Which Home Security System?

Consumers show preferences for certain types of security options, according to Safehome.org, a home security survey. For example, the group of consumers who say they feel safe were two times more likely to have a front door security system, the survey found. Professionally monitored security systems help many consumers feel safe, but certain demographics felt more at ease with other features. For example, baby boomers prefer security cameras around the property, men surveyed felt most safe with guns, and renters and homeowners in rural areas felt safest with an entry keypad with a security code and alarm.

About a third of consumers surveyed with a home security system use a variety of accessories, including door sensors and security keypads. Thirty percent of those surveyed also chose all-in-one security systems, which usually consist of live streaming cameras, motion sensors, arming and disarming functionality, and sirens.

Source: “Security in the Home,” Safehome.org (2019)

“I Want to Buy a Home” Report

Many non-owners—those renting or living with someone else—are eager to buy a home. But their current financial situation is what is mostly holding them back.

The newly released “2019 Profile of Buyers and Sellers” report contained a new section this year, including a survey about non-owners and their views on home ownership. NAR released the report during the 2019 REALTORS® Conference & Expo in San Francisco this week.

But the main reason they aren’t buying yet is because they can’t afford to make the jump into ownership. “Making the largest financial purchase in one’s life relies on the financial strength to do so,” the report notes. Seventy-five percent of non-owners surveyed say they believe home ownership is part of the American dream. Eighty-one percent of non-owners say they want to own a home in the future.

Source: National Association of REALTORS®’

Re-Acceleration in Home Prices

Good news for sellers: Home prices are on the rise. But buyers should brace for higher prices.

Nearly all—93%—of the largest metros in the U.S. saw home prices rise in the third quarter over the past year. A shortage of homes for sale, combined with higher demand, continues to push home prices higher, according to the latest quarterly report from the National Association of REALTORS®, released Thursday.

While the majority of metros saw higher prices in the third quarter, a few markets did register lower prices, notably in areas long-known for high costs. Single-family median home prices moderated in the third quarter in markets such as San Jose-Sunnyvale-Santa Clara, Calif. (–4.6%); San Francisco-Oakland-Hayward, Calif. (–2.5%); and San Diego-Carlsbad, Calif. (–0.8%).

‘Zombie’ Foreclosures Lurking?

More than 1.5 million—or 1.5% of U.S. single-family homes and condos—were vacant in the fourth quarter of 2019 , according to a new report from ATTOM Data Solutions. Marking improvements, but so-called “zombie” foreclosures are still plaguing some markets.

Despite an ongoing housing shortage, several markets are still dealing with zombie foreclosures. These are homes that have been vacated by the owners and remain vacant while lingering in the foreclosure process. The percentage of zombie properties was at 2.96% in the fourth quarter, down from 3.2% in the third quarter.

Growth of the Backyard Bungalow

Accessory dwelling units are popping up in more backyards, CNBC reports. These standalone housing units are either serving as rentals to generate extra income for homeowners or extra space for aging parents or adult children who move back home. The growing interest in ADUs has sparked changes to local and state zoning rules to allow for more construction. Some communities are even pointing to ADUs as a solution for a lack of affordable housing.

“ADU is still, for the most part, an affluent homeowner product, meaning you have to have cash on hand to take this on,” Steve Vallejos, CEO of Prefab ADU, told CNBC. His company’s most popular ADU model is a 288-square-foot home that costs about $105,000 to build. ADUs are “addressing financing, it’s addressing standardizing products within cities, and then also it’s creating partner relationships with contractors, architects, and even other builders,” Vallejos says. “There are many different scenarios that people look into based on income, lot size, different zoning rules—so we build ADUs that start at about 150 square feet up to 1,200 square feet.”

Facebook Pledges $1 Billion Toward Affordable Housing

Facebook has become the latest company to pledge money to help ease a housing crisis that critics blame big tech for. The social media giant on Tuesday said it would allocate $1 billion in grants, land, and loans to generate more affordable housing in California’s Bay Area. The funds will be used to build an estimated 20,000 housing units for middle- to low-income households.

In June, Google pledged $1 billion in land and money to build homes to help to ease the housing crisis in the East Bay area. It also vowed to build at least 20,000 homes in the Bay Area with that money. In January, Microsoft pledged $500 million toward affordable housing in Seattle.

The companies are looking to add affordable housing around their campuses. Facebook will use the money to generate more housing over the next decade.

California boasts some of the highest salaries, but the highest state poverty levels.

Source: “Facebook Pledges $1 Billion to Ease Housing Crisis Inflamed by Big Tech,” The New York Times (Oct. 22, 2019)

Comeback of ‘Split-Level Homes’

The split-level home—with its rooms on multiple floors—was all the rage in the 1970s, but you don’t see the style as much in contemporary homes. However, that may soon change. Google searches are revealing the split-level home is more in demand.

While the open floor plan is hot, more homeowners have been showing some desire to separate spaces more lately. The split-level blueprint allows for more separation between downstairs and upstairs than other home designs, and also allow for more separated noise and activity between family rooms and bedrooms. It’s also gaining popularity among multigenerational households.

Source: “Surprise! Split-Level Homes Are Becoming Popular Again—and I Know Why,” Apartment Therapy (Oct. 20, 2019)

 

Blame Housing If Recession Hits?

Economists say that if the country goes into recession, it won’t be the real estate market’s fault. While a slowdown in housing was largely blamed for the Great Recession, economics this time around does not correlate with weakness in the real estate sector.

In fact, it’s the opposite: The housing market has gotten a boost this fall, with more robust existing-home sales and an uptick in new-home construction. Buyers are being drawn to the market by lower mortgage rates, housing analysts say. “Housing is a critical sector because it acts as a multiplier by touching a wide swath of industries, from construction to financial services to home-improvement and appliance sales,” NBC News reports.

Mortgage applications have been on the rise since interest rates have decreased in recent weeks. The lower rates are giving home buyers an average of about $50,000 more in “purchase ability,” Todd Teta, chief product officer at ATTOM Data Solutions, told NBC. “It allows people to buy more home. That is meaningful on an absolute dollar basis for a lot of buyers.”

Source: “Recession Coming? Don’t Blame Housing,” NBC News (Oct. 8, 2019)

HUD Expands Affordable Housing

The U.S. Department of Housing and Urban Development announced this week that it is allocating $112 million to expand the supply of permanent affordable housing to low-income people with disabilities. Funding is available through the Section 811 program.

About half of the new funding will go toward the development of new supportive housing for people with disabilities. About $37 million also will go toward rental assistance, through eligible housing agencies.

“Very simply, we need more permanent supportive housing to assist people living with disabilities,” says HUD Secretary Ben Carson. “The funding will support existing developments and, for the first time in nearly a decade, help to produce new affordable housing at a time we need it the most.”

Source: HUD.gov

Mortgage Rates ‘Are Dropping’

The 30-year fixed-mortgage fell 8 basis points this week, averaging 3.57%, Freddie Mac reports. The lower rates are drawing out more home buyers in the fall market.

“The 50-year low in the unemployment rate combined with low mortgage rates has led to increased home buyer demand this year. Much of this strength is coming from entry-level buyers—the first-time home buyer share of the loans Freddie Mac purchased in 2019 is 46%, a two-decade high,” says Sam Khater, Freddie Mac’s chief economist.

Freddie Mac reports the following national averages for the week ending Oct. 10:

  • 30-year fixed-rate mortgages: averaged 3.57%, with an average 0.6 point, falling from last week’s 3.65% average. Last year the 30-year rates averaged 4.90%.
  • 15-year fixed-rate mortgages: averaged 3.05%, with an average 0.5 point, falling from last week’s 3.14% average. A year ago, 15-year rates averaged 4.29%.
Source: Freddie Mac