New-Home Trend: Bigger Houses, Smaller Lots

New-Home Trend: Bigger Houses, Smaller Lots

New homes are getting larger, but their lot sizes are getting smaller. The median size of a new home increased from 1,938 square feet in 1990 to 2,300 square feet in 2016, but lot sizes during this same period decreased from 8,250 square feet to 6,970 square feet. That amounts to about a 16 percent decrease.

However, the trend hasn’t been consistent: Between 2006 and 2011, home buyers were showing demand for larger homes and larger lots. As home prices dropped during the housing crisis, greater affordability gave buyers opportunities to seek larger outdoor spaces. Today’s pullback in lot sizes come as builders look to cut costs.

“When home prices appreciate at a fast pace, the land value rises even faster, which, in turn, drives the cost of homes higher,” according to CoreLogic’s Insights blog. “In order to mitigate the high cost of the land value, home builders reduce the size of the lots to bring the cost of the new home down so they can price these homes at a reasonable level.”

Indeed, the data shows that sizable price gains on large homes between 2014 and 2016 put pressure on builders in the cost of acquiring and developing land. More builders responded by building larger homes but on smaller lots.

Source: “The More, the Merrier,” CoreLogic Insights Blog (April 5, 2017)

Why Sellers Are So Stressed in a Seller’s Market

Why Sellers Are So Stressed in a Seller’s Market

Home sellers say the greatest challenge for them this year is the lack of homes to choose from when it’s time for them to move, according to a new survey of more than 800 real estate professionals from Redfin.

“It’s a seller’s market, but the catch is, most sellers need to buy as well,” says Eileen Lorway, a Redfin real estate professional in the Boston area. “This is a conversation I have with many clients at our first meeting. We discuss options like ‘seller to find suitable housing’ contingencies for the sale contract, ‘purchase contingent on sale of current home’ options for the buy offer, rental options, stay-with-family options, and bridge loans. Sellers who are buying need to think outside the box a little bit. It’s not easy, but we often do end up closing on sale and purchase on the same day.”

Lorway also encourages more of her sellers lately to sell first, then buy. They will need to consider temporary housing options, but “then they will be able to take the time they need to find their dream house, know exactly what they’ll have to work with financially, and won’t end up adding unnecessary contingencies to offers, which will give them a better chance to get the home,” Lorway says.

Inventories of homes for sale have hit record lows in many parts of the country. Buyer demand, however, remains high. About fifty-seven percent of real estate professionals surveyed by Redfin say they have been involved in at least one instance of a home receiving 10 or more offers this year.

Source: “Lack of Homes for Sale Is a Problem for Sellers, Too,” Redfin (March 31, 2017)

Home Prices Blamed for Student Loan Defaults

Home Prices Blamed for Student Loan Defaults

The housing crisis may also have sparked the increase in student loan default rates, according to a working paper by the National Bureau of Economic Research.

The study says the drop in home prices during the Great Recession also coincided with a 24 to 32 percent rise in student loan default rates. Researchers looked at administrative student loan data along with ZIP code home price data for about 300,000 student loan borrowers in repayment during the recession.

Last year, more than 1 million federal student loan borrowers defaulted on their debt.

“The huge rise in student loan defaults is on everybody’s minds and the question is what’s the cause of this rise?” says Holger Mueller, one of the authors of the paper and a professor of finance at New York University’s Stern School of Business. “What we want to do is point to another very important source of default risk and that’s just the labor market.”

Researchers point to the impact falling home prices may have had on an area’s labor market. When the value of homes drop, homeowners tend to spend less. Local businesses then are often forced to keep workers’ pay stagnant or even lay them off. That ripple effect may have also contributed to the higher student loan default rates.

Source: “Why Lower Prices Lead to Higher Student Loan Default Rates,” MarketWatch (April 1, 2017)

Ways to Better Manage Your Social Media

Ways to Better Manage Your Social Media

When using social media, make sure you aren’t turning off potential customers with your behavior online. Forbes.com offers the following tips on behaviors to avoid on social media, including:

Being present on too many social media platforms: “Be careful not to create a social media behemoth you can’t control,” writes Forbes columnist Mike Templeman. “If you can’t maintain fresh, engaging content on all your social media channels, try backing off the ones that you’re having a hard time keeping up with.”

Worrying too much about your number of followers: Templeman notes that there is no advantage gained by having a high number of followers. “Spamming the web does not improve user engagement or ROI,” he notes.

Using too many hashtags: Sure, hashtags can help increase your visibility, but excessive use can quickly get #annoying.

Referring to your brand too much: Vary the type of content you post so you don’t become a one-trick pony. Retweet or repost content that you feel can add value to your followers, Templeman notes.

Posting too much: Do not post every couple of hours. Be consistent with your timing, but don’t overshare. Consider blogging once a week and posting one or two daily Facebook status updates, while more frequently updating Twitter, Templeman says.

Source: “8 Things to Avoid on Social Media and 6 Ways to Respond,” Forbes.com (March 31, 2017)

The Funny Side of Tight Inventory

The Funny Side of Tight Inventory

Realtor.com® revealed their 2017 ad campaign today—which will include TV spots, interactive digital video experiences, and social integration—featuring Elizabeth Banks. The Emmy-nominated actress, producer, and director is returning as the brand’s spokesperson for a third year.

The TV ads feature home buyers who are being tailed by their “not-yous”: doppelgangers who have similar tastes in properties but who are “non-users” of realtor.com®. The scripts capitalize on Banks’ cheeky, chummy humor; new homeowners happily share with her their success in the real estate transaction as the not-yous express their jealousy and frustration in humorous ways.

The campaign comes in response to conditions of low inventory in much of the country. “The idea for the not-yous came out of an insight that, particularly in a seller’s market, you really have to have an advantage over everyone else who is ultimately looking for something very similar to you,” says Andrew Strickman, head of brand and chief creative for realtor.com®.

The intent of the campaign is both to increase brand awareness and capitalize on recent traffic gains; realtor.com® attracts an average of 50 million unique users every month. “We want to increase top-level awareness, but then we want to entice someone to take an action,” says Ryan O’Hara, CEO of Move Inc. and realtor.com®, noting that each spot ends with a clear call-to-action to use the site. “Both the brand and the product are really integral to making the consumer experience better.”

Though the ad campaign is targeted tightly on the consumer experience, O’Hara says the company is continually focused on the impact their success has on NAR members looking to stand out in a crowded field. “A strong REALTOR® brand is really important for realtor.com®, and a strong realtor.com® brand is really important for the REALTOR®. It’s a symbiotic relationship,” he says. “We both do better if we grow together and support each other.”

The TV campaign launches today on CBS and HGTV and will run across major broadcast networks and cable channels. The social media integrations will begin to roll out next month and the digital video series featuring Banks will be online in July. Later in the summer, the brand will roll out humorous gifs that real estate pros can use to congratulate clients upon closing, as well as online-exclusive video segments where Banks helps the not-yous move on after defeat.

The campaign is part of a larger strategy, which includes technological improvements to the user experience at realtor.com®. One such upgrade, announced last Thursday, brings Matterport 3D virtual home tours to listings on the realtor.com® iOS app.

“We’ve grown in a major way in usage in the last two years… Part of that is the branding campaign and part of it is the improvements to the technology,” O’Hara says. “If we’re able to continue that amount of investment, it makes the REALTOR® brand stronger.”

—Source Meg White, REALTOR® Magazine

‘No Knock’ Registry Is a Jab at Real Estate

‘No Knock’ Registry Is a Jab at Real Estate

Longtime Jersey City, N.J., homeowners say they’ve been harassed by real estate solicitations in recent months. They’re hoping the city’s new “No Knock” registry will put an end to the door knocks inquiring if they want to sell their home.

The Jersey City Council recently unanimously passed a resolution creating an antisolicitation program, dubbed the “No Knock” registry. Residents who sign up will receive “No Knock” decals for their front doors. Any violators will be fined up to $2,000 and sentenced to 90 days of community service.

Jersey City’s population has surged between 2010 and 2015, blooming by 6.7 percent in that time, according to Census data. As such, demand for housing has grown too, as have home values. Median home prices have surged 17 percent in the last six years, reaching $305,000 in 2016, according to RealtyTrac, a real estate data provider.

Longtime homeowners say they’ve been bombarded with constant offers from real estate investors and developers. Assunta Folcarelli, who has owned her Jersey City home for 35 years, told The Wall Street Journal that she started getting calls six years ago from real estate professionals asking to buy her home.

“They keep on calling up, they want my house. I say, ‘Wait a minute, where am I going to go?” says Folcarelli, 57.

Other New Jersey towns, such as Jackson and Toms River, also have established “No Knock” registries.

Source: “Jersey City Creates ‘No Knock’ Registry as Relief From REALTORS®,” The Wall Street Journal (March 28, 2017) [Log-in required.]