Category Archives: real estate market

Renovating? The Type of Project Matters

Homeowners undertaking a renovation may either reap rewards come resale, or regrettably find themselves in the red. The latter, says Scott Robinson, president of the Appraisal Institute, is more likely—somewhat.

“Home improvement projects are not necessarily investments in which a homeowner should expect a dollar-for-dollar return,” explains Robinson, who oversees the nation’s largest association of real estate appraisers. “Rather, these projects can increase the likelihood of a sale, or that a property will be comparable to other properties in a neighborhood.”

Robinson advises renovators to consider if the improvement is in keeping within what’s standard in the community.

“Projects that take a home significantly beyond community norms are often not worth the cost when the owner sells the home,” Robinson says. “If the improvements don’t match what’s standard in a community, they’ll be considered excessive.”

Robinson notes renovators may find it best to hold off on large-scale projects if they’re unsure of how long they’ll be in their home. Generally, the longer a homeowner stays in a home, the greater the opportunity for a return on investment.

A real estate appraiser can conduct a feasibility study, which offers an unbiased analysis of what the home would be worth before and after a project. During the study, the appraiser will analyze the property, weigh the cost of rehabilitation, and provide an estimate of the property’s value before and after the improvement.

Currently, the projects with the highest expected return on investment (ROI) are attic insulation, manufactured stone veneer and a garage door replacement, according to Remodeling magazine’s Cost vs. Value Report. Other projects with potential payoffs are an entry door replacement and a minor kitchen remodel.

Reprinted with permission from RISMedia. ©2016. All rights reserved.

First Look: Home-Buying Season Is Already Booming

The 2016 home-buying season is in full swing, with homes in April moving 7 percent faster than one year ago, even as asking prices continue to break records. This, according to new data released this week by Realtor.com.

Median age of inventory is now 68 days, moving five days faster in April than a year earlier and 6 days faster than last month – pointing to solid momentum this spring. The median-priced home was listed at $245,500, 9 percent higher than one year ago and 2 percent higher than March. For-sale housing inventory is increasing on a monthly basis, but remains lower than one year ago.

“A robust buying season has already fully bloomed this spring, clearly demonstrated by our preliminary read on April inventory and activity on realtor.com,” says Jonathan Smoke, chief economist of realtor.com. “Pent-up demand, lower mortgage rates and strong employment continue to power the strongest and healthiest real estate market we have seen in a decade. Close to 550,000 new listings came onto the market in April, which helped total inventory grow 2 percent over March. However, we know that sales are picking up faster than inventory since the median age of inventory fell again by six days after falling a whopping 22 days in March. As a result we have 4 percent fewer homes available for sale compared to last year and homes stay on the market five fewer days.”

The median age of inventory for April is expected to be 68 days, down 7 percent year over year and down 8 percent from March.

The median listing price for April will likely reach a record high of $245,500, a 9 percent increase year over year and a two percent increase month over month.

Listing inventory in April showed a 2 percent increase over March. However, inventory decreased 4 percent year over year.

Realtor.com’s Hottest Markets receive two to three times the number of views per listing compared to the national average. In terms of supply, these markets are seeing inventory move 17-45 days more quickly than the rest of the U.S. They have also seen days on market drop by an average of four days from March.

Reprinted with permission from RISMedia. ©2016. All rights reserved.

Consumers See Interest Rate Increase from Opposite Angles

Real Estate News

Prospective homeowners express concern over increase and perceived effect on real estate decisions and lifestyles; existing homeowners stand indifferent to rate boost

Berkshire Hathaway HomeServices, part of the HSF Affiliates LLC family of real estate brokerage franchise networks,  released results from its 2015 Homeowner Sentiment Survey indicating a significant split in the way real estate consumers perceive the Federal Reserve’s anticipated raising of its benchmark interest rate and the subsequent impact on mortgage rates.

Existing homeowners expressed indifference to the notion of a lift in mortgage rates as a result of the Fed’s action. By contrast, 62% of prospective homeowners – a survey group composed mainly of millennials and Gen-Xers – said rising mortgage rates would make them feel anxious about their current financial situations.

It’s been nearly 10 years since the Fed raised its benchmark rate, which stands near zero as part of the Fed’s effort to stimulate the U.S. economy. Accordingly, mortgage rates, which move in response to the fed funds rate, have hovered at or near historic lows for years. Yet in the survey, 67% of prospective homebuyers categorized the level of today’s mortgage rates as “average” or “high.”

“The Fed is seeing more people going back to work and with the expectation of job growth for America it feels comfortable with its intent to raise rates,” said Berkshire Hathaway HomeServices President Stephen Phillips. “But the reality is that an entire generation of first-time buyers has never experienced a meaningful rate increase; this is a new and unfamiliar phenomenon to them.”

Should mortgage rates rise in response to a boost in the fed fund rate, many prospective homeowners said they would have to alter their home searches and 51% would adjust their savings pace. In addition, exactly half of prospective homeowners believed they would experience more difficulty affording their ideal home. Current homeowners, whose ranks are mostly Boomers and Gen-Xers, said that increased mortgage payments would mean more personal sacrifices in areas such as family vacations, home improvements and shopping.

Fed policymakers have said the pace at which they’ll raise interest rates will be gradual – an increase of a quarter of a percentage point is typical. A similar rise in mortgage rates would add about $43 a month to a hypothetical $300,000, 30-year mortgage with a 3.75% rate, explained Gino Blefari, CEO of HSF Affiliates. “A bump in mortgage rates has more bark than bite,” he said. “The average American spends about twice as much every month on coffee[1].”

A majority of current homeowners (59%) and half of prospective homeowners believed interest rates are holding steady. Lower interest rates remain the top reason why many survey respondents view the current housing market favorably.

Respondents also identified factors they believed are driving U.S. real estate forward. Increased residential construction and increased construction in urban areas offering more housing choices closer to work topped the list. Respondents also indicated that the housing market is benefiting from an increase in millennial buyers and by a boost in housing inventory; the latter factor has hamstrung real estate in many markets since the downturn. (See Homeowner Sentiment Survey results from September.)

“As always, our agents and the industry as a whole must take great care to educate buyers and sellers about the real estate process, which includes mortgage rates,” said Blefari. “A Fed rate increase may grab people’s attention, yet the cost of borrowing money to buy a home remains historically low by all measurements. From our perspective, even though we can’t predict the future, it looks like mortgage rates will remain attractive, and that’s good for consumers and the real estate market.”

The full survey details are available upon request.

 

Berkshire Hathaway HomeServices Consumer Sentiment Survey Methodology

Interviews with 2,502 respondents were conducted online by Edelman Berland in November 2015. The respondents captured were either current homeowners (individuals who currently own a home as a primary residence) or prospective homeowners (individuals who are looking to buy a home within the next six months). The margin of error is +/-2.2% for current homeowners and +/- 4.4% for prospective homeowners.


Real Estate News

About Berkshire Hathaway HomeServices and HSF Affiliates LLC

Berkshire Hathaway HomeServices, based in Irvine, CA, is a real estate brokerage network built for a new era in residential real estate. The network, among the few organizations entrusted to use the world-renowned Berkshire Hathaway name, brings to the real estate market a definitive mark of trust, integrity, stability and longevity. Visit www.berkshirehathawayhs.com.

 

Irvine, CA-based HSF Affiliates LLC operates Berkshire Hathaway HomeServices, Prudential Real Estate and Real Living Real Estate franchise networks. The company is a joint venture of which HomeServices of America, Inc., the nation’s second-largest, full-service residential brokerage firm, is a majority owner. HomeServices of America is an affiliate of world-renowned Berkshire Hathaway Inc.

[1] According to a National Coffee Association study.

Housing Market and Forecast for 2016

Lawrence YunIn a recent Forbes article Lawrence Yun, Chief Economist and Senior Vice President National Association of Realtors, predicted that nationally the housing market should show another gain in 2016, simply because there is still sizable pent-up demand for home buying — and supply will steadily rise to help meet that demand.

But what exactly does that look like? Hear it right from Mr. Yun himself as he talks to Washington Journal about housing and mortgage trends, the housing market’s impact on the overall U.S. economy, and what recent trends might portend for 2016.

Save the Barcroft Community Shopping Center

Recently our esteemed friends at the DMV decided to move its Four Mile Run customer service center from Arlington County to Barcroft Plaza, a shopping center in Falls Church, Fairfax County.  While on the surface this might not seem like a big deal, after all, it is only 5-6 miles from the old location so not a big deal for Arlington Residents to drive and one shopping center is as good as another, right?

Wrong.

The Four Mile Run facility is one of the five busiest in the state, handling an average of more than 540 customers a day and more than 150,000 in a year. It is currently located in a standalone 12,000 sq. ft. building in a light-industrial district and is served by a dedicated parking area with 102 spaces.

The proposed space in Barcroft Plaza is in no way prepared to handle that kind of traffic.  Bank of America, Zips Dry Cleaners, Starbucks, and a large Harris Teeter food market. The shopping center is surrounded by residential neighborhoods and an elementary school. It is busy, evidence of its value to families living in the area.

To name only a few if the key problems with this idea:

  1. Safety of Drivers: Access is from Columbia Pike and Lincolnia Roads – neither side has a stop light. Forcing patrons into a situation where they must cross the extremely busy Columbia Pike without the benefit of a stop light is negligent at best. Someone will get killed here.
  2. Safety for community: Unlike the current DMV location, this one is surrounded by a school and residential neighborhoods that are simply not prepared to handle the impact of the additional traffic and student drivers. Children live and play in this community and this will have a negative impact on their quality of life and will put them at risk.
  3. Parking: There is just enough parking to support the businesses already there, adding another 550+ visitors will choke the existing businesses.
  4. Economic: By adding a mass service center to a community shopping center you will drive away the existing customer base and thereby put the existing businesses in jeopardy.
  5. Cultural/Community Impact: As mentioned before, this is a community shopping center serving the residents of Barcroft, Parklawn, Lincolnia, Sleepy Hollow, and other similar neighborhoods. To put a mass service center in the middle of the neighborhood is not only unwise, it would destroy the flavor of the community.

The DMV did not bother to consult the community or residents it purports to serve or many of our elected officials regarding its plan to relocate to Barcroft Plaza. The community only happened to learned of the plan from an October 30 post on the Annandale Blog.

On December 3rd, Delegate Kory and the Mason District Council of Community Associations convened a meeting of residents with state and county representatives to hear and discuss DMV’s plan for the relocation. More than 100 residents attended; more than 30 spoke out in opposition and no resident supported the plan. Surprisingly, it was apparent from the DMV representatives that no consideration whatsoever had been given to the compatibility of their proposed service center with the Barcroft Plaza community. The justification for their plan was simply that DMV would save money on rent, and they had no requirement to notify the public.

If you agree that this is not a good use of Virginia residents’ tax payer dollars and that moving a mass service center to a small community shopping center is a bad idea, please review this comment and sign the petition at Change.org to save our community shopping center.

HUD Town Hall Discussion on Millennials and the Housing Market

HUD Town Hall Discussion on Millennials and the Housing MarketFrom the PenFed Realty Blog

Virtual Town Hall: HUD Secretary and Realtor.com Chief Economist Discuss Millennials and the Housing Market at GW University

The latest research in urban areas indicates that Millennials are the largest group of homebuyers at 32%. They compose 68% of first time homebuyers, and just under half of them will be looking for a first time home during the next two years.

A recent town hall was held called “Millennials and the Housing Market.” In the following video recap, U.S. Secretary of Housing and Urban Development Julián Castro and two economists discuss millennial housing trends and answer questions before an audience of graduate students from George Washington University and online viewers.

Topics included:

  • Millennial mortgages and the popularity of FHA loans
  • The impact of student debt on millennial buyers
  • The most popular housing markets for millennials

Be sure to watch this informative discussion.

Author: Sue Cushing

Berkshire Hathaway HomeServices PenFed Realty on Major Growth Trajectory

Berkshire Hathaway HomeServices PenFed Realty on Growth Trajectory Mid-Year Report 40.2% Unit Growth & 39.7% Volume Growth

2015 Year to Date vs. 2014 – Exceeding Industry Growth

RESTON, Va., Sept. 16, 2015 Berkshire Hathaway HomeServices PenFed Realty Mid-Atlantic has established a strong growth pattern for 2015 with 40.2% growth in homes sold, 39.7% in sales volume growth and 16% in new agent growth since it joined the Berkshire Hathaway Home Services network in December of 2014. In the greater D.C. and Baltimore markets the firm has grown by 175 real estate agents in the past 12 months.

Graph based from January through July data. Source: Data based on multiple listings from the following five systems: Mid-Atlantic Regional Information Systems, Central Virginia Regional MLS, Trend MLS, Sussex County MLS and Flex MLS.

Graph based from January through July data. Source: Data based on multiple listings from the following five systems: Mid-Atlantic Regional Information Systems, Central Virginia Regional MLS, Trend MLS, Sussex County MLS and Flex MLS.

According to Kevin Wiles, president of PenFed Realty Mid-Atlantic, the gains are due to increased opportunities to serve the Maryland, Virginia and Washington D. C. markets more effectively through its alignment with the Berkshire Hathaway Home Services name. “Our well respected brand reflects the company core values of trust, integrity, stability and longevity. These values are very important to all of our agents, because they know we are here for the long-term,” Wiles explained.

“The combination of the Berkshire Hathaway HomeServices brand and PenFed Realty,
which is backed by the venerable PenFed Credit Union (PenFed), creates a compelling value proposition for those selling and buying homes,” added Wiles. Along with being a wholly owned subsidiary of PenFed, a financial institution with $18 billion in assets, and having strong brand awareness, Wiles points to game changing innovative marketing solutions for its tremendous growth. “We have a Real Estate Rewards program that offers our home buyers up to $10,000 in closing cost savings. Our clients love this truly unique program,” he said.

“Moving forward we will constantly innovate, improve and invest across all areas of the company to help our agents succeed and attract new clients.”

About Berkshire Hathaway HomeServices PenFed Realty

Berkshire Hathaway HomeServices PenFed Realty is a full-service real estate company with annual sales volume of $2.8 billion with 1,700 sales agents and 50+ offices providing complete real estate services nationwide. PenFed Realty is a wholly owned subsidiary of PenFed Credit Union (PenFed). PenFed is a financial institution with $18 billion in assets and more than 1.3 million members. PenFed Realty is also a member of the Berkshire Hathaway HomeServices brokerage network, operated by HSF Affiliates LLC. Visit PenFedRealty.com. Equal Opportunity Employer: m/f/v/d.