Even Inexpensive Homes Too Pricey for Many Workers

Great article from Zillow describing exactly the problem I see with some potential buyers. Most of my clients work in high tech here in the Silicon Valley, but some work for jobs that are not so sexy and not so glamorous. Some work for lower paying jobs. It are those people who are just as hard working as anyone else, but just don't have the income to buy in this valley, especially seeing how the median sales prices keeps going up for the moment. 

The market will go down, I am sure of that. When it does some of those buyers who were priced out of the market will be in a position of buy. The only question is, WHEN will the market go down?

Even Inexpensive Homes Too Pricey for Many Workers
The incomes of low-paid workers are not keeping pace with rising home values.

With rents eating up an ever greater share of people’s incomes, more renters are looking to buy homes. But that avenue isn’t possible for many lower-income workers.

Their incomes are not keeping pace with rising home values. Since 2000, incomes among the lowest third of U.S. workers have grown 15 percent, while home values have gained 41 percent.

Although renters spend an average of 30 percent of their monthly incomes on rent, and home buyers pay an average of 15 percent for mortgage payments, the situation varies considerably by market — and by how much you make.

One extreme case is in Los Angeles, where someone in the bottom third of earners would have to spend an average of 85 percent of her monthly income on a low-priced home. By contrast, middle-income earners would pay 41 percent for mid-priced homes, and the top third of earners would pay 30 percent for the most expensive homes.

Los Angeles is one of four markets — the others are Santa Barbara, Salinas and San Jose, all in California — where the top third of earners would pay 30 percent or more of their monthly incomes for mortgages on expensive homes. Mid-range earners have to pay more than 30 percent of their incomes for mid-valued homes in 11 markets.

But the lowest third of earners have to pay more than 30 percent of their monthly incomes on low-priced homes in 77 markets — effectively pricing many of them out.

Source: Zillow Blog, Melissa Allison
http://www.zillow.com/blog/housing-too-pricey-for-many-workers-175038/

6 Things Everyone Should Do When Moving Into a New House

Good advice from HouseLogic website.

Moving into your first home is exciting! But it also means you’ve got work to do.

When I bought my first house, my timing couldn’t have been better: The house closing was two weeks before the lease was up on my apartment. That meant I could take my time packing and moving, and I could get to know the new place before moving in.

I recruited family and friends to help me move (in exchange for a beer-and-pizza picnic on the floor) and, as a bonus, I got to pick their brains about what first-time homeowners should know.

Their help was one of the best housewarming presents I could have gotten. And thanks to their expertise and a little Googling, here’s what I learned about what to do before moving in.

1. Change the locks. You really don’t know who else has keys to your home, so change the locks. That ensures you’re the only person who has access. Install new deadbolts yourself for as little as $10 per lock, or call a locksmith — if you supply the new locks, they typically charge about $20-$30 per lock for labor.

2. Check for plumbing leaks. Your home inspector should do this for you before closing, but it never hurts to double-check. I didn’t have any leaks to fix, but when checking my kitchen sink, I did discover the sink sprayer was broken. I replaced it for under $20.

Keep an eye out for dripping faucets and running toilets, and check your water heater for signs of a leak.

Here’s a neat trick: Check your water meter at the beginning and end of a two-hour window in which no water is being used in your house. If the reading is different, you have a leak.

3. Steam clean carpets. Do this before you move your furniture in, and your new home life will be off to a fresh start. You can pay a professional carpet cleaning service — you’ll pay about $50 per room; most services require a minimum of about $100 before they’ll come out — or you can rent a steam cleaner for about $30 per day and do the work yourself. I was able to save some money by borrowing a steam cleaner from a friend.

4. Wipe out your cabinets. Another no-brainer before you move in your dishes and bathroom supplies. Make sure to wipe inside and out, preferably with a non-toxic cleaner, and replace contact paper if necessary.

When I cleaned my kitchen cabinets, I found an unpleasant surprise: Mouse poop. Which leads me to my next tip …

5. Give critters the heave-ho. That includes mice, rats, bats, termites, roaches, and any other uninvited guests. There are any number of DIY ways to get rid of pests, but if you need to bring out the big guns, an initial visit from a pest removal service will run you $100-$300, followed by monthly or quarterly visits at about $50 each time.

For my mousy enemies, I strategically placed poison packets around the kitchen, and I haven’t found any carcasses or any more poop, so the droppings I found must have been old. I might owe a debt of gratitude to the snake that lives under my back deck, but I prefer not to think about him.

6. Introduce yourself to your circuit breaker box and main water valve. My first experience with electrical wiring was replacing a broken light fixture in a bathroom. After locating the breaker box, which is in my garage, I turned off the power to that bathroom so I wouldn’t electrocute myself.

It’s a good idea to figure out which fuses control what parts of your house and label them accordingly. This will take two people: One to stand in the room where the power is supposed to go off, the other to trip the fuses and yell, “Did that work? How about now?”

You’ll want to know how to turn off your main water valve if you have a plumbing emergency, if a hurricane or tornado is headed your way, or if you’re going out of town. Just locate the valve — it could be inside or outside your house — and turn the knob until it’s off. Test it by turning on any faucet in the house; no water should come out.




Source: HouseLogic, Courtney Craig
http://www.houselogic.com/blog/maintenance-repair/things-to-do-when-moving-into-a-new-house/

Top Reasons People Want to Move

Top Reasons People Want to Move



DAILY REAL ESTATE NEWS | WEDNESDAY, FEBRUARY 25, 2015

One in three U.S. households say they plan to move in the next five years, according to a survey conducted by the Demand Institute of 10,000 households' current living situations. And it's the location of the home that will be driving most of those moving decisions — more so than the physical home itself.

Seventy-five percent of the households surveyed cited one or more location-related reasons for why they were moving. The top reasons were the desire for a safer neighborhood (30%); being closer to family (27%); a change of climate (26%); being closer to work (25%), and moving for a new job (23%).

More than half — 59 percent — of households say they don't plan to go too far, with most indicating a move within 30 miles of their current home.

For those seeking a location for climate reasons, the Western and Southern U.S. continue to be the top destinations.

The following were the top location characteristics identified as “very important” by those surveyed:

• Amenities/services in walking distance (39%)
• Good school district (34%)
• Close to work (32%)
• Diverse neighborhood (26%)
• Near public transit (25%)

Many movers say they're eyeing more walkable communities. Indeed, walkable communities have been reporting stronger home-price growth compared to less walkable communities, according to the Demand Institute's report. Those who reside in walkable communities also are more likely to report that their quality of life has improved in the past few years due to their change in residence.

As such, Americans are desiring more amenities near them. Of those surveyed, the following places were identified as what home buyers would most like to have near their future home:

• Grocery stores (63% say short drive OK; 22% want it within walking distance)
• Restaurants and cafes (56% short drive; 20% walking distance)
• Parks and green space (40% short drive; 35% walking distance)
• Healthcare services (62% short drive; 10% walking distance)
• Retail (57% short drive; 12% walking distance)

Source: Demand Institute


Top Reasons People Want to Move

4 Simple Strategies to Shave Years Off Your Mortgage

Great article from Zillow.

Just because you’ve got a 30-year loan doesn’t mean you have to spend 30 years paying it off. These tips can help you reach the finish line up to 10 years early.
4 Simple Strategies to Shave Years Off Your Mortgage

January Pending Home Sales Hit Highest Level In 18 Months, Says NAR

January Pending Home Sales Hit Highest Level In 18 Months, Says NAR

The number of contracts signed to buy previously-owned homes in January marked the highest level in 18 months, the National Association of Realtors said Friday.

NAR’s Pending Home Sales Index, which tracks contract signings (as opposed to closed sales), rose 1.7% in January to 104.2, from an upwardly revised December level of 102.5. (An index of 100 represents an average level of contract activity.) That level was 8.4% higher than in January 2014, when the index stood at 96.1, and marks the fifth straight month of year-over-year gains. December’s figures beat expectations of economists surveyed by Bloomberg ahead of the release.

“Contract activity is convincingly up compared to a year ago despite comparable inventory levels,” said Lawrence Yun, NAR’s chief economist. “The difference this year is the positive factors supporting stronger sales, such as slightly improving credit conditions, more jobs and slower price growth.”

Yun pointed out that January buyers were able to buy despite a tight supply of homes for sale, a data point he says underscores pent-up demand. Unsold inventory in January stood at a 4.7-month supply at the current sales pace, up from the 4.4-month supply for December but well short of the 6-month figure considered to a marker of a healthy housing market. Inventory levels are about the same as they were last January, but the sales level was higher. Data suggests that the buyers are regular people rather than investors, since all-cash sales and investor purchases are both down compared to a year ago. January’s very low interest rates may have also pushed some buyers to sign contracts.


January’s numbers continue a change in the market that began in September. Before that month, contract signings had been down on a year-over-year basis since September 2013, as quickly escalating prices slowed the pace at which Americans were purchasing homes. As price gains slowed down and investors exited the market, contract-signings have crept up.

“All indications point to modest sales gains as we head into the spring buying season,” says Yun. “However, the pace will greatly depend on how much upward pressure the impact of low inventory will have on home prices. Appreciation anywhere near double-digits isn’t healthy or sustainable in the current economic environment.”

Compared to housing reports released in the past weeks, Friday’s news is more optimistic about the housing market overall. Construction starts on new homes fell 2% in January, according to Commerce. A separate report Monday showed sales of previously-owned homes falling 4.9% in January. But home sales price growth was up just slightly in December, after 11 straight months of year-over-year slowdowns. Further, today’s report is considered a more timely measure of the market than the former reports, because it is based on contracts signed rather than closed transactions. Closings generally come one to two months after a contract is signed.

The national median sales price for existing, or previously-owned, homes for 2014 rose 5.7% to $208,100. That level of price appreciation is much steadier than the rapid, 11.5% gain for 2013. In 2015, NAR expects the national median existing-home prices to rise between about 5%.

Total  existing-home sales for 2015 are forecast to be around 5.26 million, or about 6.4% above 2014. Last year sales finished 2.9% below 2013 levels (5.1 million) at 4.94 million.

All regions increased activity in January with the exception of the Midwest. Pending contracts for existing homes rose from December to January in the Northeast (by 0.1%), South (by 3.2%), West (by 2.2%), while falling in the Midwest (by 0.7%).  All regions of the United States increased contract-signings in January on a year-over-year basis: the Northeast by 6.9%, South by 9.7%, West by 11.4%, Midwest by 4.2%

Source: Forbes, Erin Carlyle
http://www.forbes.com/sites/erincarlyle/2015/02/27/january-pending-home-sales-hit-highest-level-in-18-months/

How Zillow Is Overestimating the Value of Your Home

This article comes as no surprise to any of us in the real estate business, but it may come as a surprise to some first time home buyers and maybe some of you reading this blog post. There have been a number of times throughout my real estate career where a buyer or seller client of mine used inaccurate home value information from Zillow to justify their offer price, if they're a buyer, or listing price if they are a seller. An appraisal is the most accurate in determine price, and the second most accurate, in my opinion, is a Comparable Market Analysis (CMA) that we Realtors routinely prepare for clients. 

According to the article, Zillow's "Zestimates" have a 8% median error rate across the country. So for a $500K homes, the price can be off by as much as $40K! Zillow CEO Spencer Rascoff even admits that his companies website is not supposed to be final say on a home's value, but rather a starting point.

How Zillow Is Overestimating the Value of Your Home