Home Buying

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In most major cities in the United States, homes in gayborhoods are worth more than the typical home – in some cases several times more.

To identify gayborhoods across the country ahead of Pride Month, Zillow analyzed data from the American Community Survey to find which neighborhoods have the highest share of same-sex couple households compared with others in the areai.

The neighborhood with the highest share is North Banker’s Hill, San Diego, where 10.1 percent of households are same-sex couples. The North Banker’s Hill housing premium is about 25 percent – the typical North Banker’s Hill home is worth $792,400, compared with the citywide median value of $632,600.

West Palm Springs in California has the second-highest share of same-sex couple households at 9.2 percent, but homes there come with a much higher premium. Homes in West Palm Springs are worth more than three times as much as the typical home in the broader Riverside metro.

In fact, there are 10 major cities where home values in the gayborhood are more than double the community at large, including Houston, Charlotte and Philadelphia. That’s not to say home values are necessarily higher simply because it’s the gayborhood. Other factors could be driving the premium; gayborhoods are often close to amenities like bars, restaurants, and job centers.

There are a few places where gayborhoods buck this trend. In the downtown area of San Jose, Calif., homes are worth 38.1 percent less than the typical San Jose home. The area also has the smallest share of same-sex couples in the analysis at 1.1 percent. Gayborhoods in San Antonio and Kansas City have a similar discount on housing.

“The narrative of gayborhoods as a signal for rapid home value appreciation and gentrification has been around for decades, with Greenwich Village and the Castro long held up as examples,” said Zillow Director of Economic Research Skylar Olsen. “Today, the story is a little different. While these neighborhoods still foster a sense of community and social acceptance, living within them often comes at premium many may not be able to afford. This has a disproportionate effect on intersectional LGBTQ people —not just gay, but a person of color, transgender, a woman—those who are disadvantaged when it comes to earning potential.

Mike Wheatley is the senior editor at Realty Biz News. Got a real estate related news article you wish to share, contact Mike at [email protected].
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Source: realtybiznews.com

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U.S. Census Bureau data published this week shows that the homeownership rate fell slightly to 64.1%, despite the fact that the number of new households is rising. That’s because most new household formations come from rentals, the number of which was larger than the amount of new homeowners for the first time since 2016.

“The housing shortage, especially at the level of moderately priced homes, has prevented financially capable renters from owning,” Lawrence Yun, chief economist of the National Association of Realtors, said in a statement about the latest homeownership rate numbers. “More home construction is needed to relieve the housing shortage and allow more Americans to participate in the wealth gains associated with ownership.”

Mark Fleming, chief economist of First American, said in another report this month that the homeownership rate is below what it should be at present. In 2018, he said the homeownership rate was underperforming potential demand by 8.7%, mainly due to the lifestyle choices of young adults.

The problem is that millennials are trailing previous generations when it comes to homeownership. Many are choosing to delay getting married and having kids, which are often the main triggers for buying a home. As such, Fleming said there’s a six percentage point difference between millennials and members of Generation X at 30-years old.

“But the bulk of millennials have yet to turn 30, which signals higher potential homeownership demand may be on the horizon,” he said.

The largest number of millennials by birth year will turn 30 in 2020, which is the prime age for buying a home, Fleming said. Even better, many are well prepared to make the step up to homeownership, he added. For example, millennials are the most educated generation, and have the highest incomes compared to older generations at the same age. The inflation-adjusted income for 37 year old millennials is $77,000, compared to $72,000 for Generation X and $69,000 for baby boomers.

As such, Fleming believes the homeownership rate could well grow in the coming years.

“Higher income leads to higher house-buying power,” Fleming said. “Coupled with today’s 3.8 percent 30-year fixed-rate mortgage, 37-year-old millennials can afford $35,000 more home than Generation X and $52,000 more home than baby boomers at the same age. We expect the homeownership rate to further close the gap with potential in the years ahead as millennials continue to make important decisions, such as attaining an education and, later in life, getting married and having children.”

Mike Wheatley is the senior editor at Realty Biz News. Got a real estate related news article you wish to share, contact Mike at [email protected]
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Source: realtybiznews.com

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Consumer fears of a recession are growing, and experts say it could cause some Americans to get skittish about possible knock-on effects on the housing market.

One reason for that is many Americans remain haunted by memories of the Great Recession last decade, which caused thousands to lose their homes to foreclosure. But experts say we’re unlikely to see another “real estate fire sale” in the event a new recession.

“This is going to be a much shorter recession than the last one,” George Ratiu, senior economist with realtor.com, wrote in a recent article. “I don’t think the next recession will be a repeat of 2008. The housing market is in a better position.”

And fears of a recession coming any time soon could be overblown, realtor.com noted. According to a survey of 200 members of the National Association for Business Economics, just 2% of economists, academics, policymakers and strategists believe we’ll see a recession this year. However, 38% believe we could see a recession begin next year, while 25% don’t expect one until 2021 at the earliest. Another 14% said the good times would likely continue beyond then.

Also, there are many signs the real estate market is still strong. For example, the Federal Reserve is widely expected to cut interest rates again in September, which would bring mortgage rates down even more. Unemployment is at its lowest point in 50 years, wages are growing, and the U.S. is still going through its longest economic expansion in history.

But if the economy does fall aparet, will home prices plunge again like they did in the Great Recession?

Most economists say no.

Ratiu said that at worst, home prices might flatten during the next recession, but not drop. He said a shortage of homes for sale, combined with the low number being built would likely cushion any price falls against buyer demand.

In addition, the National Association of Realtors’ chief economist Lawrence Yun points out that lending laws are much tighter now than during the last housing crisis. In addition, homeowners these days have record amounts of equity built up in their homes, which means that even if they do lose their jobs they’re unlikely to head directly into foreclosure, and would instead have more time to sell their property by themselves.

However, one expert said that the fragile American psyche means that many are still nervous.
“With people having PTSD from the last time, they’re still afraid of buying at the wrong time,” Ali Wolf, director of economic research at Meyers Research, told realtor.com. “But prices aren’t likely to fall 50% like they did last time.”

Mike Wheatley is the senior editor at Realty Biz News. Got a real estate related news article you wish to share, contact Mike at [email protected]
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Source: realtybiznews.com

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Aspiring home buyers with medical debt are more likely than others to be denied a mortgage, while those with student loan debt more often put off buying. That’s according to the 4th annual Zillow Group Report on Consumer Housing Trends, released today.

Personal debt – particularly credit card, student loan and medical – tremendously impacts the type and features of home someone can afford, their timeline for buying a home, their ability to afford an adequate down payment and, ultimately, whether or not they are approved for a mortgage, according to the report, the largest and most comprehensive survey of real estate consumers.

More than two thirds of renters have debt, and about a quarter of
renters and home buyers said their debt caused them to be denied either a
rental agreement or a mortgage at some point. That impact was most
commonly reported by those with medical debt, which has a unique
capacity to bust budgets. Nearly two-thirds of renters and 44% of
homeowners with medical debt said they couldn’t cover an unforeseen $1,000 expense. That’s compared to about half of all renters and one-fifth of all homeowners.

Half of renters and 39% of buyers said student debt led them to delay buying a home. And once they do, it impacts how much they are able to put down, ultimately affecting their monthly budgets for decades. Two-thirds of buyers with any kind of debt put down less than 20% when they secure a mortgage, compared with 40% of buyers without debt. The share is even higher (76%) for buyers with student debt. Putting down less than 20%, while fairly common, not only increases monthly payments but also can lead to added expenses if a lender requires private mortgage insurance or other upfront fees to compensate for the added risk.

And for those burdened with debt, financial sacrifices are common – 73% of renters and 68% of buyers with debt said they made at least one financial sacrifice to afford their home, compared with half of renters and 39% of buyers without debt. The most commonly cited lifestyle changes were reducing spending on entertainment, picking up additional work, cutting back on vacation and decreasing spending on technology. Those in debt also are more likely to go over their home buying budgets.

“When we focus on low unemployment and the strong economy, we often
forget that in many ways the rising costs of life can erode most of
those gains,” said Skylar Olsen, Zillow’s
director of economic research. “Health care has never been more
expensive. Getting a college degree, a path more likely to lead to
economic success for those able to get through it, has never been more
expensive. U.S. housing values and rents have never been more expensive.
While incomes, both at the high and low end, are growing, the pace
hasn’t kept up with those crucial life expenses. That’s fact and
Americans are feeling it.”

Mike Wheatley is the senior editor at Realty Biz News. Got a real estate related news article you wish to share, contact Mike at [email protected]
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Source: realtybiznews.com

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More home buyers are being tempted onto the market by the incredibly low mortgage rates being offered, but they’re becoming increasingly frustrated at the limited choice of homes for sale.

The combination of an unseasonable surge in buyer demand and reduced housing inventories, there simply aren’t enough homes to satisfy everyone who’s looking, CNBC reported.

Indeed,
housing inventories nationwide fell 2.5% in September, compared to
the same month one year ago. But the situation gets even worse when
we consider the most affordable segment of the market. According to
CNBC, inventory of homes priced at $200,000 or less is down 10%
compared to a year ago, while the $200,000 to $750,000 segment saw no
change. Unfortunately, economists believe inventory in that price
range will also fall in the coming months.

“If,
or better yet, when inventory in this segment begins to take a
downturn, the vast majority of home buyers are going to feel its
effects as their options rapidly dwindle,” George Raitu,
realtor.com’s senior economist, told CNBC. “September inventory
trends, especially in the mid-market, may be the canary in the coal
mine that we could be headed for even lower levels of inventory in
early 2020.”

The
most likely result of this growing demand for homes and the shortage
of available options is that home prices will rise, which may
eventually help to reduce demand and balance things out.

But
right now, buyers are being increasingly tempted to have a look due
to the low mortgage rates on offer. According to Freddie Mac, the
30-year fixed-rate mortgage hovered around 3.5% in September, well
below the average of 5% we saw last November. And both new and
existing home sales have increased simultaneously, as rates decline.

Even
worse, it seems builders are unable to make up the shortfall. Robert
Dietz, chief economist of the National Association of Home Builders,
told CNBC that new construction is unlikely to be fast enough to
provide buyers with the options they want at affordable price points.
He said that just 10% of sales of newly built homes are priced at
$200,000 or less, whereas that percentage was at 40% just ten years
ago. He adds that the new home market is undersupplied by around 1
million housing units overall.

“We’ve
faced what has been called a perfect storm of supply-side
challenges,” Dietz said. “There has been an ongoing labor
shortage, we lack the necessary land and lots to build homes, we’ve
had building material cost concerns, and then probably the most
important factor has been higher regulatory costs since the Great
Recession.”

Mike Wheatley is the senior editor at Realty Biz News. Got a real estate related news article you wish to share, contact Mike at [email protected]
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Source: realtybiznews.com

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Lesbian, gay, bisexual, and transgender home-buyers and renters must pay a premium to live in states, cities and counties that offer legal protection from discrimination.

While it is unlikely that legal protections for LGBT people increase home values, the fact that these jurisdictions are more expensive has a disproportionate impact on LGBT buyers and renters who aspire to live there, Zillow reported.

To identify price differences across regions with and without local legal protections, Zillow analyzed the typical cost of buying a home in states, cities and counties that have laws in place to protect LGBT buyers from housing discrimination. Protections include being evicted, denied housing, or refused the ability to rent or buy housing based on sexual orientation or gender identity. While these premiums pertain to buyers, LGBT renters also feel the effects – given that high home values generally correlate with high rents.  The same situation with condos for sale. Fodyo.com provides high quality service to protect your interest.

National housing and employment non-discrimination laws protect classes such as sex, race, age, color, religion, and national origin. The Supreme Court on Monday affirmed job protections for people who identify as LGBT, but explicit protections against housing discrimination do not exist at the federal level, and vary significantly based on local jurisdictions. Currently, only 22 U.S. states and the District of Columbia offer statewide laws explicitly prohibiting housing discrimination based on sexual orientation and gender identity.

Typical home values in those jurisdictions with legal protections are about $127,000 higher than home values in places without those laws – about $328,575 compared to $201,462. Many of these jurisdictions also offer the LGBT community legal protections beyond housing, including employment and public accommodation protections. While it’s not the specific legal protections bumping up home values in these states, those who identify as LGBT, among other buyers and renters, are paying more to buy or rent in areas that offer protections through anti-discriminatory policies.

LGBT buyers in Hawaii, Washington, D.C., and California can expect to pay the biggest premium to live in an area with those protections. Home values in Hawaii are about 219% higher than the typical home values in areas with no protections. Washington, D.C., is a close second at 218% higher, followed by California at 187%. Iowa is the only state with explicit protections for LGBT homebuyers where the typical home costs less than in places without protections – 23% less. More than 70% of LGBT buyers report making at least one sacrifice to stay at or below budget, compared to 58% of cisgender heterosexual buyers, according to data gathered for Zillow’s 2019 Consumer Housing Trends Report, and the 2020 edition scheduled to be released later this year. Such sacrifices include buying a home in worse condition, without desired finishes, and smaller than initially planned.

States without anti-discrimination laws for the LGBT community often have cities and counties that do provide legal protections, but those still largely come at a premium. For example, Austin, Texas, has local regulations protecting LGBT homebuyers from housing discrimination. The typical home value in Austin is $401,999 – 90.3% higher than the state overall, and 99.5% higher than the nation in areas without protections.

“In addition to providing legal protections, there are other steps local and state governments can take to create housing markets that are more inclusive and accessible for LGBT people,” said Skylar Olsen, senior principal economist at Zillow. “We know LGBT buyers – especially LGBT buyers of color – are more likely to purchase affordable home types such as condos and townhomes. More local governments should work to allow more of these types of homes, opening up areas and neighborhoods that historically priced out many LGBT buyers. Legal protections for LGBT become more meaningful when people can afford to access them.”

Mike Wheatley is the senior editor at Realty Biz News. Got a real estate related news article you wish to share, contact Mike at [email protected]
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Source: realtybiznews.com

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One quarter of home buyers say they’re planning to move from their current residence, with many saying the COVID-19 pandemic has convinced them to relocate to smaller towns and cities.

Redfin reported last week that its database of more than one million house hunters shows that a record 27% are looking to move to a different metro area from the one they currently reside in.

And it’s not only Redfin that has noticed this trend. Last week, realtor.com released its own report showing that more than half of home searchers in the nation’s 100 largest metros are focused on homes in the suburbs of those areas. Indeed, listing views of homes in the suburbs in May dramatically exceeded those from one year ago. But the migration to the suburbs is not a new trend, as it actually began accelerating prior to the pandemic, according to realtor.com’s director of economic research Javier Vivas.

“After several months of shelter-in-place orders, the desire to have more space and the potential for more people to work remotely are likely two of the factors contributing to the popularity of the burbs,” he said.

In addition, homes in smaller towns are getting more attention too. Redfin said that page views for listings in towns with 50,000 or less residents saw traffic grow by 87% in the last year. That’s almost four-times the 22% annual increase in views of listings in cities with 1 million+ residents.

“While there has been a huge increase in the number of people looking online at homes in small towns, the long-term impact of the pandemic on people actually moving from one part of the country to another remains to be seen,” Taylor Marr, a Redfin economist, said. “People are starting to take the plunge and move away from big, expensive cities, though most of them were probably already considering a lifestyle change. The pandemic and work-from-home opportunities that come with it are accelerating migration patterns that were already in place toward relatively affordable parts of the country. But for many people, the lure of large homes in wide open spaces will be passing a dream fueled by coronavirus-induced isolation.”

The largest net outflow of Redfin searchers in April and May was in the cities of Los Angeles, New York and San Francisco, which means more people are moving out of those areas than moving into them. Moreover, Phoenix; Sacramento, Calif.; Las Vegas; and Dallas saw the highest net inflow of users in the same months. Homes in those metros also tend to be more affordable than in the coastal regions.

Mike Wheatley is the senior editor at Realty Biz News. Got a real estate related news article you wish to share, contact Mike at [email protected]
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Source: realtybiznews.com

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