Home Owners Delaying Remodeling

Remodeling and home improvement spending posted a strong rebound last year, but the rebound was short-lived, a new report says. Home owners remodeling projects and expenditures are back on the decline this year as housing market conditions and fading tax incentives cause more home owners to delay projects once again.

The primary driver of home remodeling expenditures is the pace of single-family existing home sales, writes Robert Dietz, an economist with the National Association of Home Builders, in an article at U.S. News & World Report. Between the summer of 2013 and March of this year, existing-home sales fell, Dietz says, despite a recent rebound. As such, Dietz says the remodeling market has seen declines in the annual pace of improvement spending since December 2013.                                         home owners

“Existing home owners are most likely to improve a home prior to placing the home on the market, and new home owners find the best time to make substantial changes to a home is immediately after purchase,” Dietz notes.

The pace of remodeling in August was down more than 10 percent year-over-year, according to U.S. Census Bureau data.

Dietz points not only to the stall in home sales but also to the expiration at the end of 2013 of a set of federal energy-efficiency tax credits for the slowdown in remodeling expenditures. The tax credits helped home owners to offset the cost of replacing older windows, hot water tanks, and appliances with new energy-efficient models.

“Despite these economic and policy headwinds, the prospects for the remodeling sector appear more positive for 2015,” Dietz notes. An index of professional remodeler sentiment shows a gain in confidence, particularly as the existing single-family sales market improves. The National Association of REALTORS® is forecasting a 7.7 percent growth in existing sales in 2015.

“Underlying these market improvements is the fact that our nation’s housing stock continues to age, and aging homes require upgrading and modification,” Dietz notes. The median age of owner-occupied homes was 35 years old, according to the 2011 American Housing Survey (in the 1985 AHS survey, the median age was 23).

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Source: US News & World Report 10/20/2014

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Some Housing Markets Still Facing Inventory Crunch

Some housing markets still facing inventory crunch. Supply nationwide in September was at five and a half months; most economists consider a normal level to be six to seven months. The supply of new homes was even lower, at nearly five months, according to realtor.com®’s September National Housing Trend Report.

“To truly relieve the inventory shortage on a sustained basis, new-home construction needs to rise by at least 50 percent from the current levels,” says Lawrence Yun, chief economist for the National Association of REALTORS®.

The following markets have posted some of the biggest drops in listings year-over-year:

  • Las Vegas: -37.9%
  • San Jose, Calif.: -36.2%
  • Columbus, Ohio: -29%
  • Cincinnati: -26.5%
  • Houston: -25.2%
  • Washington, D.C.: -25%
  • San Francisco: -23.4%
  • Chicago: -22.8%

Meanwhile, in some markets, home buyers have found more choices in the past year. These markets have seen the biggest growth in inventory levels year-over-year:

  • Honolulu: +27.5%
  • Orlando, Fla.: +25.8%
  • Miami: +22%
  • Charleston, W.Va.: +20.1%

Nationwide, the median age of inventory fell slightly year-over-year in September due to the reduced number of homes on the market, according to realtor.com®. Homes spent about 90 days on the market in September, three days less than a year ago.

Also, median listing prices held steady for the fourth consecutive month, maintaining a 7.7 percent gain year-over-year. The median list price in September was $214,900 nationwide.

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Source: Realtor.com September National Housing Trend Report

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1 in 3 US Homes Are Rentals

A growing number of single-family homes have become rentals, according to the findings from the newly released 2013 American Housing Survey, by the U.S. Department of Housing and Urban Development and U.S. Census Bureau. The report takes a look at the nation’s housing stock and provides information on the housing quality and make-up.

1 in 3 US homes are a rental . The report shows that 65 percent of all housing units were occupied by owners in 2011, while 35 percent were occupied by renters. Fewer homes are standing vacant. Of the 133 million total housing units in 2013, 87 percent were occupied—an increase of 413,000 since 2011.               rentals

The housing stock is reportedly having fewer maintenance issues. Households reported slightly fewer problems with the plumbing, heating, and electrical from 2011 to 2013, the report showed. Still, nearly 2 million homes reported severe physical problems in 2013, and nearly 4 million housing units that had moderate physical problems. Ten percent—or 1 in 10 households—reported seeing signs of cockroaches within last 12 months; 9 percent reported evidence of mice.

The survey also showed that lot sizes are getting a lot smaller. The median size of a single-family lot was 0.25 acres in 2013, compared to 0.36 acres in 1973. But at least as lots get smaller, more Americans are getting along with their neighbors. About half of all Americans reported getting along with their neighbors. Eighty-two percent of households said they had talked to their neighbor in the past month and about 50 percent “strongly agree” with the statement that they get along with their neighbors, the survey showed.

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Source: US Census Bureau & HousingWire 10/16/2014

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Foreclose On Everything Says Detroit

Detroit is aiming to further eliminate neighborhood blight and recover lost revenue from home owners who are delinquent on their mortgages. Wayne County is taking on an unprecedented effort to take possession of every property that is three or more years behind in taxes. Foreclose On Everything Says Detroit. The county is notifying 80,000 property owners that they are on the verge of losing their homes to foreclosure due to delinquent taxes. That equates to one of every five properties in Detroit, the city’s Motor City Muckraker reports.                              foreclose

The effort is the biggest foreclosure spree since foreclosures started skyrocketing years ago in the city. In 2013, Wayne County began the foreclosure process on 42,000 properties; this year, it has targeted 56,000 properties.

“We have decided to foreclose on everything,” says Chief Deputy Treasurer David Szymanski. “In 2008 and 2009, finances were so tight that people had to decide between eating and paying taxes in Detroit. The economy has improved.”

Szymanski hopes that the foreclosure warnings will prompt more home owners to catch up on their bills or get assistance under the Step Forward Program, a statewide assistance program for home owners who are in default.

“If someone can’t pay their taxes, they really shouldn’t own a home,” Szymanski says. “We have a culture that has grown to expect that taxes are optional.”

The county currently has crews knocking on doors and posting foreclosure signs on properties affected by the 80,000-property sweep.

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Source: Motor City Muckraker 10/10/2014

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Foreclosures Back To Pre-Housing-Bubble Levels

A new sign that foreclosures may largely be in the rearview mirror, new filings in the third quarter of this year were down 16 percent from a year ago — bringing overall foreclosure activity down to its level before the housing crisis, according to RealtyTrac’s Foreclosure Market Report. What’s more, default notices, scheduled auctions, and bank repossessions foreclosuresin September dropped 9 percent from the previous month and were down 19 percent from a year ago. That’s the lowest level since July 2006.

“September foreclosure activity was back to pre-housing-bubble levels nationwide, in large part thanks to a continued slide in bank repossessions,” says Daren Blomquist, vice president at RealtyTrac. “However, a recent rise in scheduled foreclosure auctions in many markets across the country shows lenders are continuing to clean house of lingering delinquent loans. This rise in scheduled auctions foreshadows a corresponding rise in bank repossessions and auction sales to third-party buyers in the coming months.”

While foreclosure filings fell last month, they were up slightly by 0.42 percent in the third quarter from the previous quarter. It’s a small percentage, but it does mark the first quarterly increase since the third quarter of 2011, according to RealtyTrac. The uptick was largely attributed to a 2 percent increase in default notices and a 7 percent quarterly increase in scheduled foreclosure auctions.

That proves the foreclosure crisis isn’t over in every market quite yet. Default notices in the third quarter rose from a year ago in 10 states, including Indiana (up 59%); Oklahoma (49%); Massachusetts (38%); New Jersey (19%); Iowa (12%); and New York (2%).

Lenders are taking longer to process foreclosures, too. The foreclosure process took an average of 615 days in the third quarter, up 13 percent from a year ago. That’s the longest average time to complete a foreclosure since RealtyTrac began tracking such data in 2007. The states with the longest foreclosure wait times are New Jersey (1,064 days); Florida (951 days); Hawaii (937 days); New York (902 days); and Illinois (889 days).

The five states with the highest foreclosure rates in the third quarter were:

  • Florida
  • Maryland
  • New Jersey
  • Nevada
  • Illinois

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Source: RealtyTrac

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Where Your Social Security Check Goes The Farthest

Social Security is the largest source of retirement income for many retirees, but how far those checks will stretch depends on how much you’ve earned in Social Security benefits as well as where you live.

For retired workers, the average Social Security benefit was $1,294 per month at the end of 2013, which equates for a couple to be about $31,056 in annual Social Security benefits (also adjusted for inflation).                    social security

U.S. News & World Report recently crunched Census Bureau and Bureau of Labor Statistics data to determine where a retired couple could live comfortably using Social Security as their main source of income. The publication factored in basic expenses like typical costs for housing, food, utilities, transportation, and health care.

Some of the cities U.S. News & World Report found as possible havens where retirees’ Social Security income alone covers basic costs are:

  • Albuquerque, N.M.: Home owners age 65 and older who have a mortgage pay a median of $1,078 per month, or about $368 per month if they have the mortgage paid off.
  • Austin, Texas: Retirees pay a median of $1,395 per month with a mortgage, or $545 if they own the home.
  • Buffalo, N.Y.: Retiree home owners pay $1,009 monthly, on average, if they’re still making payments on their home, or $466 monthly if they paid off their home.
  • Columbia, S.C.: Home owners age 65 and older pay $1,074 monthly with a mortgage, or $367 if they have the house paid off.
  • Grand Rapids, Mich.: Retiree home owners pay $1,080 monthly with a mortgage, or $427 per month if the home has been paid off.
  • Jacksonville, Fla.: Retiree home owners pay $1,247 per month, on average, if they still have a mortgage, or about $405 if they have paid off the house.
  • Pittsburgh: Retirees pay $1,023 per month, on average, if they still have a mortgage, or $434 if they have paid off their house.

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Source: US News & World Report 10/14/2014

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Value Of Landscaping: Boost Home Value 12%

The value of landscaping: you might want to take a closer look at your listing’s curb appeal: 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.

Researcher Alex X. Niemiera with the Department of Horticulture at Virginia Tech found that a $150,000 home with no landscaping could fetch an additional $8,300 to $19,000 by adding a landscape with color and large plants.                         value of landscaping,

The value of landscaping differed greatly from state to state. 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 following landscape elements were found to be most important to survey respondents:

  • 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. 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. This advantage is especially important in a competitive housing market.”

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Source: Realty Times 10/13/2014

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50.2 % Of American Adults Are Single

Half of all American adults now live in one-person households, a rapidly growing number, according to the Bureau of Labor Statistics. The singles demographic is likely to reshape multifamily communities and single-family home designs going forward, according to Builder Online.                 american adults

In 1976, only 37 percent of adults were single. As of August, that percentage has bloomed to 50.2 percent, or about 124.6 million singles. It marks the first time that single Americans make up the majority of the adult population since the government began tracking such data.

“Thanks to the growth of single-adult households, floor plans will go from static to flexible as living arrangements change more frequently,” Susan Yashinsky, vice president of innovation trends for Waterford, Mich.-based Sphere Trending, LLC, predicts on Builder Online. “Analysts project that this group of adults will job hop more often, bring new types of living arrangements into the housing market (think friends buying homes together), and expect their environments to adapt to their frequently changing lifestyles as easily as picking a favorite Keurig coffee flavor.”

Affordability will be key, since single home buyers will have less income per household than dual-earner couples.

Also, “housing developments will need to embed elements of community that address the social aspects singles need, similar to what we have seen in multifamily new builds,” according to Builder. “Builders, developers, and designers who create housing for single consumers need to consider fresh concepts, such as communal sheds for lawnmowers and snow blowers, and even cars that can be rented as needed versus owned. Work/live spaces will evolve to reflect the growing number of entrepreneurs working from home. And, backyard cottages will bring solutions for related and/or unrelated adults sharing a single lot.”

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Source: Builder Online 10/6/2014

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Almost 19K Lost Sales Because OF Tight Credit

Tight mortgage lending standards continue to drastically curtail new-home sales and are causing a growing number of deals to be lost, according to a survey by the National Association of Home Builders.

“While housing has seen some positive growth throughout the year, there is no denying that tight credit conditions are hindering a full, healthy housing recovery,” says NAHB Chief Economist David Crowe. “These persistently tight mortgage credit standards continue to limit the number of creditworthy borrowers, particularly younger families and first-time home buyers, from entering the housing market.”                tight credit

Eighty-three percent of builders say they have lost sales over the last six months due to buyers not qualifying for a mortgage. The NAHB estimates that those sales losses translate to about 18,700 new-home sales lost because buyers were unable to qualify for mortgages.

“We’ve seen banks and regulators swing the pendulum too far and create an environment where lending standards are too restrictive,” says Kevin Kelly, NAHB chair. “We want a return to reasonable lending standards where qualified borrowers are able to obtain a mortgage and create the American dream for themselves.”

Last week, media outlets reported that former Federal Reserve Chair Ben S. Bernanke, who has a net worth of at least $1.1 million, said that he couldn’t refinance his home due to the restrictive mortgage standards. Because of his recent job switch from chairman of the Federal Reserve to a fellow at the Brookings Institution, lenders may have deemed him as a credit risk .

Mortgage standards are at their toughest levels since at least 1998, according to a new index by CoreLogic. Credit availability for all home loans as of May was about half of what it was in the late 1990s, when the housing market was in recovery-mode similar to it is today, according to CoreLogic’s Housing Credit Index.

“It is clear that credit is quite tight relative to normal,” says Mark Fleming, CoreLogic’s chief economist. Fleming says that banks shouldn’t revert to the overly loose credit standards from the housing bubble, but he believes more lenders could expand credit like they did in the late 1990s, while still being cautious with their lending.

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Source: National Association of Home Builders & Bloomberg 10/08/2014

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N.J. Has the Highest Real Estate Tax In Country

New Jersey once again topped the nation with the priciest median real estate tax bill at $7,331, according to the newly released 2013 American Community Survey. On the other hand, Alabama has the lowest in the nation at $532.

Depending on where you live can greatly influence how much – or how little – you pay in real estate taxes. The highest property tax states are mostly centered in the Northeast, while the lowest are often in the South, according to the survey.               real estate tax

“When comparing residential tax bills across states it is important to consider government financing,” researchers note at the National Association of Home Builders’ Eye on Housing blog. “Property taxes may represent 40.3 percent of state and local tax receipts, but some states rely less heavily on property taxes as a source of revenue than others.” For example, in New Hampshire the median real estate bill is the third highest in the nation at $5,017, but residents there do not pay an individual income tax at the state level. However, in West Virginia, which has one of the lowest median real estate taxes at $605, residents face the highest marginal rate for individual state income tax at 6.5 percent, according to NAHB.

The following are the states where home owners can expect to pay some of the highest median real estate taxes:

  1. New Jersey: $7,331
  2. Connecticut: $5,280
  3. New Hampshire: $5,017
  4. New York: $4,559
  5. Massachusetts: $3,955
  6. Illinois: $3,939
  7. Rhode Island: $3,872
  8. Vermont: $3,727
  9. Wisconsin: $3,202
  10. Maryland: $3,075

On the other hand, home owners will likely find the cheapest median real estate taxes in:

  • Alabama: $532
  • West Virginia: $605
  • Arkansas: $674

View this chart to see where your state’s property taxes stack up.

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Source: National Association of Home Builders 10/8/2014

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