Chinese Pull Back From U.S. Property Investments

Karen Xu, a Shanghai resident looking to invest in U.S. real estate, decided this spring to seek a Miami one-bedroom condominium in the $500,000-to-$750,000 price range.

China’s economic slowdown has since changed her mind. “I don’t think I’ll be investing in the U.S. right now,” said Ms. Xu, who works at an investment consulting firm. “Maybe I’ll wait another five years, or invest in China.”

Capping a five-year real-estate binge, Chinese nationals surpassed Canadian snowbirds as the top foreign buyers of U.S. homes for the year that ended in March—the most recent annual data—scooping up everything from $500,000 condos in New Jersey to $3 million vacation homes in California to $13 million Manhattan condos.

But in recent weeks, some Chinese buyers have started to pull back, scared off by China’s stock-market selloff, slowing economic growth, currency devaluation and tightened restrictions on capital outflows. On Friday, China’s benchmark stock index fell by 5.5%, its biggest daily slide since August, as Beijing authorities stepped up a crackdown on the securities industry.

“We are ready to embrace a winter for Chinese buyers in the next one year, two years,” said Daniel Chang, a New York City-based broker at Sotheby’s International Realty. Mr. Chang, who sells properties in the $2 million-to-$10 million range, said about half of the clients served by his team are Chinese.

Christina Shaw, a Realtor with Re/Max Fine Homes in Newport Beach, Calif., said one client who gave her a budget of $10 million to buy two houses in the area was now looking to reduce his budget by about one-third.



Interest from Chinese buyers “went dark” for several weeks after stocks becan their sharp fall, said Tom Mitchell, president and chief operating officer of Tri Pointe Group, a home builder in Irvine, Calif. China’s main stock index, the Shanghai Composite Index, is down 38% since its June peak.

Foreign Chinese buyers make up about 30% of customers in a handful of the company’s developments in Orange County and the San Francisco area. Price increases there, he said, have prompted clients to “pause and think.”

Zhang Xin, chief executive of SOHO China Ltd., a real-estate developer, said last month she wouldn’t buy overseas real estate today because many cities abroad are too pricey.

Real estate consultants and brokers say the pullback likely is temporary. Many Chinese view U.S. real estate as not only a good investment but as a haven for savings. Some Chinese buyers also figure a U.S. address would make it easier for their children to enroll in an American college.

“In the very short term there will be some impact for people who don’t have a foreign income stream or who don’t have a bank account or funds in overseas banks,” said Frank Chen, executive director and head of research at property consultancy CBRE China. “But the outbound real-estate investment trend is likely to remain quite strong.”

Still, even a temporary pullback could hurt markets where Chinese buyers target some of the priciest American homes, often paying in cash. The average purchase price of existing homes in the U.S. by foreign home buyers in the year ended in March was nearly $500,000, nearly double the price for all buyers, according to the National Association of Realtors. One-third of Chinese purchases were concentrated in California for the year ended in March, according to the National Association of Realtors, trailed by Washington, D.C., with 8% of purchases, and New York, at 7%.

The Chinese are attracted by many of the same qualities as local buyers: good schools, good location and a good value, compared with prices in Hong Kong, for example.

Home builders also could feel the effects. The chief executive of Walnut, Calif.-based Shea Homes, Bert Selva, told investors this month that the company has seen a “significant slowdown” in Chinese buyers in Orange County.

“That buyer is really drying up. To be honest, I don’t think that’s a bad thing, because I think there was a lot of frenzy driven by that, pushing up prices a bit,” he said in a conference call.

Chinese and other foreign buyers have helped reshape the American real-estate market, driving up prices for homes in Southern California suburbs, skyscrapers looming over New York’s Central Park and residences in such college towns as Cambridge, Mass., brokers and economists said.

Buyers from mainland China, as well as those from Hong Kong and Taiwan, spent $28.6 billion in the year that ended in March on U.S. home purchases, according to estimates by the Realtors. While that accounts for just over 2% of American home purchases by dollar volume, the percentage is much greater in the high end of the housing market in such cities as New York, San Francisco, Los Angeles and, increasingly, Miami, according to the association.

In Southern California, they have been eager property investors in the San Gabriel Valley in Los Angeles County and in Irvine in Orange County, each with a substantial Asian population.

Chinese residents began buying American homes in large numbers about five years ago, driven largely by growing wealth and a desire to safeguard savings against political instability, brokers and economists said.

American homes looked like a bargain after the real-estate crash, drawing busloads of Chinese buyers to see properties in California and Manhattan. To many, it seemed “a gold mine everywhere,” said Calvin Lo, a real-estate agent at Berkshire Hathaway HomeServices in Southern California.

To sate that demand, U.S. real-estate brokerages now hold conferences with thousands of attendees in China, and such Chinese property portals as Juwai.com, advertise U.S. properties and other country listings. “Over the long term, the stock-market gyrations reinforce preference for international investment,” said Simon Henry, co-founder of Juwai.com.

Chinese individuals are limited to annual overseas investments equal to about $50,000. For years, Chinese have surpassed that limit, in part, by funneling money through relatives and employees. In recent months, the government has made it tougher to transfer money abroad, said real-estate brokers in both countries.

“It’s like barbarians at the gate,” said John Chang, a real-estate broker with Re/Max in New York City. Chinese families want to buy, he said, “but they just can’t get the money out.”

Yang Bin, a 38-year-old businessman from Beijing, said the economic slowdown has stoked his desire to purchase a home in Silicon Valley. “I see many problems with Chinese universities, and the environment and air quality here aren’t very satisfying,” Mr. Yang said. With a budget of about $1 million, he said he wanted to buy a home that his now-8-year-old child would one day occupy.

For now, Mr. Yang is caught in the dilemma prompted by China’s economy, which, he said, “has increased my desire to buy a house in the U.S., but also requires me to wait and watch more carefully.”

Source: Wall Street Journal, Laura Kuisto
http://www.wsj.com/article_email/chinese-pull-back-from-u-s-property-investments-1448649226-lMyQjAxMTI1NDI5ODQyODgxWj

Get a Black Friday Deal on a Home This Holiday Season

The day after Thanksgiving is universally known as the day to get started on holiday shopping and score big savings on the hottest gifts for friends and family.

But what about finding deals on a new home? It turns out, shoppers can get those, too. Zillow’s second annual analysis on bargain home shopping is here, revealing the cities offering the biggest home discounts and the most price cuts.

Zillow looked at two metrics for the analysis: the actual home discount as a percentage of the original listing price, and the percentage of listings with a recent price cut, as of September 2015.

And now — drum roll, please — for the winners:

Detroit comes in at number one, for the second year in a row, as the city to get the biggest home discount. The median discount given on a home in Detroit is 16.7 percent. Detroit leads by a large margin; Cleveland, OH is the next-best city to get a discount, with a median discount of 7.6 percent.

Check out Albuquerque, NM and Omaha, NE for the greatest odds of finding a home with a price cut: 23.6 percent of homes in Albuquerque have a price cut, and 23.5 percent of homes in Omaha.

Below is the complete list of city winners. Happy Black Friday, and happy shopping!



Source: Zillow Blog, Jordyn Lee
http://www.zillow.com/blog/black-friday-deal-on-a-home-187309/

These Are the 20 Richest Cities in America

This article is really no huge surprise to me. San Jose is the heart of the Silicon Valley and allot of tech giants reside in or around the San Jose area. According to this article from Bloomberg Business, San Jose is the #1 wealthiest city in America! No wonder why rents are high and the housing market is still hot. It just goes to show another good reason to own real estate here.

San Jose, San Francisco, Seattle: These cities house more than the headquarters of the world's largest technology companies. They are also some of the most productive hubs in the U.S. economy.

The San Jose, California metro area had the highest output per resident for 2014, according to a Bloomberg analysis of U.S. Bureau of Economic Analysis data for the 100 largest metropolitan areas. Gross metropolitan product (GMP) per capita in the Silicon Valley epicenter was $105,482, more than double the national average. Bridgeport, Connecticut ranked second at $94,349. San Francisco, Seattle and Boston followed.


These GMP per capita figures help uncover underlying economic trends, which are often masked by the population inflows and outflows that affect unadjusted output statistics. The 2014 rankings highlight a surge in tech centers since the recession, with San Jose now producing about $11,000 more per person than No. 2 Bridgeport. Until 2011, the Connecticut suburb for New York bankers held the top spot.

It's no surprise that these high-output cities also have some of the densest concentrations of educated workers, reflecting the soaring returns to schooling in today's job market. Harvard University professor Edward Glaeser says the diverging fates of high-skilled and low-skilled regions has been one of the most significant trends in the U.S. economy as well as other developed economies over the last three decades.

There's an ''ongoing trend towards skilled places being far more compensated than non-skilled places," said Glaeser, whose research focuses on what causes cities to grow.  "The poster-child of this in the data is the San Jose metropolitan area, which is off the charts in terms of income growth.''

Tech cities outside the Bay Area have also benefited from the industry's boom. Helped by not only Amazon Inc. but also newer Internet companies like Zulily Inc., Seattle's GMP per capita grew by a cumulative 7.9 percent since 2009, when the economic recovery began. (The cumulative growth since 2008 is a much more tempered 2.5 percent because of the dramatic drop in the financial crisis.) That helped the Washington city catapult to No. 4 from its No. 6 spot in 2008 through 2011. Biotech hotbed Boston also jumped two places since 2008, while Portland, Oregon (sometimes called Silicon Forest) climbed six spots.

These emerging tech hubs will probably expand even more in coming years, according to Luis Torres, a research economist specializing in regional economies at the Texas A&M Real Estate Center. Sky-high rents in northern California force workers and businesses to look elsewhere, Torres said.

Methodology: Bloomberg ranked the 100 biggest metropolitan statistical areas (MSA) in the U.S. according to their gross metropolitan product per resident from 2008 to 2014, calculated with data from the U.S. Bureau of Economic Analysis and the U.S. Census Bureau. Data for 2014 were advance statistics and subject to future revision. Previous years' data were revised from previous releases. The map above only displays the primary city in each MSA.

Source: Bloomberg Business, Ali Donaldson
http://www.bloomberg.com/news/articles/2015-11-05/these-are-the-20-richest-cities-in-america

How to Use Gift Money for a Down Payment

Coming up with the money for a down payment can be a headache for potential new home buyers. Depending on the home you want, your lender and the type of mortgage, the down payment can be a hefty sum. Some people use a gift (from parents or others) to help cover the down payment. But even if you do have a financial gift coming, you need to be careful how you use it. Check out these details about financing a down payment with a gift.

Who can gift

In order to use a gift on your down payment, lenders generally prefer the gift to come from a family member. Parents, grandparents and even siblings can usually give a gift to be used on a down payment. Neighbors, friends or third cousins twice removed generally cannot. It’s also important that the money is traceable. Experts say lenders are cautious of cash gifts so it’s a good idea for your donor to gift the money through check or a wire transfer. It is also a good idea for donors to document that they are financially able to make the gift. And if supporting documents are passed on to you along with the gift, it’s a good idea to keep them readily available.

How much you can receive

As of 2015, individuals can make a tax-free gift of up to $14,000. So, a married couple can give $28,000 to their child or $56,000 to their child and son- or daughter-in-law. Any greater amount and the donor will be required to pay gift taxes to the IRS. Depending on the type of mortgage you apply for, there will be different rules for how much of the down payment the gift can cover. For a conventional mortgage, if you put down 20% or more as a down payment, all of it can be from a gift. If you are putting down less than 20%, part must be from your own money. This amount varies from lender to lender. Additionally, you can only use the gift on primary or second homes. For FHA and VA mortgages, gifts can only be used on primary homes.

Using the money

If you want to use gift money toward a down payment, you will have to ask your mortgage lender to provide a letter for you and the donor to sign. The letter must show that the gift is indeed a gift and not a loan to be repaid at a future date. Different lenders will have slightly different rules, so it’s important to check with them on what they require.

Before making any decision on buying a home, it is important to know how much you can afford to pay monthly for your mortgage. Your credit score will play a part in determining this, since it will factor into the interest rate you’re approved for on your loan. (You can check your credit scores for free on Credit.com to see where you stand.) The down payment will be a large portion of home-buying costs and a gift from a family member can make the difference between getting the keys and having to re-sign your rental agreement. Just make sure you and the donor run the numbers and keep everything documented.

Source: Realtor.com, AJ Smith with Credit.com
http://www.realtor.com/advice/finance/how-to-use-gift-money-for-a-down-payment/

Happy Thanksgiving From The Mimi Wang Team

Sending my best wishes to you and hoping that you find continued success and wealth in abundance.

Happy Thanksgiving from The Mimi Wang Team!

Before You Buy a Fixer-Upper, Read This

Yes, my husband and I did it: We bought a fixer-upper, and it nearly did us in. It was Brooklyn, NY, in 2008. I remember walking to the place for the first time and seeing the back seat of a van on cinder blocks being used as a couch—and quickly looked past that eyesore. This could be a great space once it was renovated, I thought. The light was abundant, the space ample and flexible, and its Park Slope neighborhood was about to bloom.

Six months into the renovations, our contractor told us: “In hindsight, we should have knocked this down and started from scratch. It would have been cheaper.” Ah, blessed hindsight.

We wanted to keep you from getting sucked into a money pit of your own. For expert advice, we turned to Cathy Baumbusch, a Realtor® in Washington, DC, who told us how to master the art of buying a fixer-upper.

1. Know that some flaws can be fixed

Fixer-uppers generally fall into two categories: total wreck and ugly house.

“An ugly house is not architecturally appealing: Its paint is chipping away, the yard is unkempt, inside it may smell bad,” says Baumbusch. In short, everything about it needs freshening up.

But if these are the kinds of flaws you’re dealing with, take heart: They’re merely cosmetic, and they’re easy to fix. Painting is the easiest task that you can do yourself. Just don’t cut corners—buy all the right equipment (use the tape!) and paint correctly, with the right number of coats. It’s extra work, but it pays off in the end. Even if you hire a painter, it won’t cost as much as redoing the bathroom. You could also refinish the floors yourself, although it involves renting a machine.

2. Then again, other flaws cost a bundle

On the other hand, some blemishes may initially slide under your radar—but eventually make a big impression on your wallet.

“Problems with the foundation, structure, roofing, and siding can be expensive to fix,” says Baumbusch—as can major replacements with sewage, septic, and heating, ventilating, and air-conditioning systems. Replacing decks and driveways can also be costly. Sometimes environmental problems such as a wet basement or mold can be mitigated, but treatments are not always successful. In some houses, it can just be impossible to solve a bad mold problem.

“I once viewed a property for sale where the mold was so bad, it was difficult to breathe,” says Baumbusch. “It was everywhere, and the property management company was doing nothing to stop it. That home would probably be better off completely gutted or razed altogether.”

3. Ballpark your renovation costs

Hire a structural engineer to evaluate the home before you buy—but before you even get there, do your research. There are a lot of repair estimators out there, so ask your friends and co-workers if they’ve done repairs lately and could tell you how much they cost. That way, you can quickly ascertain whether the repairs would fall within your budget. Draw up a reference sheet for renovation costs such as roof, foundation, HVAC, and windows. This will help you to determine a viable offer price.

4. Ask for a discount—gently

Now on to the real upside of buying a fixer-upper: major savings! These houses can go for as little as 60% to 80% of the original asking price, says Baumbusch. This is especially true if the home has been sitting on the market for a while, or if you’re able to offer cash upfront.

Of course, even if you and everyone within eyeball range know that this house is in shambles, that doesn’t mean the sellers know that, or want to hear it. To avoid insulting them, start out by saying you love their home, but you (or your engineer, inspector, or friend) have noticed some issues that will take time and money to fix. Then subtract that sum from their asking price, and you don’t have to stop there.

If the renovations will keep you from living (or living comfortably) in your home, it’s also customary to tack on an extra fee for what Realtors call “the hassle factor,” which can be estimated by the amount of time and money you’d spend living elsewhere while the renovations happen.

The bottom line: The more you break down your expenses, the more sense your offer will make to the sellers, who will hopefully play ball.

5. Get the right kind of loan

A home requiring major renovations can qualify for a special type of financing called a renovation loan. And there are different types: A 203(k) loan, recently rising in popularity, is insured by the Federal Housing Administration. Since these loans are backed by the government, lenders are fine accepting lower interest rates than what would be required by your typical home renovation loan; they’re also open to people with less-than-stellar credit. The downside? There’s a limit to how much you can borrow (anywhere from $271,000 to $729,750, depending on the price of property in your area). Be sure to explore all your options with your Realtor or other qualified experts.

In the case of our Brooklyn home, we transformed a disheveled hovel into a beautiful home. It took a very long time and a lot of money. It just might have been nice to know what we were actually getting into to try to avoid the panic that came with every change order.

So, if you’re thinking about tackling a fixer-upper, trust me—it helps to know what you’re in for first.

Source: Realtor.com, Rosie Amodio
http://www.realtor.com/advice/buy/how-to-buy-a-fixer-upper/

5 Reasons to Be Thankful for a Great Real Estate Agent

Not all real estate agents are created equal. Like all industries, there are plenty of terrific pros, but once in a while a bad apple rubs a buyer or seller the wrong way and spoils it for the rest of us.

If you’ve had a bad experience in the past, don’t let it happen again. If you aren’t comfortable with your current agent, stop everything. You can find wonderful agents in every market — don’t move forward until you have.

Once you find an exceptional real estate agent, you’ll discover plenty of reasons to be thankful for them.

They’ll be there for you during the difficult moments

In the middle of a transaction that seems to be giving you more heartache than love? Maybe it’s not the “deal” you thought it was, or something just doesn’t seem right?

A good agent will take your call at 10 p.m., hear you out and support your decision not to move ahead. Buying or selling a home is a serious financial transaction — not to mention one with huge emotional and practical considerations.

Your agent should uncover any issues and, if it’s the best decision, suggest backing out of the deal before you even bring it up. They’ll be on your side, and looking to build a long-term relationship — not just make a quick buck.

They’ll help get your house ready for sale in record time

A good listing agent doubles as a project manager, designer, and connector of all things quick and fast for home improvement.

Thinking of selling, but daunted by the idea of prepping your home, making necessary fixes or simply deep cleaning? Good listing agents take on the burden and alleviate unnecessary drama from an already stressful time in your life.

With your approval, your agent can muster up a team of painters, stagers, floor finishers, home organizers — and the list goes on. As the lead on prepping your home for sale, your agent will be your single point of contact and get the job done quickly.

They know you’re juggling work, kids and all the other parts of your life

A real estate transaction can be so tedious. Someone always wants a random signature or a document notarized. Inspectors and appraisers need to get into the home, and sometimes one of the parties has a last-minute request that you can’t ignore.

A good agent realizes you have a life outside your real estate transaction. She’ll drive to your home late at night or catch you in the lobby of your office building in between your meetings for that important signature. He’ll open doors, get second bids, sometimes pull weeds and even walk your dogs.

Tasked with making your life easier and your transaction as smooth as possible, a good real estate agent is full service 24/7. And they love doing it.

They’ll send you helpful data about your home long after you’ve closed

Some agents do their deals and move on, seeing your purchase or sale as transactional. But good agents know that their services continue long after you close.

Homeowners like to know what’s going on in the market and how their investment has fared over time. Agents see homes in person each week, and can take note of comparable homes and keep their past clients informed about the market.

It’s true you have a lot of information at your fingertips already, but having an active agent keeping you in the loop, without even asking, is the best.

They have the inside track because they’re well-connected and well-liked

Often, deals fall into place because of the strength of the relationships a good agent builds over time. Being well-connected with other agents, bankers, inspectors and deal-makers means they can help you find opportunities off the market, get the attention or time you need, or get your offer to the top of the pack in a competitive bidding situation.

A truly great agent constantly has your interests, wants and needs in mind, and uncovers opportunities to find the house or the buyer of your dreams.

If you’ve found your dream agent, you have a lot for which to be thankful. If you haven’t, find a good agent and get them on your team. They can make all the difference.

Source: Zillow Blog, Brendon Desimone
http://www.zillow.com/blog/be-thankful-for-real-estate-agent-187080/

The Key to a Smooth Mortgage Process? Paperwork

So you are ready to apply for a mortgage or refinance your current mortgage to terms better suited for you? You may be focusing on your home or researching the details of the arrangement, which is great, but you might want to get down to work on paperwork. You will always need to prove your ability to pay when taking out such a large loan. It’s a good idea to be prepared for some serious paperwork. Below is a checklist of some of the information and paperwork involved in a mortgage or refinance application.

Proof of income

Whether you need recent pay stubs, tax returns or tax forms (like W-2s and 1099s from the past two years), it’s important to be ready with the paperwork that proves you have income. You may even need the names and addresses of all employers for the past two years. Depending on your situation, you may also need to show documents accounting for Social Security and/or disability payments, pension income, dividends, child support, alimony, bonuses, overtime and any possible rental income.

Homeowners insurance

Especially for a refinance, you will likely need to produce documentation for homeowners insurance to prove that you have enough coverage for your property.

Proof of assets

You will probably have to provide documentation about all of your financial assets other than your home. This means the titles or statements from savings accounts, stocks, bonds, mutual funds, CDs, retirement accounts, automobiles and any other real estate you may own. These will be evaluated to verify that you can cover a down payment, are being honest about the source of that money, and will still be able to afford monthly bills.

Credit information

Your lender will also check your credit to determine how likely you are to pay your loan and how creditworthy you are. (You should already know what your credit looks like, and be sure that it is in the best possible shape.) It’s smart to check your free annual credit reports when contemplating a new mortgage—and to dispute any errors that might be hurting your credit score—well ahead of applying. (You can check your credit scores for free on Credit.com every month to see where you stand.)

Good faith estimate

In an effort to make the closing process simpler and more transparent, the Consumer Financial Protection Bureau has launched a “Know Before You Owe” mortgage disclosure rule. Lenders will provide you with a loan estimate and a closing disclosure, which replace four previously used forms with two new ones.

The basics

It’s important to remember that you will also have to provide basic identifying information, including your Social Security number, a list of addresses for residences from the past two years, a check for the application fee and—if you’re refinancing—an appraisal.

Gathering all your documentation may not be very fun, but it is the only way lenders can trust that you can afford a mortgage or mortgage refinance. The more ready you are with the paperwork you need, the quicker the process can be over. It’s a good idea to keep in mind that most documents expire after 60 days, so you may need to update. And remember that each lender may require their own documents, so contact them to inquire what you will need as soon as you know they are an option. There is simply no way to avoid the paperwork, so you may as well just focus on completing the checklist and talking to your prospective lender.

Source: Realtor.com > credit.com, AJ Smith
http://www.realtor.com/advice/finance/the-key-to-a-smooth-mortgage-process-paperwork/

7 Ways to Get Top Dollar for Your Home During the Off-Season

After a record-setting summer selling season in many parts of the country, home sales have quieted down for the fall. If you’re putting your home on the market, you might see that as an obstacle, but it can be an opportunity. Even if there is less traffic, there’s less competition from other sellers. In a market where inventory is already tight, that gives you an even greater advantage.

Fall is a particularly good time to sell if you’re marketing to retirees, millennials, or those with very young children—they’re less concerned about tying a purchase to the school calendar. Going into winter, you’ll find that buyers who are willing to trudge through snow to see a home tend to be much more motivated to make a purchase than those who spend a sunny Saturday dropping into open houses.

If you’re thinking of listing your home in the next few months, follow these steps to ensure a quick sale at a great price:

1. Skip the holiday décor

Staging basics such as decluttering and depersonalizing still count during the holidays, so it’s best to keep the inflatable Rudolph and the tinsel in storage.

“You never know who your potential buyer is,” says David Peterson of Synergy Staging in Portland, OR. “We don’t want to pigeonhole or potentially turn someone off.”

2. Update your photos

Even without holiday decorations, photos can quickly look dated as the seasons change. It’s fine to lead your listing right now with a gorgeous photo of crimson- and gold-leaved trees on the front lawn, but once the leaves have fallen, you’ll want a new photo to keep the listing looking fresh, says Jan Niebauer of Niebauer Realty in Milford, MI. Try to snap photos on days when there’s a blue sky, which will pop against a blanket of white snow.

3. Keep the outside neat

Curb appeal is just as important but slightly more difficult to achieve in fall and winter. A leaf- or snow-covered lawn can be beautiful, but it can also get messy quickly.

“Make sure it’s neat and tidy,” Peterson says.

Put an added focus on raking and removing leaves, and consider hiring a snow-removal service to be sure that your driveway and walkways are clear and safe for visitors at all times.

4. Clear the entryway

You’ll want to make sure there’s space for a few people (like a couple and their agent) to stand in the foyer, shed their winter clothes, and stomp off the debris on their shoes, Peterson says. Provide an umbrella stand and shoe covers to keep visitors from tracking mud and snow through your home.

5. Make it warm—literally and figuratively

If you’re going to be out of the house, be sure that your Realtor® arrives early to crank up the thermostat before a showing (or leave it at a warmer temperature when you leave in the morning), which will help potential buyers feel more comfortable.

“It’s vital that a house be warm,” Peterson says, but “not too warm that people have to peel off all their clothes, but definitely not so cold that they want to get out as fast as possible.”

If you have a gas fireplace, make sure it’s lit, and enhance that warm, hospitable feeling with a tasteful throw blanket or area rug.

6. Be more flexible with showings

There are fewer hours of daylight, when your home looks its best, in the winter months, so try to accommodate potential buyers who want to come for daytime visits, Niebauer says.

7. Light it up

Even during the day, cloudy gray skies can make window-lined rooms feel gloomy. Adding floor lamps and turning on all the lights will make the property feel more welcoming.

“Light up every dark corner because they can make a room feel smaller than it is,” Niebauer says. If visitors are coming at night, you’ll want to turn on all your exterior lights as well.

Source: Realtor.com, Beth Braverman
http://www.realtor.com/advice/sell/seven-ways-to-get-top-dollar-for-your-home-in-the-off-season/

4 Renovation Blunders That Can Hamper Value

Renovations are mostly done not only for a home owner’s comfort but to add value to their home. However, in some cases, home owners may end up making their home worth less depending on what they choose to do.

MarketWatch recently featured some of the most common renovations for home owners that potentially could decrease the value of their home, including:

1. Eliminating a bedroom: Even if the home owner plans to remove a bedroom in order to expand another one or make a living space larger, this renovation project likely could burn them at resale. The more bedrooms a home has, the higher the price it usually can get. “When you start eliminating bedroom space, you’ve completely changed the comparable value of your home in the neighborhood,” says David Pekel, president of Pekel Construction and Remodeling in Wauwatosa, Wis.

2. Renovating the garage into living space: Getting rid of the garage space in favor of an extra office, family room, or bedroom can be a turnoff to many potential buyers at resale, real estate professionals say. Seventy-four percent of recent buyers said that having a garage is extremely or very important, according to a survey of 7,500 people by Crescent Communities. For home owners who do choose to renovate the garage into living space, they may find leaving the garage doors on the outside a good move so that buyers could more easily convert the space back into a garage if preferable.

3. Removing closets: Michele Silverman Bedell, chief executive of Silversons in Westchester, N.Y., recalls a client who removed a closet out of the master bedroom in order to make a bigger master bath. But the renovation made the home much more difficult to sell, Silverman says. “People need closets,” she told MarketWatch. “They’ll walk in and count the number of closets per room.”

4. Too much wallpaper: While wallpaper can be removed, it has the reputation of being a lot of work to get it off.

Source: Realtor Mag Online > MarketWatch
http://realtormag.realtor.org/daily-news/2015/11/20/4-renovation-blunders-can-hamper-value?om_rid=AAFmZk&om_mid=_BWT2owB9II1pk0&om_ntype=RMODaily

Slaying Myths About Buying A Home

The Down Payment Quandary: Trying to Save 20 Percent

The crimp that high rents are putting in people’s budgets has a direct impact on how able they are to save for a down payment.



Rising home prices compound the problem, requiring an even larger heap of cash to reach the 20 percent mark, the amount typically required to avoid mortgage insurance.

People used to get there with second jobs, but lenders don’t see this as much since the recession.

“Instead, what you see is somebody graduates from college, they move back home to pay off debt and save money, and they work 50, 60 hours a week at the job that they found,” said Staci Titsworth, a regional manager for PNC Mortgage in Pittsburgh.

There are also more double-income households, and more first-time buyers waiting to buy homes where they can stay more than 5 years and possibly raise families, she said.

People are also coming in below 20 percent, which typically requires paying mortgage insurance.

Even with mortgage insurance tacked on, people tend to have lower monthly payments for mortgages than for rent. Indeed, homeowners in general can expect to spend about 15 percent of their monthly income on mortgage payments (without mortgage insurance) for a median-valued home, while renters can expect to spend 30 percent on rent.

Borrowers in pricey markets have taken the lower down payment route for years.

That’s how Sara Clarke, an editor at U.S. News & World Report, and her husband landed their first home: a townhouse in Alexandria, VA, that cost $299,500. They put down 5 percent, money saved from a childhood paper route and fast-food jobs, plus a little help from a relative.

By the time they sold it about 10 years later, they had accrued the 20 percent down payment they needed for a single-family home in Fairfax County. They even had money left over to replenish a savings account depleted by upgrades on their first kitchen, bathrooms, roof and “redoing everything we could redo.”

Assistance from parents remains a common way to get a foot in the door of your own home. Loans and gifts from family and friends rose from 8 percent to 21 percent during the recession, and was down to 13 percent last year.

JPMorgan Chase has also seen first-time buyers becoming more disciplined about spending and tapping into 401(k)s, said Sean Grzebin, the bank’s head of retail mortgage lending.

Source: Zillow Blog, Melissa Allison
http://www.zillow.com/blog/trying-to-save-20-percent-186587/

Cybercriminals Targeting Real Estate Transactions

It used to be banks and major retailers that were the target of cyber criminals, but now it seems they are also setting their sights on us Realtors. As an active real estate agent who has closed numerous deals, I know there is a wealth of data that is accumulated during the course of a real estate transaction, but I use encryption to protect that data. Be that as it may, I know of many agents who aren't as tech savvy who are putting their clients at risk by being careless with their information.

SAN DIEGO, Nov. 14, 2015 /PRNewswire/ -- Small real estate businesses, agents and their clients are fast becoming the targets of sophisticated cyber scammers. That's according to panelists at the Risk Management and License Law Forum yesterday at the 2015 REALTORS® Conference & Expo, who discussed potential threats and offered tips for agents to protect themselves and their businesses and clients from cyber-attacks.

Melanie Wyne, National Association of Realtors® technology policy expert said that while we often hear in the news about large companies falling victim to hackers, small businesses, which often lack the vast technology and legal teams of larger businesses, actually account for the majority of attacks. "Small businesses need to pay just as much attention as large companies to possible cyber threats," she said.

Darity Wesley, founder of the Lotus Law Center, said hackers are seeking personally identifiable information, data that could potentially identify a specific individual, such as credit card or bank account information, login credentials, employment details or a physical address, e-mail address, and phone or social security number.

"Most people don't know the vast amount of data stored about them in a variety of systems," said Wesley. "Identity thieves can do a lot of damage with this information; your credit and whole life could be ruined."

Wyne said data breaches can impact real estate businesses in three main ways: businesses can suffer from financial harm from expenses resulting from the breach; legal risks from lawsuits from clients or others impacted by the hack; and reputational risks from having to publicly disclose the hack. She said commercial properties are also vulnerable from hacks into their automated or building control systems.

While cloud and free email services are convenient for business they are never completely secure, and Wyne recommended that Realtors® research the level of security those companies are employing before using their services and storing information or documents into them. She also recommended that agents ask these services to be indemnified in the service is hacked. Wesley said anyone using a free email service for business should encrypt emails with client data; she recommended visiting lifehacker.com (then search on "encryption") for great tips for encrypting emails.

Jessica Edgerton, NAR associate counsel shared that in recent months, real estate professionals have reported an upswing in a particular wire scam, where a hacker breaks into an agent's email account and obtains information about upcoming real estate transactions. After monitoring the account, the hacker will send an email to the buyer as he or she nears closing, posing as the agent or someone from the title company and requesting that the buyer wire transaction-related funds. Edgerton recommended that agents inform their clients at the beginning of any transaction about this scam and that if buyers do receive an email about wiring funds that they immediately call the agent on the phone.

Currently, the majority of laws governing data security are at the state level, although NAR has been advocating federal law for years. Therefore, Wyne also said it's important for agents to know the state laws regarding data security and privacy that affect their organization, especially since some states have enacted laws that require businesses to have proactive security programs in place.

All of the speakers recommended strong passwords and developing a data security program and implementing and maintaining safeguards to protect private data. A privacy policy disclosing some or all of the ways the business collects, shares, protects, and destroys personal client information is also a good business practice.

Source: National Association of Realtors
http://www.prnewswire.com/news-releases/cybercriminals-targeting-real-estate-transactions-300178856.html

Great video that sums up the Silicon Valley market real estate perfectly. The video was produced by a married couple with two high paying income and despite their high pay, they are still having difficulty buying in Silicon Valley, largely due to "chasing the market." Although I don't totally agree with conclusion that the market will go up forever, it is still a great watch.

Million Dollar Shack: Trapped in Silicon Valley's Housing Bubble

Fannie Mae’s Housing Forecast [INFOGRAPHIC]

Home-Loan Borrowers Bypass the Banks

Look out, banks. Home buyers are increasingly turning to independent mortgage companies for their loans.

In 2014, nondepository independent mortgage companies originated 47% of completed home-purchase loans and 42% of refinance loans, according to data from the Federal Reserve. That’s up from 43% and 31%, respectively, in 2013 and the largest share of the mortgage market held by non-banks since 1995.

Examples of nonbank lenders include Quicken Loans, now the nation’s second-largest retail-mortgage lender, behind Wells Fargo. Another lender, Irvine, Calif.-based Loan Depot, filed an initial public offering in October. And Finance of America Holdings, a Blackstone Group company, is poised to become one of the nation’s largest nonbank lenders after recently completing the acquisition of Gateway Funding Diversified Mortgage Services, Pinnacle Capital Mortgage and certain assets and operations of PMAC Lending Services Inc.

The vast majority of nonbank mortgage volume is still from conforming mortgages backed by Fannie Mae, Freddie Mac and the Federal Housing Administration, but nonbank lenders are eager to increase their market share of jumbo loans, says Guy Cecala, CEO and publisher of Inside Mortgage Finance, a trade publication that tracks originations. Jumbo mortgages have dollar amounts above conforming loan limits of $417,000 in most areas and $625,500 in some pricey home markets, such as New York and San Francisco.

Still, banks may have an edge in the jumbo market. Because these loans exceed government limits, lenders either must sell the loans to a tiny secondary market of mortgage-backed securities (less than 3% of all jumbo mortgages), or hold them in portfolio, a capacity which only the largest lending-only institutions may have, Mr. Cecala says.

Some nonbank lenders are now selling their jumbo loans to big banks and large institutions, such as Wells Fargo, insurance companies and real estate investment trusts (REITs), Mr. Cecala says. “Banks are realists,” he adds. “They need to buy loans from nonbanks to keep their portfolios growing.”

Feeding loans to bigger institutions lessens the lending risk for nonbanks, allowing them to meet and sometimes surpass banks with competitive rates and terms, Mr. Cecala says.

Some also are targeting those jumbo borrowers who want particular niches of service.

For example, Quicken Loans allows jumbo borrowers who have straightforward income documentation to complete their transaction fully online. “In many cases, you don’t have to talk to a loan officer,” says Bob Walters, chief economist for Quicken Loans.

Online nonbank lenders will have an increasing advantage as more millennials—those born between 1981 and 2000—enter the mortgage market, says Jason van den Brand, CEO of Lenda, a San Francisco-based lender that currently offers only refinances but plans to expand to purchase loans by the end of 2015.

Speed is a selling point for Charlotte, N.C.-based Movement Mortgage, which operates in 42 states and originated $4.24 billion in mortgages in 2014, says CEO Casey Crawford.

Movement’s sales pitch to conforming loan borrowers is being able to close mortgages in seven business days and jumbo borrowers in only a few days more, even with new federally mandated waiting periods on closing documents that went into effect last month.

Beyond lending power, banks hold one other advantage over nonbank lenders—being able to offer lower rates or closing costs to customers based on length of account history and amount of holdings.

“Bank lenders also focus on the overall client relationship, and can offer discounts based on the depth of that relationship,” said D. Steve Boland, Bank of America consumer-lending executive.

Corrections & Amplifications:
Data on loan originations come from the Federal Reserve. An earlier version of this article incorrectly cited the Federal Financial Institutions Examination Council. (11/4/15)


Source: The Wall Street Journal, Anya Martin
http://www.wsj.com/articles/home-loan-borrowers-bypass-the-banks-1446651048

Are you ready for homeownership?

According to combined data from the National Association of REALTORS® and the U.S. Census Bureau, more than 6 million homes will be sold in 2015 -- the most in nearly a decade.

And, of those 6 million homes, nearly one-third will be sold to first-time buyers.

It's not hard to understand why.

Nationwide, rents have been rising at a rate of more than four percent per year, and a survey from Rent.com of property managers nationwide suggests that rents could rise 8% or more in 2016.

Meanwhile, as rental rates rise, mortgage rates fall.

For nearly all of 2015, 30-year mortgage rates have averaged less than four percent, which helps to keep the costs of homeownership low. And, unlike rents, which can increase every 12 months, the payment on a fixed-rate mortgage never changes.

Renters know this.

They also know that mortgage lenders are making it easier to get mortgage-approved, with more access to low- and no-downpayment mortgages than during any period this decade.

Lenders are approving and closing more than 70% of all purchase applications, according to Ellie Mae, whose mortgage-processing software handles more than 3.7 million loan applications annually.

That's a huge number.

If you're a renter looking to buy your first home, today's housing market is working in your favor. It's an excellent time to consider the purchase of a home.

WHAT'S DIFFERENT ABOUT BEING A HOMEOWNER

Nationwide, renters become first-time homeowners every day -- more than a million times per year. It's not a rare occurrence and you can do it, too.

Generally, for renters, the decision to buy a home focuses on three big questions, each of which are financial in nature :

1. "Should I rent or should I buy?"
2. "How do I know which mortgage to choose?"
3. "How big of a downpayment should I make?"

And, while the answers to these 3 financial questions remain important, there are other considerations a renter should make before deciding to purchase a home.

Every homeowner will tell you -- there are certain "lessons" you learn in the game of homeownership. You can learn them on your own, the hard way. Or, you can take the advice of somebody who's been there before.

Among the most important lessons first-time homeowners learn is that homeownership costs only begin with monthly payment on your mortgage. There is plenty more which costs money.

For example, when you own your own home and something breaks, repairs and fixes are your responsibility to fix.

Sometimes, repairs will be large and will necessitate an insurance claim, such as with a damaged roof or windows. Most other times, though, repairs will be small and paid via cash.

It's good to budget 1.5% of your home's value for its annual maintenance costs.

First-time homeowners will also tell you that -- no matter what -- the mortgage has to get paid.

Unlike renting, when you get some leeway from a landlord, lenders require on-time payments month-after-month until the mortgage is paid-in-full. No matter what.

Missed payments not only put you at risk of eviction via foreclosure, but can damage your credit score and limit your ability to refinance to lower mortgage rates in the future.

Then, there's the matter of real estate taxes.

Real estate taxes are taxes paid to local governments, linked to the value of your property. As your property value rises, then, so does your annual tax bill. Taxes can also be increased via levies, which are often included (and approved) on Election Day ballots.

All of this means that -- even with a fixed-rate mortgage -- your cost of homeownership can increase over time.

The good news, though, is that homeownership provides stability and security for families, and can be a terrific means to build wealth -- two other lessons first-time homeowners will share.

By living in a community, you establish "roots" which has been shown to elevate psychological well-being among adults and children; and you also put yourself in position to rapidly expand your net worth.

Remember: You own your home and it's your asset -- regardless of whether or not the home is mortgaged. As the asset's value increases, so does your balance sheet.

Home values are up nearly 6% from 12 months ago. If you bought a home for $200,000 last year, then, your net worth has increased $12,000.

As a renter, you can't leverage a $200,000 home to build wealth. You can only do that as a homeowner. But, are you absolutely ready to become a homeowner?

There are a few ways you can know for sure.

YOU'RE READY TO BE A HOMEOWNER WHEN...

There are lot of reasons why renters choose to remain renters. For some, it's the flexibility that comes with having a landlord and being free to move "with 30 day's notice".

For others, renting may provide less expensive access to homes in a desirable school district, or for renters living in cities such as New York, San Francisco, or Chicago, access to apartments buildings and condos which offer unique amenities.

However, as a renter looking at homeownership, it's important that you're not deterred by the unpredictable nature of life.

For example, for a newly-married couple beginning a family, it can be tempting to wait to purchase until a child is "old enough for school"; or, for a longtime renter, to delay a home purchase because a job promotion may be on the horizon.

Life happens. It always will. And, no matter how much you plan, plans change.

Therefore, before buying a home, think past "life events" -- especially the unexpected ones -- and be secure in your choices and finances.

Here are three signals that you're ready to buy a home.

1. You have a 6-month reserve fund established

As the owner of a home, you will incur unexpected costs. The heating and cooling unit will break before its time; a tree will fall in the yard; a pipe will develop a leak -- the list of potential problems is endless.

Additionally, you may lose your job; or, become ill; or, add children or parents to your home.

Each of these events adds costs to your budget, but when you have a reserve fund equal to at least six months of living expenses, you can manage the unexpectedly nature of life.

Note that your 6 months of reserves should include all elements of your spending -- not just the PITI of your loan. A good way to determine how much you'll need is to average your last 18 months of credit card statements, insurance payments, and doctors' bills, along with your mortgage costs.

Multiply that average by 6 and consider it your minimum savings in reserves.

2. You have a reasonable idea that you won't need to move within the next two years

Buying a home is cheap. Selling one, however, is not.

This is because it's U.S. custom for the home seller to pay the real estate commissions due upon the sale of a home, the amount of which is split among the agents.

Real estate commissions range near five percent, but can be higher or lower depending on your home and market. This also happens to be about the same percentage that home values have climbed in the past 12 months.

Therefore, if you purchased a home last year and sold it today, the gains on your home -- $5,000 per $100,000 in price -- will be paid to the real estate agents who handled your transaction.

This is not a bad thing, necessarily. It can be argued that real estate agents will help you sell your home for more money than you could have sold it yourself, but it's still something about which to be aware.

Selling your home in fewer than two years can negate your real estate profits.

There can be tax implications of selling too quickly, too.

The IRS allows up to $500,000 in profit from the sale of a home to be exempted from capital gains on a jointly-filed tax return, or $250,000 on a single-person filing.

However, in order to claim the capital gains exemption from the sale of real estate, you must show that you lived in the home as your primary residence for at least 2 of the prior five years.

If you sell your home in fewer than two years, you subject yourself to additional federal income taxes. However, be sure to consult with a tax professional before making tax-related decisions.

3. You can forecast your household income for the next few years

Before purchasing a home, you should have a reasonable idea of what your household income will look like for the next few years.

This doesn't mean that you should know to the dollar how much you'll earn, but you should have a fair idea of the range into which your income will fall.

It's part of the financial planning required for homeownership.

For example, if you know that you're likely to take a pay cut in the coming years because you plan to switch from full-time employment to self-employment; or, if you know that your family may shift to a one-income household with the birth of a child, you'll want to account for that in your planning.

Remember: Mortgage payments are due monthly and real estate tax bills are prone to increase. Understanding your income can help plan for that.

Now, there's always the chance that you get lucky and current mortgage rates move lower in the future, giving you the ability to refinance your home to lower payments; or, to cash-out your home equity for personal reasons.

You can't plan for that, however.

A good refinance can offset the effects of a reduction in household income and a mounting of consumer debt. But getting to refinance is a bonus. You do it when you can, and feel grateful for it later.

Source: The Mortgage Reports - Dan Green Blogs on Mortgages, Dan Green
http://themortgagereports.com/18429/signs-ready-to-buy-home-renters

Milpitas council to review future housing, retail near Great Mall

A problem of growing concern for businesses and residents here in the Silicon Valley is the lack of housing. It seems that there are too many people, many of whom are recent imports to this valley due being high tech workers for the likes of Google and Apple, and this growing influx of new people is pushing our housing needs to its limits thus driving up prices on what available housing there is. So city leaders for many of the cities that make of the silicon valley are doing whatever they can to have more housing built such as the case with the city of Milpitas as the article from the Mercury News points out.

Milpitas City Council on Tuesday, Nov. 17 is to consider approving high-density housing and retail commercial projects near the Great Mall.

Up for review will be changes to three projects: the McCandless Drive proposal for 83,842 square feet of retail, a hotel with 175 rooms and a 423-residential unit building; a Centre Pointe Drive proposal for 241 units; and a Houret Drive proposal for 114 condominiums along Houret Drive and Houret Court.

Bill Ekern, the city's interim planning director, said the developer is Newport Beach-based Lyon Communities.

He added that Lyon is currently constructing a project known as District One -- located north of McCandless along Great Mall Parkway -- which involves a 175-room hotel.

"They are still negotiating with hotels for the current project under consideration," he said.

In addition, the District One project may see a grocery store anchor. Ekern said Lyon has not released the name of possible chains with whom it's negotiating.

"It's one of those 'any day now' discussions," he added.

Similarly, Milpitas Economic Development Manager Edesa Bitbadal confirmed Lyon is working on a deal with "a reputable grocery store."

"I know which one but I cannot disclose it either," Bitbadal said. "However, I am personally pleased with the high quality of produce, variety and service it may bring to our city."

Milpitas Planning Commission voted 5-0 on Oct. 28 to recommend the council approve a requested general plan amendment and a conditional use permit for these same projects.

According to Ekern, if the council approves the projects Tuesday, the developer may then sell the three project sites -- two at Centre Pointe and one at Houret -- to other for-sale housing developers.

"They intend to develop the other three lots as rental as well as all of the commercial and hotel product," Ekern said. "They have two years to pull the trigger on the projects, though they can ask for a one-time extension of a year from the city. There are no timelines yet, but they intend to move quickly to meet market demand."

The council meeting will begin 7 p.m. on Nov. 17 inside Milpitas City Hall's Council Chambers, 455 E. Calaveras Blvd.

Source: The San Jose Mercury News, Ian Bauer

http://www.mercurynews.com/milpitas/ci_29104436/milpitas-council-review-future-housing-retail-near-great?source=infinite-up

Q&A Manager of homeowner association treats renters unfairly

Question: The manager of our homeowner association does not like renters and goes out of her way to force them to move. She fines and penalizes renters for things they don't even know are violations. She tells renters asking for clarification on bogus charges and fines: "You did it. Get out of here or I'll call security."

Owners who ask management to correct invoices containing alleged renter-violations are told: "Tell your renters to move." Titleholders don't want problems with management, so they go back to their tenants and tell them: "Just pay the fines or they'll be evicted."

Renters don't want to make waves or be evicted, so they pay bogus fines. Management tells renters to go to the board to resolve their problems; the board says "go to management and pay the bill." Now what?

Answer: Ignoring renters' problems or complaints is a monumental mistake. Once a renter brings problems to the attention of management or the board, both are on notice, and the statute of limitations time clock for resolution is ticking away. If the association fails to implement an acceptable remedy, these time limitations could force renters to take legal action.

Aside from being unprofessional, threatening renters with calls to security and avoiding questions cast a cloud over association operations. Tenants who are mistreated, discriminated against or simply ignored may attempt to break their lease, sue their landlord or both.

A manager, management company or board director should not interfere with a landlord's rental business or income generated by rental property by imposing illicit fines or failing to make corrections on titleholder accounts. Such actions may result in the association and all those responsible for such acts being sued for interference with the titleholder's business.

If the association allows rentals, then management and the board need to treat renters the same as any other resident. Any type of discriminatory behavior by the board or one of its agents creates an unnecessary risk of liability against the association. Knowingly creating such liability is a breach of the board's duty of care to the association and its owners.

Titleholders, not their tenants, are responsible for violations and resulting fines. It is the titleholder's responsibility to resolve disputes regarding a tenant's violation; the time involved is part of the cost of doing business as a landlord. The board and the management owe these titleholders a duty of good faith and fair dealing.

Directors must act as responsible fiduciaries for owner assets and any lawful business owner conduct. It is not acceptable for management or directors to treat a rented property differently from an owner-occupied property. It is also not appropriate for a titleholder-landlord to require tenants to assume landlord obligations.

Management and directors must avoid creating liability and being the subject of litigation. They must act reasonably and not single out titleholder-landlords for disparate treatment.

Titleholders who are wronged may seek a claim against the association for damages, including lost profits if a tenant breaks a lease or moves out because of wrongful actions taken by the association.

Director duties include active supervision of managers, holding them accountable for their actions. Failure to do so may result in joint and several liability against all directors.

Source: La Times, Donie Vanizian
http://www.latimes.com/business/technology/la-fi-associations-20151101-story.html

Hispanics & Housing: Demand Over The Next Decade

The Mortgage Bankers’ Association (MBA) recently released a report: ‘Housing Demand: Demographics And The Numbers Behind The Coming Multi-Million Increase In Households’. In this study, the MBA “utilized a comprehensive analysis of data from 1976 to 2014, a period encompassing several market and housing cycles, to provide a projection of much stronger housing demand over the next decade.”

According to the report:

“by 2024, demographic and economic changes will bring what could be one of the largest expansions in the history of the U.S housing market with 13.9 million additional households.”

But, what did they say about the Impact of the Hispanic community?

The Impact of Demographics on Housing Demand

• Over the next decade, Hispanic household growth will increase by 5.7 million households.
• New "minority-owned" households will be more than one-third higher than the number of new "non-Hispanic/White" households.
• The homeownership rate among Hispanics ages 40 and over is greater than the current average rate of 46% for all Americans.
• Millennials will be a key component of growth raising the ranks of households age 18 to 44 by 4.1 million. (21% of Millennials in the U.S. are Hispanic.)

Bottom Line

The Hispanic community will be a major driver of housing over the next decade.

New study shows profound impact of tech industry on Bay Area real estate

To say that the tech sector has an effect on the real estate market here in the Silicon Valley would be a huge understatement, but still a good article though.


The tech industry. Over and over in recent years, this economic sector has been targeted as the cause of dramatic upticks in both home prices and rents in the Bay Area.

But is this a fair accusation? Apparently so, according to a new Zillow study. “[This analysis] highlights the widening wealth gap between tech company employees and other U.S. workers – a gap that is putting increasing pressure on housing markets where tech companies are booming,” said Zillow chief economist Dr. Svenja Gudell.

Facebook, Apple, Google and home ownership

First off, home values: Data show that Google, Facebook and Apple employees live in pricier homes than other Bay Area workers and have faster home value growth as well. In fact, the average Apple worker now lives in a home that is more than five times more valuable than the average U.S. home, according to Zillow.

Using census data, Zillow found the “typical worker at Apple’s Cupertino, Calif., headquarters lives in a home that is worth about $1.14 million, about $241,000 (27 percent) more than the median home in the already-pricey San Jose metro area and $380,000 (50 percent) above the median home value in the San Francisco metro area.”

Apple’s not alone. Workers at Google and Facebook headquarters — in Mountain View and Menlo Park respectively – live in more valuable homes as well. The median home value among Facebook workers is $1.25 million; among Google workers, it’s $1.28 million.

Zillow used data from the U.S. Census Bureau tracking where workers live and work across the Bay Area, then combined that data with Zillow’s Living Database of All Homes to compute a median home value for workers at the Apple, Google, and Facebook campuses in the Silicon Valley. Boiled down, the information shows:

• On average, employees of Google, Facebook and Apple live in homes with a median value of well over $1 million.
• Homes rented or owned by employees of these three tech companies are worth more than surrounding homes and are appreciating more quickly than surrounding homes

The gap, just like the iPhone, is getting bigger: 

The gap between tech employee home values and those of surrounding areas has grown larger. Apple workers’ home values took off after the first iPhone was released in June 2007. Apple’s stock price rose, increasing the wealth of many employees and cementing the company as one of the most successful in the world. Prior to summer 2007, the typical Apple worker lived in a home that was 13 percent more expensive than the typical San Jose home; since summer 2007, that gap has widened  to 20 percent.

As recently as 2010, homes in the neighborhoods where Apple workers lived were worth only three times the national median. Now they are worth five times that median.

Apple’s gains are the most dramatic, likely thanks to the iPhone. In the same period, the typical Google employee went from living in a home that was 37 percent more expensive than the average San Jose home in 2007 to living in one that is now 39 percent more expensive. For Facebook employees, the gap went from 31 percent to 33 percent.

San Francisco metro highlights

Other interesting (and possibly troubling) local findings point to recently inflated housing prices in all areas in the San Francisco metro, including rent:

• Condos have appreciated 13.5 percent over the past year
• Single-family homes have appreciated 12 percent over the past year
• Rent has gone up 13.3 percent over the past year

The takeway

Probably the only thing we didn’t already know here is just how much and how deeply the tech boom has impacted local real estate. If you’re qualified to work for these companies, you’re likely qualified to buy and/or rent homes nearby. Other people, however, may be thoroughly priced out.

Anna theOnThe Block blog, Marie Erwert
http://blog.sfgate.com/ontheblock/2015/11/02/new-study-shows-profound-impact-of-tech-industry-on-bay-area-real-estate/

The Perils of Taking Possession Before Closing

Timing your move out of one house and into another is a delicate feat that might seem as tricky as determining the next GOP presidential nominee. Trickier, even! In addition to the usual stress of packing and arranging to have your things transported (we’re talking about housing again), you also need to coordinate with the current owners of your new home and the incoming residents of your current home. And since no one wants to pay another month’s rent or mortgage, it’s awfully tempting to move into your new place even if the closing isn’t quite final yet.

But taking possession of a home before your name is on the title could open a Pandora’s box of problems—for buyers and sellers.

Why buyers should move in with caution

Buyers who move into a house before closing lose some of their bargaining power, says Daniel C. Price, president and CEO of OneTitle National Guaranty Co. in New York City.

“Any unresolved title issues could be problematic for buyers moving in before closing,” he says. “Buyers might lose the leverage necessary to clear issues like judgments, liens, and even old mortgages, since they will have a much harder time walking away once their possessions are in the house if these title issues are not resolved.”

Buyers also lose the ability to voice concern or negotiate over any last-minute issues with a home’s condition.

“A final walk-through prior to moving in should always be conducted,” says Price.

The question of who pays for what also comes into play. If you move in early, the seller might expect you to fork over cash for utilities used before the closing. Even if that doesn’t amount to much, the squabble could delay closing.

Another concern: coverage in the event of theft, fire, or other calamities.

A home insurance policy on a new home doesn’t take effect until closing, and a property is legally in the possession of the buyer, says Ken Davidson, principal at Eagle Independent Insurance Agency in Dallas.

So any damage that happens to the structure is covered by the seller’s home insurance, he says—but that doesn’t include damage to, or loss of, your personal property.

However, such damage or loss could be covered if you have a homeowners insurance policy on your current home that has “off premises” property coverage. The coverage limit, however, is usually 10% of the total personal property limit.

Why sellers face risk, too

Price says sellers who hand over the keys before closing could also be in trouble if the deal falls through.

“If something happens and a buyer backs out last minute, sellers could face the costly and lengthy process of eviction proceedings. Not only is that a hassle, it will delay the ability to relist the home.”

Sellers also run the risk of having their home insurance claim history dented.

If the buyer’s movers damage the house, or if their buddy slips down the stairs while helping out, you as the seller are liable. Your insurance covers this kind of damage and injury (to the extent dictated by your policy), but the fact that you’ve had to file a claim could jack up the premium for the policy on your new home.

Davidson recommends talking to an insurance agent and the real estate agent and attorney, if applicable, handling the sale before shaking hands on any preclosing deals.

“One five-minute phone call could prevent a huge headache.”

Source: Realtor.com, Gina Roberts-Grey
http://www.realtor.com/advice/buy/risks-of-moving-in-before-closing/

9 hidden costs that come with buying a home

Buying a home isn't just a 20% down payment and a monthly check for the mortgage.

There are a mountain of hidden costs — from closing fees to taxes — that can add up to more than $9,000 each year, real estate marketplace Zillow estimates — and that number will only jump if you live in a major US city.

Business Insider spoke to Zillow's chief economist, Svenja Gudell, about the three big unavoidable costs — homeowners' insurance, property taxes, and utilities — and other common costs that are often overlooked.

If you're considering buying a home, be mindful of these expenses when establishing your budget, Gudell says:

Source: Business Insider, Dylan Roach and Kathleen Elkins

http://www.businessinsider.com/hidden-costs-of-buying-a-home-2015-10 

5 Tips for Renting in a Pricey Market

As you know I am a Realtor and I will of course encourage people to BUY a home instead of renting. I won't go into the benefits of owning here in this blog post, but I do know that for some, renting is the best or only option for them. If you're one of these people, you may find the blow post from the Zillow blog helpful. It gives some helpful tips for renting in hot rental markets like San Francisco and the Silicon Valley where I work.


Recent data shows that U.S. renters can now expect to pay more than the suggested 30 percent of their income on their monthly housing payment. With vacancies decreasing and the growing popularity of renting in booming tech cities such as San Francisco, Seattle and Denver, finding a rental can be particularly hard hitting on the wallet.

Whether you’re dead set on living in your dream city or just landed a job in an area with sky-high rents, here are some tips for finding a home in a pricey market:

Be prepared to jump quickly

If you’re renting in an expensive market, that usually means a low number of vacancies. Fewer vacancies creates more competition for the units that are available. When you see something you like, be prepared to call or email the property management or landlord immediately. You should also keep your application paperwork — recent paystubs or a letter confirming that you’ve accepted employment, bank statements, contact info for current and past landlords — on hand to ensure that you’re ready to act quickly when you find a place you love.

Expect to compromise

When you picture your dream apartment, you might envision hardwood floors, a fireplace, two spacious bedrooms and of course, the ability to bring Fido with you so you can explore your new city together. While this type of place does exist, it may come at a pretty penny (or if it does exist in your price range, it’s gone about two hours after the ad is posted).

Don’t get discouraged. Know what’s most important to you in your home and then stick with that. Is location more important than aesthetics? Or can you not live without a charming vintage place to call your own? If you answered yes to the second question, you might have to prepare yourself for a long commute from the suburbs. Also, having a pet may automatically limit your options, as landlords can be picky in a tight market.

Consider sharing the burden

While you may have been able to live alone in a less expensive city, that may not be the case in an expensive market. Finding a roommate to share costs will lessen the burden. If you are not comfortable with house sharing, then be prepared to live smaller. Be creative when it comes to storage and buy multipurpose furniture.

Anticipate additional costs

Landlords in expensive rental markets typically expect a deposit plus the first month’s rent before you even move. Moving to a large city like New York often means paying a broker’s fee, which you pay at the lease signing for the broker’s help with finding an apartment. While apartment hunting in a less expensive market may just require a quick online search, navigating the New York City rental market can often be overwhelming and more expensive if you go it on your own. According to StreetEasy, broker’s fees are typically around 12-15 percent of the annual rent, which can get pretty expensive when it comes to Manhattan or Brooklyn rent prices.

Know the fair housing laws

Renting in an expensive market can unfortunately lend itself to scams and less-than-law-abiding landlords. While this isn’t the case most of the time, be sure to know your rights as a renter. For example, if you have a disability that requires a service animal, then a building’s no-pet policy doesn’t apply to you. Also, unless a building is specifically set aside for the use of senior citizens, a landlord cannot discriminate against anyone with children. Check your specific state laws on the rules for application fees and security deposits to protect yourself.

Source: Zillow Blog, Jamie Birdwell-Branson
http://www.zillow.com/blog/renting-in-a-pricey-market-186244/


Related: 
'Million Dollar Shack' documentary looks at Bay Area's insane housing market
8 U.S. housing markets where the rent is just too high

INFOGRAPHIC - Luxury Home Sales

Buying A Home Moves Beyond Just “Location, Location, Location”

FIRST-TIME AND MOVE-UP BUYERS: 87% OF THE MARKET

The U.S. housing market is strong.

According to the National Association of REALTORS®, home resales totaled 5.50 million in September on a seasonally-adjusted, annualized basis -- a 9% increase as compared to one year ago.

Plus, as a signal of the housing market's staying power, home sales are no longer fueled by speculative real estate investors. Everyday consumers comprise the majority of this year's action.

First-time buyers and move-up buyers account for 87% of today's home sales.

For most of these buyers, purchasing a home will be the largest asset purchase they make in their life; and it can be tricky, confusing, and frustrating for those who fail to prepare.

In addition to mortgage concerns, such as "Do I have to put 20% down on a home?" and "Which is the best mortgage for me?", buyers should approach the home-selection process with the same level of detail.

There are a number of red flags to consider when buying a home, for example, and a number of signals that all's clear to move ahead.

Recognizing the difference between the two can be the difference between getting a great deal on a home or having regrets about the purchase you've just made.

WILL YOUR HOME SERVE YOU TODAY, AND TOMORROW?

In its most recent profile of home buyers and sellers, the National Association of REALTORS® reports that the typical home buyer lives in their home for a period of approximately 10 years.

Therefore, as a home buyer, you should consider your purchase of a home within the context of "a decade".

It's terrific to be in the school district you want, for example; or, to be near amenities which are important to your household, but it's important to look at your potential purchase and the health of its systems.

Be alert to potential problems and you'll increase the chance that your new home will treat you well for the time you expect to reside in it.

1. What is the condition of the roof?

There are few "replacement costs" higher to a homeowner than the replacement cost of a roof. Depending on the size of your home, replacing a roof can cost tens of thousands of dollars. Sometimes, these costs can be covered by hazard insurance.

Many times, they are not.

When you in the home search process, then, ask current homeowners about the age of their home's roof. Most roofs last 20 years with little maintenance. Some roofs will last longer.

If the current homeowner does not know the age of their home's roof, be on the lookout for missing or curled shingles, which can be a sign that the roof is aging and reaching the end of its useful life.

If you’re unable to uncover the age of a roof and cannot determine its condition via eyesight, consider asking the seller for a formal roof inspection be completed prior to purchase.

2. What is the condition of the HVAC system?

Another expensive item to replace in a home is the HVAC system.

HVAC stands for Heating, Ventilation, and Air Condition. HVAC systems typically last 10-12 years, but with regular, seasonal maintenance, they can last up to 15 years or more.

Therefore, when looking at homes, it's a good idea to ask the current homeowner when their HVAC system was purchased, and how regularly the system gets serviced.

If a home's HVAC system looks "old", similar to with the roof, you can request that an inspection be performed prior to closing. This will help ensure, as a new homeowner, the HVAC system you inherit is in good, safe, and working order.

3. What is the condition of neighboring homes?

"Location, Location, Location" -- it's a common refrain among real estate professionals. And, for good reason.

When you’re buying a home, the location of the home can affect its long-term value and utility than its number of bedrooms or total square footage, as examples.

Some of the information you should seek to includes:

What is the plan for future development near this home?
How do the local schools perform versus the state, and nationally?
How close is this home to public services including fire and police?
You should also consider the home's real estate tax bill, which affects your monthly mortgage payment.

Tax costs are often listed on a home's listing sheet and you can plug them into a mortgage calculator to see the home's true cost.

4. What is the home's efficiency rating?

The cost of heating a home and cooling it is often overlooked as part of the home purchase process. A home with leaky windows or poor insulation, though, can suck thousands of dollars from your annual budget  -- the cost of several months of groceries.

A home with window which fail to seal tightly or which are generally inefficient will yield larger heating and cooling costs as compared to a home with new, efficient windows. Similarly, a poorly insulated home will lose heat during the winter months, adding to energy costs which temperatures are low.

Sometimes, small changes can yield large savings in terms of energy consumption. For example, changing light bulbs and replacing appliances can reduce a home's energy footprint. Other times, large changes are needed -- and this may include replacing windows and roofing.

Ask a home's current owner about its monthly utility costs, or seek more information from your local utility company. Small changes can sometimes be handled prior to closing by the seller.

For larger items, consider using the FHA 203k loan, which is especially suitable for energy-efficiency improvements on a home.

Source: The Mortgage Reports Dan Green Blog, Kyle Hiscock
http://themortgagereports.com/18408/buying-home-location-mortgage-structure

7 Simple Ways to Increase the Value of Your Home

Unless you have a luxury shoe habit that rivals Carrie Bradshaw’s (who needs 400K in shoes?), your home is probably the most valuable thing you own. But just because it’s already worth a lot doesn’t mean you can’t bump up the value a few more notches. Whether you’re planning to sell in the near future – or you just want to grow your investment – these seven easy adjustments will make your home worth more money!

1. Hire the Right Person for the Job
When you're hiring a contractor to care for your home, you're basically putting your biggest asset in the hands of someone else. Make sure it's the right contractor by using Angie's List. By taking the time to find a reputable contractor, you'll ensure that your home is up to snuff, which will save you money in the long run and increase the value of your home.

2. Inspect Early and Often
When prospective buyers get close to pulling the trigger, one of the first things they’ll do is have your home professionally inspected. If any nasty surprises are uncovered – such as mold or water damage – things are going to change. At best, you’ll have to lower your asking price. There’s also the possibility that the buyer will take their business elsewhere and simply disappear in a puff of smoke. Avoid this problem by inspecting your house regularly! A few important areas to check are your basement, attic and bathrooms.

3. Add Extra Seating
This one is so simple that a lot of people don’t even think of it! By adding some chairs and a table to an open part of your house, you instantly create a second dining or seating area. The furniture helps show the potential of the space, which can translate to a higher perceived value to the buyer. This is especially helpful for outdoor areas, such as your deck or patio.

4. Paint Your Cabinets
Replacing your entire kitchen-cabinet setup can be expensive and time-consuming, but a fresh coat of paint can accomplish almost the same thing! Not only will this hide any scratches your cabinets may have picked up over time, it will give your kitchen a new look, too. For more places around the house that can benefit from a coat of paint, read: Paint: It’s Not Just for Walls.

5. Use Potted Plants
A beautiful, lush garden on either side of the front door is great, but it’s not always feasible. If you don’t have the time to let your green thumb thrive, try placing little groups of potted plants on your front porch, instead. Your curb appeal will get an instant upgrade, but you won’t have to hire a part-time gardener to handle the upkeep.

6. When In Doubt, Add Storage
This is less about providing a ton of storage for potential buyers (although that’s important) and more about establishing an organized atmosphere in your home. You don’t need to fill every open spot in your house with cabinets or wardrobes, but there are probably a few simple additions you can make that will tie a room together. Need some ideas? Start in the kitchen!

7. Make It Shine
When you want to make a great impression at a party, you spend some extra time on your makeup, right? The same principle applies to your house. Except instead of perfecting your eyeliner, you can shine some fixtures! Anything that’s stainless steel (like your sinks and faucets) is a perfect place to start, because it’s easy to really make them sparkle.

Source: Brightnest, Brian
https://brightnest.com/posts/7-simple-ways-to-increase-the-value-of-your-home