from cnnmoney.com good food for thought...
Look out, mortgage rates are going up!
That's the fear mongering that some are telling homeowners and homebuyers after the Federal Reserve raised interest rates -- a tad -- off their historic lows Wednesday.
But when a realtor or well-meaning relative tells you to buy a house ASAP, remind them that the Fed rate isn't the mortgage rate.
The current rate on a 30-year mortgage is 3.97%. That's incredibly low by historical standards. Most experts don't think mortgages will go much higher than 4% anytime soon.
The early indications are that rates barely budged after the big Fed announcement (and they may even go down).
"I don't think [mortgage rates] are going up," says Ed Yardeni, president and chief investment strategist at Yardeni Research. "Mortgage rates are really tied more to the bond market than the Fed funds rate."
Translation: There probably won't be much difference between buying a home now or next year.
Even if mortgage rates go up to 4.5% this summer, that would only add about $700 a year to the mortgage payments for a $200,000 home.
Home prices are likely to come down
The other key thing to keep in mind is that as mortgage rates go up, home prices usually come down.
"As interest rates go up, we expect home prices will come down eventually. It doesn't happen overnight," says Karen Stone, a real estate broker for TOWN Residential in New York City.
That could be good for buyers. Right now many cities have been "seller's markets." There aren't many homes for sale but there are a lot of people looking.
"In New York City, I'm still seeing bidding wars," says Stone, who admits she's even been surprised at the price some homes have sold for. "The last few years have been a 'no rules' environment."
Now she's starting to see a shift as buyers are saying, "Wait a minute. I'm not quite ready to spend that much more."
A lot of people aren't even aware of the rates
People looking for homes say they would be "anxious" about mortgage rates going up, according to a recent survey from Berkshire Hathaway Home Services. Nearly 4 in 10 say they would be discouraged from even starting the process of looking for a home.
One CNNMoney reader named Parker, who is in her 20s, worries that her dream of owning a home is over.
But the same Berkshire survey also found that many buyers don't have a clue what the mortgage rates are. It's why real estate agents spend time educating home buyers about rates and what their monthly costs will be.
Potential buyers like Parker who are paying attention to the Fed should feel some ease because rates are unlikely to go up much, even by December 2016.
The Fed has stressed that it plans to move slowly and gradually to raise rates further. Some investors even think the Fed will end up having to cut rates again.
Mortgage rates are tied the closest to the yield on the 10-year U.S. Treasury bond. It fell on Thursday.
Many investors are concerned about a global economic slowdown and they continue to buy U.S. government bonds, which helps keep rates low. The Fed also continues to buy a ton of mortgage-backed securities. Until the Fed stops gobbling up mortgages entirely, rates will stay cheap.
It is a good time to refinance
The key figure to watch is when mortgage rates hit 5%. That could be a turning point.
"Some markets will be more impacted than others, especially places where housing is unaffordable like Denver, San Francisco, Los Angeles and Miami," says Svenja Gudell, chief economist at the housing site Zillow.
When the typical home price is near $1 million in San Francisco, even small increases in mortgage costs are much harder to absorb.
For now, experts say the only people who should act soon are homeowners trying to refinance, although the window of opportunity won't close immediately.
"Personally, I'm refinancing myself to capture the lower rate," says real estate broker Stone.
Friday, December 18, 2015
If You Don’t Price Your Home Right, You’ll Really Pay
great article and insight from realtor.com
When it comes to selling your home quickly and (hopefully) for a sweet profit, setting the right asking price from the get-go is key to your success. Set the price too high? The place will stagnate on the market and force you into price cuts, possibly multiple ones. Set it too low? You’re kissing off money that could’ve gone into your pocket.
So how do you hit that sweet spot of an asking price? Well, for starters, avoid these common mistakes!
Mistake No. 1: Basing your price on how much you paid
Even in lackluster markets, homeowners can’t help but hope they’ll make a big profit when they sell—and that’s why many nudge their price ever higher, regardless of real-world demand. But the harsh reality is this: Buyers could care less how much you paid. All they care about is getting the best deal possible in today’s market—and if you aren’t willing to accept that and swallow a potential loss, they’ll take their money elsewhere. Another thing buyers care not a whit about: how much you owe on the mortgage. So, sadly, that shouldn’t factor into your asking price, either. It’s a cruel world. Deal with it.
Mistake No. 2: Expecting to get reimbursed for renovations
So you overhauled the kitchen or put a swimming pool out back, and it cost you a bundle. It’s logical to think that you can pass that entire expense along to buyers who’ll be enjoying the fruits of your labors. Right? Well, not exactly. Remodeling projects offer an average 62% return on investment, according to Remodeling magazine, which is why it’s a good idea to skip major cosmetic remodels right before a sale. This is particularly true if you’ve got wild or exorbitant tastes that buyers might not share.
“Some people have very expensive taste when they put in renovations, but the neighborhood doesn’t warrant the price,” says Lauren Sheehan, an agent with Windermere Real Estate in Portland, OR.
Mistake No. 3: Leaving too much room to negotiate down
The days of extreme lowball offers have gone the way of fax machines, Atkins diet plans, and jeggings. So pricing your property too high—thinking you’ll leave prospects with plenty of room to negotiate—may quickly scare away legitimate offers. Plus, buyers who search for homes online (translation: pretty much all of them) often screen by price, so they may not even see an overpriced property.
Instead, aim to price your property at or just slightly below the going rate. Today’s buyers are highly informed, so if they sense they’re getting a deal, they’re likely to bid up a property that’s slightly underpriced, especially in areas with low inventory.
Mistake No. 4: Not shopping your competition
While you might assume your home is more or less the same as others on your block, small differences can add up to big discrepancies in price. That extra half-bath in the home next door or that fireplace in your living room should all be taken into account. So spend some time perusing local listings and attending open houses to figure out how your home stacks up.
“Home sellers need to understand the positives and negatives of their house and price accordingly,” says Scott Tamkin, an agent with Nest Realtors at John Aaroe Group in Los Angeles. That said, don’t make the next mistake…
Mistake No. 5: Basing your home on a neighbor’s asking price
Just because your neighbor is asking for a certain price on his property doesn’t mean he’s going to get it. And it may not be due to delusion, either.
“Your neighbor may not really need to sell and may be less motivated,” says Danielle Moy, a real estate agent with Coldwell Banker in Chicago. “Those properties may sit on the market for a long time.”
A far better benchmark if you want to sell your home is to look at the prices on recently closed sales. These are available through a comparative market analysis from a Realtor® and will give you a better picture of where home values are going in your neighborhood.
Mistake No. 6: Getting emotionally involved
All sellers think their home is worth more than it is. All of them. Just because you raised a beautiful family in your house doesn’t mean potential buyers will see themselves doing the same, or that they’ll pay a premium for the opportunity to do so.
Mistake No. 7: Failing to quickly and decisively reduce
If your home goes several weeks without an offer, it’s likely priced too high, particularly if homes in your area have a relatively short average days on market. Rather than making a small price cut and risking having to do it again in a subsequent month (while your listing gets older and staler), make a large and decisive price cut—$10,000 or more—that will attract buyer attention and show you’re serious about selling.
When it comes to selling your home quickly and (hopefully) for a sweet profit, setting the right asking price from the get-go is key to your success. Set the price too high? The place will stagnate on the market and force you into price cuts, possibly multiple ones. Set it too low? You’re kissing off money that could’ve gone into your pocket.
So how do you hit that sweet spot of an asking price? Well, for starters, avoid these common mistakes!
Mistake No. 1: Basing your price on how much you paid
Even in lackluster markets, homeowners can’t help but hope they’ll make a big profit when they sell—and that’s why many nudge their price ever higher, regardless of real-world demand. But the harsh reality is this: Buyers could care less how much you paid. All they care about is getting the best deal possible in today’s market—and if you aren’t willing to accept that and swallow a potential loss, they’ll take their money elsewhere. Another thing buyers care not a whit about: how much you owe on the mortgage. So, sadly, that shouldn’t factor into your asking price, either. It’s a cruel world. Deal with it.
Mistake No. 2: Expecting to get reimbursed for renovations
So you overhauled the kitchen or put a swimming pool out back, and it cost you a bundle. It’s logical to think that you can pass that entire expense along to buyers who’ll be enjoying the fruits of your labors. Right? Well, not exactly. Remodeling projects offer an average 62% return on investment, according to Remodeling magazine, which is why it’s a good idea to skip major cosmetic remodels right before a sale. This is particularly true if you’ve got wild or exorbitant tastes that buyers might not share.
“Some people have very expensive taste when they put in renovations, but the neighborhood doesn’t warrant the price,” says Lauren Sheehan, an agent with Windermere Real Estate in Portland, OR.
Mistake No. 3: Leaving too much room to negotiate down
The days of extreme lowball offers have gone the way of fax machines, Atkins diet plans, and jeggings. So pricing your property too high—thinking you’ll leave prospects with plenty of room to negotiate—may quickly scare away legitimate offers. Plus, buyers who search for homes online (translation: pretty much all of them) often screen by price, so they may not even see an overpriced property.
Instead, aim to price your property at or just slightly below the going rate. Today’s buyers are highly informed, so if they sense they’re getting a deal, they’re likely to bid up a property that’s slightly underpriced, especially in areas with low inventory.
Mistake No. 4: Not shopping your competition
While you might assume your home is more or less the same as others on your block, small differences can add up to big discrepancies in price. That extra half-bath in the home next door or that fireplace in your living room should all be taken into account. So spend some time perusing local listings and attending open houses to figure out how your home stacks up.
“Home sellers need to understand the positives and negatives of their house and price accordingly,” says Scott Tamkin, an agent with Nest Realtors at John Aaroe Group in Los Angeles. That said, don’t make the next mistake…
Mistake No. 5: Basing your home on a neighbor’s asking price
Just because your neighbor is asking for a certain price on his property doesn’t mean he’s going to get it. And it may not be due to delusion, either.
“Your neighbor may not really need to sell and may be less motivated,” says Danielle Moy, a real estate agent with Coldwell Banker in Chicago. “Those properties may sit on the market for a long time.”
A far better benchmark if you want to sell your home is to look at the prices on recently closed sales. These are available through a comparative market analysis from a Realtor® and will give you a better picture of where home values are going in your neighborhood.
Mistake No. 6: Getting emotionally involved
All sellers think their home is worth more than it is. All of them. Just because you raised a beautiful family in your house doesn’t mean potential buyers will see themselves doing the same, or that they’ll pay a premium for the opportunity to do so.
Mistake No. 7: Failing to quickly and decisively reduce
If your home goes several weeks without an offer, it’s likely priced too high, particularly if homes in your area have a relatively short average days on market. Rather than making a small price cut and risking having to do it again in a subsequent month (while your listing gets older and staler), make a large and decisive price cut—$10,000 or more—that will attract buyer attention and show you’re serious about selling.
4 Predictions for the Housing Market in 2016
interesting snippet of an article from thestreet.com
"More than seven years after one of the worst recessions in American history, the U.S. housing market appears to be on firm ground again. Despite some hiccups, it is likely that it will carry the momentum it gained this year into next.
In fact, the prospects are better than the average consumer probably thinks. In October, an index of home builder confidence at the National Association of Home Builders reached a 10-year high.
The huge millennial population is going to be buying more homes. So-called boomerang buyers who lost their homes in the Great Recession are returning and the conditions for attaining a decent mortgage and a home at a reasonable price look solid.
Here are a few predictions for the housing market in 2016.
1. Millennials Coming Of Age
The consensus among experts has been that millennials would stimulate the housing sector. A majority of those born roughly 30 years ago are starting to realize their financial aspirations, and simultaneously entering their peak homebuyer age.
According to the National Association of Realtors (NAR), millennials are the largest population of buyers for the second consecutive year. They make up about one in three buyers. It makes sense that their entrance into the housing market will provide a boost.
To be sure, many millennials remain cautious about making big investments. As is the case with other groups, they were chastened by the declines of the Great Recession.
However, this group also represents untapped potential. The millennial home-buying momentum should pick up. Expect millennials to make up a greater share of buyers and to boost the home-buying market.
2. Boomerang Buyers To Make Their Return
Millennials were not the only population impacted by the latest recession. An estimated seven million Americans were believed to have lost their homes to foreclosure over the same period. The loss of equity resulting from the downturn, in addition to a weakened job market, made it increasingly difficult for homeowners to meet their mortgage obligations.
Many of them became renters, forgotten by institutional lenders who are hesitant to lend to individuals who had a foreclosure on their records. Over the past seven years, a number of these formerly distressed homeowners have been able to recover and represent reasonable credit risks.
The National Association of Realtors (NAR) says that about 950,000 formerly distressed homeowners are looking to buy again. Over the next five years, an additional 1.5 million formerly distressed homeowners are expected to actively participate in the housing industry. These boomerang buyers should be a boon to the housing industry.
"The deep wounds inflicted on the housing market during the downturn are finally beginning to heal as distressed sales continue to decline and home prices in some parts of the country have bounced back to their near-peak levels," said Lawrence Yun, chief economist at the NAR. "Borrowers with restored credit will likely have the ability and desire to own again, encouraged by the long-term benefits homeownership provides in a stronger economy and more stable job market."
3. Mortgage Lending Will Ease
Mortgage underwritings have undergone significant changes in a short period of time. This year, the Federal Housing Administration (FHA) dropped premiums on mortgage insurance below the standard 1.35% to 0.85%. While the decrease may not seem like much, it could catch the attention of those that have been hedging about buying a home. After all, the move is expected to save the average homeowner roughly $900 a year on mortgage insurance premiums. It is reasonable to expect the housing market to benefit from this move as early as next year.
Separately, Fannie Mae intends to make it easier for qualified borrowers to receive a loan. Households have come a long way since the depths of the recession, and underwritings are starting to reflect the improvements. In a recent move, the mortgage giant has opened the door for more borrowers to receive a loan. Qualified borrowers are now able to put as little as 3% down on a home. Perhaps even more importantly, however, is the implementation of the HomeReady mortgage program.
Unlike before, this new program will consider the incomes of others planning to live in the house, but without including them as a borrower on the loan. That way, if you live with someone, as long as they represent at least 30% of the household income, Fannie Mae will count their money towards your loan qualification criteria. If that wasn't enough, those not even living in the home can be counted toward a mortgage payment. This means millennials with parents willing to provide monetary assistance will have an easier time qualifying for a home.
The end effect: Loan requirements should ease further in the coming year. Anticipate more people qualifying for loans in 2016.
4. Growing Homebuilder Confidence
The most recent National Association of Home Builders builder sentiment index fell to 62, down three points from October's record number.
Still, single-family home sales are surging in the final quarter of 2015, and the inventory levels are at their highest point in five years.
With the number of homes on the market set to rise in 2016, the principles of supply and demand suggest that home price appreciation will slacken. More people should be able to afford the homes that are currently for sale."
"More than seven years after one of the worst recessions in American history, the U.S. housing market appears to be on firm ground again. Despite some hiccups, it is likely that it will carry the momentum it gained this year into next.
In fact, the prospects are better than the average consumer probably thinks. In October, an index of home builder confidence at the National Association of Home Builders reached a 10-year high.
The huge millennial population is going to be buying more homes. So-called boomerang buyers who lost their homes in the Great Recession are returning and the conditions for attaining a decent mortgage and a home at a reasonable price look solid.
Here are a few predictions for the housing market in 2016.
1. Millennials Coming Of Age
The consensus among experts has been that millennials would stimulate the housing sector. A majority of those born roughly 30 years ago are starting to realize their financial aspirations, and simultaneously entering their peak homebuyer age.
According to the National Association of Realtors (NAR), millennials are the largest population of buyers for the second consecutive year. They make up about one in three buyers. It makes sense that their entrance into the housing market will provide a boost.
To be sure, many millennials remain cautious about making big investments. As is the case with other groups, they were chastened by the declines of the Great Recession.
However, this group also represents untapped potential. The millennial home-buying momentum should pick up. Expect millennials to make up a greater share of buyers and to boost the home-buying market.
2. Boomerang Buyers To Make Their Return
Millennials were not the only population impacted by the latest recession. An estimated seven million Americans were believed to have lost their homes to foreclosure over the same period. The loss of equity resulting from the downturn, in addition to a weakened job market, made it increasingly difficult for homeowners to meet their mortgage obligations.
Many of them became renters, forgotten by institutional lenders who are hesitant to lend to individuals who had a foreclosure on their records. Over the past seven years, a number of these formerly distressed homeowners have been able to recover and represent reasonable credit risks.
The National Association of Realtors (NAR) says that about 950,000 formerly distressed homeowners are looking to buy again. Over the next five years, an additional 1.5 million formerly distressed homeowners are expected to actively participate in the housing industry. These boomerang buyers should be a boon to the housing industry.
"The deep wounds inflicted on the housing market during the downturn are finally beginning to heal as distressed sales continue to decline and home prices in some parts of the country have bounced back to their near-peak levels," said Lawrence Yun, chief economist at the NAR. "Borrowers with restored credit will likely have the ability and desire to own again, encouraged by the long-term benefits homeownership provides in a stronger economy and more stable job market."
3. Mortgage Lending Will Ease
Mortgage underwritings have undergone significant changes in a short period of time. This year, the Federal Housing Administration (FHA) dropped premiums on mortgage insurance below the standard 1.35% to 0.85%. While the decrease may not seem like much, it could catch the attention of those that have been hedging about buying a home. After all, the move is expected to save the average homeowner roughly $900 a year on mortgage insurance premiums. It is reasonable to expect the housing market to benefit from this move as early as next year.
Separately, Fannie Mae intends to make it easier for qualified borrowers to receive a loan. Households have come a long way since the depths of the recession, and underwritings are starting to reflect the improvements. In a recent move, the mortgage giant has opened the door for more borrowers to receive a loan. Qualified borrowers are now able to put as little as 3% down on a home. Perhaps even more importantly, however, is the implementation of the HomeReady mortgage program.
Unlike before, this new program will consider the incomes of others planning to live in the house, but without including them as a borrower on the loan. That way, if you live with someone, as long as they represent at least 30% of the household income, Fannie Mae will count their money towards your loan qualification criteria. If that wasn't enough, those not even living in the home can be counted toward a mortgage payment. This means millennials with parents willing to provide monetary assistance will have an easier time qualifying for a home.
The end effect: Loan requirements should ease further in the coming year. Anticipate more people qualifying for loans in 2016.
4. Growing Homebuilder Confidence
The most recent National Association of Home Builders builder sentiment index fell to 62, down three points from October's record number.
Still, single-family home sales are surging in the final quarter of 2015, and the inventory levels are at their highest point in five years.
With the number of homes on the market set to rise in 2016, the principles of supply and demand suggest that home price appreciation will slacken. More people should be able to afford the homes that are currently for sale."
Check Out These 8 Surprising Predictors of Housing Prices
interesting post from realtor.com
Like investors in the stock market, 1933 Saint Gaudens Double Eagle coins, or orange juice futures, home buyers and owners want to know which way prices are heading. Are valuations heading up, up, up, making it the perfect time to buy? Or are they beginning a precipitous decline from their peak—making it high time to sell? To read the tea leaves, they might focus on the latest jobs reports, check out what’s going on in other markets, or scrutinize the writings of economists.
But when it comes to nailing the best deal in real estate, you can get a jump on the competition! Inside-track insights can be found in the most unusual places—such as on a grocery run, or at the gas pump. We’ve rounded up eight surprising indicators of change in home prices. Do they play a role in pushing the numbers skyward or down into the dirt? Or are they false prophets? We’re here to help you sort it out!
1. Gas prices
Sure, it feels fantastic to fill up your car with gas for just $35 when it used to cost almost $50. But if you’re looking to buy a home, the financial benefit of cheap gas might be overrated—as gas prices fall, home prices inevitably go up. And homes sell faster, too, which takes a toll on available inventory.
For every $1 decrease in gas prices, home prices increase by roughly $4,000 and the average time to sell a property decreases by 25 days, according to a study by Longwood University and Florida Atlantic University.
Lower gas prices lead to increased consumer confidence and more disposable income for potential buyers, Longwood professor Bennie Waller explains. In addition, the listing broker—who has to travel between properties—is more likely to market more aggressively and have more showings when gas is cheap.
2. Trader Joe’s vs. Whole Foods
When it comes to healthy eats, cost-conscious gourmet market Trader Joe’s and pricey, environmentally conscious Whole Foods each have their own massive cult following. But it turns out, if you’re seeking a neighborhood where homes are worth more—and gaining in value—you’d better know which store to look for.
Homes near the two foodie superstores significantly trump the national average home value, but homes near a Trader Joe’s are worth 5% more than homes near a Whole Foods, according to RealtyTrac. So close, Whole Foods!
Homes near a Trader Joe’s also appreciate faster, with an average appreciation rate of 40% from the time of purchase. Meanwhile, homes near a Whole Foods appreciated 34%, the same as the national average. So even if you do tend to shop at “Whole Paycheck,” you’d probably do better to buy a home near TJ’s—and load up on some Two-Buck Chuck while you’re at it.
3. Sports facilities
Walking distance to the big game? Score! Living near a stadium clearly is not a hard sell for sports fans, but even those without an obsessive rooting interest in the local teams should pay close attention if there’s a major sports facility nearby.
Moving a residential housing unit one mile closer to a professional sports facility increases its value by $793. But the effect disappears after four miles, according to researchers at the College of William and Mary and University of Alberta, who extracted property data within 5 miles of every NFL, NBA, MLB, and NHL facility in the U.S. So sidle up to that stadium—just be sure you have a dedicated parking space.
4. Marijuana
The legalization of marijuana was predicted to have a major impact on state tax revenues, and with people relocating to take advantage of its medical benefits or just because they enjoy a regular toke, some have suggested that legal pot might also push up real estate values.
Marijuana’s impact on housing is a tale of two states: Colorado and Washington, the only ones that have legalized the sale of recreational marijuana.
The buzz is felt more in the real estate market of Colorado. Since the doors opened for recreational sales in January 2014, housing prices have appreciated 20.4%, much higher than the 15.2% across the country over the same period.
Marijuana sales in Washington are more modest, and so is the real estate growth. The state’s housing prices have risen by 7.3% since it launched its legal marijuana market in July 2014—the height of the yearly housing market—while at the national level, they increased 6.5% over the same period. (Keep in mind that housing prices are generally lower in the winter and higher in the summer, the purpose is not to compare the numbers of Colorado to Washington).
Of course, it’s hard to say whether the legalization of marijuana is really driving those numbers. After all, both Denver and Seattle are hubs for tech businesses that are fueling employment, which in turn fuels the housing market. But if you already own a home in Colorado or Washington, you’ve got plenty of reasons to be mellow and to listen to “Dark Side of the Moon” on a continuous loop.
5. Temperature change
Global warming affects not only nature, but also our daily lives and housing decisions. The National Association of Realtors® looked at home prices and temperature change over the past four years and found what seemed to be a negative correlation between temperature increase and housing prices.
Out of the 82 markets studied, those with the highest gains in housing prices typically had a small increase in temperature (up to 2 degrees Fahrenheit). For example, in Atlanta, GA, the temperature increased 1 degree while house prices increased 78%. But markets where the temperature rose more than 3 degrees did not experience significant price gains, such as Little Rock, AR.
6. Casinos
Part of Las Vegas’ legendary success story is that casinos brought wild prosperity to a barren desert area. But in fact, Sin City is an American anomaly in just about every way imaginable, not the least of which are real estate valuations. The truth is, casinos across the country, from riverboats to Native American reservations, usually have a negative impact on surrounding home values—by 2% to 10%, according to various studies.
One case study showed that in Henderson, NV, properties within a mile of a proposed large-scale casino would see their values fall by $9,200. Snake eyes!
7. Highways
Is it a good idea to live close to the highway? Yes … and no. It depends on just how close we’re talking.
A case study of the Superstition Freeway (U.S. Route 60) corridor in Mesa and Gilbert, AZ, showed that single-family homes within 0.5 miles of the freeway were adversely impacted. But the negative impacts were more than offset by housing price appreciation in the surrounding areas. Average sales price appreciation for homes within 5 miles of the freeway (including negatively affected properties) was higher than the whole metropolitan area. So while you probably don’t want to buy right by an exit ramp, easy access to a transportation corridor is definitely a strong selling point.
8. Trees on the street
Everyone knows that stately old-growth trees add major charm to a neighborhood—and are probably an indicator of more expensive homes. But did you know just how expensive? A recent study found that houses on streets where there were trees fetched an average of $7,130 more than houses on treeless streets. Maybe it’s time to consider branching out.
Like investors in the stock market, 1933 Saint Gaudens Double Eagle coins, or orange juice futures, home buyers and owners want to know which way prices are heading. Are valuations heading up, up, up, making it the perfect time to buy? Or are they beginning a precipitous decline from their peak—making it high time to sell? To read the tea leaves, they might focus on the latest jobs reports, check out what’s going on in other markets, or scrutinize the writings of economists.
But when it comes to nailing the best deal in real estate, you can get a jump on the competition! Inside-track insights can be found in the most unusual places—such as on a grocery run, or at the gas pump. We’ve rounded up eight surprising indicators of change in home prices. Do they play a role in pushing the numbers skyward or down into the dirt? Or are they false prophets? We’re here to help you sort it out!
1. Gas prices
Sure, it feels fantastic to fill up your car with gas for just $35 when it used to cost almost $50. But if you’re looking to buy a home, the financial benefit of cheap gas might be overrated—as gas prices fall, home prices inevitably go up. And homes sell faster, too, which takes a toll on available inventory.
For every $1 decrease in gas prices, home prices increase by roughly $4,000 and the average time to sell a property decreases by 25 days, according to a study by Longwood University and Florida Atlantic University.
Lower gas prices lead to increased consumer confidence and more disposable income for potential buyers, Longwood professor Bennie Waller explains. In addition, the listing broker—who has to travel between properties—is more likely to market more aggressively and have more showings when gas is cheap.
2. Trader Joe’s vs. Whole Foods
When it comes to healthy eats, cost-conscious gourmet market Trader Joe’s and pricey, environmentally conscious Whole Foods each have their own massive cult following. But it turns out, if you’re seeking a neighborhood where homes are worth more—and gaining in value—you’d better know which store to look for.
Homes near the two foodie superstores significantly trump the national average home value, but homes near a Trader Joe’s are worth 5% more than homes near a Whole Foods, according to RealtyTrac. So close, Whole Foods!
Homes near a Trader Joe’s also appreciate faster, with an average appreciation rate of 40% from the time of purchase. Meanwhile, homes near a Whole Foods appreciated 34%, the same as the national average. So even if you do tend to shop at “Whole Paycheck,” you’d probably do better to buy a home near TJ’s—and load up on some Two-Buck Chuck while you’re at it.
3. Sports facilities
Walking distance to the big game? Score! Living near a stadium clearly is not a hard sell for sports fans, but even those without an obsessive rooting interest in the local teams should pay close attention if there’s a major sports facility nearby.
Moving a residential housing unit one mile closer to a professional sports facility increases its value by $793. But the effect disappears after four miles, according to researchers at the College of William and Mary and University of Alberta, who extracted property data within 5 miles of every NFL, NBA, MLB, and NHL facility in the U.S. So sidle up to that stadium—just be sure you have a dedicated parking space.
4. Marijuana
The legalization of marijuana was predicted to have a major impact on state tax revenues, and with people relocating to take advantage of its medical benefits or just because they enjoy a regular toke, some have suggested that legal pot might also push up real estate values.
Marijuana’s impact on housing is a tale of two states: Colorado and Washington, the only ones that have legalized the sale of recreational marijuana.
The buzz is felt more in the real estate market of Colorado. Since the doors opened for recreational sales in January 2014, housing prices have appreciated 20.4%, much higher than the 15.2% across the country over the same period.
Marijuana sales in Washington are more modest, and so is the real estate growth. The state’s housing prices have risen by 7.3% since it launched its legal marijuana market in July 2014—the height of the yearly housing market—while at the national level, they increased 6.5% over the same period. (Keep in mind that housing prices are generally lower in the winter and higher in the summer, the purpose is not to compare the numbers of Colorado to Washington).
Of course, it’s hard to say whether the legalization of marijuana is really driving those numbers. After all, both Denver and Seattle are hubs for tech businesses that are fueling employment, which in turn fuels the housing market. But if you already own a home in Colorado or Washington, you’ve got plenty of reasons to be mellow and to listen to “Dark Side of the Moon” on a continuous loop.
5. Temperature change
Global warming affects not only nature, but also our daily lives and housing decisions. The National Association of Realtors® looked at home prices and temperature change over the past four years and found what seemed to be a negative correlation between temperature increase and housing prices.
Out of the 82 markets studied, those with the highest gains in housing prices typically had a small increase in temperature (up to 2 degrees Fahrenheit). For example, in Atlanta, GA, the temperature increased 1 degree while house prices increased 78%. But markets where the temperature rose more than 3 degrees did not experience significant price gains, such as Little Rock, AR.
6. Casinos
Part of Las Vegas’ legendary success story is that casinos brought wild prosperity to a barren desert area. But in fact, Sin City is an American anomaly in just about every way imaginable, not the least of which are real estate valuations. The truth is, casinos across the country, from riverboats to Native American reservations, usually have a negative impact on surrounding home values—by 2% to 10%, according to various studies.
One case study showed that in Henderson, NV, properties within a mile of a proposed large-scale casino would see their values fall by $9,200. Snake eyes!
7. Highways
Is it a good idea to live close to the highway? Yes … and no. It depends on just how close we’re talking.
A case study of the Superstition Freeway (U.S. Route 60) corridor in Mesa and Gilbert, AZ, showed that single-family homes within 0.5 miles of the freeway were adversely impacted. But the negative impacts were more than offset by housing price appreciation in the surrounding areas. Average sales price appreciation for homes within 5 miles of the freeway (including negatively affected properties) was higher than the whole metropolitan area. So while you probably don’t want to buy right by an exit ramp, easy access to a transportation corridor is definitely a strong selling point.
8. Trees on the street
Everyone knows that stately old-growth trees add major charm to a neighborhood—and are probably an indicator of more expensive homes. But did you know just how expensive? A recent study found that houses on streets where there were trees fetched an average of $7,130 more than houses on treeless streets. Maybe it’s time to consider branching out.
Thursday, December 10, 2015
Yacht on a Cliff Overlooking Ocean
from Wikipedia.org
Sun Cruise Resort & Yacht is a hotel resort in Jeongdongjin on the east coast of South Korea. Designed in the image of a cruise ship, the hotel is 165 metres (541 ft) long and 45 metres (148 ft) tall and overlooks the beach resort.[1][2] It is believed to be the first of its kind in the world.
Built at the top of a large cliff, the hotel looks out over the sea[2][3] and gives the impression that a cruise ship has run aground. The town of Jeongdongjin is known for its views of the sunrise and sunset over the Sea of Japan (East Sea) and is itself a tourist destination. This has been further enhanced by the construction of the hotel, with its unusual design making it one of the most popular attractions in the country.[1][2][3]
The hotel has 211 rooms, including bedrooms and apartments, and six function rooms. There are six restaurants serving Korean and European food and a rotating bar on the top floor, giving visitors a panoramic view of the horizon and the famed sunrises.[1][2][3] Sporting facilities include a netted golf range, volleyball court, and a fitness club.[4] The cruise ship theme is enhanced by the sound of crashing waves played on speakers throughout the hotel and the use of salt water in the swimming pool.[1][4]
The resort also contains a park located adjacent to the hotel.[1] Prominent within the landscaped gardens are "The Hands of Promise", two giant hands rising from the ground, along with a variety of other sculptures. There is also an observation area with a glass floor suspended above the sea, an exhibition hall, and a lake
Sun Cruise Resort & Yacht is a hotel resort in Jeongdongjin on the east coast of South Korea. Designed in the image of a cruise ship, the hotel is 165 metres (541 ft) long and 45 metres (148 ft) tall and overlooks the beach resort.[1][2] It is believed to be the first of its kind in the world.
Built at the top of a large cliff, the hotel looks out over the sea[2][3] and gives the impression that a cruise ship has run aground. The town of Jeongdongjin is known for its views of the sunrise and sunset over the Sea of Japan (East Sea) and is itself a tourist destination. This has been further enhanced by the construction of the hotel, with its unusual design making it one of the most popular attractions in the country.[1][2][3]
The hotel has 211 rooms, including bedrooms and apartments, and six function rooms. There are six restaurants serving Korean and European food and a rotating bar on the top floor, giving visitors a panoramic view of the horizon and the famed sunrises.[1][2][3] Sporting facilities include a netted golf range, volleyball court, and a fitness club.[4] The cruise ship theme is enhanced by the sound of crashing waves played on speakers throughout the hotel and the use of salt water in the swimming pool.[1][4]
The resort also contains a park located adjacent to the hotel.[1] Prominent within the landscaped gardens are "The Hands of Promise", two giant hands rising from the ground, along with a variety of other sculptures. There is also an observation area with a glass floor suspended above the sea, an exhibition hall, and a lake
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