Hispanic Home ownership Surges

Hispanic Home ownership Surges

Hispanics are increasingly making up what’s considered the typical American home buyer, Curbed.com reports. Latinos are expected to make up 52 percent of new home buyers between 2010 and 2030, largely driven by the country’s 14.6 million Latino millennials.

Since 2000, the number of Hispanic households has jumped by 6.7 million, which comprises 42.5 percent of the country’s overall household growth. Hispanics’ “fervent desire to own a home” has fueled homebuying by Latinos across the country, demographers note.

“The fact is the majority of Latinos want to be home owners and will make up half of all new home buyers in the next 20 years,” Scott Astrada, director of federal advocacy at the Center for Responsible Lending, told NBC. “They have a central place in the housing market and finance system.”

Harvard University Joint Center for Housing Studies’ “State of the Nation’s Housing” study predicts minorities overall will drive three-quarters of the gains in U.S. households. Latinos will likely account for one-third of those increases alone.

Hispanics currently make up 17 percent of the U.S. population. Hispanics are expected to make up the largest segment of the Texas population by 2020 and comprise a prime source of population growth in California too.

“With credit remaining tight and limited housing inventory in several markets, these numbers are extremely encouraging and a testament to the economic resilience of the Hispanic community,” says Joseph Nery, 2016 president of the National Association of Hispanic Real Estate Professionals.

Real estate analysts say they view this market demographic as one of the major growth engines for the American housing and real estate industries.

But there are plenty of challenges that could jeopardize Hispanics making a larger imprint on the real estate industry. The Great Recession had a large impact on their savings, wiping out an estimated two-thirds of Latino wealth. NAHREP urges that this population would benefit from expanding access to affordable lending products with low down payment requirements. NAHREP cites stats that show Hispanics were denied loans at a rate of 17.3 percent, which is 9 percentage points higher than the denial rate for non-Hispanic whites. Also, NAHREP warns that deportations and immigration policies could have an impact on the Hispanic housing market. A 2016 study linked deportations to increased foreclosure rates among Hispanic households.

Source: “Booming Hispanic Homeownership Helping Fuel U.S. Housing Market,” Curbed.com (Sept. 5, 2017)

Homeowners ‘Stuck’ In Starter Homes

Homeowners ‘Stuck’ In Starter Homes

Prior to the housing crisis, many consumers were in the mindset of buying a “starter home” to stay in for five or six years and then move on to a larger space as their family grew. But the idea of the starter home has become a fading memory.

Homeowners don’t want to give up their ultralow mortgage interest rates that they have secured in recent years. They’re also finding fewer larger homes to move into. As a result, many are making the best of what they once pictured as their “starter home.”

The percentage of homeowners moving up to their next home is at the lowest average in 25 years, Todd Tomalak, vice president of research for John Burns Real Estate Consulting, told the Chicago Tribune.

The stay-put mindset is leaving fewer homes available for sale and prompting home prices to surge due to the short supplies, Tomalak says.

“We’ve never seen this in any prior cycle,” he says.

Home buyers stayed in their homes an average of six years before selling from 1987 to 2008, according to the National Association of REALTORS®. Since 2010, the number of years homeowners are staying has now jumped to around 15 years.

“A generation is stuck in starter homes,” Urban Institute researchers wrote in a July report. First-time home buying has rebounded since the housing crisis, but repeat buying remains sluggish, the report notes.

Meanwhile, the home remodeling business is surging. Last year, homeowners spent about $320 billion on remodeling, a 5 percent increase over the prior year, Tomalak says. Remodeling is expected to top $350 billion this year, a 9 percent increase.

Source: “Why Americans Are Shunning New Homes and Opting to Stay Put, Renovate Instead,” The Chicago Tribune (Aug. 24, 2017)

Short Supplies Pummel Home Sales

Short Supplies Pummel Home Sales

Contract signing mostly stalled last month as housing shortages across the country continued to hamper home sales, the National Association of REALTORS® reported Thursday. The West was the only major region of the U.S. to see an uptick in pending July home sales.

Overall, NAR’s Pending Home Sales Index—a forward-looking indicator based on contract signings—dropped 0.8 percent to a reading of 109.1 in July. The index is now 1.3 percent lower than a year ago. It has fallen on an annual basis in three of the past four months.

“With the exception of a minimal gain in the West, pending sales were weaker in most areas in July as house hunters saw limited options for sale and highly competitive market conditions,” says Lawrence Yun, NAR’s chief economist. “The housing market remains stuck in a holding pattern with little signs of breaking through. The pace of new listings is not catching up with what’s being sold at an astonishingly fast pace.”

In the past five years, the national median sales price has increased 38 percent. Hourly earnings, on the other hand, have increased by less than a third of that (12 percent), Yun notes. Affordability is becoming a growing problem in many markets, as more consumers are being priced out of housing, Yun says.

Nevertheless, buyer traffic continues to be higher than a year ago, Yun notes. The typical listing has gone under contract within a month since April, and inventory at the end of July was 9 percent lower than last July.

“The reality, therefore, is that sales in the coming months will not break out unless supply miraculously improves,” Yun says. “This seems unlikely given the inadequate pace of housing starts in recent months and the lack of interest from real estate investors looking to sell.”

Yun is projecting that existing-home sales will close out 2017 at about 5.52 million, a 1.3 percent increase from 2016’s 5.45 million. He predicts that the median existing-home price will increase by about 5 percent.

Source: National Association of REALTORS®

Flooded Homes Can Be Fixed

Flooded Homes Can Be Fixed

As Hurricane Harvey moves off the coastline of Texas, it’s leaving massive flooding in its wake that has destroyed homes and businesses.

Until the floodwaters recede, cleanup efforts are mostly on hold. But remediation companies say they’re ready to jump into action as soon as they’re able. In preparation for the undertaking, here are a few important items to share about repairing a flooded home, compiled by realtor.com®.

Time is of the essence.

A home that has been flooded does not need to be torn down, but the water does need to be removed quickly. Truck-mounted vacuums with 2,000 horsepower and dehumidifiers can extract moisture from furniture, hardwood, tile, and Sheetrock. But Robyn Kent, a claims administrator at Dalworth Restoration in Euless, Texas, says the most important element is getting it cleaned up quickly: “Closer to the three- to five-day mark is when it becomes questionable, since by then, all the materials have become fragile.”

Mold is the real issue.

“One of the biggest problems—especially in Houston in the summer—is going to be mold,” Tyler Drew, a Los Angeles real estate professional and investor, told realtor.com®. “The longer a house sits with water, the worse the mold infestation. Affected areas have to be removed, the wood and concrete treated with anti-mold agents, and all of this has to be done after the house is sealed, in order to prevent the infestation from spreading and sickening people.”

Repair costs can escalate.

“Drying off a 2,000-square-foot house in normal conditions may cost more than $2,500, while in situations like Harvey is producing, the job scope expands quickly—and so will costs,” says Peter Duncanson, director of operations and safety with ServiceMaster Restore. Flood insurance may cover the cost of repairs, but it depends on what type of insurance the owner has. Standard homeowner’s insurance policies don’t typically cover flooding inside a home, and many in Houston don’t have flood insurance.

Source: “5 Surprises About Fixing a Flooded Home,” realtor.com® (Aug. 29, 2017)

REALTORS® Promise to Send Help to Texas

REALTORS® Promise to Send Help to Texas

As the rains slowly subside in Texas and the full scale of Hurricane Harvey’s destruction comes into focus, the National Association of REALTORS® is calling on members nationwide to donate funds to the REALTOR® Relief Foundation to support storm victims. The RRF, whose goal is to help families who have endured catastrophic loss, will use the money for mortgage and rental assistance. Since its launch in 2001, the RRF has raised more than $25 million to provide housing-related aid to victims of disasters around the country, such as wildfires, floods, tornadoes, and hurricanes.

Meteorologists have warned that the magnitude of property damage from Harvey’s wrath could surpass that of Hurricane Katrina in 2005, though Harvey did not cause a similar death toll. Harvey came ashore as a Category 4 hurricane last Friday and hovered for days as a tropical storm, dumping up to 50 inches of rain in parts of Texas. Houston is one of the hardest-hit areas, submerged in more than two feet of water.

“This may require our REALTOR® family’s largest effort since Hurricane Katrina—or even 9/11,” RRF President Martin Edwards wrote in an internal memo to NAR directors and staff. “Hopefully, REALTORS® across America will heed the call to donate without precedent, as the on-the-ground membership in Texas will be stretched beyond belief.”

NAR President William E. Brown said in a statement that the storm provides an opportunity for all 1.2 million REALTORS® to focus their energy on supporting each other and their colleagues in Texas, including donating to RRF. “There will be many families in the greater Houston area who need our help,” Brown said. “It will take time to know the full impact of Hurricane Harvey, but we know the devastation will be widespread and that our support will be necessary.”

NAR also has released guidance for real estate professionals whose transactions were interrupted by the storm. If a natural disaster hamstrings your client’s deal, here are some steps to take:

• Communicate clearly. Advise your clients as soon as possible about what is known and what is not known.
• Review the purchase agreement. Most have provisions addressing damages that occur to the property prior to closing and whether such damage occurs “in the ordinary course” or due to dramatic events. Contracts also ordinarily contain provisions addressing what happens when one or both parties cannot perform their duties for reasons beyond their control. Typically the provision holds that such nonperformance is not a default.
• Check your state’s laws. Apart from contractual provisions regarding loss or damage to property, state law may dictate which party—seller or buyer—bears the risk of loss during the pendency of a transaction.
• Advise your client to file a homeowners insurance claim. At the very least, your client should notify the insurance carrier of the claim as soon as possible. Tell your client to document all damages in writing, photos, and video, and to keep records of everything he or she spends on repairs and replacements.
• Talk to lenders. Buyers should check with their lenders to determine how they will handle reinspections or reappraisals that may be required. Make sure your client asks lenders about additional costs or closing time frames caused by the disaster.

—Source REALTOR® Magazine