A Look at Pricing Per Square Foot by Region

Posted on September 14, 2016 by Erin Johnston

Daily Real Estate News | Tuesday, September 13, 2016

When comparing single-family homes started last year by region, the median price per square foot can vary quite a bit.

For example, contractor-built homes in the Pacific division price per square foot averaged $168 while speculatively built homes in the East South Central division averaged $78 per square foot.

“At $168 per square foot, new contractor-built single-family homes in Pacific are the most expensive to build exceeding the national average of $105 per square foot by 60 percent,” notes the National Association of Home Builders on its Eye on Housing blog. The price per square foot excludes the cost of developed land.

New England has the second most expensive contract prices per square foot at $149 per square foot. The region also had the priciest spec houses last year with a median sales price of $144 per square foot.

Meanwhile, for home buyers searching for deals they may want to look South. The South Region had the least expensive spec homes, with median sales prices per square foot ranging from $78 in the East South Central division to $87 in the West South Central division. Contractor-built new-home starts were higher, ranging from $98 in the West South Central division to $100 in the East South Central and South Atlantic divisions.

“Typically, contractor-built custom homes are more expensive per square foot than spec homes after excluding improved lot values, suggesting that new custom home buyers are not only willing to wait longer to move into a new home but also pay extra for more expensive features and materials,” the Eye on Housing blog notes.

Source: “Sale and Contract Prices Per Square Foot in 2015,” National Association of Home Builders Eye on Housing blog (Sept. 12, 2016)

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Paint Colors That Make a Room Look Bigger

Posted on September 14, 2016 by Erin Johnston

Daily Real Estate News | Tuesday, September 9, 2016

A room’s size is sometimes a matter of perception, and the paint color on the walls has a lot to with that perception. Some colors can actually make a room appear smaller, while other colors can make the walls expand and feel larger. Realtor.com® recently highlighted some of the paint colors to create the illusion of more space, including:

White: White reflects light, thereby making a space look brighter and feel more open. “White will make any room appear bigger and complement the natural lighting,” Than Merrill, a real estate investor and host of A&E’s “Flip This House” told realtor.com®.

Yellow: A creamy and soft yellow can also reflect light, and can create a softer alternative to white (as long as it’s not too bold of a yellow). Add white accents, such as on the trim, to add further dimension to the room.

Gray: A calming, light shade can help expand a room and, unlike white, doesn’t cast off a glare.

Monochromatic color schemes: Use a monochromatic color scheme for the entire space to open it up (in other words, stick with the white, gray or soft yellow and don’t introduce then a bolder color). “Choose rugs, furniture, and accents in similar shades – like a patterned rug in white and light gray,” realtor.com®’s article suggests. “This creates a minimalist, clean look that makes the entire space feel larger.”

Source: “What Colors Make a Room Look Bigger?” realtor.com® (Sept. 9, 2016)

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5 Home Buying Myths

Posted on September 6, 2016 by Erin Johnston

Daily Real Estate News | Tuesday, September 06, 2016

Home buyers get a lot of advice from friends and family – some good, some bad. A lot of myths can pop up and negatively guide their home purchasing experience. Make sure your clients don’t fall for one of these common buying falsehoods.

1. The only upfront cost is the down payment.

Buyers need to be prepared for several expenses – everything from fees, taxes, costs for inspections, credit reports, insurance, and others. Closing costs can be anywhere from 3 percent to 6 percent of the purchase price. Those costs can fluctuate greatly depending on the state you live in too.

2. Just looking for a house casually is not a big deal.

Some people may want to just start looking at homes to get a feel for the area, before they even sit down with a REALTOR®. But they could be setting themselves up for major heartbreak. “A buyer might be viewing homes that are in a higher or lower price range than what they are qualified for,” Connie Antoniou, a broker associate in Barrington, Ill., told realtor.com®. Home shoppers – even at the earliest stages – should get pre-approved for a mortgage so they know their budget from the get-go and don’t waste time looking at homes that are out of their price range.

3. You must have a 20 percent down payment.

A 20 percent down payment will help a buyer avoid paying private mortgage insurance. But 20 percent down isn’t required. Many lenders will still qualify a buyer for home loans with 10 percent or 5 percent down. Some buyers can even qualify for only 3.5 percent down with a Federal Housing Administration loan. There are many options for down payment assistance that lenders can explore with a buyer who has a limited amount to put down.

4. Schools shouldn’t matter if you don’t have kids.

“The neighborhood you choose matters – both now and later when you might consider selling,” notes the realtor.com® article. “Even if you don’t have children, good schools are a sign of a good neighborhood.” Buyers should explore all factors with their REALTOR® on items that could influence their homes appreciation and desirability so they don’t run into trouble later on one day when they try to sell.

5. You don’t need a home inspection.

When the housing market is extremely competitive, some home shoppers may be willing to waive the home inspection in order to get the home they want. “But beware: sellers are banking on your skipping this crucial step,” the realtor.com® article notes. “It means you’ll get the home as is, including any and all problems that come with it. And sometimes those problems aren’t exactly visible.”

Source: “9 Home-Buying Myths You Need to Stop Believing Immediately,” realtor.com® (Sept. 6, 2016)

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5 Fixes That Can Raise a Home’s Value

Posted on September 2, 2016 by Erin Johnston

Daily Real Estate News | Thursday, September 01, 2016

For home owners 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. They are into big spaces,” Kristin Wellins, senior manager of program development at ERA Real Estate, told This Old House.

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. “High wattage bulbs make small spaces feel larger, and soft lighting brings warmth to empty spaces,” This Old House notes.

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.” Have an overhang on the front porch, such as an awning or portico above the front door, suggests Roger Voisinet, a real estate professional in Charlottesville, Va.

4. Pay attention to the floors.

Spend some money on the floors, suggests the real estate professionals surveyed by This Old House. Even a $600 to $900 investment could help boost the home’s value by possibly $2,000, they say. Get a carpenter or handyman to eliminate distracting squeaks from floors, repair any broken tiles, patch damaged floor boards, 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 House Value,” This Old House (September 2016)

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Sales Contracts Surge to Highest Rate in 10 Years

Posted on August 31, 2016 by Erin Johnston

Daily Real Estate News | Wednesday, August 31, 2016

Pending home sales were up in most areas of the country in July, reaching the second highest reading in more than a decade, according to the National Association of REALTORS®’ Pending Home Sales Index. Last month the Midwest was the only region of the U.S. to see a drop in pending sales.

The index increased 1.3 percent in July to a reading of 111.3. Pending home sales are now 1.4 percent higher than a year ago.

“Amidst tight inventory conditions that have lingered the entire summer, contract activity last month was able to pick up at least modestly in a majority of areas,” says Lawrence Yun, NAR’s chief economist. “More home shoppers having success is good news for the housing market heading into the fall, but buyers still have few choices and little time before deciding to make an offer on a home available for sale. There’s little doubt there’d be more sales activity right now if there were more affordable listings on the market.”

Notably, the West saw the highest jump in pending home sales, with contract signings up to the highest rate in more than three years. Yun attributed the rise to stronger labor market conditions in the region.

“If home building increases in the region to tame price growth and alleviate the ongoing affordability concerns, the healthy rate of job gains should support more sales,” Yun says.

Builders may be showing signs of focusing more on the middle and lower price tiers. They’ve been mostly focused on building larger, pricier homes for the upper end of the market for the last few years.

“REALTORS® in several high-cost areas have been saying for quite a while there is robust demand for single-family starter homes and townhomes at an affordable price point for young buyers,” Yun says. “The home ownership rate won’t move up from its over 50-year low without a meaningful boost from first-time buyers, whose participating has yet to noticeably increase so far this year despite mortgage rates near all-time lows.”

NAR predicts that existing-home sales will reach about 5.38 million this year, a 2.8 percent increase over 2015. That also would mark the highest annual pace since 2006 (when sales were at 6.48 million). Price growth of existing homes will likely moderate to around 4 percent this year, after a 6.8 percent jump a year ago, NAR forecasts.

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HARP Extended to 2017 as Bridge to New Refi Program

Posted on August 29, 2016 by Erin Johnston

Daily Real Estate News | Monday, August 29, 2016

The Federal Housing Finance Agency is extending the Home Affordable Refinance Program (HARP) until Sept. 30, 2017. The FHFA estimates that more than 300,000 home owners could still benefit by refinancing through HARP.

The Home Affordable Modification Program and HARP aim to help borrowers lower their monthly payments. The program was launched in 2009  and originally set to expire on Dec. 31, 2013, but the government continues to extend it.

FHFA says the reason it opted to extend it again was to smooth a transition into a new refinance product that will be offered by Fannie Mae and Freddie Mac at the end of 2017. That product will reportedly be aimed at borrowers with high loan-to-value ratios.

“The new refinance offering will provide much-needed liquidity for borrowers who are current on their mortgage but are unable to refinance through traditional programs based on their LTV ratio exceeds the [GSEs’] maximum limit,” according to a recent news release.

The FHFA says that with the new LTV streamlined refinance product eligible borrowers will not be subject to a minimum credit score, there will be no maximum debt-to-income ratio or maximum LTV, and an appraisal often won’t be required. Borrowers would also be able to use it more than once to refinance their mortgage. (View more of the eligibility requirements at FHFA.)

The new LTV refinance offering won’t be available to borrowers until October 2017, FHFA says.

Source: Federal Housing Finance Agency and “HARP Extended into 2017; FHFA Plans New Refinance Program,” HousingWire (Aug. 25, 2016)

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Good for Buyers: Mortgage Rates Barely Budge

Posted on August 26, 2016 by Erin Johnston

Daily Real Estate News | Friday, August 26, 2016

Mortgage rates continue to hover around all-time lows with the 30-year fixed-rate mortgage averaging 3.43 percent this week.

“This marks the ninth consecutive week that mortgage rates have been below 3.5 percent,” says Sean Becketti, Freddie Mac’s chief economists. “Markets are erring on the side of caution ahead of the second estimate for second-quarter GDP and Fed Chair Janet Yellen’s speech on Friday.”

Freddie Mac reports the following national averages with mortgage rates for the week ending Aug. 25:

  • 30-year fixed-rate mortgages: averaged 3.43 percent, with an average 0.6 point, holding the same average as last week. A year ago, 30-year rates averaged 3.84 percent.
  • 15-year fixed-rate mortgages: averaged 2.74 percent, with an average 0.5 point, holding the same as the previous week as well. Last year at this time, 15-year rates averaged 3.06 percent.
  • 5-year hybrid adjustable-rate mortgages: averaged 2.75 percent, with an average 0.4 point, increasing from last week’s 2.74 percent average. Last year at this time, 5-year ARMs averaged 2.90 percent.

Source: Freddie Mac

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Will That Home Work as You Age?

Posted on August 24, 2016 by Erin Johnston

Daily Real Estate News | Tuesday, August 23, 2016

Many older adults say they want to stay put in their homes as they age. But how many older adults will actually be able to do so is another question.

Indeed, “a recent AARP study … showed that 71 percent of 50 to 64 year olds want to stay in their homes and their current communities,” says Rodney Harrell, director of Livability Thought Leadership at AARP. “But communities as we build them often don’t have the options that people need to age well. The idea of a livable community is one that has housing, transportation, and other options that allow people to stay and thrive in their homes.”

For example, older adults have found the following community amenities are most important to them to live near (a.k.a. 1 mile or less):

  • Bus stop: 50%
  • Grocery store: 47%
  • Pharmacy/drug store: 42%
  • Park: 42%
  • Hospital: 29%
  • Church/religious: 29%
  • Train/subway: 23%
  • Big box store: 18%
  • Entertainment: 16%
  • Shopping mall: 13%

AARP has launched a Livability Index to help older adults search for the right home. It factors in seven categories of livability in judging neighborhoods, including on housing, transportation, environment, health, engagement, and more.

If people do desire to age in place, they must carefully assess a home when they buy in the first place whether it will meet their needs as they grow older and under several scenarios too.

“If you are on that cul de sac and your spouse has passed, your kids live elsewhere and your income is much lower and you are no longer driving, then suddenly that dream house, which wasn’t planned for long term, is isolating,” says Harrell. “You may no longer be able to access the second floor and the functionality and usefulness of the house is suddenly gone.”

In fact, Harrell continues: “When we look at places through our livability index, some of the most prized communities are very low on livability index for three reasons. First, these neighborhoods score low because they are so homogenous. Their lack of variety of housing options limits the type of home owners who can live and continue to live there. Next, they are expensive – if your income changes for any reason, you can’t live there. And the third reason is that there are no alternative transportation options.”

Source: “What’s Your Neighborhood Score for Aging in Place?” BUILDER (Aug. 19, 2016)

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Mortgage Rates Move Even Lower This Week

Posted on August 22, 2016 by Erin Johnston

 

Daily Real Estate News | Friday, August 19, 2016

Fixed-rate mortgages dropped slightly this week compared to the previous week, and continue to hover near all-time lows.

“The 30-year fixed-rate mortgage fell 2 basis points to 3.43 percent this week, erasing last week’s uptick,” says Sean Becketti, Freddie Mac’s chief economist. “For eight consecutive weeks mortgage rates have ranged between 3.41 and 3.48 percent. Inflation is not adding any upward pressure on interest rates as the Bureau of Labor Statistics reported that the Consumer Price Index was unchanged in July.”

Freddie Mac reports the following national averages with mortgage rates for the week ending Aug. 18:

  • 30-year fixed-rate mortgages: averaged 3.43 percent, with an average 0.5 point, dropping from last week’s 3.45 percent average. Last year at this time, 30-year rates averaged 3.93 percent.
  • 15-year fixed-rate mortgages: averaged 2.74 percent, with an average 0.5 point, dropping from last week’s 2.76 percent average. A year ago, 15-year rates averaged 3.15 percent.
  • 5-year hybrid adjustable-rate mortgages: averaged 2.76 percent, with an average 0.4 point, rising from last week’s 2.74 percent average. A year ago, 5-year ARMs averaged 2.94 percent.

Source: Freddie Mac

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