Hot Home Trend: Bamboo Everything!

Bamboo is making its way into more home interiors. From flooring, window treatments to wall accents, furnishings and more, this sustainable material is popping up everywhere.

Some designers are making bamboo their go-to material, which RISMedia recently highlighted in the article “4 Reasons Why Bamboo Is Taking Home Décor by Storm.”

Bamboo is widely available and more affordable than many other wood products. Bamboo is traditionally considered a type of wood flooring, but it’s actually not a wood at all, but a grass. And at growth rates of three to five feet per year, bamboo is one of the fastest growing plants on Earth, which means it’s widely available for spicing up interiors.

By Melissa Dittmann Tracey, REALTOR® Magazine

Deeper Debt Isn’t Stopping Millennial Buyers

Millennials are taking out the greatest share of all new mortgages and buying homes across price ranges. But a new study also shows they’re going more into debt at an alarming rate.

Realtor.com®’s research team analyzed records for more than 3.2 million mortgages originated from January 2013 to October 2017 and divided it by age groups.

Compared to other generations, millennials are narrowing the gap in the price of homes they’re purchasing. In September, millennials obtained mortgages on homes with a median purchase price of $237,000. Generation Xers (born between 1965 and 1981) purchased homes with mortgages on a median price of $280,000, and baby boomers (born between 1946 and 1964) purchased at $258,000.

Millennials are making down payments nearly as high as Generation Xers. The average down payment for a millennial originated mortgage is 9.1 percent. Gen X buyers have been making down payments of 11 percent, since early 2013.

Source: “Millennials Are Taking Over Real Estate—But They’re Going Deeper Into Debt Too,” realtor.com® (Dec. 5, 2017)

Housing Trend to Watch: The ‘Surban’

Suburban and urban areas are combining to create a new kind of living style known as the “surban.” Many in the real estate industry are predicting it to be one of the hottest housing trends to watch heading into the new year.

A surban offers greater walkability to retail and restaurants from a home or apartment, but in a suburban area. It’s a blend of both suburbia and city life. Previously, urban planners dubbed these areas “mixed-use.”

The Urban Land Institute estimates that surban areas will draw at least 80 percent of new households and attract the most families over the next decade.

Source: “2018 Real Estate Trends to Watch: ‘Surban’—That Sweet Spot Between City and Suburb,” RISMedia (Dec. 4, 2017)

New Homes Are Getting Smaller

Developers are continuing to shrink the size of new single-family homes, according third-quarter housing data compiled by the National Association of Home Builders. The median square footage of a single-family home was 2,378 square feet in the third quarter.

In the years following the Great Recession, builders were focused on the higher end of the market, catering to larger-sized homes. But more recently, builders have renewed their focus on the entry-level market, and NAHB predicts square footage of new homes to continue to decrease.

“Typical new-home size falls prior to and during a recession, as home buyers tighten budgets, and then sizes rise as high-end home buyers, who face fewer credit constraints, return to the housing market in relatively greater proportions,” NAHB explains at its Eye on Housing blog. “This pattern was exacerbated during the current business cycle due to the market weakness among first-time home buyers. But the recent declines in size indicate that this part of the cycle has ended, and the size will trend lower as builders add more entry-level homes into inventory.”

Source: “Declining New Home Size Trend Continues,” National Association of Home Builders’ Eye on Housing blog (Nov. 17, 2017)

Lift in Housing Starts Indicates Inventory Relief

Housing starts neared their postrecession high in October, with expectations that the new-home market will soon provide much-needed inventory relief, the Commerce Department reports.

Starts, which reflect combined totals within the single-family and multifamily sectors, jumped 13.7 percent in October to a seasonally adjusted annual rate of 1.29 million. That’s the highest reading for new-home production since October 2016, when starts had reached a high of 1.33 million.

Starts for single-family homes in October increased 5.3 percent last month, reaching a seasonally adjusted annual rate of 877,000. They are now up 8.4 percent from a year ago. Multifamily starts surged nearly 37 percent, reaching 413,000 units in October after a weak September production report.

 

Source: National Association of Home Builders

Rates Hit Pause, Consumers Rush to Lock In?

A slight dip in interest rates last week brought more homeowners and home buyers to the mortgage market. More homeowners were quick to refinance before interest rates rise again, and home buyers were able to lock in lower rates during the week.

The Mortgage Bankers Association reported that total mortgage application volume—which includes for refinancings and home purchases—rose 3.1 percent last week on a seasonally adjusted basis. Mortgage applications, however, still remain 8.5 percent below a year ago.

Additional data at: “Weekly Mortgage Applications Rise as Rates Briefly Fall Back,” CNBC (Nov. 15, 2017)

When to Drop Your Listing Price

Though low inventory is prompting buyers to raise their offers in order to beat out competitors, you still want your sellers to know: an overpriced listing will linger on the market. Buyers pay attention to time on market and may erroneously assume something is wrong with a property that has gone “stale.” Real estate pros say it’s critical to determine what time frame is considered stale in your market and drop the price of your listing before getting to that pivotal moment.

Soaring home prices may make buyers pause, but houses are still selling fast. Nationwide, the average time a home spent on the market was 34 days in September, down from 39 days a year prior, according to the National Association of REALTORS®. Some sellers may be adamant about “testing the market” with a high asking price, so you should have a game plan for what to do if it backfires.

Source: “How to Know When to Drop the Asking Price on Your Home,” CNBC (Oct. 27, 2017)

Consumers: Home Appraisals Still Falling Short

Appraisals continue to lag homeowners’ price expectations, according to the latest Quicken Loans’ National Home Price Perception Index, which compares homeowners’ initial estimates and appraiser’s opinions of home values. Appraised values were 1.35 percent lower than homeowners’ expectations in August. That has narrowed from a 1.55 percent difference in July.

Many homeowners are still not understanding their home’s current value, according to the analysis. The perceptions can vary quite a bit across the country, too. For example, home values are 3 percent higher than homeowners’ estimated values in the West, while they are 3 percent lower than expected in the Midwest and Northeast.

More interesting data and graphs at: quickenloans.com/press-room/2017/09/12/quicken-loans-study-shows-consumers-continue-to-be-too-optimistic-with-anticipated-home-value/

‘Granny Flats’ Are Finding a Bigger Purpose

Accessory dwelling units are increasingly being used by homeowners to add small secondary housing options on their property. These “granny flats” may be in the form of a converted garage or even a tiny home in an over sized backyard.

As more municipalities look to grant permits for these structures, some hope the trend can help alleviate housing shortages. Many forms of guest houses were deemed illegal in California up until recently. But a new law that took effect at the beginning of this year makes ADUs easier to add, leading to an upswing of these units in the state. If just 10 percent of California’s single-family homeowners added granny flats to their properties, 600,000 new units could be added to the state’s housing supply, according to USMondularInc, a firm that specializes in secondary housing units.

“California is in a housing crisis, and allowing people to modify their existing home or build a small cottage in their backyard will increase the rental supply at no cost to taxpayers,” state Sen. Bob Wieckowski, D-Fremont, said in a statement late last year.

Source: “Granny Flats Are on the Upswing – and They’re Not Just for Grannies Anymore,” San Gabriel Valley Tribune (Sept. 10, 2017)

Hispanic Homeownership Surges

Hispanics are increasingly making up what’s considered the typical American home buyer, Curbed.com reports. Latinos are expected to make up 52 percent of new home buyers between 2010 and 2030, largely driven by the country’s 14.6 million Latino millennials.

“The fact is the majority of Latinos want to be home owners and will make up half of all new home buyers in the next 20 years,” Scott Astrada, director of federal advocacy at the Center for Responsible Lending, told NBC. “They have a central place in the housing market and finance system.”

Harvard University Joint Center for Housing Studies’ “State of the Nation’s Housing” study predicts minorities overall will drive three-quarters of the gains in U.S. households. Latinos will likely account for one-third of those increases alone.

Source: “Booming Hispanic Homeownership Helping Fuel U.S. Housing Market,” Curbed.com (Sept. 5, 2017)