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LOW MORTGAGE INTEREST FOR 12 WEEKS IN A RAW - WHAT IS GOING ON IN REAL ESTATE MARKET TODAY?

After years of flunking, the American housing market finally merits a B+ grade.

Good news abounds: In August, new home sales are at their highest level since 2008. Homebuilder confidence is back to its best level in a decade and even mortgage applications are climbing again.

And data released Tuesday shows construction crews are starting on homes at the fastest pace since the recession.

Put all that together and the housing market is finally starting to be a real boost to the U.S. economy -- and stock market -- instead of a drag.

But today's real estate market is a very different place than before the recession.

American home buyers are getting older and homes are getting bigger.

The median age of a homebuyer has gone from 35 to 43

The median age of a homebuyer in 1985 was 35.

When the housing boom was nearing its peak in 2005, the median homebuyer's age was 39. Now it's 43, according to U.S. Census data.

"We consistently tell that story of people delaying homeownership," says Skylar Olsen, senior economist at Zillow. "People are delaying things that pre-date homeownership -- like getting married later and having children later.

Homes are getting bigger

Homebuilders are catering to more middle aged buyers by building larger homes.

Since 2000, the typical American home for sale had about 1,800 square feet. That's remained fairly steady over time.

But new homes that are just being built typically have 2,200 square feet, according to an analysis by the National Association of Home Builders. Potential homebuyers say they want a place that is at least that large.

So what's going into all that extra space?

More bathrooms.

"Builders are adding more bathrooms. You want a little bit more privacy," says Olsen.

Multi-family homes are also booming as people buy homes as investment properties to rent out. In the late 1980s, people would rent for four years before purchasing their first home. Now it's at least six years.

Large homes often translate to more money for builders. No wonder the stock market funds that track homebuilders are soaring this year.

The iShares U.S. Home Construction ETF (ITB), SPDR S&P Homebuilders ETF (XHB) and iShares Residential Real Estate Capped ETF (REZ) are all up about 6% or more in 2015. That's much better than the overall stock market, which is negative for the year

Student debt doesn't explain housing trends

The other common explanation for this big shift in American real estate is that young people have too much debt to buy homes, especially from student loans.

But economists at Zillow took a look at the probability that someone would buy a home if they have zero debt all the way up to $50,000 in student loans.

They found that higher student debt had almost no impact on the decision to buy a home.

Banks were very willing to lend to young people who had bachelor's degree or higher, a recognition that these people would be likely to earn good salaries and pay off their loans.

The one exception was people who earned only an associate's degree. There was a 75% chance of buying a home if they had no student debt.

But that fell to less than 60% chance of purchasing property if they had $50,000 in loans.

It's an economic reality that workers with at least a bachelor's degree now earn about $65,000 on average a year, compared to less than $50,000 a year for those with only an associate's degree.

CNNMoney (New York) October 21, 2015: 5:12 AM ET

Where Millennials are buying homes

Des Moines, Iowa

• Share of Millennial mortgage holders: 59%

More Millennials have been calling Des Moines home recently thanks to job growth and low home prices.

And that's not the only place they're hanging their hats.

The lack of buying among first-time buyers in the wake of the economic crisis has had the industry biting its nails wondering if young adults would ever give up renting or move out of their parent's basement.

But now that they've finally reached the normal home-buying age, they're jumping into the market. "The No. 1 buying cohort has always been the 25-34 year olds," said Jonathan Smoke, chief economist for Realtor.com.

Here are the top 10 markets where Millennials represented a large share of new mortgages, according to Realtor.com.

1- Des Moines- Iowa , 2- Provo- Utah, 3- Baton Rouge-Louisiana, 4- Lafayette-Louisiana, 5- New Orleans-Louisiana, 6-Shreveport-Louisiana, 7- Clarksville-Tennessee, 8- Madison-Wisconsin, 9- Pittsburgh- Pennsylvania, 10- Grand Rapids- Michigan. 

JUST LISTED - 27911 Shefield, Mission Viejo - FOR SALE

8 THINGS YOU NEED TO KNOW ABOUT BUYING A NEW BUILT HOME

Buying a new home can be a truly exciting experience. Choosing your lot and floorplan, picking out all your fixtures, watching the progress from foundation to framing to finishes. Makes me want to run out and tour a model home right now!

Through all the excitement, though, there are a few realities that may be surprising for those buying new for the first time.

1. You probably won't be able to negotiate the price

New homes are not like resale, where there is the expectation of price negotiations back and forth. The price set by the builder is most likely the price you're going to pay. The exceptions are when there are just a few homes left and when there is standing inventory that needs to be sold.

"Look for builder inventory homes that have been on the market for 45 days or more," said Inman. "These are the homes in which a buyer might be able to get a good deal."

2. But you may be able get some upgrades at no cost

More typical in a new-home community is getting some upgrades thrown in—things like window coverings or nicer flooring. Negotiating a few must-haves into your deal can help offset your costs. Some builders may also help with closing costs as an incentive to buy.

Meritage

3. There might also be incentives to using the builder's in-house lender

Many builders have an in-house or preferred lender they work with to provide financing for buyers. There may be advantages to using this lender—better terms or a rate that's bought down. By law, the builder can't make you use their lender, so if you feel pressured, be sure to discuss with your real estate agent.

4. Use a REALTOR®

Speaking of Realtors…you can use your agent to buy a new home, and, in fact, you should.

"In general, builders' model homes are staffed by agents who work directly for and represent the builder. A buyer also needs to have a real estate agent who represents them and looks after their best interests," said Inman. "Keep in mind that most builders will require that the real estate agent accompany and register the buyer on their first visit to the builder's model home or community."

Curbed

5. Your home will not look like the model

When you tour a model home, it's decked out with pretty walls and floors and lighting and countertops. The furniture is to scale and the fabrics are custom and the pictures are hung perfectly. It's pretty seductive. But the empty shell you buy won't look like this if you go with all the standard configurations and finishes. Be realistic about what you want, what you need, what you can afford, and how that translates to what you are seeing. The salesperson can point out which of the items you love in the model come standard and which are pricey upgrades.

6. The price of the home as advertised is not what you'll pay

Typically, it will take many tens of thousands of dollars in upgrades and options to get the home you buy to look like the model. This can be a rude awakening for buyers who are trying to stick to a strict budget. The good news is rolling some of those upgrades into the mortgage can make good financial sense, according to Money Crashers.

"Upgrading during the initial construction phase is generally cheaper than updating your home later on. For example, if you choose to upgrade from laminate flooring to hardwood, you'll pay the difference in material costs—but you won't necessarily have to pay extra for the installation itself, since your builder needs to install floors in the first place. The same goes for things like windows and bathroom features."

Merchant Circle

7. You'll be dealing with construction noise and traffic. For a while.

The peaceful life you envision can be a reality, but probably not from the get-go. Depending on the community, it may take time to complete construction. Which means dealing with congestion and hassle for the time being. Amenities like pools, sport courts, and trails may also not be built out by the time you move in. Asking ahead of time about the construction schedule can help you manage expectations.

8. Not everything will work perfectly

In any house, there are bound to be issues. New homes are no different. Builder warranties will help.

"Warranties for newly built homes generally offer limited coverage on workmanship and materials relating to various components of the home, such as windows, heating, ventilation and air conditioning (HVAC), plumbing, and electrical systems for specific periods. Warranties also typically define how repairs will be made," said the FCC. "The duration of coverage varies depending on the component of the house. Most warranties on new construction cover siding and stucco, doors and trim, and drywall and paint during the first year. Coverage for HVAC, plumbing, and electrical systems is generally two years. Some builders provide coverage for up to 10 years for "major structural defects."

RealtyTimes ByWritten by Jaymi Naciri on Sunday, 09 August 2015 9:46 am

What to expect from housing in the 2nd half

The housing outlook for the second half of the year is all about affordability—for buying and renting. How bad will it get, and how much will it hurt the recovery in home sales?

Home prices are still rising, but at a slower pace than this time last year. That cannot be said of mortgage rates, which are now on a straight trajectory up. The short supply of homes for sale shows little sign of improving, though, which is keeping prices high. At some point, however, higher mortgage rates will hit affordability and could trump that short supply in taking the heat out of home prices.

Homebuilders have not ramped up production that much this year, and they are unlikely to surge ahead in the next six months. They want to hold on to their pricing power, and they are hampered themselves by tight credit and an acute shortage of skilled labor. Builders are also still not back into the speculative game; they are building only for contract buyers. There will be gains in new construction, but not enough to make a serious dent in the supply problem.

Renters are unlikely to see much relief. There has been more multifamily construction of late, and more deliveries of new units, but demand is growing faster. Occupancy is at a record high, and that gives landlords strong pricing power. Renters do not appear to be turning into buyers, at least not in sizable numbers, and the second half of this year will see no change in that. High rents make it harder to save for a down payment, and even as more new households form, the vast majority of these residents are renters.

The biggest change in the second half will likely be a sharper focus on mortgage credit availability. Lenders are facing new regulations that will make them ever more careful; rising rates, however, will make them hungrier for business. Independent lenders will likely take on an even bigger share of the pie, as they tend to be more flexible and creative with credit.

By Diana Olick CNBC Real Estate Reporter 

According to CNN Money Article; 

Becoming a homeowner requires a lot of cash, but a college degree can sometimes make it harder.

In 30 of the top 100 markets in the country, saving for a 20% down payment is faster without a college degree, according to a new study from Trulia.

"In those markets, a household with a college degree isn't making that much more than a household without," said Ralph McLaughlin, Trulia's housing economist. "The burden that student debt brings to a household with a college degree makes it slower to save for a down payment."

A home is the biggest purchase most people will make, and there's been a lack of buying activity among Millennials. Student loan debt tends to get blamed. While going to college usually means higher lifetime earnings, hefty student loans can erode savings and make it harder to accumulate a down payment.

"It's pretty clear cut that most new home buyers feel that saving up for a down payment is their biggest obstacle to buying a first home," said McLaughlin.

Millennials without a degree can save for a down payment at least one year faster than college grads in Columbia, S.C., El Paso, Texas, Las Vegas and Daytona Beach, Fla.

But one state is a big exception.

The California market is particularly tough to become a homeowner. Seven out of the 10 housing markets where it takes the longest to save for a down payment are located in The Golden State.

But those with a degree have an advantage there. Not only is the income premium for a college degree high in the state, homes are very expensive and prices continue to rise, according to McLaughlin. "Only those with the highest income and high-income growth trajectories can save for a down payment."

In San Francisco -- which is experiencing double-digit price gains -- it will take 25-30-year-olds with a college degree nearly 30 years to save for a 20% down payment on a median-priced home. And for those without a diploma in that age group, it's nearly impossible to save the cash to put down.

Outside of California's heated housing market, there are many markets where saving for a down payment takes less than seven years for a young person, with or without a degree. Buyers in Detroit face the smallest wait time at 4.1 years with a college degree and 5.3 without.

Ohio is also an affordable options for Millennial buyers.

"Ohio is a state that if you want to buy a house, it's going to be your best shot at doing so," said McLaughlin. "You are going to be able to do it faster than any other state in the country -- every major Ohio market makes the list.

CNN Money July 8,2015

By Kathryn Vase

Orange County Housing Market Update:

Informative for Californian and specially for

O.C homeowner;

According to Orange County Association of Realtors,  pending home sales in Southern California posted back-to-back double-digit year-over-year gains, a positive trend to be sure. In Orange County, Pending Sales were up 11.1 percent for detached homes and up 8.3 percent for attached properties compared with May last year. Although overall inventory levels should continue to rise throughout the summer months, Orange County's current supply of homes is too low to meet demand. In May, the inventory of detached homes was down 15.6 percent to 4,797, and the inventory of attached homes was down 26.6 percent to 2,474 versus a year ago. Compared with this time last year, months' supply of inventory was down 20 percent to 3.2 months for detached homes and down 26.5 percent to 2.5 months for attached homes. Tight inventory has resulted in fierce competition for existing listings, with many properties attracting multiple offers and some even becoming the subject of old fashioned bidding wars.
Not surprisingly, we are seeing a corresponding increase in home prices. In May, the Median Sales Price was up 4.8 percent to $712,750 for detached homes and up 6 percent to $415,000 for attached. It should be noted that, in April, the share of equity-or non-distressed property sales edged up to account for 91.6 percent of all home sales in California, the highest percentage since 2007.

GET TO KNOW YOUR NEW GENERATION CUSTOMERS "MILLENNIAL"

3 Ways to Convert More Millennial Clients (and Win Big Commissions)

It’s 2015. Those clients of “tomorrow” are officially the business of today. Yes, I’m talking about the Millennial. Those 80s and 90s babies who’ve grown up with the Internet, the laptop take over, and new value set that’s driving every market, including real estate.

To sell and convert to the largest prospect pool to appear in more than 50 years—note at 76.6 million, there are more millennial than boomers—here are a few marketing and conversation strategies data says will work:

1. Inspiration – the New Brass Ring

One of the biggest differences between millennials and other generations is their definition of success or “making it”. Buyers and sellers born between 1977 and the mid-90s aren’t after the same brass rings of past generations. The economic rollercoasters, aging workforce, and increased education of the crowd have changed their leading purchase motivations.

In past generations, factors like jobs, homes, marriage, and kids lead to purchases. While this generation does want all of the above,Experian’s Consumer Speak Series and CEB’s Marketing Blog research shows that millennials’ leading values and purchase motivators are skewed toward more abstract concepts and outputs.

For example, Experian research showed the top decision motivator of millennials was money, not jobs. Among a few groups, like Hispanic respondents a record number of those surveyed (44 percent) said that entrepreneurship is a major life goal.

CEB reported that the critical motivators for this audience are “happiness, passion, diversity, sharing and discovery.”

That means that if you’re going to entice and motivate this generation into action, you need to sell the same things differently. Yes, you’re still selling property, but you may want to de-emphasize and shift your targeting from home features and specifications to the neighborhood and financial benefits attached to ownership. What are the lifestyle features your local millennials are looking for? Easy commutes? Walkability? Dog parks?

Find these things and you will unlock anew generation of success in your marketing and growing engaging your generation of clients.

2. Autonomy – What Dreams Are Made Of?

The fact is, according to NAR research, the number of multi-generational households have doubled since 1980. In addition, more than 35 percent of homebuyers in 2013 were single and unmarried. These are two of a few indicators that signal that independence has become a critical part of ownership.

If you’re hoping to snag this millennial market’s attention, try changing the “dream home” you use in your marketing. The eight-bedroom McMansion isn’t what’s going to move this audience. Instead, starter homes, condos, and fixer-uppers may generate a ton more interest among this audience.

3. Mortgage “Magic”

To convert this client pool, NAR’s 2014 reports show that a mortgage that is within reach is crucial. Data presented in late 2014 showed that while 59 percent of renters between 18-39 want to buy, most—75 percent—feeling like lending options are out of reach.

When you market the feasibility of getting financed, you’ll be working magic in the mind of millennial. Connecting with your local lenders and pushing key local programs that help buyers and sellers can be crucial in generating millennial interest and ultimately closing them during counseling.

Localize and Mobilize—Get out and about before you speak up!

These trends are national. While they do apply, make sure you add your own local insights to your strategy while gearing up for this year’s hot season. If you have the cash to commission a study, great. If not, you can visit local coffee shop or eatery (where this post was written from) and exchange coffee for information you can turn into marketing success.

C/O TruliaWRITTEN BYJovan Hackley

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