What you need to know to maximize your investment in today's changing marketplace
By Daniel DiClerico
The rise of the “semi-suburb,” the decline of the starter home, and the rampant impact that technology and the sharing economy are having on the real estate industry. Those are some of the hot topics of discussion happening this week at the 50th annual conference of the National Association of Real Estate Editors. Here are the details.
1. Buzz around “semi-suburbs” builds. Despite the image of the tech-crazed, city-loving Millennial, most of them have their sights set on the suburbs, just like the generations before them. But the high-density, close-in "semi suburbs" are attracting more buyers from this cohort, according to housing economists and real estate pros.
That’s all consistent with findings from a recent Consumer Reports survey of Millennials, in which many expressed preference for close-in, walkable communities. If you’re planning to relocate, communities with mixed-use developments and diverse transit options will likely hold the most value—the Domain in Austin, the West Loop in Chicago, and the Hudson Waterfront in New Jersey are a few models to look at.
2. Down payments are still a drag. Though interest rates are projected to continue rising (up to 4.6% by the end of 2017, according to Lawrence Yun, chief economist for the National Association of Realtors), the stiffest headwind for first-time homebuyers is still the down payment. There are a growing number of assistance programs out there, including new low-down-payment programs for low and moderate-income borrowers that Wells Fargo, Bank of America, and JP Morgan Chase have started rolling out. Read It's Now Easier to Get a Mortgage With a Low Down Payment for more details.
New data released this week from Down Payment Resource finds that across 513 counties nationwide, buyers using these available down-payment assistance programs stood to save an average of $17,766. That represents 41 percent of a year’s wages compared to buyers who do not use down-payment assistance.
3. Technology continues to redefine the role of the real estate agent. The days of relying on a real estate professional to show you a bunch of properties are long gone, thanks to the abundance of online real estate sites. In Consumer Reports’ review of Realtor.com, Redfin, Trulia, and Zillow, we found that none provides a complete picture of what’s currently on the market, so it pays to try them all.
Even if you find the perfect home online, you’ll still probably need an agent to help with the transaction. That’s starting to change too, however, with the emergence of services like Ten-X, an online real estate marketplace. Boosted by a $50 million infusion from Google Capital, Ten-X is ramping up a tool aimed at homeowners that allows them manage their transaction online, from price negotiations to final closing.
For the time being, many of the old rules apply to finding the best real estate pro to help you close the deal. Ask friends and family for recommendations and meet with at least three candidates. Make sure they have a current state license and check for complaints with your state’s real estate licensing division. Also see if they’re a member of the National Association of Realtors, in which case they’ll need to adhere to a strict code of ethics.
4. Aging in place continues to come of age. The combination of the aging population (another 10,000 Baby Boomers retire every day) and the aging housing stock (the 1,167,000 housing starts projected for 2016 is only about half of what we saw in the 2005-2006 peak), means more homeowners are remodeling their existing homes so that they can age comfortably in them. "Nesting is seen as a powerful form of investing," says Brad Hunter, chief economist at HomeAdvisor, a website that connects homeowners with prescreened service professionals.
Aging in place (or long-term livability, if you prefer) is also starting to resonate with Millennials. In Bank of America’s 2016 Homebuyer Insights Reports, 75 percent of first-time buyers said they would rather bypass the starter home and buy a place that will meet their future needs, even if it means they’ll have to wait to save more.
Smart remodeling, including the addition of walk-in showers, comfort-height toilets, and automated lighting systems, will boost your home's value by letting you make the aging-in-place pitch when it comes time to sell.
5. The “sharing economy” is having an impact. Cities of tomorrow won’t have so many hulking commercial garages, thanks to ride-sharing services like Uber, Lyft, Divvy, and Citi Bike. Multi-car garages in homes could be on the decline as well. Another effect of the sharing-economy: neighborhoods that used to be less desirable because of limited access are suddenly getting a new lease on life. Keep that in mind if you’re looking to be a pioneer in your area’s next emerging neighborhood.
“Virtually every market in the country has a hot spot,” says Jonathan Smoke, chief economist at Realtor.com. The trick is knowing where to find them.
Author:Nicole Dimov Phone: 561-282-7638 Dated: August 9th 2016 Views: 79 About Nicole: ...
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