Dome Homes the Next Big Thing?

Dome Homes the Next Big Thing? Image courtesy of jannoon028 / FreeDigitalPhotos.net

Dome homes may become more popular in the future because of their reputation for holding up well against natural disasters.

Dome homes are reportedly strong enough to withstand the force of an EF5 tornado, a mammoth hurricane, and even a powerful earthquake. They are made of concrete and can deflect flying debris, such as trees and cars, and the roofs won’t blow off in a high-wind storm.

“People feel safer in a dome,” says Nanette South Clark, a design engineer with Monolithic Dome Institute. “Domes have a double curvature like an egg, so they’re very strong. They’re the buildings of the future.”

Gary Clark, vice president of Monolithic sales and marketing, insists that dome homes are the “strongest disaster-preventative shape that can be built for the dollar.”

The company has been building dome homes for residential and commercial use, and it concentrates on natural disaster-prone areas in the U.S. Dome homes cost between $125 and $135 a square foot to build, or about $125,000 to $135,000. That’s comparable to the average cost of a 1,000-square-foot home in Texas, according to Monolithic Dome.

In 2012, the Federal Emergency Management Agency built dome shelters in Texas communities that had been hard-hit by tornadoes.

Meteorologists are predicting more violent weather systems in the future, which may prompt more home owners worried about the safety of their homes to seek alternative structures that can withstand intense storms, dome advocates say.

However, one hindrance to the dome home growing in popularity may come down to aesthetics.

“Domes are very efficient and work well, but the majority of people don’t like them. They don’t fit people’s preconceived notion of what a house should look like,” says Peter von Ahn, a South Carolina architect.

Dome homes have been nicknamed “ball houses,” “igloos,” and “bubbles.”

Source: “Why your next home may look more like a snow globe,” CNBC (Dec. 29, 2013)

The Most Desirable Celebrity Neighbors

The Most Desirable Celebrity Neighbors. Image courtesy of cooldesign / FreeDigitalPhotos.net

Americans chose late-night TV host Jimmy Fallon as the most desirable celebrity neighbor for 2014, according to the recently-released seventh annual Zillow Celebrity Neighbor Survey.

Fallon nabbed 11 percent of the vote, dethroning last year’s “most desirable neighbor” duo—Miranda Lambert and Blake Shelton. In order to be Fallon’s neighbor, you’d have to move to Sagaonack, N.Y., where Fallon owns an nineteenth-century farmhouse that sits on more than two acres.

After Fallon, the survey found the following most desirable celebrity neighbors are:

• Miranda Lambert and Blake Shelton
• Jennifer Lawrence
• Sofia Vergara
• Robin Roberts
• Lebron James

On the other hand, topping the list as worst neighbors for this year: Reality star Kim Kardashian and singer Kanye West, according to the survey. The couple beat out the cast of “Here Comes Honey Boo Boo,” Justin Bieber, Miley Cyrus, Lady Gaga, and Alex Rodriguez as worst neighbors.

However, “what remains clear is that many people don’t want to live next to any celebrity, regardless of why they are famous,” says Amy Bohutinsky, Zillow’s chief marketing officer. Indeed, the survey found that more than one-third of Americans say they prefer a non-celebrity neighbor.

Source: “Jimmy Fallon Named Most Desirable Celebrity Neighbor for 2014,” Zillow Blog (Dec. 27, 2013)\

Housing’s Best Buys for 2014

Housing’s Best Buys for 2014. Image courtesy of imagerymajestic / FreeDigitalPhotos.net

Home prices and mortgage rates are on the rise, and some investors are retreating from the market. However, Forbes believes there are still plenty of housing deals left for home buyers in the new year, and with possibly less competition.

Forbes recently released a list of cities where prices are still low but offer the potential of large growth in 2014. To compile its list, Forbes partnered with Local Market Monitor, which tracks home prices and local economic factors in more than 300 housing markets. Cities were ranked based on housing markets still considered “undervalued” in prices and that offer some of the largest job growth in their economies.

The following metros topped Forbes’ list for Best Buy Cities for 2014:

1. Fort Worth-Arlington, Texas
   • Median home price: $168,383
   • 3-year growth forecast: 25% (3-year growth forecast is prediction for cumulative rise in home prices over the next three years)
   • Prices are considered 20 percent below their actual value
2. Dallas-Plano-Irving, Texas
   • Median home price: $180,645
   • 3-year growth forecast: 29%
   • Prices are considered 12 percent below their actual value
3. Charlotte-Gastonia-Concord, N.C.-S.C.
   • Median home price: $201,855
   • 3-year growth forecast: 24%
   • Prices are considered 15 percent undervalued
4. Nashville-Davidson-Murfreesboro-Franklin, Tenn.
   • Median home price: $199,506
   • 3-year growth forecast: 23%
   • Prices are considered 16 percent undervalued
5. Houston-Sugar Land-Baytown, Texas
   • Median home price: $191,279
   • 3-year growth forecast: 24%
   • Prices are considered 13 percent undervalued
6. Atlanta-Sandy Springs-Marietta, Ga.
   • Median home price: $170,701
   • 3-year growth forecast: 26%
   • Prices are considered 26 percent undervalued
7. Oklahoma City, Okla.
   • Median home price: $159,713
   • 3-year growth forecast: 16%
   • Prices are considered 17 percent undervalued
8. Orlando-Kissimmee, Fla.
   • Median home price: $172,609
   • 3-year growth forecast: 35%
   • Prices are considered 17 percent undervalued

Source: “Best Buy Cities: Where to Invest in Housing in 2014,” Forbes (Dec. 26, 2013)

Investors Likely to Curb Buying in 2014

Investors Likely to Curb Buying in 2014 . Image courtesy of pixbox77 / FreeDigitalPhotos.net

Institutional investors who have been buying up thousands of foreclosed single-family homes will likely take a “more restrained” approach in 2014, according to a new report by RealtyTrac and Pintar Investment Co., a single-family rental investment company.

Over the past two years, institutional investors have been scooping up thousands of single-family homes to turn into rentals. But as the number of distressed homes in many markets falls, investors’ presence is expected to slip too. RealtyTrac defines institutional investors as firms that purchase at least 10 single family homes within a calendar year. From January 2011 to November 2013, institutional investors purchased a combined total of 366,206 single-family homes.

“Investors will expand their holdings now and into 2014, but this expansion is likely to be decidedly more restrained than the binge of the past 18 months,” according to the RealtyTrac/Pintar report, “Back to Reality with Buy and Rent.”

Markets such as Memphis, Fresno, Charlotte, Atlanta, and Phoenix had seen a large spike in institutional investors in 2012, but a limited distressed inventory is prompting more investors to move on to other markets. According to the report, investors will most likely seek to acquire more homes in secondary markets. Many of those markets are expected to be in the southeast, in places such as Jacksonville, Fla.; Winston-Salem, N.C.; Tampa, Fla.; Lakeland, Fla.; and Macon, Ga.

Also in the new year, institutional investors will likely focus more on managing their geographically diverse, existing portfolios. Some investors are facing the realities that yields that may have looked good on paper aren’t always so favorable when it comes to often-overlooked factors such as rent delinquency and collection issues as well as unforeseen maintenance, according to the report.

Source: “Back to Reality with Buy and Rent,” Realty Trac/Pintar (December 2013) and “Higher REO Prices May Slow Investor Buying in 2014,” National Mortgage News (Dec. 24, 2013)

Buyers Facing Fewer Bidding Wars

Buyers Facing Fewer Bidding Wars. Image courtesy of Stuart Miles / FreeDigitalPhotos.net

With bidding wars easing in many markets, buyers may face less competition in their attempts to snag a home this winter. That’s according to the latest Bidding War Report by the real estate brokerage Redfin.

According to the report, competition for homes hit its lowest point since 2011 last month. About 51 percent of Redfin agents nationwide reported facing bidding wars in November, down from 63.6 percent a year earlier. The home-buying competition rate has dropped for eight straight months, after peaking in March at 75.3 percent.

Still, the brokerage’s report does show demand growing stronger than expected at the end of the year. “Home buyers who failed to get an offer accepted early in the year have been stockpiling down payment money all year long,” says Amber Hancock, manager of Redfin’s San Francisco East Bay market. “They’re jumping back in this time as better qualified, more confident competitors, taking advantage of the easing late-fall market.”

Buyers are still using competitive strategies to get the house they want—with the use of all-cash offers, waived financing and inspection contingencies, and personal cover letters becoming more common in November, Redfin reports.

The two markets that saw the largest month-over-month decreases in competition were Seattle and Orange County, Calif. Meanwhile, bidding wars heated up in November in Washington, D.C., San Diego, Baltimore, and Los Angeles.

Source: Redfin

Underwater Home Owners Face Heavier Tax Burden

Underwater Home Owners Face Heavier Tax Burden. Image courtesy of Salvatore Vuono / FreeDigitalPhotos.net

If Congress doesn’t act on the Mortgage Forgiveness Debt Relief Act, which expires at the end of this year, it could leave distressed borrowers with an additional financial burden in 2014.

The measure was designed to keep underwater homeowners from having to pay income taxes on the portion of their mortgage debt that was wiped out in a short sale or other mitigation tactic.

“What you’re looking at is people who have lost their house,” says Marceline White of the Maryland Consumer Rights Coalition. “And then to have them hit with this [tax] just boggles the mind.”

Maryland legislators plan to renew a measure exempting residents from state taxes even if the federal law sunsets, but few other states have similar protections in place. There are three bills on Capitol Hill seeking extension of the federal law, but it is uncertain how much of a priority the issue will be in Congress next year.

“We’re far from out of the foreclosure crisis,” White warned.  “We hope that policymakers look at longer-term solutions.”

Source: “Underwater Homeowners Could Face Extra Tax Burden in 2014,” The Washington Post (Dec. 26, 2013)

New-Home Sales Drop in November

New-Home Sales Drop in November. Image courtesy of David Castillo Dominici / FreeDigitalPhotos.net

Sales of new single-family homes dropped 2.1 percent in November, according to the Commerce Department’s latest new-home sales report, which was released Tuesday. New-home sales reached a seasonally adjusted annual rate of 464,000 units for the month.

Still, that’s up 16.6 percent from November 2012, and last month’s numbers were close to October’s revised sales pace of 474,000 units — the highest level for home sales since July 2008.

“The very low supply of new homes on the market and tight credit conditions for home buyers shows that builders are still cautious about getting ahead of themselves,” says Rick Judson, chairman of the National Association of Home Builders.

Regionally, new-home sales were up in the West by 31.1 percent and the Northeast by 15.2 percent in November. However, new-home sales dropped by 26.6 percent in the Midwest and posted a 9.1 percent decline in the South.

The report followed a Commerce Department report last week showing that new-home construction hit its fastest pace in five years. Housing inventories, though, remain tight at a 4.3-month supply, with inventories of new homes hovering at a four-and-a-half-year low.

Source: National Association of Home Builders and “U.S. New Home Sales Fall Modestly From Five-Year Peak, Prices Up,” Reuters (Dec. 24, 2013)

Job Growth to Drive 2014 Housing Market

Job Growth to Drive 2014 Housing Market. Image courtesy of ddpavumba / FreeDigitalPhotos.net

The housing recovery is expected to remain strong in the new year, driven by economic growth and an improving employment picture, economists say.

In fact, job growth likely will be one key to driving housing growth in the new year. An estimated 2 million or more jobs will be created in 2014, predicts Lawrence Yun, National Association of REALTORS(R)’ chief economist.

As employment picks up, greater demand for housing is expected to occur and a surge in homebuilding activity. Celia Chen, housing economist at Moody’s Analytic, predicts a “homebuilding boom” in 2014 that will spark even more jobs — from construction workers to manufacturers — and bring about greater demand for housing overall.

“The homebuilding boom in 2014 drives our strong economic forecast,” Chen said. “Homebuilding generates a lot of jobs.

The housing recovery is expected to continue on its path in the new year with home prices continuing to rise (although at a slower pace); sales to rise slightly; and the foreclosure crisis expected to finally draw to an end.

“For the general consumer, the market will be good in 2014,” says Lawrence Yun, chief economist at the National Association of REALTORS®. “Home values will continue to rise, but not sharply, but there won’t be a decline.”

Yun notes 2014 will be the second consecutive year of a “very respectable recovery,” marked by a 20 percent cumulative rise in existing-home sales over the past two years and nearly a 20 percent increase in home values.

However, he notes that existing-home sales will likely plateau in 2014. Sales have already been slowing in the latest reports.

Yun says home prices rose 11 percent in 2013, but growth will likely be slower in 2014 at a pace of 5 percent. The reason for the slowing pace of home prices, he says, is mostly being driven by “less affordable conditions from higher prices and higher mortgage rates.” Thirty-year fixed-rate mortgages are expected to rise above 5 percent in the second half of 2014 (up from a current average of 4.47 percent this week).

“While rates will be higher than what they were, they won’t be at a level that will discourage home purchases,” says Jay Brinkmann, chief economist at the Mortgage Bankers Association. MBA is predicting interest rates to also average about 5 percent in 2014.

Meanwhile, the distressed housing crisis is expected to fade away in 2014. Daren Blomquist, vice president at RealtyTrac, says that 2014 will likely be the year “we transition back to normal.” About 85,000 foreclosure filings a month nationwide are expected by the first quarter of 2015.

“The market has worked through most of the bad loans that triggered the crisis to begin with,” Blomquist says. Still, some loans need to be “cleaned up.”

Source: “How Will Housing Recovery Fare In 2014?” Investor’s Business Daily (Dec. 20, 2013)