Study: Landscaping boosts home values up to 12%

20901BLACKSBURG, Va. – Oct. 15, 2014 – Upgrading a home’s landscape from average to excellent can raise its overall value by 10 percent to 12 percent, according to research from Virginia Tech.

Alex X. Niemiera with Virginia Tech’s Department of Horticulture found that a $150,000 home with no landscaping could fetch an additional $8,300 to $19,000 more once surrounded by plants that vary in color and size.

The value of landscaping differed greatly from state to state, however. For example, the change in value from a home with no landscape to well landscaped ranged from 5.5 percent in Louisiana to 11.4 percent in South Carolina. Michigan homes saw the biggest difference in landscaping appeal, with a home’s value being increased by 12.7 percent.

“The most preferred landscape included a sophisticated design with large deciduous, evergreen, and annual color plants and colored hardscape,” according to Niemiera. Adding different plant sizes to a front yard, for example, can boost curb appeal, as well as mixing fruit trees and flowers for added color.

The survey found the following landscape elements most important:

Design sophistication
Plant size
Diversity of plant material type
“Survey results showed that relatively large landscape expenditures significantly increase perceived home value and will result in a higher selling price than homes with a minimal landscape,” Niemiera writes in the paper. “Design sophistication and plant size were the landscape factors that most affected value.”

Niemiera offers one reason why a boost in landscaping can impact a home’s value: “The resulting increase in ‘curb appeal’ of the property may also help differentiate a home in a subdivision where house styles are similar and thereby attract potential buyers into a home,” he says. “This advantage is especially important in a competitive housing market.”

Source: “Does Landscaping Increase Your Homes Value?” Realty Times (Oct. 13, 2014)

© Copyright 2014 INFORMATION, INC. Bethesda, MD (301) 215-4688

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Student debt costs housing $83B this year

IRVINE, Calif. – Oct. 13, 2014 – The latest John Burns Real Estate Consulting study calculates that student debt will cost the housing industry approximately $83 billion in sales this year.

With college debt increasing nearly 6 percent annually, the trend will probably continue – and likely worsen – in the years to come. The researchers estimate that heavy college debt will slash real estate sales by 8 percent for 2014, and that households that pay $750 or more for college loan debt a month will be priced out of the residential real estate market entirely, forcing them to rent or find other living situations.

Another recent study found that approved borrowers had monthly college loan payments around $300. Home-loan applicants paying nearly $500 per month in student debt, however, were usually denied.

Those researchers wrote: “Using previous academic literature as a benchmark for our own complicated calculation, we then estimated that today’s purchase rate is reduced from the normal 8 percent depending on the level of student debt.”

Source: Housing Wire (10/08/14) Garrison, Trey

© Copyright 2014 INFORMATION, INC. Bethesda, MD (301) 215-4688

Mortgage Rates will Rise – But When?

WASHINGTON – Oct. 13, 2014 – Mortgage rates have hovered around yearly lows for weeks. But with rate-hike forecasts looming, can buyers count on borrowing costs to stay low?

Many economists now predict that the average 30-year fixed-rate mortgage will reach 5 percent by the middle of the next year, according to a New York Times report. On Friday, Freddie Mac reported the 30-year fixed-rate mortgage averaged 4.12 percent.

A hike in rates will come, in part, from the Federal Reserve’s plan to stop buying mortgage-backed securities.

Economists note that a 5 percent mortgage rate is low by historical standards, but that type of increase will still reduce buying power in a home purchase. For example: A 1 percent increase in interest rates can raise a monthly mortgage payment on a typical home by more than $700 in pricier parts of the country. However, the increase would likely be much more modest in other, less expensive markets.

But even in the case of rate hikes up to 7 percent, the analysis found that homes still remain affordable overall. From 1985 to 2000, homeowners’ housing costs – including the principal and interest on a median-priced home – accounted for 22 percent of a homeowners’ median household income. However, today’s households spend about 15 percent of their median income on a median-priced home.

Source: “When Mortgage Rates Rise,” The New York Times (Sept. 25, 2014)

© Copyright 2014 INFORMATION, INC. Bethesda, MD (301) 215-4688

Industry trends to watch this fall

NEW YORK – Oct. 13, 2014 – The housing market is expected to heat up this fall, but buyers no longer see ownership as a sure path to economic independence.

Bankrate.com recently highlighted some trends to watch this fall in the nation’s real estate market:

1. An overall pick up in housing activity. Some less-than-stellar sales numbers in certain areas of the U.S. this summer were blamed on low inventories of homes for sale. However, the number of listings is increasing, which could unleash some pent-up demand among buyers.

At the end of August, housing inventory was at 2.31 million existing homes available for sale, which represents a 5.5-month supply of homes, according to the National Association of Realtors®. That’s 4.5 percent higher than a year ago.

When buyers have greater options in their home shopping, they may be more likely to finally jump off the sidelines, says Jonathan Corr, president and chief operating officer for Ellie Mae. “The housing market is going to be a function of the economy. I think we are going to see steady growth in the coming months.”

2. Buyers are more cautious. In what most housing experts still describe as a “seller’s market,” buyers seem to be getting more conservative with their spending. “They are sticking to their budgets,” says Pava Leyrer, director of training for Northern Mortgage Services in Grandville, Mich.

The past housing crisis has prompted buyers – particularly the younger generation – to be more cautious, because they’ve learned that home prices don’t always appreciate. Because of that, the younger generation views a house as a place to live, and not the great investment that their parents did, says Daren Blomquist, vice president at RealtyTrac.

Forty percent of the millennial generation believes buying a home is a safe investment with great potential, compared to about 50 percent of boomers, according to a survey by Fannie Mae National Housing Survey.

3. Mortgage rates will climb – really. Housing experts said mortgage rates would rise this year, but those forecasts have largely been wrong – so far.

However, the Mortgage Bankers Association expects the 30-year fixed-rate mortgage to start its climb to 4.5 percent by the fourth quarter, and continue to gradually climb and reach 5 percent by mid-2015. That’s prompted some lenders and real estate professionals to urge their buyers to lock in a mortgage rate now while they’re still at yearly lows.

Source: “5 Housing Trends for Fall 2014,” Bankrate.com (October 2014)

© Copyright 2014 INFORMATION, INC. Bethesda, MD (301) 215-4688

Florida “Numero Uno” in Aug. for Short Sales and Foreclosures

Yeap, they say it’s over… I don’t think so. Hey, at least we’re number one in something… sorry for the sarcasm. I see this everyday when I go into the tax rolls, and I always point it out to my wife who is also in Real Estate.

I act for some of my customers as their buyer at auctions, and it hasn’t been busier since 2008.

According to the RealtyTrac August 2014 U.S. Residential & Foreclosure Sales Report, Florida ranked No. 2 nationwide for distressed sales – short sales, REOs (bank-owned homes) and foreclosure auctions.

However, the state outpaced all others in two of the categories: Short sales and foreclosure auctions, which ranked No. 1. In REO sales, seven other states recorded more.

Three days only: Tax-free holiday on some appliances

TALLAHASSEE, Fla. – Sept. 16, 2014 – While Florida’s school-sales-tax holiday makes headlines in August, a lesser-publicized tax holiday on energy-efficient appliances takes place this weekend, Sept. 19-21.

The tax holiday covers qualifying Energy Star and WaterSense products, and sales tax won’t be collected on the first $1,500 of the price during the tax-free weekend. Energy Star products use at least 10 percent less energy, and WaterSense products use at least 20 percent less water.

The list of qualified products includes selected ceiling fans, dishwashers, freezers, refrigerators, light bulbs, clothes washers, bathroom sink faucets, showerheads and more. Consumers are limited to one tax-free purchase of any item that costs more than $500, and it doesn’t apply to any rentals or repairs. There are no quantity limits on items that cost less than $500.

The holiday begins at 12:01 a.m. on Friday, Sept. 19, and ends at 11:59 p.m. on Sunday, Sept. 21.

Qualifying Energy Star Products

  • Air purifier
  • Ceiling fan
  • Clothes dryer
  • Clothes washer
  • Dehumidifier
  • Dishwasher
  • Freezer
  • Light bulbs (packages)
  • Refrigerator
  • Room air conditioner
  • Swimming pool pump
  • Water heater

An Energy Star item must be designated by the United States Environmental Protection Agency and the United States Department of Energy as meeting or exceeding the requirements under the Energy Star Program. An Energy Star label must be affixed to the product.

Qualifying WaterSense Products

  • Bathroom sink faucet
  • Faucet accessory
  • High-efficiency toilet or urinal
  • Showerhead
  • Weather or sensor-based irrigation controller

A WaterSense item must be recognized as water efficient by the WaterSense Program sponsored by the United States Environmental Protection Agency. A WaterSense label must be affixed to the product.

For more information, visit the Florida Department of Agriculture and Consumer Services website.

© 2014 Florida Realtors®

Did you read the book?

First time buyers spend a lot of time reading on the internet how to buy their first home. Although a lot of useful information can be found in different blogs, most don’t paint the “real” picture of what’s going in the market right now. Most blogs or “books” paint an ideal situation, or something that applied when they wrote the book, or simple something that’s a good idea in a different state.

This information often make the prospective buyer miss out on a couple good buys as they learn what the local market is really doing. What can us REALTORS do? Not much. We have to be patient and let the buyer learn on his own. Unfortunately, I hear one too many times: “Man, that house we saw first was really a good deal”

My suggestion, is to talk to different REALTORS to get a better opinion on how to go about winning that right home early on. A common statement we use in the business when we see an offer that tells the story of an inexperienced buyer is: Did he read the book?

Home Price Ease Sign Of A Normal Market

After a period of sharp increases, home price gains began to slow last fall. The trend – which has continued ever since – is an indication of a more normal housing market, according to David M. Blitzer, chairman of the index committee at S&P Dow Jones Indices. The latest S&P / Case-Shiller U.S. National Home Price Index found that, though up from one year ago, home prices are increasing at an ever-slower pace. In fact, all of the cities covered by the index showed lower annual rates for the first time since February 2008. According to Blitzer, the trend – along with other positive housing indicators, such as housing starts, existing-home sales, and builders’ sentiment – is an indication that the housing market is normalizing. And, in addition to contributing to a more balanced market, slower price gains, combined with mortgage rates still hovering near historic lows, mean more opportunities for buyers this fall. The S&P Case-Shiller Home Price Indices are considered the leading measure of U.S. home prices. More here.

Housing Market Continues To Stabilize

Since hitting its weakest point in September 2011, the housing market has made a 23.3 percent rebound, according to Freddie NeighborhoodMac’s most recent Multi-Indicator Market Index. The index – which measures local housing markets in all 50 states based on several fundamentals, including home purchase applications, payment-to-income-ratios, and proportion of on-time mortgage payments – found that most markets, though still weak, are trending upward. Frank Nothaft, Freddie Mac’s chief economist, said as we see the economy slowly normalizing we’re starting to see its effects in the housing market as well. In fact, according to Nothaft, the bigger housing markets – some of which were among the hardest hit – continue to improve. Evidence of that improvement can be seen in recently released housing data showing positive gains in existing-home sales, new residential construction, and builder confidence. After a disappointingly slow start to the year, local markets are getting a boost from encouraging economic data and an increasingly stable job market.