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Homeownership a higher priority for millennials than travel, marriage, children

Friday, October 19, 2018

Homeownership is the biggest priority for millennials, according to the latest Bank of America Insights Report. A little over 70 percent of those surveyed said homeownership is their top priority, outranking traveling (61 percent) getting married (50 percent) and having children (44 percent).

“This fall’s report finds that millennials are redefining life’s priorities by placing homeownership above nearly all other key milestones, including marriage,” D. Steve Boland, head of consumer lending at Bank of America said in the report. “Millennials equate homeownership with personal and financial success, and it’s encouraging to see this generation aspire to homeownership.”

However, renters were split between renting or buying. The age-old debate found 51 percent of renters believed renting is just as or less expensive than buying a home. But those that believed renting is more expensive were in the minority. While both sides are split, nearly seven in 10 said their rent will continue to rise each year or every other year. Nearly half of renters said 30 percent of their monthly income goes to rent.

The report also found over half of renters disliked rising rental costs and felt like they were throwing away money. Forty-four percent of renters said they did not have enough money saved for a down payment to purchase a home.

Many renters also believed other common homebuying myths. About half still believed a 20 percent down payment is required to buy a home, and that they would have to pay private mortgage insurance if they cannot pay the 20 percent.

However, many millennials are still looking for their own place. The report found an even split between those who wanted a starter home or a forever home. Over three-fourths said they planned to update or renovate their homes as many first-time buyers felt the look and feel of a home isn’t permanent. Nearly 10 percent said they planned on gutting it entirely.

Of course, buyers alike wanted to be in their preferred location. Nine in 10 said they wanted to be in their preferred location. Potential home-buyers wanted to stay in the same city, or at the very least, in the same county or township. However, some are willing to move. Nearly one in five said they were willing to move to a new city or different state.

Regardless of their location preferences, homebuyers were motivated by the same thing: money. Those that are looking to buy their home were motivated by having enough money saved or having a higher salary. More than half said having enough money saved was their biggest priority. A little less than 45 percent cited having a high salary was also their motivation.

 

Proposed amendments on Florida ballot impact homeowners

Thursday, October 18, 2018

In Florida and throughout the nation, voters heading to the polls on or before Nov. 6 will be voting in one of the most anticipated midterm elections in recent memory. Races for governor, senator and other offices promise to be the most closely watched, but several measures further down the ballot could have a direct impact on Florida homeowners if passed.

That includes a record number of proposed amendments to the state’s constitution, with 12 different issues being brought to a vote in Florida. According to an overview of each of the proposals organized by The Miami Herald, at least two of the amendments deal directly with laws related to homeownership. Any amendment brought to a vote in Florida must garner at least 60 percent of the vote to be enshrined in the state constitution.

Amendment 1 is first on the list, and would affect homeowners by increasing the assessed home value that may be exempted from non-school property taxes. If passed, Amendment 1 would raise that threshold from $50,000 to $75,000 and earn Florida homeowners a sizable tax break. On the other hand, this amendment would reduce municipal revenue by around $645 million in its first year, which could put a strain on local government.

Amendment 2 relates to a smaller segment of homeowners, as it concerns only property taxes on “non-homestead real property,” or homes where the owner is not the primary resident. If passed, Amendment 2 would permanently enshrine a 2008 law that limits non-homestead tax assessment increases to no more than 10 percent of the previous year’s assessed value. This law has been in effect since 2008 and is scheduled to be repealed in 2019 unless the amendment passes.

Other amendments on the docket are only loosely tied to private property laws, if at all. Amendment 5 would require a two-thirds majority vote in both the Florida House of Representatives and the Senate to pass any law that would raise state taxes or fees. And Amendment 11, actually a bundle of three different proposals, would revise the Florida Constitution to remove language that could prevent “aliens ineligible for citizenship” from legally owning property. However, a case pending in appeals court would strike that amendment from the ballot if finalized by Election Day.

The rest of the amendments on the ballot involve a variety of laws related to gambling, local government structure and voting rights for convicted felons, among others.

 

Miami leads the US in foreign-born homeownership rate

Thursday, October 18, 2018

The United States currently has the highest percentage of immigrants since 1910 with 13.7 percent of the population being foreign-born. This has led to economic growth from 2011 to 2016 that accounted for much of the nation’s post-recession growth according to a study from Oxford University and Citi Research.

A new report from LendingTree shows that immigrants are buying homes in specific parts of the country – especially dynamic urban centers, which has helped fuel the residential home market in those areas. LendingTree reports a high correlation between home prices and foreign-born homeownership rates in U.S. markets.

“This is not to say that immigrants raise home prices — rather, it’s likely that immigrants gravitate towards these cities which have higher home prices, as they also have more dynamic economies and thus more employment opportunities,” LendingTree Chief Economist Tendayi Kapfidze writes.

Most of the cities that ended up on the bottom of the list also tended to have low home prices. LendingTree found that the percentage of foreign-born homeowners in the bottom five cites is lower than 3 percent, even though home values were extremely affordable at an average of $160,000.

Miami topped the list of cities in the country with the most foreign-born residents at 41 percent with a foreign-born homeownership rate of 26 percent. Compared to the California-based cities that made up the top 5, Miami’s median home value seems affordable at $278,700.

 

Miami leads the US in foreign-born homeownership rate

Thursday, October 18, 2018

The United States currently has the highest percentage of immigrants since 1910 with 13.7 percent of the population being foreign-born. This has led to economic growth from 2011 to 2016 that accounted for much of the nation’s post-recession growth according to a study from Oxford University and Citi Research.

A new report from LendingTree shows that immigrants are buying homes in specific parts of the country – especially dynamic urban centers, which has helped fuel the residential home market in those areas. LendingTree reports a high correlation between home prices and foreign-born homeownership rates in U.S. markets.

“This is not to say that immigrants raise home prices — rather, it’s likely that immigrants gravitate towards these cities which have higher home prices, as they also have more dynamic economies and thus more employment opportunities,” LendingTree Chief Economist Tendayi Kapfidze writes.

Most of the cities that ended up on the bottom of the list also tended to have low home prices. LendingTree found that the percentage of foreign-born homeowners in the bottom five cites is lower than 3 percent, even though home values were extremely affordable at an average of $160,000.

Miami topped the list of cities in the country with the most foreign-born residents at 41 percent with a foreign-born homeownership rate of 26 percent. Compared to the California-based cities that made up the top 5, Miami’s median home value seems affordable at $278,700.

 

Real Estate in Brief: Americans still want their dream home, foreclosure rates shrink and more

Wednesday, October 17, 2018

Americans are fixated on owning their dream homes despite the current housing market trends, a new survey from the PenFed Credit Union National Mortgage Survey revealed.

Over the next two years 37 percent of adults and 52 percent of millennials are expecting to buy a home. The study also found that while 95 percent of current homeowners like their homes, 54 percent of the owners would still like to renovate their home.

“Americans are undeterred when it comes to owning their dream home and we are finding that for many that means renovating their current homes,” said Craig Chapman, vice president of mortgage sales and business development, PenFed. “At PenFed our second trust loans are up and we expect to end the year with a 20 percent increase over last year. Like many industry experts we expect this increase to continue.”

Additionally, 48 percent of residents who currently do not own a home will be actively house-hunting over the next couple of years. However, common misconceptions around mortgages have become apparent as 65 percent of homeowners didn’t shop around for a mortgage.

In other real estate news:

  • CoreLogic’s monthly Loan Performance Insights Report found that in July 2018, 4.1 percent of mortgages nationally were in some phase of delinquency. This number represents a 0.6 percentage point decline from July 2017’s 4.7 percent in the overall delinquency rate. The foreclosure rate for July is the lowest it has been in 12 years.
  • The Mortgage Bankers Association Weekly Mortgage Applications survey found that mortgage applications fell by 1.7 percent on a seasonally-adjusted basis from one week earlier, ending Oct. 5, 2018. The rise of rates following the recession, as the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances experienced a record high uptick, rising above 5 percent and to its highest since February 2011.
  • National Association of Realtors President Elizabeth Mendenhall issued an appraising statement in respect to the Senate’s vote to pass S. 3021, America’s Water Infrastructure Act of 2018. “America’s Water Infrastructure Act of 2018 ensures the U.S. Army Corps of Engineers can continue providing vital economic and environmental services to property owners across this country. Overall, this legislation supports U.S. economic development and the real estate industry by investing in natural disaster and flood control protections; by securing clean, sustainable drinkable water for everyone in America; and by maintaining waterways and ports that help us transport goods across the country,” said Mendenhall.
  • Keller Williams has expanded its franchise countries with the addition of Trinidad and Tobago. The new master franchise in the dual-island Caribbean nation is preparing to launch its first office before the end of 2018 and is currently establishing operations. With another Keller Williams launch in the Argentina Region and an expansion of over 200 agents in the Colombia region, Keller Williams has 21 market centers and more than 750 agents within nine countries across Central and South America.
  • Redfin announced that former Amazon senior behavioral economist Daryl Fairweather has joined the team as the new chief economist. Fairweather will be responsible for a team of economists and data scientists who are obligated to provide reports on real estate market, homeownership, and the economic trends of home sales. As chief economist, Fairweather will work regularly with Redfin business leaders and agents across the country in deciphering the actions and mindset of homebuyers and sellers.
 

Rising home values can help homeowners, but it may cost them

Tuesday, October 16, 2018

Thanks to rising home values, more American homeowners are looking to tap into home equity that continues to grow, according to a recent survey conducted by Bankrate.com and research firm GfK f. But even though leveraging home equity into a loan or line of credit can pad household cash flow, rising interest rates make this a more expensive proposition at the same time. This may change the calculus behind a homeowner’s decision to sell or stay put.

Bankrate and GfK estimated that around three quarters of U.S. homeowners view home equity loans as smart ways to invest in home renovations that may increase a home’s market value. Other wise uses for home equity cash, according to respondents, include debt consolidation or paying for college tuition.

But the survey also revealed sentiments on home equity that worry some financial experts. According to the survey, 15 percent said they would use home equity loans to “keep up with regular household bills,” while smaller numbers said they would consider spending the cash on a vacation, new appliances or even plastic surgery. Among homeowners who earn less than $30,000 per year, one-third of survey respondents said they would tap home equity to cover regular expenses.

Home equity loans essentially convert equity that homeowners build through mortgage payments into cash that can be used for any expense. Higher property values also allow home equity to swell. But just like any other loan, they incur additional costs through interest and fees. More significantly, if home equity borrowers can’t keep up with payments, their lender could pursue foreclosure and take possession of the house.

According to people like John Hope Bryant, CEO of Promise Homes in Atlanta, surging home equity could entice homeowners to take on loans without understanding their associated risks and costs.

“The high interest rate on home-equity debt is going to exacerbate the situation” of homeowners borrowing beyond what they can repay, Bryant told Bloomberg in response to the Bankrate report. He added that such a trend “could ultimately dampen property sales.”

So far, though, home equity borrowing has slowed compared to last year. Bankrate cited a report from analytics firm Black Knight which found that home equity use was near four-year lows as of mid-2018. Only 1.13 percent of the record-high $636 billion in available home equity was being utilized as credit, according to the report.

 

Zillow: Younger Americans more likely to use money for down payment over renovations

Tuesday, October 16, 2018

Two-thirds of homeowners would prefer to renovate their current home rather than make a down payment on a new one, according to a new report from Zillow.

Overall, it seems that homeowners are happy with their current homes, with 83 percent saying that they love their home and the majority saying they don’t have plans to sell their home at this time.

Older or retired homeowners were more likely to want to renovate their home, as 87 percent of respondents over the age of 55 and 91 percent of retirees said they’d rather renovate than put that money toward a new down payment.

However, renters and younger Americans (those between 18 and 34) were the most likely to say they would use the money as a down payment.

The preference to renovate rather than buy a new home could be adding to the strain of low inventory across the country. Zillow reports that the number of homes for sale has fallen for 43 straight months, although there has been some slowdown in this area. Additionally, rising mortgage rates may have an impact on this since those who have a low mortgage rate now may not want to lose by buying another home at a higher rate.

“Even in a seller’s market, simultaneously buying and selling is an exercise in frustration. Add to that the emotional history between you and your home, and it’s no wonder low inventory has been in a self-fulfilling cycle,” said Skylar Olsen, Zillow’s director of economic research and outreach. “Homeowners may hesitate to sell because of limited options for them as buyers, but by holding on to their homes, they are themselves contributing to low inventory.”

 

4 tips on how agents can work with international buyers

Monday, October 15, 2018

Reaching international buyers is paramount to success in some markets. While many agents spend money on print and other advertising in foreign cities, by and large the best bang for your buck is to begin fostering relationships with local brokers, accountants, financial advisers and attorneys. Partnerships such as these do not require a lot of marketing money; they require your time, effort, and professionalism.

Respond in a hot minute! Many agents will pay to have their listings added to international sites and portals and when a potential lead comes in, shockingly only 50 percent actually respond in a timely manner. If you are courting leads from the internet, time is of the essence. A lead should be immediately called as that site visitor will forget which site they responded to and their focus will have changed, the lead is hot for about 20 minutes. Follow up immediately, especially knowing that 50 percent of agents will not bother.

Bringing clients from another country often requires several months of communication before a site visit is booked and the actual real estate process begins. It is imperative that an agent stay in constant communication with the client; otherwise you might simply put the idea of buying a Miami condo in their head and over the months, they don’t hear from you and buy from another other agent who was in the right place at the right time. It happens more than you would imagine! Ensure that your communication is constant, informative, and that you are top of mind.

It sounds basic, but many times agents will be provided with marketing in another language by a builder or broker. Double-check that the translation is well done and that the content is relevant for the market that you are working on. Many agents do not check and it doesn’t help your professional appearance when your marketing is not up to par.

Ensure that your online profile is up to date. Yes, it is also common sense, but with so many details that agents have to remember to keep sales together, it is a bit like the plumber’s pipes and often gets overlooked. Schedule time once a month to double-check all social media, add updates, and Google yourself. An hour per month would help keep your profile tidy and for a prospective partner or client in another country. How else will they initially become acquainted with you?

 

This week in Miami real estate: Second homes, high-rises and more

Monday, October 15, 2018

Second vacation homes can provide you with more than just luxury, but profit too if you know where to buy from. Realtor.com compiled a list of the top 10 most profitable markets for vacation homes, ranking the markets where sellers are making the largest profits.

Two Florida cities ranked on Realtor.com’s list, with Port St. Lucie ranking No. 5 and Key West at No. 10. To compile the list, Realtor.com looked at the 500 largest metropolitan areas in which second homes contributed to 12 percent of all properties. The study then focused on all of the home sales that had occurred within the previous 12 months, and compared the most recent sale prices to their previous ones, dating back as far as 2008. Using these figures, the study calculated the annualized rate of return for each market and optimized geographic diversity by limiting the ranking to two metros per state.

Port St. Lucie has an annualized rate of return of 11 percent with a median home list price of $279,300. Properties are selling fast as Port St. Lucie offers prime real estate for below $1 million with oceanfront homes starting as low as $500,000 and condos for even cheaper. Key West has an annualized rate of return of 9 percent with a median home list price of $687,100. Although buyers are coming from all over, the city mainly attracts second home buyers from colder states.

In other local real estate news:

  • Developer Jorge Pérez and his company Miami-based Related Group, announced their plan to buy three project sites to build apartment complexes in southwest Las Vegas Valley. The project is hoped to break ground next year, with more deals following in 2020. The Review Journal reported that Pérez and other developers are shying away from high-rises and focusing on apartment construction.
  • Miami developer Habitat Group announced it had injected $11 million into its newest project, East River Living. Located in the Miami River District, the development will include 34 residential units and add to the growing housing stock alongside the Miami River.
  • Pordes Residential revealed itself as the exclusive sales partner for Palm Villas in Bay Harbor Islands. The brokerage will manage all sales within the community of luxury townhomes currently priced at $1.2 million and up. Palm Villas is the fourth exclusive sales deal in the Bay Harbor Islands for Pordes Residential.
  • A project that promises to deliver the tallest building in Fort Lauderdale is being led by an all-female development team. OneWorld Properties is leading the sales and marketing of 100 Las Olas, scheduled for completion in 2020. OneWorld is led by Peggy Fucci as CEO and Catherine Kohn as sales director. The building’s lead designer (Carrie Tolman of Simeone Deary), senior project manager (Diana Manning Yankee of KAST Construction), architect (SB Architects, with vice president Pinar Harris) and developer (Shannon Lee of Kolter Urban) are all women, a rare sight in a male-dominated industry. Upon completion, 100 Las Olas will rise 499 feet above ground and feature 113 luxury condos, as well as a Hyatt Centric hotel and retail space.
 

Real Estate in Brief: Zillow lawsuit tossed, Trump tax evasion and more

Friday, October 12, 2018

After almost five years of record-low inventory and record-high prices, prospective homebuyers are finally experiencing some relief. Realtor.com released their September housing report which revealed that new listings to the housing market saw an 8 percent increase over this time last year. With 465,000 new listings entering the market, this month’s uptick signals the largest year-over-year recorded increase since 2013.

The housing report recorded that the national inventory has declined by 0.2 percent from a year ago, and the flat-lining of these numbers signals a possible turning point in the inventory crisis.

The new September listings were on average 8 percent, or $25,000, cheaper and 10 percent, or 200 square-feet, smaller than existing housing inventory on the market. Condominiums and townhomes experienced new inventory growth, with a 3 percent year-over-year uptick.

Realtor.com reported that the recovery of the national inventory is evident in larger cities, as 45 of the largest U.S. markets experienced year-over-year increases. Markets in San Jose, Calif.; Seattle; Jacksonville, Fla.; San Diego, and San Francisco, had the largest inventory surges, with increases of 31 percent or higher. Chicago, Miami, Dallas, Boston, Los Angeles, and New York also experienced inventory growth, and contributed to the combined markets’ 5.6 percent year-over-year average increase, the largest yearly increase since 2013.

In other real estate news:

  • The lawsuit claiming Zillow defrauded investors by omitting participation in Consumer Financial Protection Bureau investigation has been dismissed. The U.S. District Judge John C. Coughenour stated that by trying to prove Zillow’s purposeful violation of the Real Estate Settlement Procedures Act (RESPA), the investor plaintiffs verified the contrary. HousingWire reported that Judge Coughenour stated the plaintiffs could file again with confirmation that: Zillow designed the program to intentionally violate RESPA; that Zillow instructed third parties to commit RESPA violations; that Zillow made false or misleading statements about the program’s involvement with RESPA; and that Zillow’s false statements directly correlate to the alleged loss in stock value.
  • Democratic senators are calling for government action in the investigation of criminal activity involving foreign buyers and U.S. real estate, as reported by HousingWire. The Treasury Department’s Financial Crimes Enforcement Network found that over the past three years, foreign buyers have been using shell companies to buy luxury U.S. real estate in order to launder money. The original investigation found high indications of possible criminal activity, as more than 25 percent of transactions covered in the initial inquiry involved a “beneficial owner” who is also the subject of a “suspicious activity report”.
  • A New York Times article has provoked New York’s tax authorities to investigate the origins of President Donald Trump’s wealth, the Trump real estate empire. The article claimed that the Trump family dodged over half a billion dollars in taxes through dubious tax schemes” and “instances of outright fraud”. Inman reported that following the publication of the article, New York’s Department of Taxation and Finance announced that they will be reviewing the claims made in the New York Times piece.
 

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303 Articles Found

Saturday, October 20, 2018

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Homeownership a higher priority for millennials than travel, marriage, children
Homeownership is the biggest priority for millennials, according to the latest Bank of...

Miami leads the US in foreign-born homeownership rate
The United States currently has the highest percentage of immigrants since 1910 with 13.7...

Miami leads the US in foreign-born homeownership rate
The United States currently has the highest percentage of immigrants since 1910 with 13.7...