Sep 6, 2019 | Real Estate
Residential real estate developers in America are responding to a national slowdown in new home construction by building smaller homes that are more 
modestly priced. The demand for smaller, less expensive homes is growing, while the overall demand for new custom homes is declining. Prices decreased slightly, by about one-half percent, from the price levels in 2018 for newly-constructed homes.
Lower Profits For Builders
The median price for a newly-constructed home in America is $372,900. The median sales price of an existing home is $309,700.
American construction companies are feeling the pressure to build lower-priced homes along with the increased costs for imported building materials due to the tariffs and a labor shortage. This is lowering profits for the construction companies, yet creates a buying opportunity for those looking for a new home.
Lower New Home Inventory Levels
These pressures caused new home inventory to decrease by 1% from the 2018 levels. To put this in perspective, the inventory of new homes only decreased this much in 2013. Even though mortgage loans are easier to come by than a number of years ago, there is not the same demand as before for new homes. Perhaps, this is an advance indicator of an upcoming slowdown.
Down-Sized Demand
The U.S. Census reports that the average size of a new home went from 1,660 square feet in the 1970s to 2,687 square feet in 2105. In 2018, the average size of a new home was only 2,386 square feet.
During 2018, there were around 119,000 contractor-built single-family new homes that started construction and over 840,000 that were completed.
Other interesting trends reported by the Census about the 840,000 new single-family homes that finished construction in 2018 include:
- 783,000 of the new homes have air-conditioning installed, which is 93% of the total.
- 778,000 of the new homes have wood frames.
- 59,000 of the new homes have concrete frames.
- 336,000 of the new homes have a heat pump.
- 270,000 of the new homes have a porch or patio.
- Only 10% or 84,000 of the new homes have two bedrooms or fewer.
- About half or 376,000 of the new homes have four bedrooms or more.
- 31,000 of the new homes have one and one-half bathrooms or fewer.
- 306,000 of the new homes have three or more bathrooms.
Conclusion
Builders who offer smaller, lower-priced homes are still experiencing strong demand. In fact, the demand for these modest homes is growing. This trend is likely to continue for the time being.
If you are in the market for a new home or interested in listing your current property, be sure to contact your trusted real estate professional.
Sep 5, 2019 | Real Estate
Smart home technology is useful for many reasons. It improves security, helps improve energy-efficiency, and makes it more convenient for the home’s occupants. There is also a new trend in the use of smart home technology as a sales tool to help sell a home or a condominium.
A real-estate agency in Atlanta, Georgia is using Alexa® devices, along with nicely-framed display cards, to help prospective buyers learn more about a condominium that is for sale in the Districts Lofts building.
There are now more than 53 million personal assistant devices, such as the Alexa® device from Amazon and the Google Assistant®, which are in use. Many people are very comfortable using them to ask questions and get the answers spoken back to them in a calm, soothing voice.
Alexa® Tell Me More
The innovative trend in home sales is to place an Alexa® device in each room, preprogrammed with the answers to frequently asked questions. Display cards that sit on the counter next to the Alexa® device encourage the potential buyer to says things like “Alexa, tell me about the kitchen.” or “Alexa, what are the amenities in the neighborhood?”
These systems work with chatbot technology that uses artificial-intelligence, voice-recognition programming to understand the questions and provide the answers from a stored database of information. Also, if the chatbot cannot answer the question, the Alexa® device can connect the potential buyer to a live human operator to answer the question.
Friendly, Effective, And Cost-Efficient
Using the Alexa® device and similar devices can be less intimidating for many people than having to speak with a human salesperson. These devices can deliver the answers in a professional and consistent way.
Not needing to have a human being waiting around for a potential customer saves an enormous amount of labor expense and time. Moreover, the Alexa® device can be always available for extended hours to show a model unit when it is convenient for potential customers.
Conclusion
Using Alexa® devices to better inform potential buyers is interesting. The devices can be preprogrammed with all the information needed and can also collect customer information, which the customers voluntarily give, for follow-up purposes.
After Alexa® answers all a potential buyer’s questions, it can then ask them if they would like a brochure emailed to their email address to build up a mailing list for the real estate agency. This kind of personalized customer service, using advanced technology, is the wave of the future for real estate sales.
Of course, technology can only go so far. Your professional real estate agent and mortgage lender are the best resource for making a decision on which home is the right one for you and helping you negotiate your best deal.
Sep 4, 2019 | Real Estate
Decorating and putting the finishing touches on your new home is definitely one of the most fun parts of moving. It’s satisfying to fill your new home with furnishings and décor choices that reflect your personality and lifestyle.
One of the most overlooked aspects of decorating is the hardware. However, hardware changes can dramatically transform your home in unexpected ways. Here are some ideas to use.
Install A New Door Knocker
If your new home has a door knocker, replace it with a new one. If it doesn’t already have one, it’s easy to install a door knocker using a simple household tool box.
Install A Peephole
Your front door will be more secure with a peephole installed. Modern peepholes give a broad range of vision that will allow you to see to the far right and left of the front door. Be sure to install it low enough that older kids can look out of it easily, too.
Replace Doorknobs
If your new home is actually just new to you, it may have old and worn doorknobs. New doorknobs will make the actual door look brand new, too. Consider decorative doorknobs, which are a step above the standard brass doorknobs we’re all familiar with. If you aren’t comfortable replacing doorknobs, consider hiring a handyman or locksmith to do it for you.
Upgrade Wall Outlet Covers
Wall outlets are in every room, yet few homeowners think to upgrade them. You can find decorative wall outlet covers in various patterns, colors and images in hardware stores and online. If the idea of switching out all your wall outlet covers is overwhelming, consider just a few in special places, like your child’s bedroom or in the kitchen.
Upgrade Lighting Pull Cords
Those ceiling light pull cords leave a lot to be desired. Most of them are utilitarian but definitely not decorative. Consider adding an attractive fob to the end of each lighting fixture pull. Your local hardware lighting section will have many to choose from, and they’re very easy to install with not tools at all.
Replace Kitchen Cabinet Handles
Your new kitchen cabinets will get a facelift when you replace the old handles with new ones. Be sure to also get matching drawer pulls for the best overall effect.
Now you can see that changing out or adding new hardware can make such a big difference in the way your new home looks and feels. Just one afternoon of doing this easy project will make your new home look amazing for years to come.
If you are in the market for a new home or interested in listing your current property, be sure to contact your trusted real estate agent.
Sep 3, 2019 | Financial Reports
Last week’s economic news included readings on home price trends, pending home sales and weekly readings on average mortgage rates and first-time jobless claims. The University of Michigan also released consumer sentiment report.
Case-Shiller Reports Slower Home Price Growth in June
According to Case-Shiller Home Price Indices for June, home prices gained an average of 2.10 percent year-over-year. This was the slowest growth of home prices since 2012. Analysts said that home prices grew at one-third the 6.30 percent that home prices grew last year.
Home prices grew fastest in Phoenix, Arizona with year-over-year growth of 5.80 percent; Las Vegas, Nevada home prices rose 5.50 percent and Tampa, Florida reported 4.70 percent growth in home prices.
West coast cities led home price growth in recent years when home prices were rapidly increasing, but growth has slowed and Seattle, Washington reported negative year-over-year growth of home prices in June.Potential obstacles to home price growth include rising materials costs due to tariffs on imported building materials and concerns over slowing economic growth.
Pending Home Sales Lower in July
The National Association of Realtors® reported fewer pending home sales in July as compared to June. Pending sales, which are defined as sales for which purchase contracts have been signed, but sales not closed, fell by -2.50 percent in July as compared to 2,80 percent growth in June. Real estate pros said that the peak home-buying season slows as summer progresses.
All four regions reported fewer contract signings for previously-owned homes in July; the Northeast reported -1.60 percent fewer pending sales, the Midwest had -2.50 percent fewer pending sales and the South reported -2.40 percent fewer sales contracts signed. The biggest dip in contracts signed was in the West with sales contracts -3.40 percent lower than for June.
Analysts and real estate pros expected falling mortgage rates to boost home sales, but current homeowners took advantage of low mortgage rates to refinance their mortgages as would-be home buyers were unaffected by low mortgage rates.
Mortgage Rates Mixed, New Jobless Claims Rise
Freddie Mac reported higher mortgage rates for fixed rate loans; rates rose three basis points on average for 30 and 15-year fixed rate mortgages. Rates for a 30-year fixed rate mortgage averaged 3.58 percent; the average rate for a 15-year fixed rate mortgage was 3.06 percent and 5/1 adjustable rate mortgage rates averaged 3.31 percent. Discount points averaged 0.50 percent for fixed rate mortgages and 0.40 percent for 5/1 adjustable rate mortgages
Initial jobless claims rose from the prior week’s reading of 211,000 to 215,000 new jobless claims filed last week. Analysts expected 214,000 new claims to be filed. The University of Michigan’s consumer sentiment index dropped to an index reading of 89.8 as compared to the expected reading of 92.3 and July’s reading of 92.1. August’s reading was the lowest measurement of consumer sentiment since 2012.
What’s Ahead
This week’s scheduled economic news includes readings on construction spending and data on public and private-sector jobs growth and the national unemployment rate. Weekly reports on mortgage rates and first-time jobless claims will also be released.
Aug 30, 2019 | Real Estate
When buying real estate there are certain standard rights usually included, unless the property has an encumbrance that in some way causes an exclusion as noted in the sale.There are also additional rights that may or may not be in the sale, which may represent significant value.
Standard Real Estate Ownership Rights
The standard rights conveyed to the owner of the title deed for a property include:
- Possession: Possession is a legal word for ownership. Possession occurs after closing on the purchase of a property, receiving the title, and recording the sale with the county office where the property is. Anyone who has a claim against the property files a lien with the county for the amount of the claim. These can be on behalf of the mortgage lender, a tax authority, a building contractor, and others who win a judgment award, in the courts, against the property owner.
- Control: The buyer of the property gets control over it, subject to any prohibitions under law or rules of a homeowners’ association (HOA) called “covenants and restrictions.” Be sure to read all the details of the HOA rules (if any). Investigate any county and city restrictions as well to understand allowed uses of the property.
- Exclusion: Owners of private property control who uses it, with the exception of any easements that may exist. Common easements allow utility companies and municipalities access to some portion of the property. These may be found in the zoning regulations or indicated in the title documentation. Less common easements, allow others to cross the property or have an access road to get to other properties.
- Enjoyment: This permits the owner to use the property in any legal manner. For example, if not prohibited by any HOA rules, county laws, or other restrictions, a new property owner can do whatever they like on their property, such as put up a pig farm or fill the yard with broken-down automobiles. However, there are usually rules and laws that prohibit this type of “enjoyment.”
- Disposition: This right allows an owner to rent, sell, or transfer the property when desired. However, any liens have the ability to have priority to block a sale or transfer until they are fully satisfied.
Special Real Estate Ownership Rights
There are additional rights that may be included in the sale or not, which include:
- Mineral Rights: These rights include anything found underground such as valuable metals, gemstones, minerals, natural gas, and oil. If these rights do not sell with a property, it is possible that a third-party will own them and have the right to come onto the property to extract them.
- Water Rights: If there is any natural water available to the property, such as lakes, rivers, streams, water wells, and underground aquifers, these water rights can be sold, or not, with the property.
- Air/View Rights: These rights may include all the air above the property and the views from the property. These rights become important in congested areas where construction on an adjacent property might block a view, put the property in a shadow, or inhibit desirable breezes.
Title Insurance
Most real estate transactions close with the help of a title company. The title company does the research to determine the included rights and any encumbrance by liens. Title insurance is protection for the home buyers that there are no claims, which remain unidentified in the closing documents by the title company.
Ownership of property comes from holding the title to it. The documentation of the title is the deed. When a sale occurs, creating a new deed transfers the title of the property along with any rights associated with it.
Summary
Knowing the rights when buying a property is a part of being a well-informed buyer. All rights that are available for a specific property are valuable. The rights included the sale (or lack thereof) create the full value of the real estate.
Be sure to partner with a trusted real estate agent and home mortgage professional to assist you with all of your real estate needs.
