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10 Housing Markets to Envy in 2017

DAILY REAL ESTATE NEWS | THURSDAY, DECEMBER 01, 2016

The national housing market is largely predicted to moderate in 2017, but a handful of metros are expected to beat expectations. In fact, 10 markets are looking like hot-beds for growth in the new year with Phoenix, Arizona being number one.

Realtor.com®’s research team has flagged markets that will likely see average price gains of 5.8 percent and sales growth of 6.3 percent in 2017. Those gains would exceed next year’s anticipated national growth of 3.9 percent in home prices and 1.9 percent in home sales.

As such, real estate professionals in these 10 markets should expect a booming business in 2017. Realtor.com® notes these are the hottest housing markets to watch in the new year, based on price and sales gains:

1. Phoenix–Mesa–Scottsdale, Ariz.

2. Los Angeles-Long Beach-Anaheim, Calif.

3. Boston-Cambridge-Newton, Mass.-N.H.

4. Sacramento–Roseville–Arden-Arcade, Calif.

5. Riverside-San Bernardino-Ontario, Calif.

6. Jacksonville, Fla.

7. Orlando-Kissimmee-Sanford, Fla.

8. Raleigh, N.C.

9. Tucson, Ariz.

10. Portland-Vancouver-Hillsboro, Ore.-Wash.

Why are expectations so high for these 10 markets? Realtor.com®’s research team notes that strong local economies and population growth are helping to fuel sales. Also, the top 10 housing markets have other commonalities, such as relatively affordable rental prices, low unemployment, and large populations of millennials and baby boomers.

Top Housing Trends for 2017
Next year’s predicted slowing price and sales growth, increasing interest rates and changing buyer demographics are setting the stage for five key housing trends:

Millennials and boomers will dominate the market – Next year, the housing market will be in the middle of two massive demographic waves, millennials and baby boomers – that will power demand for at least the next 10 years. Although increasing interest rates have prompted realtor.com® to lower its prediction of millennial market share to 33 percent of the buyer pool; millennials and baby boomers will still comprise the majority of the market. Baby boomers are expected to make up 30 percent of buyers in 2017 and given they’re less dependent on financing, they are anticipated to be more successful when it comes to closing.
Midwestern cities will continue to be hotbeds for millennials – Midwestern cities are anticipated to continue to beat the national average in millennial purchase market share in 2017 with Madison, Wis.; Columbus, Ohio; Omaha, Neb.; Des Moines, Iowa; and Minneapolis, leading the pack. This year, average millennial market share in these markets is 42 percent, far higher than the U.S. average of 38 percent. With strong affordability in 15 of the 19 largest Midwestern markets, realtor.com^® expects this trend to continue in 2017 even as interest rates increase.
Slowing price appreciation – Nationally, home prices are forecast to slow to 3.9 percent growth year over year, from an estimated 4.9 percent in 2016. Of the top 100 largest metros in the country, 26 markets are expected to see price acceleration of 1 percent point or more with Greensboro–High Point, N.C.; Akron, Ohio; and Baltimore–Columbia–Towson, Md., experiencing the largest gains. Likewise, 46 markets are expected to see a slowdown in price growth of 1 percent or more with Lakeland–Winter Haven, Fla., Durham–Chapel Hill, N.C.; and Jackson, Miss., undergoing the biggest shift to slower price appreciation.
Fewer homes on the market and fast moving markets – Inventory is currently down an average of 11 percent in the top 100 metros in the U.S. The conditions that are limiting home supply are not expected to change in 2017. Median age of inventory is currently 68 days in the top 100 metros, which is 14 percent – or 11 days – faster than U.S. overall.
Western cities will continue to lead the nation in prices and sales – Western metros in the U.S. are forecast to see a price increase of 5.8 percent and sales increase of 4.7 percent, much higher than the U.S. overall. These markets also dominate the ranking of the realtor.com® 2017 top housing markets, making up five of the top 10 markets on the list (Los Angeles, Sacramentoand Riverside, Calif., Tucson, Ariz., and Portland, Ore.) and 11 of the top 25 (Colorado Springs, Colo.; San Diego; Salt Lake City; Provo–Orem, Utah; Seattle. and Oxnard–Thousand Oaks–Ventura, Calif.)

Mortgage Rates Hover Near All-Time Low

HISTORICPHOENIXDISTRICTS.COM DAILY REAL ESTATE NEWS | FRIDAY, JULY 01, 2016

Fixed-rate mortgages this week dropped to their lowest averages of the year, which analysts attribute to the fallout from last week’s “Brexit” vote.

The 30-year fixed-rate mortgage averaged 3.48 percent this week, only 17 basis points from its all-time record low of 3.31 percent in November 2012, Freddie Mac reports.

“In the wake of the Brexit vote, the yield on the 10-year U.S. Treasury bond plummeted 24 basis points,” says Sean Becketti, Freddie Mac’s chief economist. “This extremely low mortgage rate should support solid home sales and refinancing volume this summer.”

Freddie Mac reports the following national averages for the week ending June 30:

30-year fixed-rate mortgages: averaged 3.48 percent, with an average 0.5 point, falling from last week’s 3.56 percent average. Last year at this time, 30-year rates averaged 4.08 percent.
15-year fixed-rate mortgages: averaged 2.78 percent, with an average 0.4 point, dropping from last week’s 2.83 percent average. Last year at this time, 15-year rates averaged 3.24 percent.
5-year hybrid adjustable-rate mortgages: averaged 2.70 percent, with an average 0.5 point, falling from last week’s 2.74 percent average. A year ago, 5-year ARMs averaged 2.99 percent.

Source: Freddie Mac

It’s never been a better time to buy a home. Money is inexpensive but that doesn’t mean you should spend a lot, unless you’re wealthy, of course. Call Laura B. for a free consultation on buying a home in any one of the Historic Phoenix Districts, historic adjacent, Uptown, Midtown, Downtown, Scottsdale, Biltmore, Paradise Valley, Arcadia or Surrounding suburbs.

Mortgage Rates Reach a New Low for 2016

It’s a great time to buy a Phoenix home.

DAILY REAL ESTATE NEWS | FRIDAY, APRIL 15, 2016

Mortgage Rates in 2016 The 30-year fixed mortgage rate dipped to its lowest average of the year this week, averaging 3.58 percent, Freddie Mac reports in its latest mortgage market survey.

“Demand for Treasuries remained high this week, driving yields to their lowest point since February,” says Sean Becketti, Freddie Mac’s chief economist. “In response, the 30-year mortgage rate fell 1 basis point to 3.58 percent. This rate represents yet another low for 2016 and the lowest mark since May 2013.”

Freddie Mac reports the following national averages with mortgage rates for the week ending April 14:

30-year fixed-rate mortgages: averaged 3.58 percent, with an average 0.5 point, dropping from last week’s 3.59 percent average. Last year at this time, 30-year rates averaged 3.67 percent.
15-year fixed-rate mortgages: averaged 2.86 percent, with an average 0.5 point, falling from last week’s 2.88 percent average. A year ago, 15-year rates averaged 2.94 percent.
5-year hybrid adjustable-rate mortgages: averaged 2.84 percent, with an average 0.4 point, rising from last week’s 2.82 percent average. Last year at this time, 5-year ARMs averaged 2.88 percent.

It’s a great time to buy a home in Phoenix, Arizona. Call Laura B. today to begin the process of buying your historic Phoenix dream home.

Mortgage Rates Hit New Low for 2016

DAILY REAL ESTATE NEWS | FRIDAY, APRIL 08, 2016

Mortgage rates this week plunged to their lowest level since February 2015, unlocking more savings for home buyers and home owners who are refinancing.

“Mortgage rates this week registered the delayed impact of last week’s sharp drop in Treasury yields, as the 30-year mortgage rate fell 12 basis points to 3.59 percent,” says Freddie Mac chief economist Sean Becketti. “This rate marks a new low for 2016. Low mortgage rates and a positive employment outlook should support a strong housing market in the second quarter of 2016.”

Freddie Mac reports the following national averages with mortgage rates for the week ending April 7:

30-year fixed-rate mortgages: averaged 3.59 percent, with an average 0.5 point, dropping from last week’s 3.71 percent average. Last year at this time, 30-year rates averaged 3.66 percent.
15-year fixed-rate mortgages: averaged 2.88 percent, with an average 0.4 point, falling from last week’s 2.98 percent average. A year ago, 15-year rates averaged 2.93 percent.
5-year hybrid adjustable-rate mortgages: averaged 2.82 percent, with an average 0.5 point, dropping from last week’s 2.90 percent average. A year ago, 5-year ARMs averaged 2.83 percent.

It’s a great time to buy a home in Phoenix, Arizona. Call Laura B. today to begin the process of buying your historic Phoenix dream home.

Source: Freddie Mac

Cool Spots to Work Continue to Pop Up In The Phoenix Area

As the number of young professionals and entrepreneurs across the Valley has continued to increase, so has the market for alternatives to the traditional office.

Lauren Potter, Special for The Republic | azcentral.com | February 18,2016

Developers in the Valley are responding to this trend by creating shared, or co-working, spaces.

Unlike traditional offices, these spaces allow people who are self-employed, work for small companies or don’t have a dedicated office space to share equipment and collaborate under one roof.

People want to come downtown
The Department, on the sixth floor of 1 N. First St. in downtown Phoenix, is one of the Valley’s newest co-working spaces. A project by private investment firm Marketplace One, the space was created to house the growing number of small-business owners and startups the firm was investing in and working with.

“We saw a need, especially downtown,” said Kyle Frazey, operating manager of the collaborative workspace. “People were wanting to come downtown more, especially the younger Millennials, tech entrepreneurs and investors.”

The 16,000-square-foot space is visually striking and offers views of South Mountain from its sixth-floor windows. Custom contemporary furniture dots the bright open-plan design, which houses three shared conference rooms, private offices, shared and reserved workstations, as well as a central lounge and kitchen area.

According to Frazey, current members include artists, private-equity investors, consultants, digital agencies and non-profits. While their industries may be different, Frazey said members share something in common.

“They’re really people that want to help each other succeed,” Frazey said.

Frazey said the space was designed to be collaborative, adding that this type of space has a certain energy and encourages relationship-building among those co-working there.

Three levels of membership are available (flex, reserve and team) starting at $200 per month. There are no hourly or daily pricing options. However, there is another co-working space in Phoenix that targets this niche market.

Co-working — with an emphasis on hospitality

A joint project between Valley developers Ironline Partners and Novawest, Mod is a meeting and workspace option for on-the-go and mobile workers. It offers a stylish lounge feel and, unlike other shared workspaces, places a strong focus on hospitality.

Located at 2828 N. Central Ave. in midtown Phoenix, Mod caters to traveling and mobile professionals. It offers amenities a traveling worker expects: Wi-Fi, printers and copiers, private and public workspaces, meeting rooms, notary services, a coffee shop, healthy cafe and bar.

There also are unexpected perks.

“If we notice one of our clients hasn’t taken a break in a really long time, (we) might surprise them with a hot towel or refreshment,” said Jamie Shaw, brand experience director at Mod. “We want you to feel pampered.”

According to Shaw, if clients need to ship a package or borrow a phone charger, the on-site “Modcierge” can help.

Phoenix is Mod’s first location, and the company is opening a space in San Francisco’s Mission District this year. A third location is planned for Seattle in 2017. Company officials say they are exploring a second Valley location, possibly in Tempe.

Work and home

Residential developers also are responding to the need for alternative workspaces.

A Chile-based commercial developer, Sencorp, has targeted this mobile-workforce market with their first U.S. project, en Hance Park located at 1130 N. Second St. in downtown Phoenix, with prices from $150,000.

Eight of the 49 units are zoned as live-work spaces with a ground-level entrance to the home office area. Alvaro said the units are best suited to “low-traffic” home-based businesses such as design, insurance or real estate. The units cater to a small and underserved part of the market, Sencorp Chief Operating Officer Alvaro Sande said.

“It’s not all the market,” he said. “It’s a niche.”

In Scottsdale, developers are targeting the live-work niche, but with a focus on luxury.

SoHo live-work townhouses and condominiums, under construction near WestWorld of Scottsdale at Bell Road, range from $651,300 to more than $1 million. Starting at 3,939 square feet, the residences give buyers the opportunity to operate a retail business on the ground-floor space.

A great workspace attracts and keeps talent
Whether working from home or in a shared or traditional office space, the design and energy of modern workspaces is increasingly important.

According to Colliers International Director of Workplace Innovation Keith Perske, the environment in which people work makes a difference to employees and business owners alike.

“If you can change the workplace, you can (positively) affect a lot of people’s lives,” Perske said.

“Companies that really get it understand the way a workplace functions as a way to attract and retain talent,” he said.

THE MORTGAGE TRICK THAT COULD SAVE YOU $100,000 OR MORE

Should you switch to a 15-year mortgage?

If paying off your house is a priority, you’ve obviously considered it. “One of the biggest benefits of a 15-year mortgage term is the ability to quickly pay off your home loan,” said Money Crashers. “This option is perfect if you plan to stay put and don’t want to pay your mortgage for a lengthy period of time.”

But even if you’re not planning to live in your home forever, a 15-year mortgage can be a great way to go because of the money saved. And we’re not talking about pennies. We’re talking hundreds of thousands of dollars.

“The 30-year fixed mortgage is practically an American archetype, the apple pie of financial instruments. It is the path that generations of Americans have taken to first-time home ownership. According to the Mortgage Bankers Association, 86% of people applying for purchase mortgages in February 2015 opted for 30-year loans,” said Investopedia. “But many of those buyers might have been better served if they had opted instead for a 15-year fixed-rate mortgage, the 30-year’s younger, and less popular, sibling. A shorter-term loan means a higher monthly payment, which makes the 15-year mortgage seem less affordable. But, in fact, the shorter term actually makes the loan cheaper on several fronts.”

The savings is substantial

“Imagine a $300,000 loan, available at 4% for 30 years or at 3.25% for 15 years,” they said. “The combined effect of the faster amortization and the lower interest rate means that borrowing the money for just 15 years would cost $79,441, compared to $215,609 over 30 years, or nearly two-thirds less.”

According to The Mortgage Reports, going with a 15-year mortgage translates to a reduction in “the amount of mortgage interest paid over the loan’s life by $44,000 per $100,000 borrowed as compared to a 30-year loan. For loans at the conforming loan limit of $417,000, then, a homeowner would save $183,000 by using a 15-year mortgage to finance the home instead of using a 30-year one.”

That’s a lot of money. But it’s that higher monthly payment that is often the sticking point for many borrowers. The monthly payment on a 15-year loan will cost more than one that’s double in length for obvious reasons—you’re paying off more money in less time. But the two loan terms do not offer an apples-to-apples comparison because the interest rates for 15-year mortgages tend to be lower.

“15-year-loans are less risky for banks than 30-year loans, and because the money banks use to make shorter-term loans costs them less than the money they use to make longer-term loans, consumers pay a lower interest rate on a 15-year-mortgage — anywhere from a quarter of a percent to a full percent (or point) less,” said Investopedia. “And the government-supported agencies that finance most mortgages impose additional fees, called loan level price adjustments, which make 30-year mortgages more expensive.”

The monthly payment on the 30-yer mortgage referenced above is $1,432. On the 15-year loan, it comes out to $2,108. That steep increase is often a deterrent for borrowers – especially those who are more concerned with their current monthly input and output than potential long-term savings.

Doing it on your own

Of course, a 15-year mortgage isn’t the only way to pay your house off sooner. Making additional principal payments can eat away at your balance without tying you to a higher monthly payment. Even one extra payment per year can make a big difference.

“Making an extra mortgage payment each year (totaling 13 payments in a 12-month period) could reduce a 30-year mortgage loan to approximately 22 years,” said Nationwide.

“The most budget-friendly way to do this is to pay 1/12 extra each month. For example, by paying $975 each month on a $900 mortgage payment, you’ll have paid the equivalent of an extra payment by the end of the year.”

Overpaying also offers a shorter path to an equity position, so when you are ready to sell, you have more equity in your home and are in a greater buying position. And if you do get into a situation where you need cash you can always pull the equity out of your home.

If you’re on the fence and are thinking about buying a historic home in Phoenix, please call Laura B. Browse all historic Phoenix Districts and their homes for sale.

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Housing Affordability Still High, For Now

DAILY REAL ESTATE NEWS | TUESDAY, FEBRUARY 02, 2016

Home prices may have been on the rise the last few years, but homes are still more affordable now than they were in the pre-bubble years, according to the latest Mortgage Monitor Report released by Black Knight Financial Services.

Households are using 21 percent of the national median income to pay a mortgage on a median-priced home. In 2000-2002, the average payment-to-income ratio was 26 percent, and in 2006, it was 33 percent.

However, Black Knight’s report warns that if home prices continue to increase – as they have year-over-year for 43 consecutive months – the affordability picture in home ownership could start to change in two years.

Black Knight factored in a continuing 5.5 percent annual home price appreciation as well as interest rate rises of 50 basis points a year. Under that scenario, “we see that in two years home affordability will be pushing the upper bounds of that pre-bubble average,” says Ben Graboske, senior vice president at Black Knight Data and Analytics. “At the state level under that same scenario, eight states would be less affordable than 2000-2002 levels within 12 months and 22 states would be within 24 months.”

Graboske notes that Hawaii and Washington, D.C., in particular, are already less affordable than they were during the pre-bubble era. On the other hand, he says, even after 24 months under this scenario, Michigan – and a few other states – would still be much more affordable by the end of 2017 than it was in the early 2000s.

Within 12 months, the average mortgage payment is expected to rise by $114, which would then require 24 percent of a household’s monthly income – still below the 2000-2002 levels, according to Black Knight. But by the end of 2017, monthly mortgage payments are expected to be $240 more than today, which would push the tally to 26.5 percent of a household’s income and the upper levels of the pre-bubble averages, the report notes.

If you’re on the fence and are thinking about buying a home in Phoenix, please call Laura B.

A State-by-State Look at Price Predictions

DAILY REAL ESTATE NEWS | WEDNESDAY, JANUARY 27, 2016

REALTORS® nationwide expect home prices to inch up 3.2 percent over the next 12 months, according to the latest REALTORS® Confidence Index Survey, based on a monthly survey of more than 50,000 NAR members about their local markets and most recent transactions. Overall, real estate professionals expect the recent strong growth in home prices to moderate as rising prices hamper affordability in many areas.

2016 State-by-State Price Predictions by the National Association of REALTORS

REALTORS® in Washington, Oregon, Wyoming, Colorado, and Florida are the most optimistic about price growth in the next year – with a median expected price growth of 4 to 5 percent.

The infographic above, from the REALTORS® Confidence Index Survey, breaks down expectations of REALTORS® on home prices over the next 12 months for each state.

6 Stellar Reasons to Buy a Home in 2016

Six Stellar Reasons To Buy a Home In 2016

Is it really 2016 already? For those of you who happen to be planning on buying a home in the new year—or even just trying to—there’s a whole lot to celebrate. Why? A variety of financial vectors have dovetailed to make this the perfect storm for home buyers to get out there and make an (winning) offer. Here are six home-buying reasons to be thankful while ringing in the new year:

Reason No. 1: Interest rates are still at record lows

Even though they may creep up at any moment, it’s nonetheless a fact that interest rates on home loans are at historic lows, with a 30-year fixed-rate home loan still hovering around 4%.

“Remember 18.5% in the ’80s?” asks Tom Postilio, a real estate broker with Douglas Elliman Real Estate and a star of HGTV’s “Selling New York.”“It is likely that we’ll never see interest rates this low again. So while prices are high in some markets, the savings in interest payments could easily amount to hundreds of thousands of dollars over the life of the mortgage.”

Reason No. 2: Rents have skyrocketed

Another reason home buyers are lucky is that rents are going up, up, up! (This, on the other hand, is a reason not to be thankful if you’re a renter.) In fact, rents outpaced home values in 20 of the 35 biggest housing markets in 2015. What’s more, according to the 2015 Rent.com Rental Market Report, 88% of property managers raised their rent in the past 12 months, and an 8% hike is predicted for 2016.

“In most metropolitan cities, monthly rent is comparable to that of a monthly mortgage payment, sometimes more,” says Heather Garriock, mortgage agent for The Mortgage Group. “Doesn’t it make more sense to put those monthly chunks of money into your own appreciating asset rather than handing it over to your landlord and saying goodbye to it forever?”

Reason No. 3: Home prices are stabilizing

For the first time in years, prices that have been climbing steadily upward are stabilizing, restoring a level playing field that helps buyers drive a harder bargain with sellers, even in heated markets.

“Local markets vary, but generally we are experiencing a cooling period,” says Postilio. “At this moment, buyers have the opportunity to capitalize on this.”

Reason No. 4: Down payments don’t need to break the bank

Probably the biggest obstacle that prevents renters from becoming homeowners is pulling together a down payment. But today, that chunk of change can be smaller, thanks to a variety of programs to help home buyers. For instance, the new Fannie Mae and Freddie Mac Home Possible Advantage Program allows for a 3% down payment for credit scores as low as 620.

Reason No. 5: Mortgage insurance is a deal, too

If you do decide to put less than 20% down on a home, you are then required to have mortgage insurance (basically in case you default). A workaround to handle this, however, is to take out a loan from the Federal Housing Administration—a government mortgage insurer that backs loans with down payments as low as 3.5% and credit scores as low as 580. The fees are way down from 1.35% to 0.85% of the mortgage balance, meaning your monthly mortgage total will be significantly lower if you fund it this way. In fact, the FHA predicts this 37% annual premium cut will bring 250,000 first-time buyers into the market. Why not be one of them?

Reason No. 6: You’ll reap major tax breaks

Tax laws continue to favor homeowners, so you’re not just buying a place to live—you’re getting a tax break! The biggest one is that unless your home loan is more than $1 million, you can deduct all the monthly interest you are paying on that loan. Homeowners may also deduct certain home-related expenses and home property taxes.

by Kimberly Dawn Neumann

A big change could be about to come to the housing market

Jonathan Marino and Andy Kiersz
Dec. 26, 2015, 8:44 AM

The Federal Reserve has finally lifted interest rates from 0% and after nine years without a rate hike.

The potential ramifications of the policy move are far-reaching and span various American industries, from automakers to homebuilders to investment banks.

But those impacts may be disparate.

Typically, rising interest rates make for a more difficult borrowing environment. That has the potential to slow home sales, which impacts US banks, as well as new starts, which will hurt homebuilders.

With the Fed’s rate hike, history shows homes starts have tended toward a decline, which will inevitably hurt homebuilders. When rates get higher, building new homes is usually a less attractive prospect.

“Homebuilding stocks are typically losers from an absolute and relative standpoint during tightening cycles,” according to a separate Credit Suisse note from December 15. “Historically homebuilding stocks under performed the S&P 500 during each of the past six Fed tightening cycles.”

For years after the Federal Reserve’s decision to back down interest rates to 0%, a badly beaten homebuilding sector saw gradual increases in both homes starts and permits. They never rose to the pre-crisis levels, but the period that led up to this was in part fueled by an unprecedented boom in lending to many unqualified borrowers.

Yet it is debatable on Wall Street whether the average consumer’s psyche is far less tethered to the behavior of US central bankers than, say, that of a Wall Street executive.

“If we do see some rate increases coming, because it reflects a stronger economy, nobody is going to not buy a house because the mortgage rates went up,” Wells Fargo CEO John Stumpf said the Goldman Sachs Financial Services Conference earlier this month. “They can choose a different product and probably get the same rate. The same thing is true for small businesses.”

But Bank of America CEO Brian Moynihan doesn’t agree with Stumpf.

“If you see rates rise, you’ll see the mortgage market slow down,” Moynihan said at same event earlier this month, before the Federal Reserve raised rates.

At still the same event, Blackstone Group CEO Steve Schwarzman noted that most interest-rate hikes have typically resulted in an uptick in home prices.

“Twenty-five out of 26 times when interest rates went up, home prices went up,” Schwarzman said.

If that is indeed the case, homebuilders may be better building more and aiming to make it up on margin. Even at the end of 2016, interest rates are expected to remain near record lows for the last half-century.

It’s a great time to buy a home.

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