Homeownership in America: August 2019:

Rates are low and mortgages are cheap, so why isn’t homeownership on the rise in America?

By Anneken Tappe, CNN Business

New York (CNN Business) Interest rates are dropping and American mortgages are cheaper than they’ve been in years. The US economy is strong. That’s a recipe for a booming housing market and homeownership should be on the rise — but it isn’t booming at all.

The reason that the market isn’t booming the way it should be is in short, due to lack of inventory and increased home prices. Since 2012, home prices increased about three times the price of wages. Although the unemployment rate is the lowest it has been in 50 years, and American paychecks are growing, this isn’t enough to allow the majority of Americans to live out the American dream of homeownership.

We can recognize that consumers are paying attention to mortgage rates because the week ending August 2, mortgage applications were up 5.3% from the week prior and refinances are up 116% from last year, however, this is also evidence that people are staying in their homes instead of moving and selling. Although rates have become cheaper, houses haven’t.”The S&P/Case-Shiller US National Home Price Index has climbed steadily over the past seven years.”

We are seeing many markets that are shifting to buyer’s markets because of the fact that people simply can’t afford the price of the homes in their area, causing homes to sit on the market longer. According to Tappe, “typically, when buyers remain on the sidelines, housing prices fall in response to lower demand. But that’s not happening at the moment because the homes on the market are priced higher than where people are willing — or able — to buy.”

There simply isn’t enough inventory at an affordable price to cast a net of consumers who would sustain a boom of homeownership.

Some of the reasons for lack of affordable housing is due to a shortage of construction workers, high material costs due to tariffs on lumber, steel, and aluminum. Another factor that could be stalling homeownership is the 2017 Trump tax reform that was initiated which limited tax-deductible mortgage interest to loans of $750,000, and state and local tax deductions are capped at $10,000. This could give some prospective homebuyers pause in certain high-tax areas.

If you are looking for a home in San Diego, please reach out to me as I work with some of the best lenders in the business and my team and I is committed to making homeownership a reality for you! Contact me here! to set up a buying or selling consultation.

Source:https://www.cnn.com/2019/08/09/economy/mortgages-home-buyers/index.html

Here is what grocery stores can do for home values: A Study

A new Attom Data Solutions study looks at the correlation between grocery stores and home values by Veronika Bondarenko from Inman.

For some of us, it is hard to imagine a life where one would have to drive 10 miles just to get some groceries. We don’t really think about the convenience of having a strip mall, grocery store or shopping center because, for many of us, that is all we have ever known.

Unfortunately, for many people, even in our country there are such thing as areas known as “food deserts”, towns and places where there are only quick-stop convenient stores such as gas stations, as opposed to grocery stores with fresh food and produce. These dreadful “food deserts” are not surprisingly

One reason we know grocery stores and home values have a strong correlation is if you look at these food deserts that are the opposite of convenience, “synonymous with more health problems, lower quality of life and, naturally, lower home values.” In addition to that, lack of grocery stores= lack of community and population growth, in turn hurting home values.

Taking that a step further, there are certain supermarkets that add higher value than others.

“A new analysis by Attom Data Solutions, released Friday, confirmed what many may have already felt intuitively. Homes within a close range of popular food stores such as Trader Joe’s and Whole Foods have high home value rates and investment returns.”

“On average, a home within close range of a Trader Joe’s, a popular

supermarket chain known for its budget-friendly fresh food and healthy frozen items, is worth $608,305. Homes near a Whole Foods, a high-end healthy food supermarket more common to urban areas, is worth $521,142.”

“Homes near ALDI, a discount supermarket known for its super-low grocery prices, have home values more in line with the national average ($222,809), but the presence of the supermarket can indicate the potential for major neighborhood growth.” (Antom Research)

The study pulled from 1,859 U.S. ZIP codes, all of which had one Whole Foods, one ALDI and one Trader Joe’s each. The study found that the return of the investment made on a property correlated to being higher within close range of at least one of the three supermarkets.

“On average, homes near Trader Joe’s had a home seller ROI of 51 percent, compared to 41 percent for homes near a Whole Foods and 34 percent for homes near an ALDI. If you average all ZIP codes with these grocery stores, the ROI comes out to 37 percent.”

When it comes to added equity, homeowners near a Trader Joe’s have an average 37 percent equity in their homes ($247,445), while homes near Whole Foods had 31 percent equity ($187,035) and homes near ALDI have 20 percent equity ($53,650).

Another interesting thing that was found in this study is that homes near ALDI have an average gross flipping ROI of 62%, which means the homes in that neighborhood are likely to grow in value. Homes near Whole Foods had an average gross flipping ROI of 35 percent, while those near Trader Joes was about 31%.

As consumers, we realize we pay a price for convieniece, this is the same idea when it comes to being within close proximity to grocery stores.

“When looking at growth over a five-year period, the study found that properties near ALDI have grown by 42 percent while those near Trader Joe’s and Whole Foods grew by 33 percent and 31 percent, respectively. (Homes within close range of one of these three stores grew by 38 percent.)”

Bondarenko says, there still needs to be more work done on the study, however, this is something to definitely keep in mind when looking for a home.

Source: https://www.inman.com/2019/08/02/heres-what-a-nearby-trader-joes-can-do-for-home-values-study/

Want to find out the value of YOUR home? Click here!

Zillow’s Expansion into Zillow Homes

Real Estate Giant, Zillow plans to open up their own proprietary marketplace or “Brokerage” if you will, with Zillow’s expansion into Zillow Homes. Zillow founder and CEO Rich Barton says, “Real Estate Agents are not going away”.

He also touches on the company’s adjustment to its Zestimate tool, and their one-year-old selling and buying operation, Zillow Homes, where they buy homes for all cash and re-list them on their website. Zillow homes plan on being in 14 markets by the end of the year. They are already present in markets such as Arizona, Atlanta, Denver, Raleigh, Houston, and Riverside.

In an article by Patrick Kearns, Inman Staff Writer, he interviews Barton on how Zillow homes will affect the real estate market as we know it.

Many people in the industry express their concern, saying this will take business away from many agents and other parties involved in the transaction as they try to make Zillow a one-stop home buying shop.

Barton believes that real estate agents will never be cut out of the transaction. Zillow works with a local brokerage to represent it on both sides of the transaction and has in the past said it pays a market rate commission – which it works out individually with each brokerage – but has declined to reveal the average commission percentage to Inman. 

“[Consumers] don’t know about all that administrative stuff that happens and slows them down and angers them, confuses them. It’s expensive and they don’t know why,” Barton said during a conversation with Inman founder Brad Inman at Inman Connect in Las Vegas during Wednesday’s general session. “They absolutely want and need an advisor. I am 100 percent certain that will continue.”

The company also has a pilot platform called “Tour it now” where the consumer gets a code sent to them and tour Zillow-owned houses. They say all of their implementations is to streamline the buying and selling process and are confident it will “reduce the friction of consumers and agents and lead to more transactions in the industry as a whole.” 

Inman relayed an anecdote about trying to view a property, only to realize halfway through the experience that the person he was talking to wasn’t the listing agent.

“For a company that says it’s consumer-friendly, that’s kind of bullshit isn’t it?” Inman asked.

Another aspect Zillow is dipping their toes into is the Mortgage side of the transaction, with the acquisition of Mortgage Lenders of America, Zillow wants the mortgage to be a part of that too. He compared it to Uber having a built-in payment system.

Barton says, “Returning to this job, I actually realized now that we are the incumbent,” Barton said. “We are part of this industry and we, in fact, are facing our own set of disruption challenges, which has provoked us into a period of an incredible renaissance of creativity.”

Barton claims that they are a “media company” and will continue to run as  “media company.”

Source: https://www.inman.com/2019/07/24/zillow-ceo-rich-barton-real-estate-agents-are-not-going-away/?utm_source=dailyheadlines&utm_medium=email&utm_campaign=localnewsletter&utm_content=745331_image_1_

Things to Think About Before Selling Your Home

We have all seen and read many articles about what to do before you put your home on the market. Stage it, hire a REALTOR®, de-clutter, make repairs, etc, however, there are many questions as a seller you probably don’t think about. In an article from Inman Select, written by Nicole Solari, a top agent from Northern California, she brings all these questions to light to help sellers think like a REALTOR®.

The first thing to think about when selling your home on Solari’s list is to figure out how much attention and expertise you need from the listing agent. While your agent is doing their best to give you their highest level of service, it is important for any working relationship to lay expectations out on the table up front so operations can run as smoothly as possible. You and your agent are a team, they are in your corner fighting for you, and there will be many issues that come along the way and you need your issues to be with each other.

Number two on Solari’s list of things to think about before listing your home is to figure out what market specific information do you have or need to acquire. Probably the most asked question to agents is, “How’s the Market?” When selling your home, it is extremely important to have a pulse on the market and know things such as when to time it so it doesn’t sit.

Know your audience comes third on Solari’s list of things to think about when listing your home. Your agent will have an idea of the demographics of your area. “If you don’t know what appeals to whom and aren’t ready to interview agents, plan to spend your weekends visiting open houses similar to yours in what you think will be your broad price range. Then, pay attention to who attends the open house, as well as what the house looks like.”

Number four on Solari’s list of things to think about when staging your home is knowing what a realistic time frame for selling your home is in your neighborhood. It is so easy as a seller to get frustrated when your home hasn’t sold, but every market is different and certain homes take longer to sell, knowing this ahead of time will put you at ease when your home doesn’t miraculously sell in 30 days.

Number five on Solari’s list of things to know before selling your home is to understand how television, technology, and social media have all changed the way people perceive things-real estate included, as we have a universe of information blasted into our pockets on our smartphones. Buyers can be constantly looking at homes on Pinterest, real estate websites, Instagram etc and get bombarded with real estate ads. “staging a home to sell is no longer optional in most markets. Do not think that watching HGTV qualifies you to stage your own home in a way that hits the right buttons with buyers.”

Also, do not think that because you’re an “artist” or you studied interior design in college that you understand how good stagers merchandise a house.

You just don’t. You need professional help with this every bit as much as you need a plumber to replace the kitchen sink. This is not a DIY opportunity!”

Article Source:https://www.inman.com/2019/06/25/sellers-dont-even-think-about-listing-till-you-answer-these-10-questions/