Category: My Blog

  • 21 Hot Housing Trends for 2015

    Everyone wants to be hip, and the latest trends in design can help distinguish one home from another. And it’s not all flash; many new home fads are geared to pare maintenance and energy use and deliver information faster. Here’s a look at what’s coming. DECEMBER 2014 | BY BARBARA BALLINGER

    This time of the year, we hear from just about every sector of the economy what’s expected to be popular in the coming year. Foodies with their fingers on the pulse of the restaurant industry and hot TV chefs will tell us to say goodbye to beet-and-goat cheese salad and hello roasted cauliflower, and there’s no end to the gadgets touted as the next big thing.

    In real estate, however, trends typically come slowly, often well after they appear in commercial spaces and fashion. And though they may entice buyers and sellers, remind them that trends are just that—a change in direction that may captivate, go mainstream, then disappear (though some will gain momentum and remain as classics). Which way they’ll go is hard to predict, but here are 21 trends that experts expect to draw great appeal this year:

    1. Coral shades. A blast of a new color is often the easiest change for sellers to make, offering the biggest bang for their buck. Sherwin-Williams says Coral Reef (#6606) is 2015’s color of the year because it reflects the country’s optimism about the future. “We have a brighter outlook now that we’re out of the recession. But this isn’t a bravado color; it’s more youthful, yet still sophisticated,” says Jackie Jordan, the company’s director of color marketing. She suggests using it outside or on an accent wall. Pair it with crisp white, gray, or similar saturations of lilac, green, and violet.
    2. Open spaces go mainstream. An open floor plan may feel like old hat, but it’s becoming a wish beyond the young hipster demographic, so you’ll increasingly see this layout in traditional condo buildings and single-family suburban homes in 2015. The reason? After the kitchen became the home’s hub, the next step was to remove all walls for greater togetherness. Design experts at Nurzia Construction Corp. recommend going a step further and adding windows to better meld indoors and outdoors.
    3. Off-the-shelf plans. Buyers who don’t want to spend time or money for a custom house have another option. House plan companies offer myriad blueprints to modify for site, code, budget, and climate conditions, says James Roche, whose Houseplans.com firm has 40,000 choices. There are lots of companies to consider, but the best bets are ones that are updating layouts for today’s wish lists—open-plan living, multiple master suites, greater energy efficiency, and smaller footprints for downsizers (in fact, Roche says, their plans’ average now is 2,300 square feet, versus 3,500 a few years ago). Many builders will accept these outsiders’ plans, though they may charge to adapt them.
    4. Freestanding tubs. Freestanding tubs may conjure images of Victorian-era opulence, but the newest iteration from companies like Kohler shows a cool sculptural hand. One caveat: Some may find it hard to climb in and out. These tubs complement other bathroom trends: open wall niches and single wash basins, since two people rarely use the room simultaneously.
    5. Quartzite. While granite still appeals, quartzite is becoming the new hot contender, thanks to its reputation as a natural stone that’s virtually indestructible. It also more closely resembles the most luxe classic—marble—without the drawbacks of staining easily. Quartzite is moving ahead of last year’s favorite, quartz, which is also tough but is manmade.
    6. Porcelain floors. If you’re going to go with imitation wood, porcelain will be your 2015 go-to. It’s less expensive and wears as well as or better than the real thing, says architect Stephen Alton. Porcelain can be found in traditional small tiles or long, linear planks. It’s also available in numerous colors and textures, including popular one-color combos with slight variations for a hint of differentiation. Good places to use this material are high-traffic rooms, hallways, and areas exposed to moisture.
    7. Almost Jetson-ready. Prices have come down for technologies such as web-controlled security cameras and motion sensors for pets. Newer models are also easier to install and operate since many are powered by batteries, rather than requiring an electrician to rewire an entire house,says Bob Cooper at Zonoff, which offers a software platform that allows multiple smart devices to communicate with each other. “You no longer have to worry about different standards,” Cooper says.
    8. Charging stations. With the size of electronic devices shrinking and the proliferation of Wi-Fi, demand for large desks and separate home office is waning. However, home owners still need a dedicated space for charging devices, and the most popular locations are a corner of a kitchen, entrance from the garage, and the mud room. In some two-story Lexington Homes plans, a niche is set aside on a landing everyone passes by daily.
    9. Multiple master suites. Having two master bedroom suites, each with its own adjoining bathroom, makes a house work better for multiple generations. Such an arrangement allows grown children and aging parents to move in for long- or short-term stays, but the arrangement also welcomes out-of-town guests, according to Nurzia Construction. When both suites are located on the main level, you hit the jackpot.
    10. Fireplaces and fire pits. The sight of a flame—real or faux—has universal appeal as a signal of warmth, romance, and togetherness. New versions on the market make this amenity more accessible with more compact design and fewer venting concerns. This year, be on the lookout for the latest iteration on this classic: chic, modern takes on the humble wood stove.
    11. Wellness systems. Builders are now addressing environmental and health concerns with holistic solutions, such as heat recovery ventilation systems that filter air continuously and use little energy, says real estate developer Gregory Malin of Troon Pacific. Other new ways to improve healthfulness include lighting systems that utilize sunshine, swimming pools that eschew chlorine and salt by featuring a second adjacent pool with plants and gravel that cleanse water, and edible gardens starring ingredients such as curly blue kale.
    12. Storage. The new buzzword is “specialized storage,” placed right where it’s needed. “Home owners want everything to have its place,” says designer Jennifer Adams. More home owners are increasingly willing to pare the dimensions of a second or third bedroom in order to gain a suitably sized walk-in closet in their master bedroom, Alton says. In a kitchen, it may mean a “super pantry”—a butler’s pantry on steroids with prep space, open storage, secondary appliances, and even a room for wrapping gifts. “It minimizes clutter in the main kitchen,” says architect Fred Wilson of Morgante-Wilson.
    13. Grander garages. According to Troon Pacific, the new trends here include bringing the driveway’s material into the garage, temperature controls, sleek glass doors, specialized zones for home audiovisual controls, and a big sink or tub to wash pets. For home owners with deeper pockets, car lifts have gone residential so extra autos don’t have to be parked outside.
    14. Keyless entry. Forget your key (again)? No big deal as builders start to switch to biometric fingerprint door locks with numerical algorithms entered in a database. Some systems permit home owners to track who entered and when, says Malin of Troon Pacific.
    15. Water conservation. The concerns of drought-ravaged California are spreading nationwide. Home owners can now purchase rainwater harvesting tanks and cisterns, graywater systems, weather-controlled watering stations, permeable pavers, drought-tolerant plants, and no- or low-mow grasses.
    16. Salon-style walls. Instead of displaying a few distinct pieces on a wall, the “salon style” trend features works from floor to ceiling and wall-to-wall. Think Parisian salon at the turn of the century. HGTV designer Taniya Nayak suggests using a common denominator for cohesiveness, such as the same mat, frame color, or subject matter. Before she hangs works, she spaces them four to five inches apart, starting at the center and at eye level and working outward, then up and down. She uses Frog Tape to test the layout since it doesn’t take paint off walls. Artist Francine Turk also installs works this way, but prefers testing the design on the floor like a big jigsaw puzzle.
    17. Cool copper. First came pewter; then brass made a comeback. The 2015 “it” metal is copper, which can exude industrial warmth in large swaths or judiciously in a few backsplash tiles, hanging fixture, or pots dangling from a rack. The appeal comes from the popularity of industrial chic, which Restoration Hardware’s iconic style has helped promote, says designer Tom Segal.
    18. Return to human scale. During the McMansion craze, kitchens got so big they almost required skates to get around. This year we’ll see a return to a more human, comfortable scale, says Mark Cutler, chief designer of design platform nousDecor. In many living or family rooms that will mean just enough space for one conversation grouping, and in kitchens one set of appliances, fewer countertops, and smaller islands.
    19. Luxury 2.0. Getting the right amount of sleep can improve alertness, mood, and productivity, according to the National Sleep Foundation. With trendsetters such as Arianna Huffington touting the importance of sleep, there’s no doubt this particular health concern will go mainstream this year. And there’s no space better to indulge the desire for quality rest than in a bedroom, says designer Jennifer Adams. “Everyone is realizing the importance of comfort, quality sleep, and taking care of yourself,” she says. To help, Adams suggests stocking up on luxury bedding, a new mattress, comfortable pillows, and calming scents.
    20. Shades of white kitchens. Despite all the variations in colors and textures for kitchen counters, backsplashes, cabinets, and flooring, the all-white kitchen still gets the brass ring. “Seven out of 10 of our kitchens have some form of white painted cabinetry,” says builder Peter Radzwillas. What’s different now is that all-white does not mean the same white, since variations add depth and visual appeal. White can go from stark white to creamy and beyond to pale blue-gray, says Radzwillas. He also notes that when cabinets are white, home owners can choose bigger, bolder hardware.
    21. Outdoor living. Interest in spending time outdoors keeps mushrooming, and 2015 will hold a few new options for enhancing the space, including outdoor showers adjacent to pools and hot tubs along with better-equipped roof decks for urban dwellers. Also expect to see improvements in perks for pets, such as private dog runs and wash stations, says landscape architect Jean Garbarini of Damon Farber Associates.

    While it’s fun to be au courant with the latest trends, it’s also wise to put what’s newest in perspective for your clients. Remind them that the ultimate decision to update should hinge on their needs and budgets, not stargazers’ tempting predictions.

  • Low Inventory May Drive Prices Up

    For the first time in 16 months, inventory of homes available for sale dropped last month, according to the National Association of REALTORS®. Although the decline was slight, less than 1 percent, per month, the drop does indicate “a reversal to the general growth of listings that had been occurring throughout 2014,” writes Lawrence Yun, NAR’s chief economist, at the Economists’ Outlook blog. “More inventories are needed, not less. Or else, home prices could re-accelerate.”

    In the month of December, the supply of existing-homes on the market was 4.4 months; 6 months is considered healthy by most economists’ standards.

    By the end of December, 1.85 million homes were listed for sale, that’s an 11 percent decline from November and 0.5 percent drop from year ago levels, according to NAR housing data. A drop in inventory is common from November to December, but Yun notes “what is of interest is the year-over-year decline in inventory because this hints at possible acceleration in home prices in upcoming months.”

    Home prices may have already begun “re-accelerating” in some markets, Yun writes. In spring and summer last year, the median price was rising at 4 to 5 percent. In November and December, the prices rose by 6 percent.

    Source: National Association of REALTORS® Economists’ Outlook Blog (Jan. 26, 2015)

  • 5 Mortgage Tips for Home Buyers

    Here are some tips from Bankrate.com on securing a mortgage, getting the best rate, and more.

    1. Be prepared to document your finances.
    Buyers need to prepare for extra review by lenders when underwriting mortgages due to new mortgage regulations that took place in January, particularly in proving the buyer’s ability to repay their loans. Buyers need to have ready their bank statements, tax returns, W-2’s, investment accounts, and documentation of any other assets they may own. They should also be prepared to explain any large deposits in their accounts, regardless of where it came from. If you can’t explain where any large deposits came from, it may delay closing.

    2. Lock in rate soon.
    Mortgage rates are expected to rise during 2014, as the Federal Reserve is winding down its $85 billion per-month bond stimulus program. A rate lock is usually good for 30, 45, or 60 days, although the time period may vary among different lenders.

    3. Shop around.
    Lenders have lost a large amount of their refinance business this year, as rising rates have made homeowners less likely to refinance. Therefore, new homeowners have a good opportunity. Lenders will be more willing to turn their attention to new home buyers and may be more willing to compete for their business. Home buyers need to shop around for the best interest rate on the loan, looking at points and closing costs also.

    4. Pay attention to credit.
    The best mortgage rates often go to people with credit scores of 720 or higher. While people with scores of 680 can likely still qualify for a loan, they might end up paying higher rates or closing costs.

    5. Watch your spending.
    Buyers need to make sure they’re not tempted to outfit their new home with all-new items on credit before closing on the home loan. Lenders will scrutinize debt obligations, like credit cards and student loans. Borrows should keep their monthly debt obligations, including mortgages and property taxes, to below 43% of their income.

  • 5 Most Affordable Housing Markets

    According to the National Association of Home Builders/Wells Fargo Housing Opportunity Index, nearly 65% of new and existing homes sold between the beginning of October and the end of December, were affordable to families earning an average income of $64,400. This is largely unchanged from the third quarter index.

    The NAHB/Wells Fargo Housing Opportunity Index shows that Youngstown-Warren Boardman, Ohio-PA, is the most affordable major housing market in the country. 89.4% of all new and existing homes sold in the fourth quarter of 2013 were affordable to families earning an average of $53,900.

    These are the top five most affordable major housing markets:

    1. Youngstown-Barren Boardman, Ohio-PA.

    2. Harrisburg-Carlisle, PA.

    3. Syracuse, NY.

    4. Buffalo-Niagara Falls, PA.

    5. Scranton-Wilkes-Barre, PA.

    The most affordable smaller market was Kokomo, Ind. 96.3% of homes sold in the fourth quarter of 2013 were affordable to people earning $60, 100.

    The index also showed that the most expensive major housing market in the country continues to be, for the fifth consecutive quarter in a row, the San Francisco-San Mateo-Redwood City, CA area. Only 14% of homes sold in the fourth quarter of 2013 were affordable to the area’s average income of $101,200.

    The National Association of Realtors also released its Housing Affordability Index, which shows that rises home prices are starting to hamper affordability throughout certain parts of the country, specifically in the West.

    While the vast majority of home owners have had significant gains in equity over the past two years, which is helping the economy, home prices are rising faster than incomes, and mortgage interest rates are rising. This is starting to affect housing affordability.

  • Average Home Size Growing

    An average new home size now has increased 300 square feet since 2009. It has increased from an average of 2,362 square feet in 2009, to 2,679 square feet in 2013.

    With this additional square footage, there are more homes adding more bedrooms, bathrooms, and amenities than there were in 2009.

    48% of homes built in 2013 had four bedrooms, whereas there were only 34% of homes with four bedrooms built in 2009. 35% of homes built in 2013 had three or more bathrooms, there were only 23% in 2010.

    Additionally, homes are now accommodating more space in the garage. 22% of homes in 2013 had space to fit three cars or more, compared to only 16% in 2010.

    Builders say that amenities that are most likely to be included in new homes are: a walk-in closet in the master bedroom, low-e windows, a laundry room, and a great room. Some other amenities that are favored by many builders are things like: granite counter tops, double sinks, a central island in the kitchen, 9 foot or higher ceilings, a front porch, exterior lighting, and a patio.

    Bigger homes though, also mean higher prices. Average sales prices have increased from $248,000 in 2009, to $318,000 in 2013.

    Some other features at the bottom of the list that builders will include in new homes during 2014 are: laminate kitchen counter tops, an outdoor kitchen, a sunroom, a two-story foyer, and a whirlpool tub in the master bathroom.

  • No Spring Slowdown for New-Home Sales

    In January, single family new-home sales surged to a five and a half year high, which is giving hope that the new-home sector isn’t going to slow down in Spring after all.

    New-home sales role 9.6% to a seasonally adjusted annual rate of 468,000 units in January. That is the highest it’s been since January 2008.

    Throughout the U.S. in January, new-home sales rose 73.7% in the Northeast, 10.4% in the South, and 11% in the West. However, due to a cold snap throughout the Midwest, new-sales slipped 17.2% there.

    Kevin Kelly, a chairman for the National Association of Realtors commented that, “The fact that the cold weather that hit much of the country didn’t stop home buyers from going out and purchasing a piece of the American dream is a great sign. However, the very low supply of new homes on the market and the continued concern of available buildable lots still have builders cautious about getting ahead of themselves.”

    The new homes for sale inventory generally remained steady throughout January, staying at a tight 4.7 month supply at the current sales pace. Housing starts had posted their largest decline in nearly three years last month, which gave concern about that the new-home sector was going to hit a downward spiral between rising home prices and mortgage rates.

    However, in January, new-home sales rose 2.2% from last January, and the average price of a new home rose to $260,100, a 3.4% increase from last year. The pace of rising home prices has also slowed in the past few months.

  • 12 States With the Lowest Amount of Foreclosures

    Many homeowners in the U.S. are still dealing with the after-effects of the housing bubble and credit meltdown. However, the foreclosure market is starting to show signs of slowly improving.

    The amount of completed foreclosures in December dropped 14% in comparison to December 2012. There were 45,000 foreclosures in December 2013, whereas there were 52,000 in December 2012. However, that’s still higher than the monthly average of foreclosures seen from 2000-2006 where there were only around 21,000 foreclosures per month.

    Anand Nallathambi, president and chief executive officer of CoreLogic remarked that 2013 was a transitional year for residential property in the U.S. However, higher home prices, lower shadow inventory levels, and the slowly improving economy are positive signs. The housing market is expected to continue healing in 2014, but progress will remain slow.

    There are presently 36 states that have a lower foreclosure inventory level than the national foreclosure inventory. These are the 12 States with the lowest foreclosure inventory level throughout the U.S.

    1. Wyoming

    Foreclosure Inventory: 0.4%
    Completed Foreclosures in 2013: 854

    2. Alaska

    Foreclosure Inventory: 0.5%
    Completed Foreclosures in 2013: 854

    3. North Dakota

    Foreclosure Inventory: 0.6%
    Completed Foreclosures in 2013: 417

    4. Nebraska

    Foreclosure Inventory: 0.6%
    Completed Foreclosures in 2013: 1,673

    5. Colorado

    Foreclosure Inventory: 0.6%
    Completed Foreclosures in 2013: 9,652

    6. California

    Foreclosure Inventory: 0.7%
    Completed Foreclosures in 2013: 39,149

    7. Minnesota

    Foreclosure Inventory: 0.7%
    Completed Foreclosures in 2013: 9,364

    8. Montana

    Foreclosure Inventory: 0.7%
    Completed Foreclosures in 2013: 1,006

    9. South Dakota

    Foreclosure Inventory: 0.7%
    Completed Foreclosures in 2013: N/A

    10. Virginia

    Foreclosure Inventory: 0.8%
    Completed Foreclosures in 2013: 12,409

    11. Missouri

    Foreclosure Inventory: 0.8%
    Completed Foreclosures in 2013: 13,811

    12. Arizona

    Foreclosure Inventory: 0.8%
    Completed Foreclosures in 2013: 19,831

  • Spring Selling Rush Coming Early

    Spring is usually the busiest time of year for the housing market, when more people are putting their homes up for sale. However, the spring selling rush seems to be starting earlier this year. Some homeowners are already putting their homes up for sale to advantage of the rebounding home prices and improved equity.

    Sellers are also starting to put home on the market early because they don’t know whether there will be a lot of people listing in the spring- which can cause a big counterbalance towards too much inventory- or if there will be a housing crunch again. Homeowners are trying to get ahead of the market and sell early to be done with it.

    Last year, there was a major home inventory shortage. The availability of homes for sale leading into spring was at a 12-year low. The shortage of homes helped boost prices a little bit, but it gave buyers very little options when looking for a home, and often sparked bidding wars in many markets. The construction of new homes in now at a third of its peak from 2006, which likely is going to keep home inventory tight in the spring. However, it is anticipated that because of improved home prices, there will be more homeowners listing their homes in the spring this year, which will help relieve the inventory crunch.

    During the last four months of 2013, home inventory levels began to increase after a 30-month decline. Inventories also increased in some of the states with the highest tightest markets. Some of these were Arizona, California, Georgia, and Florida.

    Due to the expected rise in inventory levels, home prices are expected to only rise 4% in 2014, as compared to 11% in 2013.

  • Rising Home Prices Lower Affordability

    Strong price gains are starting to lower housing affordability- especially in the West.

    The average price of a single-family home rose in 73% of housing markets in the fourth quarter of 2013, 26% of which had double-digit pricing gains.

    Lawrence Yun, NAR’s chief economist stated that, “The vast majority of  home owners have seen significant gains in equity over the past two years, which is helping the economy through increased consumer spending. At the same time, home prices have been rising faster than incomes, while mortgage interest rates are above the record lows of a year ago. This is beginning to hamper housing affordability.”

    In the fourth quarter of 2013, the average median home price was $196,000, which is 10.1% up from the previous year when it was $178,000.

    The Housing Affordability Index, which is calculated by the relationship between median home prices, median family incomes, and average effective mortgage interest rate dropped in 2013 to 175.8. This is in comparison to 2012, when it was at a 196.5, a record high. The higher the Housing Affordability Index, there’s more purchasing power.

    Yun also comments that the double-digit price growth is due in part to tighter housing inventories. There needs to be an increase in housing activity to help relieve the rising home prices. More housing supply will help to regulate the price growth and provide more affordability, but mortgage interest rates are expected to increase 5% this year.

    These were the five highest housing markets in the last quarter of 2013:

    1. San Jose, CA. at $775,000

    2. San Francisco, CA. at $682,400

    3. Honolulu, HI. at $670,800

    4. Anaheim- Santa Ana, CA. at $666,300

    5. San Diego, CA. at $476,800

    These were the five areas with the best housing affordability in 2013:

    1. Toledo, Ohio

    2. Rockford, Illinois

    3. Decatur, Illinois

    4. Lansing- East Lansing, Michigan

    5. Springfield, Illinois

  • More Consumer Commitment in 2014

    According to a recent Consumer Survey from the last quarter of 2013, consumers are expected to be more committed to buying or selling a house this year. Of the 2,500 people surveyed, 78% said they had a positive view of real estate right now, which is 5 points higher than the previous quarter, and 15 points higher than the end of 2012. 63% of consumers said they’re more committed to buying and selling in 2014.

    One particular generation has a favorable view of real estate right now, the Millennials. The generation had an 87% favorable view of real estate in the newest survey.

    More consumers are understanding that residential real estate and the U.S. economy are both moving in positive directions. Which makes them feel better about their own personal situations and is leading them to want to take advantage of better home prices and historically lower interest rates.

    However, consumers have said that two events that happened in 2013- the government sequestration, and the rising interests rates- will affect their personal finance decisions.

    Even though consumers are optimistic, they’re also remaining realistic, believing that the rate of rising home prices will probably slow after 2013. Consumers say that their biggest concerns about the housing market right now are decreasing home values, and saving up for a down payment. They’ve also stated that tighter housing inventories will likely impact their decisions for buying a house this year, and 67% said that they expect more buyer competition.

    Some other findings from the survey:
    96% say owning a home is important
    78% say that owning a home is an important part of the American dream
    72% say that finding the right home and community is an important part of their family happiness
    64% say that a good real estate agent can help them make the right decisions about the type of home and community they want to live in
    62% say that a good agent can help them maximize home ownership investment