Equity Gains for 2015

Equity Gains for 2015

More home owners are unlocking equity, which has pushed the number of underwater properties nationwide to about half of the peak reached in the second quarter of 2012, RealtyTrac reports in its Year-End 2015 U.S. Home Equity & Underwater Report.

By the end of 2015, about 6.4 million homes – or 11.5 percent of all properties with a mortgage — were considered “seriously underwater” – in which the loan amount is at least 25 percent higher than the property’s estimated market value. That marks half the 12.8 million –or 28.6 percent of all properties – of seriously underwater properties in the peak of the second quarter of 2012, RealtyTrac reports.

“Over the past three and a half years, the number of seriously underwater properties has been cut in half, but we continue to deal with a long tail of seriously underwater properties, and it will likely be another five years at least before most of those remaining underwater properties move into positive equity territory,” says Daren Blomquist, vice president at RealtyTrac. “At the other end of the spectrum, the growing number of equity rich properties reflects a moribund move-up market and restrained leveraging of home equity by U.S. home owners.”

By the end of 2015, about 12.6 million properties – or 22.5 percent of all properties with a mortgage — were considered “equity rich,” having at least 50 percent equity.

What’s more, also by the end of 2015, 49.7 percent of all homes in foreclosure had at least some equity – a record high since RealtyTrac began tracking in the third quarter of 2013.

Tracking the Highs

The following markets – with a population of at least 500,000 — had the highest share of seriously underwater properties at the end of 2015:

• Las Vegas, Nev.: 27.7%
• Lakeland, Fla.: 24.4%
• Cleveland: 24.2%
• Akron, Ohio: 22.5%
• Orlando, Fla.: 22.2%

On the other hand, the following markets had the highest share of “equity rich” properties as of the end of 2015:

• San Jose, Calif.: 53.7%
• San Francisco: 47.6%
• Honolulu, Hawaii: 36.7%
• Los Angeles: 35.8%
• Pittsburgh, Pa.: 35%

Source: RealtyTrac

Homes Built for Roommates?

Homes Built for Roommates?

The New American Home, unveiled at the International Builder Show last week in Las Vegas, was designed with roommates in mind. The 5,200-square-foot home tied in nontraditional living arrangements for extended families or roommates who may be sharing the same roof to ease financial burdens.

The home, designed by Element Design Build, incorporated affordability and cohabitation as top concerns, including a second floor that can accommodate aging parents or recent college graduates who are moving back home. The intent was to accommodate two families comfortably.

Industry professionals say they are seeing increasing demand for properties that can easily be shared by extended family members, roommates, or even rented out to tourists. Indeed, for the year ending June 2015, 13 percent of buyers purchased a home to accommodate multiple generations, according to research by the National Association of REALTORS®. What’s more, a quarter of all buyers say they want a separate suite in their home with a kitchenette to accommodate extended family members or roommates, according to research by John Burns Real Estate Consulting Inc.

Another home spotlighted at the builder show was created by Pardee Homes and included two guest suites that can be rented on home-sharing sites such as Airbnb. The suites include separate entrances and small kitchenettes. A recent survey by TRI Pointe found that 35 percent of young adults say they want to be able to rent out space in their homes, at least occasionally.

“A lot of their motivation for doing that is to make the financial step of buying their home more doable,” says Linda Mamet, vice president of corporate marketing at TRI Pointe.

Source: “New U.S. Homes Make Room for Airbnb Crowd,” The Wall Street Journal (Jan. 22, 2016)

Life for Closed Hospitals: Condos

Life for Closed Hospitals: Condos

As hospitals across the country close down, developers are seeing unexpected new purpose for these now vacant spaces. Developers in New York City have increasingly reenvisioned shutdown hospitals as luxury condominiums – believing they can make “hospital buildings hospitable for full-time residents,” The New York Times reports.

For example, a former maternity ward on Second Avenue in Manhattan has morphed into Rutherford Place, a rental-turning-condo building. Two-bedroom apartments there recently listed for as much as $2.3 million.

Gramercy Square, a $350 million complex, is planned for the former site of the Cabrini Medical Center, which closed in 2008. A condo village is being constructed on the property, which has included tearing down some of the original buildings while adapting others and building new on the 1.4-acre site. About 223 apartments are planned among four residential structures in the space.

“I found it very interesting and very rewarding to take something like that and make it work,” David Bistricer, the founder of Clipper Equity, one of the developers, told The New York Times.

Developers are redesigning towers that once housed patient rooms, operating rooms, and a psychiatric ward. Cabrini’s emergency room is now being reenvisioned as a place for gardens.

“From the standpoint of an architectural project, it was extraordinary, the range of disciplines involved,” says Jeremy Singer, the managing principal of Woods Bagot’s New York office.

The apartments are to run around $2,200 a square foot or about $995,000 for a studio and up to $33 million for a penthouse. Sales started this winter.

The project is slated to open by the end of this year.

Source: “From Hospital to Condo,” The New York Times (Jan. 22, 2016)

Home Staging Evolves

Home Staging Evolves

In the age of HGTV, real estate professionals say home staging is growing in importance and becoming more sophisticated, according to a recent article in The New York Times, which highlighted the value of home staging.

“It always makes a difference, and is essential in this market,” says Richard Balzano, an associate broker at Douglas Elliman Real Estate. Balzano says he frequently refers his clients to stagers and will often pay for the preliminary consultations.

Stagers are taking on full transformations of homes that show off contemporary design and offer an aspirational package, The New York Times reports. Today’s home buyers want “sheer or linen curtains, and they don’t want the home packed. They want a cleaner, simpler lifestyle. And more flair and fun,” says Meredith Baer, a Los Angeles-based home stager. She and her team recently transformed a formal dining room into a casual family room, painted the walls (from cream walls to all white), and brought in white sofas and chairs with clean lines.

Sid Pinkerton, owner of Manhattan Staging, says he’s doing more accent walls, such as individual panels in dark brown lacquer, bursts of coral or aqua paint and patterned wallpaper with a rainbow of color. “People are looking for more personality,” Pinkerton told The New York Times. “It used to be more innocuous, where you didn’t really want to convey a sense of style. Now, it’s gotten a lot more modern.”

Some stagers are also adding more personal photographs, no longer advising clients to rid the home of all photos. “If a photo shows the family on vacation, maybe someplace warm and nice, that ties into a lifestyle a buyer might want to emulate,” says Donna Dazzo, the president of Designed to Appeal.

But stagers also try to keep it real. “When I see a tray on a bed, with a coffee cup, I think, ‘Oh, come on,’ ” says Anne Kenney, the president of Anne Kenney Associates, a New York staging company. “Does anybody really live that way? Today’s buyer is more sophisticated, so they don’t want to see phony.”

Source: “The Art of Home Staging,” The New York Times (Jan. 22, 2016)

6 Ways to Protect Your Home From Snow

6 Ways to Protect Your Home From Snow

Just when it seemed like Old Man Winter would be a lamb instead of a lion this year, 73 million people across the Mid-Atlantic and Northeast are on high alert as a massive snowstorm bears down on them. Some areas are being threatened with more than two feet of the white stuff. For your clients who are in the path of the blizzard, here are some winter-proofing tips to protect homes from the heavy snow.

1. Shut off faucets outside. Unhook hoses, shut off inside valves, and be sure to run outdoor faucets to drain any excess water that may be lingering. Pipes leading to outdoor faucets as well as hoses can be vulnerable to damage when temperatures drop. For added protection, cover your spigot and pipes with a towel to help insulate them, Adam Webster, CEO of Rocky Mountain Restoration, told The Washington Post.
2. Protect your water pipes. If your pipes are at risk of bursting from the cold air, keep the cabinet doors beneath sinks open so warm air from inside your home can get to them. You can also use a blow dryer to warm up exposed pipes or increase your thermostat slightly more than usual, plumbers suggest.
3. Check that your carbon monoxide detectors are working. Items that use combustion to produce heat — including gas appliances and wood-burning fireplaces — can produce carbon monoxide, and they need to be properly vented to prevent carbon monoxide poisoning. Double check to see if your smoke and carbon monoxide detectors are all working.
4. Make sure your gutters are clean. Rain gutters should be clear of leaves; ice dams can form during winter storms and flood the home, says J.B Sassano, president of Mr. Handyman.
5. Keep snow away from outside drains and vents. When outside vents get blocked with snow, the indoor heating system can actually stop working.
6. Have salt on hand. Cut down on your shoveling: “Put down salt and/or sand on outside walkways a couple hours before the expected snowstorm,” says Adam Webster, CEO of Rocky Mountain Restoration. (Note: Buy coarse sand; play sand won’t work.)

Source: “How to Prepare Your Home for the Big Snow,” The Washington Post (Jan. 20, 2016) and “Last-Minute Guide to Prepping Your Home for a Snowstorm,” realtor.com® (Jan. 21, 2016)