Natural Disaster Report Ranks Housing Risk

Storm _ HouseRealtyTrac’s recently released 2015 U.S. Natural Disaster Housing Risk Report ranked 2,318 counties across the country based on their overall risk of suffering a natural disaster. The results found that – within the counties included in the analysis – 43 percent of the single-family homes and condos were at high or very high natural hazard risk. That’s 35.8 million homes with a combined estimated market value of $6.6 trillion. Daren Blomquist, RealtyTrac’s vice president, said prospective buyers should be aware of any natural disaster risk impacting a potential home purchase. “In most cases, learning about natural disaster risk will not stop a home sale, but it will help buyers make a better-informed decision about where to buy and also be prepared in terms of appropriate insurance coverage and family contingency plans depending on the type of natural disaster risks most affecting the home they end up purchasing,” Blomquist added. Not surprisingly, homes on the coasts received the highest risk rating, with California, New York, North Carolina, Florida, and New Jersey ranking in the top five.

Do Home Buyers Prefer Cities Over Suburbs?

Houses 11There is an ongoing debate over whether or not demographic trends reveal a preference for city living or suburban neighborhoods among Americans on the move. For many years, the suburbs were the most popular spot among buyers but recent evidence may indicate that Americans are beginning to move back to the city. According to Fitch Ratings’ RMBS Sustainable Home Price Report, the proof is in the prices. In short, home prices have been rising faster in cities than the surrounding area and that’s because more Americans are looking to buy a home in the city. In other words, stronger price growth in urban centers is a reflection of a broader shift in population growth trends. “This demand shift implies that city centers will continue to see growth even where regional prices have been stagnant, such as Atlanta or Chicago,” Fitch director, Stefan Hilts, said. In fact, over the past 15 years, home prices have grown 50 percent faster in city centers. Hilts added that one of the byproducts of an increased preference for cities over suburbs is that homeownership rates may remain low, as more potential home buyers opt to live in areas where rentals dominate.

Cost Of Renting Hits All-Time High

Dollar Sign 2If you’re weighing whether to buy or rent your next home, some newly released numbers may influence your decision. That’s because a new analysis shows rent is more expensive than it has ever been. In fact, renters can now expect to spend 30.2 percent of their monthly income on rent. Typically, 30 percent is what economists say is an acceptable share of monthly income to spend on housing. And, though it is still within range, rent has historically been cheaper. A look at records dating back to 1979 shows renters paying closer to 24 percent of their income on average. But how does renting compare to buying in today’s market? Well, according to this analysis, a typical buyer can expect to pay just 15.1 percent of their monthly income toward their mortgage payment, which is significantly less than the historical average of 21.3 percent. That means, buying a home is still cheaper than renting in most markets and is also more affordable than it has been compared to years’ past. In other words, now is a good time to buy a home and it will continue to be as long as rents continue to climb.

Real Estate Named Best Long Term Investment

Money 19Nearly 30 percent of surveyed Americans named real estate the best investment for money they wouldn’t need for at least a decade, according to a new survey from Bankrate. Real estate beat out cash, bonds, and the stock market and took the top spot for the first time in the survey’s three-year history. Along with a Gallup poll released in April, it marks the second time this year Americans said they trusted the housing market most with their money. It is also an indication that – following many years when the housing crash seemed to damage real estate’s reputation as a safe bet – Americans are, once again, eager to get into the market. Part of the reason for this has to do with favorable buying conditions, including mortgage rates still below historic norms. It also has to do with the fact that home values are seen as more stable – compared, for example, to the daily fluctuations of the stock market. In addition, real estate benefits from being a tangible commodity, which gives it an aura of security stocks and bonds can’t match. Whatever the reason, Americans’ perception of the housing market is clearly on the rebound.

Most Americans Don’t Follow Home Prices

Prices 2A recently released survey found that most Americans have no idea what’s happening with home prices in their area. In fact, 25 percent of participants thought home prices were flat last year, when they were actually up 4 percent nationally and, in 65 metro areas, saw double-digit increases. But, despite the seeming disinterest, home prices are important – whether you’re a prospective buyer, thinking about selling your house, or are a current homeowner. That’s because, for most of us, our home is our largest asset, which means having an idea of whether or not it’s growing in value should be of interest. And, for those of us thinking of buying or selling a home, the importance of knowing whether prices are up or down in our area is obvious. Still, the survey’s findings show a fairly common misconception that home values aren’t rising, when they really are. In some cases, such as Tampa, large percentages of respondents were wrong about their local market, with 45 percent guessing that values were flat when they actually rose by 9 percent. Other areas were closer to the truth, with Boston leading the way. In Boston, 23 percent of participants correctly judged local home prices, the highest percentage of any metro area.

When Will The Boomerang Buyers Return?

Real Estate 1Boomerang buyers, as defined by a recent RealtyTrac report, include the millions of former homeowners who lost their homes during the financial crisis. RealtyTrac estimates that there could be as many as 7.3 million of these potential buyers out there and only about 1 million of them have since bought a house. That means, there are 6 million former homeowners who could be returning to the real estate market over the next few years. Combined with evidence that younger buyers are beginning to buy homes after a period when first-time buyers were underrepresented, these return buyers could further strengthen an already improved real estate outlook. But when will they return? Well, to some extent, boomerang buyers have been held back for the past several years because of damage to their credit suffered during the housing crash. However, these buyers should soon feel some relief. That’s because foreclosures only stay on credit reports for seven years. Which means, buyers who suffered a financial misfortune during the crisis should soon be able to further re-establish their credit, which could lead them back down the path of homeownership. Though purely speculative, the theory joins a growing number of forecasts calling for an increasingly healthy and balanced housing market in the months ahead.

Homes Get Bigger As Average Household Shrinks

New House 5Recent research shows the average American home is getting bigger at the same time the size of the typical household is shrinking. In short, that means Americans today have more square feet of living space, per person, than ever before. According to an analysis of the Census Bureau’s Characteristics of New Housing done by the American Enterprise Institute, the average amount of living space per person has doubled since 1973. In fact, the average American home has increased from 1,660 square feet to 2,690 square feet over the past 40 years. At the same time, the average household has fallen from 3.01 persons in 1973 to an all-time low of 2.54 persons in 2014. That means, the average American home now offers just over 1,000 square feet of living space per person. By comparison, Americans in 1973 enjoyed far less space, with only 551 square feet of living space per person. A separate analysis from selfstorage.com shows it’s not just the size of homes that has been changing. Since 1994, newly built homes have more bathrooms and bedrooms, fewer fireplaces, and more air conditioning as well. In fact, over the past 20 years, the percentage of new homes with air conditioning has risen from 79 percent to 91 percent.

The Dramatic Return Of Homeowner Equity

Money 17Equity refers to the value of a property minus the amount still owed on the mortgage. In other words, it’s a reflection of how much of your house’s worth is actually yours. As a homeowner, your equity increases each month as you pay your monthly mortgage payment. It also goes up if your home’s value rises. Similarly, when home prices fall, so does a homeowner’s equity. For example, homeowner equity hit it’s peak of $13.1 trillion in 2005, according to the Federal Reserve. House prices were up and buying a home was considered a good way of increasing one’s net worth. However, by 2011, the financial crisis had hit and took home prices down with it. That year, homeowner equity fell to $6.4 trillion. The housing market’s worth had been cut nearly in half and million of homeowners found themselves in a much different situation and, in some cases, owing more on their mortgage than their house was worth. But, despite the dramatic crash, the housing market in the years between then and now has regained much of its previous value. In fact, according to a report from RealtyTrac, homeowner equity has increased $4.9 trillion since 2011, bringing it to a total of $11.3 trillion. That means, over the past three years, homeowners have experienced a dramatic turnaround and, in the process, regained much of their homes’ lost value. That’s great news for current homeowners but also prospective buyers who hope to find a house that will be both their home and a good investment.

Why You Have To Pay Attention To Property Tax

Houses 8There are a lot of things to consider when buying a home and many of them have to do with costs. For first-timers and even some move-up home buyers, calculating mortgage rates, closing costs, a down payment, and the eventual monthly mortgage payment can be overwhelming. So much so that it’s easy to forget a few things along the way. One of those easily forgotten things is property tax. When looking at the price of homes in a particular neighborhood, don’t forget to have a look at what they pay in taxes per year. Property tax varies from one area to the next and, depending on where you’re looking, can add a significant amount to your bottom line. For example, a recent analysis from RealtyTrac, which looked at data from the nation’s Metropolitan Statistical Areas, revealed that the highest average property taxes were found in the urban centers of New York, northern New Jersey, and eastern Pennsylvania, with communities paying as much as $12,923 a year in taxes. On the other end of the spectrum, homeowners in Fort Smith, Arkansas and portions of Oklahoma paid an annual bill of less than $500 a year. With that in mind, have a look at what taxes have been over the past few years, in the neighborhoods where you’d most like to buy, to get a feel for what it adds to the total cost of buying a house.

Potential Home Buyers Say Now Is The Time

Houses 3The results of a recent survey from Braun Research found that 62 percent of potential home buyers say now is a better time to buy than last year and 30 percent of them plan to purchase a home in the next year and a half. The survey, which asked interested buyers about their plans and concerns, adds to the growing evidence that Americans are ready to buy. Among the most commonly cited reasons for wanting to buy now were the fact that rent is getting more expensive and waiting may mean missing out on today’s historically low mortgage rates and generally favorable buying conditions. In fact, nearly 70 percent of respondents said they worry that they’ve already missed out on the best buying opportunities because of recent price increases. Other worries of potential home buyers included being able to outbid other buyers if necessary and finding a home that fits their budget and is in a good neighborhood. Still, despite their concerns, buyers say they feel it’ll be easier to get a mortgage this year and are willing to make sacrifices in order to buy their dream home. In other words, there is a feeling among potential home buyers that this is the time to buy and waiting could mean having to compromise on their dream house or neighborhood.

Rande Turner  858.945.8896
CA DRE  00857729
rande@randeturner.com

Erin Rousey Turner  760.473.8896
CA DRE  01923882
erin@randeturner.com

Sarah Tuttle Smith  858.354.6850
CA DRE  01017762
sarah@randeturner.com

Melissa James  858.280.6068
CA DRE  02041041
melissa@randeturner.com

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