Buyers Want Bigger Yards Over Bigger Homes

Buyers Want Bigger Yards Over Bigger Homes

A property that offers a great outdoor space is taking a higher priority among home buyers. In fact, home shoppers recently surveyed said they would be willing to sacrifice some space from a larger house in order to get a bigger yard.

More than half of 1,000 buyers recently surveyed—or 56 percent—said they’d be willing to sacrifice square footage in a home for a great outdoor space. The survey was conducted by Wakefield Research on behalf of Taylor Morrison, a national home builder.

Survey respondents also rated the home’s distance to neighboring homes as the most important exterior feature. Forty-eight percent of millennials and 53 percent of non-millennials believe the extra buffer is important, even more so than other curb appeal elements like siding, driveway styles, exterior paint colors, and roofing finishes. Women wanted outdoor space more than men (62 percent of women surveyed say they prefer less home square footage for a larger yard, compared to 51 percent of men).

“Demand for more elaborate exterior space continues to rise, and blending indoor-outdoor living to address customer preferences is critical to our success,” says Sheryl Palmer, Taylor Morrison’s CEO. Palmer notes that the findings come at a time when land prices are escalating and local approvals have forced smaller lot sizes.

In response, Taylor Morrison has been ramping up its properties: adding outdoor living rooms, floor-to-ceiling retractable glass walls that open to the backyard, and matching tile flooring that extends from the home’s interior to exterior for a seamless flow to the outdoor space.

Survey respondents were asked what they would spend an extra $10,000 to $15,000 on in their new home. Outdoor living items topped the list, edging out upgraded cabinets and kitchen islands.

“Outdoor living is no longer an afterthought to a home’s construction,” says Charlie Enochs, Taylor Morrison area president for the central region.

Source: 2017 Taylor Morrison Consumer Survey

Ways to Cut Kitchen Remodeling Costs

Ways to Cut Kitchen Remodeling Costs

Kitchen remodels don’t come cheap. The average cost to update a 200-square-foot kitchen—including installing new flooring, semi-custom wood cabinets, and standard appliances—is a whopping $62,000, according to Remodeling Magazine. Homeowners who want to add in more luxurious touches, such as stone counter tops, a commercial-grade cook top, designer faucets, and top-of-the-line custom cabinets, may pay as much as $123,000.

Before your clients gut their kitchen, advise them to consider more affordable options that can still make a big impact at resale. The New York Times recently spoke with designers to get some of their best budget-friendly tips for remodeling a kitchen.

Try painting or resurfacing cabinets instead of replacing them. “A bold color and modern hardware can breathe new life into old, ordinary cabinetry,” interior designer CeCe Barfield Thompson told the Times. She gave her own 1990s-era kitchen a makeover by painting the cherry wood cabinets a smokestack gray color. She also covered pea-green tile floors with a parquet charcoal laminate surface. She says the renovations cost her $7,050, which included the labor, laminate flooring, paint, and new cabinet handles and drawer pulls.

You can also reface or resurface dated cabinets, keeping the existing cabinet framework and replacing the doors, drawer fronts, and side panels. New York–based designer Carolyn DiCarlo, who used this approach when working on a Manhattan loft, says new cabinets would have cost about $22,000—but the price to reface was just $2,500.

Consider alternative materials for counter tops. Instead of choosing high-end items such as quartz or stone, go for less expensive options such as butcher block. This material can be purchased for as low as $99 in standard sizes. “It’s kind of like having a built-in cutting board throughout your kitchen,” says Kimberly Winthrop, an interior designer in Santa Monica, Calif. She says she paid $500 for a 20-foot butcher block to use in a recent kitchen makeover. But it requires some maintenance: Butcher block typically needs to be sanded and oiled twice a year.

Keep the layout intact. “Moving walls, electrical, and plumbing is where installation costs spike,” says Dana Hudson, divisional merchandising manager for kitchens at Home Depot. Mina Fies, a Reston, Va.–based designer and creator of RenovationRoadmap.com, recalls a client who wanted to reconfigure the kitchen walls to allow for more natural light. The layout changes would have required moving plumbing. Fies says she was able to show the client a design that met her needs but did not open up the walls, instead installing recessed lighting, pendant lights, and under-cabinet lighting. The client saved $8,000, Fies says.

Source: “Seven Ways to Save on Your Kitchen Renovation,” The New York Times (Aug. 11, 2017)

Buyers Putting Down Less on a Home

Buyers Putting Down Less on a Home

A 20 percent down payment is no longer the norm. In the past year, 1.5 million borrowers purchased their homes with down payments of less than 10 percent, according to Black Knight Financial Services. That marks a seven-year high.

A growing number of home shoppers are financing more than 90 percent of their home purchase.

“The increase is primarily a function of the overall growth in purchase lending, but, after nearly four consecutive years of declines, low down payment loans have ticked upward in market share over the past 18 months as well,” says Ben Graboske, executive vice president at Black Knight Data & Analytics. “In fact, they now account for nearly 40 percent of all purchase lending.”

The study showed that the segment with the largest growth in low down payment levels has been from purchasers making a 5 to 9 percent down payment.

Also, Graboske notes that the low down payment loans of today are nothing like the ones that were blamed on causing the housing crash. Half of all low down payment loans at that time were second loans or called “piggyback loans.” Today’s mortgages are mostly single, first liens, Graboske notes. The loans of the past also were mostly adjustable-rate mortgages, which are virtually nonexistent among low down payment mortgages today, according to the Black Knight report.

Instead, most of the loans issued nowadays are fixed-rate. Borrowers’ credit scores are also about 50 points higher than those between 2004 and 2007, according to Black Knight.

The growth of low down payment loans has mostly been triggered by new programs offered by mortgage financing giants Fannie Mae and Freddie Mac, which brought back 3 percent down payment loans in 2014. They require borrowers to pay mortgage insurance, just like the FHA does.

So far, defaults on recent low down payment loans have been modest, Black Knight reports. But economists note that’s mostly because home prices are rising fast and borrowers have been gaining equity quickly.

Source: “Homebuyers Put Less and Less Skin in the Game, Adding to the Market’s Overall Risk,” CNBC (Aug. 14, 2017)

Facebook Marketing Is Key…

Facebook Marketing Is Key…

Social media is increasingly a vital part of a real estate professional’s marketing strategy. Seventy-four percent of REALTORS® recently surveyed cited awareness as the main outcome of their social media efforts. Sixty-four percent of 265 REALTORS® recently surveyed say they plan to commit more time to social media, and 60 percent plan to commit more money to it too.

The survey results, released Monday, come from the 2017 REALTOR® Social and Digital Media report conducted by the REALTORS® Property Resource, a wholly owned subsidiary of the National Association of REALTORS®.

“Social media has become the new norm for reaching out and staying connected with friends, family, clients, and prospects,” says Reggie Nicolay, RPR vice president of marketing. “Not only do sites like Facebook and LinkedIn provide REALTORS® with an easy way to stay top of mind, but they now offer highly targeted advertising options with tremendous reach and analytical tracking.”

The most popular social media platforms used by REALTORS® are Facebook (94 percent of respondents say they use it) and LinkedIn, at 57 percent.

The most common type of content that REALTORS® say they post to social media are listings, followed closely by buying and home improvement tips. School information, on the other hand, they say sees the least amount of engagement on social media.

Nearly half of REALTORS® surveyed, or 48 percent, say they achieve measurable results from their use of social media within their marketing. Respondents said that market activity receives the highest engagement on social media.

Source: “2017 REALTOR® Social and Digital Media Report,” REALTORS® Property Resource (Aug. 14, 2017)

Is Housing Affordability Actually Improving?

Is Housing Affordability Actually Improving?

Growing incomes and low mortgage rates are helping to prop up housing affordability and offset rising home prices, according to the newly released National Association of Home Builders/Wells Fargo Housing Opportunity Index. A quarter-point drop in interest rates in the second quarter helped to make homes more affordable to more consumers. Between the beginning of April and the end of June, 59 percent of new and existing homes were affordable to families earning the U.S. median income of $68,000.

The national median home price increased to $256,000 in the second quarter from $245,000 in the first quarter, according to the index. Average mortgage rates fell 25 basis points to 4.08 percent in the second quarter from 4.33 percent in the first quarter. “The job market continues to gain steam, and this is boosting housing demand,” says NAHB chief economist Robert Dietz. “Home prices will continue to rise as inventory remains tight. The NAHB expects the housing market will continue to make gradual gains in 2017.”

The most affordable major housing market in the country in the second quarter was Youngstown-Warren-Boardman, Ohio-Pa., which has kept its title as most affordable for the third consecutive quarter. There, 93.3 percent of all new and existing homes are affordable to families earning the area’s median income of $54,600. Rounding out the top five most affordable major markets are Syracuse, N.Y.; Dayton, Ohio; Buffalo-Cheektowaga-Niagara Falls, N.Y.; and Scranton-Wilkes Barre-Hazelton, Pa.

The nation’s most affordable smaller market is Kokomo, Ind., where 96.9 percent of homes in the second quarter were affordable to families earning the median income of $62,500. Other smaller markets that topped the list were Davenport-Moline-Rock Island, Iowa-Ill.; Glen Falls, N.Y.; Watertown-Fort Drum, N.Y.; and Monroe, Mich.

On the other hand, the nation’s least affordable major housing market, for the 19th consecutive quarter, was San Francisco-Redwood City-South San Francisco, Calif. Just 7.6 percent of homes in the second quarter were considered affordable to families earning the area’s median income of $113,100. All five of the least affordable small housing markets were in California. In Salinas, Calif., which topped the list, 12.4 percent of all new and existing homes were affordable to families earning the area’s median income of $63,100.

Source: National Association of Home Builders