Survey: More Buyers Make Offers Sight Unseen

The number of buyers making offers sight unseen—meaning they haven’t physically visited the property is on the rise, according to a survey of recent home buyers conducted by real estate brokerage Redfin. Thirty-three percent of respondents in 11 major markets say they made an offer on at least one house sight unseen. These types of offers are more common when working with foreign buyers and in markets where homes are selling quickly, real estate professionals say.

New uses of 3-D photos, video tours, and virtual reality are giving some buyers enough confidence to purchase a home without an in-person showing. The Wall Street Journal reports that some real estate pros are conducting property walkthroughs with long-distance buyers remotely via FaceTime, Skype, or WhatsApp. Some agents are working with technology companies to create 3-D photo and video tours within the virtual reality space to make long-distance buyers feel like they’re at the property in person.

Source: “Buying a Home Sight Unseen Is Easier Than Ever – and More Common,” The Wall Street Journal (June 22, 2017) [Log-in required.]

Retirees Look to Build Smaller, Custom Homes

Many people seek to downsize their home in retirement—but not their home buying wish list. Retirees reportedly are flocking to smaller newly built homes customized to their personal needs and tastes.

One advantage older home buyers find with these custom homes is that they can be built to accommodate medical conditions or physical restrictions, such as wider hallways to accommodate mobility devices. The home also can be outfitted with age-in-place features such as outdoor ramps and lower kitchen cabinets.

Retirees are looking to cut back on home maintenance and repairs, which is why their preferences are straying away from larger, older homes. However, building a custom home can be stressful because of the wide availability of options. Real estate experts recommend researching building plans and contractors carefully to make sure buyers get the type of craftsmanship they seek.

Source: “Retirees Turning to Custom Homes to Get the Right Space,” RISMedia (June 22, 2017)

How Much Will Buyers Pay for Walkable Space?

Urban development that boasts high density and walkability is in demand over life in the suburbs, according to a report by the Center for Real Estate and Urban Analysis at George Washington University School of Business and LOCUS: Responsible Real Estate Developers and Investors. In fact, such places are gaining market share against suburban areas for the first time in decades.

The report defines walkable urban areas as those with high density, more mixed-use real estate, and multiple transportation options. These areas command larger rent premiums over suburban spaces, with the ability to charge 90 percent more for office space, 71 percent for retail, and 66 percent for multifamily rentals.

But just because a place might lack a history of density and walkability doesn’t mean it’s stuck with lower rents. The study found that new development can help, with areas known for sprawl taking notice of the trend and making strides in adding more density and walkability.

Source: “Walkable Cities Gaining Ground Against Suburbs, Says Report,” Curbed.com (June 14, 2016)

Is Summer Truly Housing’s Hottest Season?

The spring is traditionally real estate’s busiest time of year. But one real estate economist believes that this summer may trump the spring as the most robust time of buying or selling a home for 2016.

“From a buyer’s perspective you have more choice, but you’re also competing against far more buyers,” says Ken Johnson, a real estate broker as well as a professor of finance and associate dean at Florida Atlantic University’s College of Business. “Sellers are also looking to sell over the summer, particularly if they have children and want to get a deal done before school starts again.”

The groundwork for a booming summer market has already been laid out. New-home sales in April posted their strongest month in more than eight years. Existing-home sales were up for the second consecutive month. What’s more, historically low mortgage rates may increase the demand for housing this summer.

Source: “Economist Says Summer May Be the Hottest Season to Buy and Sell,” RISMedia (June 5, 2016)

Senior Housing Facing Affordability Crisis?

Millions of older adults struggle to find housing that is affordable and physically suits their needs, a new report by the Bipartisan Policy Center’s Senior Health and Housing Task Force, outlines recommendations for states and legislators to help alleviate the lack of suitable senior housing.

It’s also calling on state and local governments to allow for more permissive land-use policies to urge alternative housing structures for seniors, such as accessory dwelling units, micro-units, and congregate homes. It’s also calling for federal and state governments to provide greater support for home modifications so people may age in place, such as through property tax credits, grants, or forgivable loans.

Source: “Former HUD Secretaries: America’s Elderly Desperately Need More Affordable Housing,” HousingWire (5/22/16)

Is Facebook Losing Some of Its Mojo?

Fewer Facebook users are sharing personal updates or original content. In fact, a newly released report shows that Facebook saw a 21 percent decline in “original sharing” or personal updates among its 1.6 billion monthly active users.

“This indicates a key vulnerability for the social behemoth,” a Fortune article notes. What started as a “special and intimate place to share things grows into a big, impersonal, and professional platform.”

Fortune columnist Erin Griffith blames the decline partially on the rise of professional content on Facebook. Facebook has helped to foster the growth of professional content on its site, but Griffith says the problem is that professional content can be found anywhere online and makes Facebook lose its identity. What’s more, the greater the professional content offerings on the social network, the more other users may feel their inside jokes, blurry photos, and opinions feel out-of-place.

“The platform no longer feels like an intimate conversation among friends,” Griffith notes. If the platform is going to keep its future domination, Griffith says it needs to look to retain what made it special in the first place: Intimacy.

Source: “Facebook users Are Sharing Less and It’s a Big Problem,” Fortune (April 7, 2016)

Home Remodeling Activity Looking to Gain Steam

Expenditures for home improvements should see healthy gains in 2016, according to the Leading Indicator of Remodeling Activity (LIRA) released today by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University. The LIRA projects annual spending growth for home improvements will accelerate from 4.3% in the first quarter of 2016 to 7.6% in the third quarter. By then, the level of annual spending in nominal terms is anticipated to surpass the previous peak set in 2006.

2016 is looking to be a stronger year for home renovation activity compared to 2015 thanks to the continued recovery in the owner-occupied housing market. In most markets across the country, rising house prices are bringing more homes to the market and increasing sales, which is a large driver of home improvement activity.

For more information about the LIRA, including how it is calculated, please visit the Joint Center for Housing Studies website.

‘Mortgage Rates Drop’ After Last Week’s Spike

Good news about real estate loans! The average fixed-rate mortgages reversed course this week, falling after having soared to new highs for 2015 last week.

Freddie Mac reports the following mortgage rate averages for the week ending June 18:

  • 30-year fixed-rate mortgages: averaged 4 percent, with an average 0.7 point, dropping from last week’s 4.04 percent average. Last year at this time, 30-year rates averaged 4.17 percent.
  • 15-year fixed-rate mortgages: averaged 3.23 percent, with an average 0.5 point, dropping from last week’s 3.25 percent average. A year ago, 15-year rates averaged 3.30 percent.
  • 5-year hybrid adjustable-rate mortgages: averaged 3 percent, with an average 0.4 point, dropping from last week’s 3.01 percent average. Last year at this time, 5-year ARMs averaged 3 percent.

Source: Freddie Mac

Home Loan Interest Rates Stay Low Into Spring

The 30-year fixed-rate mortgage continues to average below 4 percent – a positive sign launching into the spring home-buying season, Freddie Mac reports in its weekly mortgage market survey. Average fixed-rate mortgages moved down this week. Freddie Mac reports the following national averages for the week ending March 19:

  • 30-year fixed-rate mortgages: averaged 3.78 percent, with an average 0.6 point, dropping from last week’s 3.86 percent average. Last year at this time, 30-year rates averaged 4.32 percent.
  • 15-year fixed-rate mortgages: averaged 3.06 percent, with an average 0.6 point, dropping from last week’s 3.10 percent average. A year ago, 15-year rates averaged 3.32 percent.
  • 5-year hybrid adjustable-rate mortgages: averaged 2.97 percent, with an average 0.5 point, dropping from last week’s 3.01 percent average. Last year at this time, 5-year ARMs averaged 3.02 percent.

Source: Freddie Mac

Why Home Renters May Be in Trouble

The gap between rental costs and household income is widening to unsustainable levels across the country. As more renters face steeper costs, it may put them even further away from home ownership, according to the National Association of REALTORS®. NAR evaluated income growth, housing costs, and changes in share of renter and owner-occupied households over the past five years in metropolitan statistical areas.

Over the last five years, a typical rent rose 15 percent, while the income of renters grew by only 11 percent, according to research in a new study just released.

“Current renters seeking relief and looking to buy are facing the same dilemma: Home prices are rising much faster than their incomes,” says Lawrence Yun, NAR’s chief economist.  “With rents taking up a larger chunk of household incomes, it’s difficult for first-time buyers – especially in high-cost areas – to save for an adequate down payment.”

“The result has been an unequal distribution of wealth as renters continue to feel the pinch of increasing housing costs every year,” according to NAR’s study.

Source: National Association of REALTORS®