Where Does the Housing Recovery Stand Now?

house on coins isolated on...
ShutterstockNational home values are forecast to return to their prior peaks in first quarter of 2017, at the earliest.

By Cory Hopkins

Roughly three years after the housing recovery began, how far do we still have to go until homes in the majority of local markets have regained all the value lost during the recession? In many areas, the answer is years and years, at least.

The housing recovery is still very much in its middle stages. Nationally, home values remain 11.3 percent below their 2007 peak. Looking ahead, U.S. home values are expected to rise another 4.2 percent through the second quarter of 2015, according to the Zillow Home Value Forecast. It will take

“In dozens of markets, homeowners who bought at the peak of the market in 2006 or 2007 will have to wait until 2017 or later to get back to the breakeven point on their homes, a lost decade in which they will have built up no home equity.”

2.7 years for national home values to re-achieve their pre-recession levels, assuming a steady rate of appreciation at the forecasted level.

In other words, national home values won’t get back to their prior peaks until at least the first quarter of 2017, almost a decade after the beginning of the housing recession. And full recovery could take even longer, as the pace of home value appreciation is expected to slow in coming months and years.

Locally, in 50 of the nation’s 100 largest metro markets, it will take three years or more for home values to reach prior peaks. Notable large metros where full recovery in home values will take longer than a decade include Minneapolis (14.5 years), Kansas City (12.5 years) and Chicago (11.7 years).

“In dozens of markets, homeowners who bought at the peak of the market in 2006 or 2007 will have to wait until 2017 or later to get back to the breakeven point on their homes, a lost decade in which they will have built up no home equity. This is reflected in stubbornly high negative equity and effective negative equity rates, with more than a third of Americans with a mortgage lacking enough equity to realistically list their home for sale and buy another,” said Zillow Chief Economist Dr. Stan Humphries. “But there is a silver lining as we navigate these tricky middle innings of the recovery. Because home values remain so far below their peak levels in so many areas, it is still possible for buyers to find bargains. This will be critical to maintaining home affordability over the coming years, especially as mortgage interest rates rise.”

U.S. home values climbed 6.3 percent year-over-year in the second quarter to a Zillow Home Value Index of $174,200, the slowest annual pace of appreciation recorded so far this year and a sign that the market is returning to more normal levels. In a more normal market, home values appreciate at roughly 3 percent per year. Home values nationwide were up 1 percent compared with the first quarter and 0.5 percent from May.

Nationally, rents rose 2.5 percent year-over-year in the second quarter, to a Zillow Rent Index of $1,310 but fell 0.3 percent compared with the first quarter. The quarterly decline was the largest recorded since Zillow first began publishing the Zillow Rent Index in late 2010. U.S. rents were flat month-over-month.

For a deeper analysis and to see what home values and rents are doing in your area, visit Zillow Research.

Did you like this? Share it:
Posted by on

How to Know What You Really Want in a Home

hand drawing dream home on blue ...
ShutterstockStarting out with a fairly concrete, realistic “wish” list for the home you want to buy will inform your search.

By Brendon DiSimone

From the moment a first-time homebuyer begins searching until the final closing papers are signed could be as short as three months or as long as three years. Along the way, the journey is filled with twists, turns and probably some bumps in the road. So how do you navigate the journey? Once you get “in the game,” you should start setting the top criteria for your home early on. Establishing your most important factors upfront will help you stay on track as you move through the home buying process. It also will help you know when to compromise and when to stick to your original list.

As the homebuying process evolves, your criteria may change as well. Nobody ever gets everything on their list. In fact, many homebuyers, around the closing table, have a chuckle as they compare their

The important thing is to prioritize what you really must have vs. what you want to have.

original list of criteria to what they eventually got.

Here are the three phases of the home buying journey where your criteria will be established.

1. Dreaming: Leveraging the Internet and online listings, homebuyers in this next generation of real estate have the opportunity to consider all options, get a feel for what they want, see what’s out there and start to understand their must-haves, nice-to-haves and the bonus stuff.

As the journey evolves, you should begin to nail down requirements and prioritize your wants and needs. The search often changes, and part of the process is to learn what works and what doesn’t. But starting out with a fairly concrete, realistic “wish” list will inform your search.

2. Getting in the game: Any serious homebuyer working with a great local agent, and with a bank pre-approval in hand, will take the home search up a notch. At this point, it’s important to determine the two biggest pieces of the puzzle: price and location. Without these criteria, you’d simply be shooting from the hip.

Price trumps all criteria. What you can afford generally dictates where you’ll live as well as the type of home you’ll purchase. Location is one of the three magic words in real estate, and it comes a close second in the home search. The thing about location is that it can’t ever be taken away from you. But a home can be altered to adapt to a location. Many homebuyers, keen on a certain neighborhood or school district, will consider buying a property that needs work or one that’s not ideal for their situation simply to be in the right location.

3. Compromising: After determining price and location, a homebuyer needs to consider things such as number of bedrooms, bathrooms and the size of the home. While there are times when you’ll choose size over location, generally the location informs the size.

After that, considerations such as a finished basement, large lot, pool or open floor plan, while important, may get trumped because of location and price.

The important thing is to prioritize what you really must have vs. what you want to have. Also, try to think ahead. Are today’s top priorities likely to remain your top priorities a few years from now? Or would it make more sense to get a three-bedroom house, for instance, instead of a two-bedroom home, as you may have children later or might need a home office down the road.

It’s not easy to set your criteria for buying a home, given how important the purchase will be. But if you don’t, you’ll be all over the map in your home search, wasting valuable time and effort. And if you’re busy chasing properties that don’t really meet your needs, you may overlook something that does.

Brendon DeSimone is the author of Next Generation Real Estate: New Rules for Smarter Home Buying & Faster Selling, an insider’s guide for navigating and better understanding the complex and ever-evolving world of buying and selling a home. DeSimone is the founder and principal of DeSimone & Co, an independent NYC real estate brokerage providing individualized services and a fresh, hands-on approach. Bringing more than a decade of residential real estate experience, DeSimone is a recognized national real estate expert and has appeared on top media outlets including CNBC, Good Morning America, HGTV, FOX News, Bloomberg and FOX Business. Consumers often call on Brendon for advice and to help them find a real estate agent. You can follow him on Twitter or Google Plus.

Note: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinion or position of Zillow or AOL.

Did you like this? Share it:
Posted by on

June Existing-Home Sales Reach Recent Highs

existing_home_soldDuring the month of June, existing-home sales reached an annual pace of 5 million sales for the first time since October 2013, according to data recently released by the National Association of REALTORS®. In addition to the heightened existing-home sales, rising inventory continued to move the housing supply forward, signaling a strengthened and more balanced market.

Lawrence Yun, NAR chief economist, says housing fundamentals are moving in the right direction. “Inventories are at their highest level in over a year and price gains have slowed to much more welcoming levels in many parts of the country. This bodes well for rising home sales in the upcoming months as consumers are provided with more choices,” he says. “On the contrary, new home construction needs to rise by at least 50 percent for a complete return to a balanced market because supply shortages—particularly in the West—are still putting upward pressure on prices.”

Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, climbed 2.6 percent to a seasonally adjusted annual rate of 5.04 million in June from an upwardly-revised 4.91 million in May. Sales are at the highest pace since October 2013 (5.13 million), but remain 2.3 percent below the 5.16 million-unit level a year ago.

Yun also noted that stagnant wage growth is holding back what should be a stronger pace of sales. “Hiring has been a bright spot in the economy this year, adding an average of 230,000 jobs each month,” he says. “However, the lack of wage increases is leaving a large pool of potential homebuyers on the sidelines who otherwise would be taking advantage of low interest rates. Income growth below price appreciation will hurt affordability.”

Total housing inventory at the end of June rose 2.2 percent to 2.30 million existing homes available for sale, which represents a 5.5-month supply at the current sales pace, unchanged from May. Unsold inventory is 6.5 percent higher than a year ago, when there were 2.16 million existing homes available for sale.

The median existing-home price for all housing types in June was $223,300, which is 4.3 percent above June 2013. This marks the 28th consecutive month of year-over-year price gains.

Distressed homes—foreclosures and short sales—accounted for 11 percent of June sales, down from 15 percent in June 2013. Eight percent of June sales were foreclosures and 3 percent were short sales. Foreclosures sold for an average discount of 20 percent below market value in June, while short sales were discounted 11 percent.

The percent share of first-time buyers continues to underperform historically, rising slightly to 28 percent in June (27 percent in May), but remain at an overall average of 28 percent over the past year.

NAR President Steve Brown says REALTORS® are reporting that some prospective buyers who have above average credit scores but low down payments are deterred from homeownership by the high cost of FHA mortgage insurance. “Access to affordable credit continues to hamper young, prospective first-time buyers,” added Brown. “NAR recommends that FHA reduce high annual mortgage insurance premiums for all qualified homebuyers and eliminate the insurance requirement for the life of the loan. FHA’s HAWK program is a good start, but it should offer further reductions for participating home buyers.”

Did you like this? Share it:
Posted by on

How to Lose a Bidding War and Still Get the House

many hands reaching out for key ...
ShutterstockSellers love backup offers because it puts pressure on the original accepted offer to close the deal quickly.

By Michael Corbett

Over the past two years, home prices have seen double-digit percentage price increases in some cities, and more modest percentage increases in others. But overall, there are more buyers vying for fewer homes in many markets across America. As that happens, it is inevitable that you are going to make a few offers on a few homes that won’t win the deal — but don’t dismay. Now, you may be able to turn that next rejection into your dream home! Here are eight reasons why you may be able to change that “Sorry, you didn’t get the house” to a “welcome home!

A Backup Offer Is a Secret Weapon – So, you lost the house to someone else, and you may never know why. Maybe they offered more money, or their terms were slightly better than yours. However, you can ask the seller to accept your offer as a backup offer, even if it was slightly less than the accepted offer. It costs you nothing! You don’t have to put out any money, yet you are in line to get the property if the current buyer falls out.

Sellers Love the Heat of Backup Offers — Sellers love backup offers because it puts pressure on the original accepted offer to close the deal quickly, knowing that there is another buyer standing in the wings, hoping to take center stage.

It’s All So Close, They Can Taste It — Once a seller has a deal on the table and it is progress, they are already psychologically starting to move out. They are picturing the closing day, handing over the keys and seeing the moving trucks arrive. If something goes wrong, and the deal abruptly comes to a screeching halt, the seller is now in a frustrating position and much more willing to move forward with a backup offer that is already in place, even if it is a little less than the first offer, just to keep that momentum going.

Chances Increase After the Inspection — I have won big in backup situations where there has already been an inspection and the house falls out because there are problems that the buyer doesn’t want to deal with, can’t handle, or the seller won’t credit or fix. But, in reality, the good news for you is those issues won’t go away. The buyer may realize he can’t pay so hardball, and may now be more willing to work something out with you, rather than lose the deal a second time.

We’re in an Era of Tougher Loan Qualifications — As loan qualifications become tighter and more scrutinized, more homebuyers are finding they can’t get their loan approved, and they may have to back out of the deal. In this situation, you have the advantage of jumping in to ‘save the day.’

Set a 30-Day Time Limit — Make your backup offer expire after 30 days. The longer it takes to complete the current transaction, the greater the chance the two parties are struggling to work through their differences. A time limit will force the hand of your competition, which may make them unable to close the deal.

Get First Right of Refusal – Ask for this clause in your backup offer. You’re not bound to take the property, but once they’ve accepted your backup offer, they are bound to ask you first.

Get the Terms of the Backup in Writing — Lock those sellers into you. Once the seller agrees to accept your offer as backup, make sure to get a fully executed agreement, signed by both of you, that clearly outlines price and terms. Make sure that they are obligated to sell to you within a certain period of time at the agreed-upon terms if the property becomes available.

Extra Bonus for the Backup Buyer: Legally, the sellers have to disclose any problems the first-position buyers uncovered, even ones that made them bolt! As a result, you will know the property’s recently uncovered flaws ahead of time. It saves you time and lets you know about some of the red flags, even before you start to spend the time and money on your own inspections.

Michael Corbett is Trulia’s real estate and lifestyle expert. He hosts NBC’s EXTRA’s “Mansions and Millionaires.” In additional to his regular segments on ABC’s The View and Fox News, he is a national best selling author with three critically acclaimed real estate books: Find It, Fix It, FLIP IT!; Ready, Set, SOLD! and Before You BUY! You can get more information on his books here, follow him on Twitter@1MichaelCorbett and like him on Facebook.

Did you like this? Share it:
Posted by on

Property Taxes: Why It’s Not Just About How Much You Pay

property tax notice
ShutterstockA new study looks at how much value U.S. residents get for the amount of property taxes they pay.

By AJ Smith

Property taxes are an additional expense homeowners must factor into their budgets. But the idea is in return they get certain services — like public safety and public schools. A recent study released by financial technology company SmartAsset states the nearly 100,000 people living in the Georgia’s Floyd County are getting the best deal on property taxes in the nation. Floyd County is near Atlanta — the county seat of Rome is just over an hour north of Georgia’s capital.

In order to figure out who is getting the most property tax value, or biggest bang for their buck, the first thing to know was how much people in each county are paying. To determine an effective property tax, the amount of money collected by the county in taxes was divided by the number of households in the

The people who live in the counties at the top of the list are essentially getting a deal — getting a lot for what they’re paying.

county. This information was provided by the Census Bureau. Then, using FBI crime rates and school rankings relative to the state, the study ranks all counties with more than 50,000 people.

The Results — The average county in the U.S. charges a 1.13 percent property tax rate, and has 101.3 violent crimes and 826.6 property crimes per 100,000 people. The people getting the worst tax property value also live in the Peach State. Richmond County is along the Georgia-South Carolina border and contains the city of Augusta. According to the study, people there are paying too much money in property tax for what they are getting in safety and public schools.

In addition, the state of Florida does poorly on the list, taking four of the bottom spots. Oklahoma and Arkansas do better, with two each in the top 10.

Overall, the people who live in the counties at the top of the list are essentially getting a deal — getting a lot for what they’re paying. The people who live in the counties at the bottom are the opposite — paying too much for what they’re getting. In some instances counties could be paying about the same in property taxes but seeing very different results in terms of crime and schools. For example, the people of Floyd County pay an effective tax rate of 0.89 percent and they are at the top of the list. The people in Mason County, Washington, pay an effective tax rate that is even lower, at 0.87 percent, but they are second from the bottom of the list. The difference is that in Floyd, crime is well below the national average and schools are well above average for the state. Meanwhile, in Mason schools are below average for the state and crimes are well above the national average.

Here is the full list:

Best 10 Counties for Property Tax Value

  1. 1. Floyd, Georgia
  2. 2. Sandoval, New Mexico
  3. 3. Washington, Utah
  4. 4. Bannock, Idaho
  5. 5. Cleveland, Oklahoma
  6. 6. Canadian, Oklahoma
  7. 7. Clay, Missouri
  8. 8. Benton, Arkansas
  9. 9. Sebastian, Arkansas
  10. 10. Taylor, Texas

Worst 10 Counties for Property Tax Value

  1. 1. Richmond, Georgia
  2. 2. Mason, Washington
  3. 3. Monroe, Florida
  4. 4. Manatee, Florida
  5. 5. Nassau, New York
  6. 6. Charles, Maryland
  7. 7. Clay, Florida
  8. 8. Bastrop, Texas
  9. 9. Escambia, Florida
  10. 10. Spalding, Georgia

What It Means for You – The goal with most purchases is to get the most for the least amount of money. It’s important to note in this case that people without children may not care as much about school rankings (though there is always the issue of resale to consider). But if you are thinking of moving, it might be a good idea to consider how much you will pay in property taxes and what you will get when determining the location of your next home.

If you’re considering purchasing a new home, you’ll want to make sure your credit is in good shape so you can qualify for the best interest rates on your mortgage. You can check two of your credit scores for free every month on Credit.com.

Did you like this? Share it:
Posted by on
Page 1 of 26912345...102030...Last »