but they aren’t an automatic no-no for communities targeted at older buyers. It just depends on what’s at the top of the staircase. A bunk room for the grandkids or an exercise room is a much better use for second- and third-floor space than a master bedroom or another place the primary resident might have to visit frequently. Also, landings and railings are both safety musts, Patterson says. “Stairs are the number one reason people go to the emergency room, and not just those over 55.”

—Meg White, REALTOR® Magazine

“Copyright National Association of REALTORS®. Reprinted with permission.”

 

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2017 Home Design Trends

Posted on January 23, 2017 by Debbie Prosser

December 2016 | By Barbara Ballinger

Housing styles emerge slowly and typically appeal first to cutting-edge architects, builders, and interior designers. As a trend spreads and gains wider interest, it may go mainstream, become almost ubiquitous, and eventually lose its star power. Just look at once-favored granite, which now has been replaced by the equally durable and attractive options of quartz and quartzite.

The economy, environment, and demographics always play a big role in trend spotting. But this year there are two additional triggers: a desire for greater healthfulness and a yearning for a sense of community.

1. Community Gathering Spaces

Why it’s happening: The combination of more time spent on social media and at work and the fact that fewer people live near their family members has caused many to feel isolated and crave face-to-face interactions.

How it will impact you as a real estate pro: Multifamily buildings and even single-family residential developments are rushing to offer an array of amenity spaces to serve this need. Some popular options include clubhouses with spiffy kitchens, outdoor decks with pools and movie screens, fitness centers with group classes, and drive-up areas for food-truck socials. At its Main+Stone building in Greenville, S.C., The Beach Co. began hosting free monthly events such as its “Bingo & Brews.” Make sure you know which buildings, communities, and neighborhoods offer these sought-after social events and gathering spaces so you can help clients connect.

2. Taupe Is the New Gray

Why it’s happening: White remains the top paint color choice due to its flexibility and the fact that it comes in so many variations (PPG Paints has 80 in its inventory, according to Dee Schlotter, senior color expert). Though white has been upstaged by gray in recent years, this year many will be searching for a warmer neutral, which is why paint manufacturer Sherwin-Williams named “Poised Taupe” as its 2017 Color of the Year. “Poised Taupe celebrates everything people love about cool gray as a neutral, and also brings in the warmth of a weathered, woodsy neutral and a sense of coziness and harmony that people seek,” says Sue Wadden, the company’s director of color marketing.

How it will impact you: Dallas-based designer Barbara Gilbert considers taupe a smart alternative since it still performs as a neutral with other colors, cool or warm. She expects to see taupe on more exteriors — blending well with roofs, doors, window frames, and surrounding landscape — but it also will turn up indoors on walls, ceilings, kitchen cabinets, furnishings, and molding. It might even work to help update a listing clad in gray, she says, as the two colors work well together.

3. More Playful Homes

Why it’s happening: Americans work harder now than ever, with many delaying retirement or starting second careers, so they want their homes to be a refuge and a place to unwind.

How it will impact you: Be sure you’re asking buyers how they like to spend their free time. Spaces that encourage play are trending higher on their wish lists, whether it’s a backyard bocce court (the latest outdoor amenity to show up in residential backyards) or a putting green. And sports don’t have to be relegated to the outdoors. says Gilbert; technological advances have allowed for rapid improvement in indoor golf simulators, for example. While some of her clients have installed modest models, she’s working on a dedicated golf room with software that gives homeowners virtual access to any golf course in the world. Though landscape architect Steve Chepurny of Beechwood Landscape Architecture in Southampton, N.J., designs putting greens with synthetic grass that range from $12,000 to $30,000, he also notes he’s seeing more playfulness outdoors in the form of non-sports amenities, such as pizza ovens.

4. Naturally Renewable, Warmer Surfaces

Why it’s happening: The pervasiveness of technology throughout homes has resulted in a corresponding yearning for more tactile surfaces and materials that convey warmth. Natural cork is a perfect expression of these needs, with the bonus of being low-maintenance.

How it will impact you: In recent years, cork, a renewable material harvested from the bark of cork oak trees, has resurfaced as a favorite for myriad uses, and for good reason. Some credit designer Ilse Crawford’s introduction of cool, edgy cork pieces in her “Sinnerlig” collection for IKEA for the resurgence. Aside from aesthetics, the material is appealing since it’s resistant to mold, mildew, water, termites, fire, cracking, and abrasions. Moreover, cork can be stained and finished with acrylic- or water-based polyurethane. Chicago designer Jessica Lagrange likes to incorporate cork to clad walls and floors. “It’s an especially effective and forgiving choice since dents bounce back and floors retain heat,” she says.

5. Surface-Deep Energy Conservation

Why it’s happening: As energy costs continue to increase, the search is on for ways to save. Incentives to do so only increase as states and municipalities enact new, stricter energy codes. While energy-wise appliances and more efficient HVAC systems are still appealing to homeowners looking to save on their utility bills, less costly surface upgrades are gaining in popularity.

How it will impact you: After New Jersey increased its requirements for insulation, architect Jason Kliwinski, principal at Designs for Life and current chair of New Jersey’s AIA Committee on the Environment, went looking for new options. He found new low-E window film that can double the performance of glass at one-fifth the cost of a full window replacement. Several options for this film are on the market now, and Kliwinski says manufacturers such as EnerLogic are producing versions that are invisible when installed. Other surface-change artists that lower energy use and that are cost-effective and relatively easy to apply include a ceramic insulating paint coating for walls and a thermal energy shield for attic interiors. Tesla, the innovative manufacturer of electric cars, is just debuting solar glass tiles that resemble traditional roof materials such as slate and terracotta, but provide passive heat gain.

6. More Authentic, Personalized Use of Space

Why it’s happening: As home prices escalate — up 5.5 percent, according to CoreLogic Case-Shiller — and baby boomers downsize to retire or cut costs, every inch of available space counts more than ever. To make the best use of space for each resident, design professionals are zeroing in on how clients want to live rather than thinking about how people use space generically. “One size doesn’t fit all any longer,” says Mary Cook, whose eponymous Chicago-based design firm specializes in amenities, public spaces, and model home interiors.

How it will impact you: You and your clients are likely to see a greater variety in terms of layouts, building materials, home systems, color palettes, and furnishing choices, both in model homes and in houses staged for sale. Listing agents can take the cue from this trend by helping sellers highlight the flexibility of their spaces when putting a home on the market. Buyers’ reps should similarly showcase a range of living options in each home-shopping session.

7. The Walkable Suburb

Why it’s happening: Urban centers have long been a magnet for residents wanting to walk rather than drive to work, shopping, and entertainment. But the trend is now spreading to the suburbs where being close to a town center — and public transit into a larger city — offers similar appeal.

How it will impact you: A high walk score has become a recognized real estate marketing tool. Real estate salesperson Stephanie Mallios of Coldwell Banker Residential Brokerage in Short Hills, N.J., has seen a huge uptick in interest and value in single-family homes and townhouses close to town centers, especially those near a train station if residents commute to a large metropolitan area. “Most homes for sale in my area list the number of blocks and steps to public transit in their marketing materials. Homes far from everything have become less valuable,” Mallios says. The most appealing towns also incorporate individually owned shops rather than chain stores.

8. Healthier Homes

Why it’s happening: Consumers have been increasingly aware of hazardous indoor environments over the last few years, but news of the lead-tainted water crisis in Flint, Mich., raised awareness to a nationwide level in 2016. Homeowners are actively seeking out healthy water supplies, purifiers, and HVAC systems, along with nontoxic paints and adhesives. A newer element to this trend in 2017 will include enhanced environmental testing.

How it will impact you: A growing number of builders, remodelers, architects, and interior designers expect health to influence their business decisions due to consumer demand, according to studies from both the Urban Land Institute and McGraw-Hill Construction. You should expect to see more buyers hiring health experts to examine listings and requiring in-home contaminant removal prior to a sale. Your clients will also have greater access to additional home products that promote healthy sleep patterns, such as those featuring UV and LED circadian lighting.

9. Shifting Hearths

Why it’s happening: The traditional log-burning fireplace has lost some appeal as homeowners realize it’s less energy-efficient and can send more particulates into the air. But there are a number of replacement options waiting in the wings.

How it will impact you: Homeowners have been switching out their log-burning fireplaces with new gas models for many years. Newer on the market are the ventless alcohol-burning fireplaces that can be placed almost anywhere and without costly construction, says Los Angeles–based designer Sarah Barnard. Another increasingly popular solution is to build a fireplace outdoors, according to landscape architect Chepurny.

10. Counter Options

Why it’s happening: Much like granite did, quartz and quartzite are predicted to be kitchen favorites until another material comes along. But other green laminate options are gaining in popularity, and they’re no longer just for the budget-minded consumer.

How it will impact you: A new countertop can make a big difference in the appeal of a room. Sally Chavez, senior product designer at Wilsonart in Temple, Texas, which manufactures engineered surfaces, says laminate options that mimic stone, wood, distressed metal, and concrete are gaining in popularity. But she recommends avoiding designs that include the “spots and dots” or speckled patterns from decades past. Some newer countertop options offer an additional perk: They lessen the time and cost of installation and also eliminate the need to discard the old countertop. Trend Transformations, an Italian manufacturer with a U.S. manufacturing facility, incorporates recycled granite, glass, and even seashells in its surfaces, which are installed over an existing countertop. Installation can be finished within a day, and prices are competitive with quartz and quartzite. Because these countertops are less porous than traditional stone, they’re also more resistant to stains and scratches.

11. The Transforming Office

Why it’s happening: Regular work-from-home time among the non–self-employed population has grown by 103 percent since 2005, according to Kate Lister, president of Global Workplace Analytics, a San Diego–based research and consulting group focused on workplace change. Her organization estimates that number will continue to grow at between 10 percent and 20 percent a year.

How it will impact you: More of your clients are likely to need a work-from-home space, but due to the diminished size and highly transient nature of technology tools, there’s less need for a dedicated, separate office. Brad Hunter, HomeAdvisor’s chief economist, says almost any area of a house can become a workplace, but the most functional ones incorporate built-ins and furnishings that serve a dual purpose. That same desire for flexibility may someday translate to layouts that can easily change to a homeowner’s whim, such as the KB Home ProjeKt movable wall concept in its “Home of 2050” at the Greenbuild Conference and Expo this past October.

Barbara Ballinger, REALTOR® Magazine Online

“Copyright National Association of REALTORS®. Reprinted with permission.”

 

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