Metros Still Exhibiting Pockets of Affordability

With home prices rising in most major metros across the United States 

for the past decades—in some cases posting double-digit gains year-over-year—the American Dream of homeownership may begin to feel elusive. However,  a homeownership investment firm, maintains there are pockets of affordability in every major metro market.

A combination of factors is seemingly putting homeownership out of reach for many Americans. Not only are home prices rising, but student debt and climbing rents are also taking a toll on potential down payment savings for many.

However, the dream of homeownership, at least, is alive and well,  which cites Ellie Mae data stating that 91 percent of millennials intend to own a home one day.

Compared home price and home income data across major metros to determine the salary necessary to purchase a median-priced home, and the number of years it would take to save for a down payment on a median-priced home with a median-priced salary. Not only did Unison look at metro areas as a whole, it also zeroed in on city-level data to determine the most affordable areas in major metros.

The least affordable metro in the nation, is San Francisco-Oakland-Hayward, where residents need to earn $231,216 to purchase a median-priced home with a 10 percent down payment. At the median salary, it would take a San Francisco metro resident 20 years to save for a 10 percent down payment on a median-priced home.

The second- and third-least affordable metros were Los Angeles-Long Beach-Anaheim and San Diego-Carlsbad, where salaries of $157,728 and $139,130, respectively, put a median-priced home within reach.

In the Los Angeles metro, it would take 19 years for a resident earning the median salary to save enough for a 10 percent down payment on a median-priced home. In the San Diego metro, residents would need to save for 16 years to put 10 percent down on a median-priced home in the market.

Homebuyers fare much better in Detroit-Warren-Dearborn, where they need to earn a salary of $35,909 to purchase a median-priced home with a 10-percent down payment. Following on the list of most affordable markets are Kansas City, Missouri, where the required salary is $40,869; and Tampa-St. Petersburg-Clearwater, Florida, where residents need to earn $43,978.

In the Detroit and Kansas City metros, it would take residents earning the median salary just five years to save for a 10 percent down payment on a median-priced home. In the Tampa metro, it would take about seven years. While Dallas, Texas, ranked a little lower for affordability, it would take median-income residents only six years to save for a down payment on a home in their market.

However, “While home prices overall have increased, there remain neighborhoods in every metro area that are relatively affordable and every metro area offers solid housing options for almost all types of home buyers,” 2018 Home Affordability Report.

In fact, the entire San Francisco Bay area has experienced “a dizzying rise in home prices,” and even the “potentially affordable neighborhoods” in the area have median home values above seven figures.

“If one city has embodied the staggering increase of California home prices this decade, it’s San Francisco,” said in its report.

On the other hand, in the Dallas metro a salary of $52,000 is necessary to purchase a median-priced home with a 10 percent down payment, but in Dallas city proper, the salary necessary s to about $49,000.

In already affordable Kansas City, the salary required to purchase a median-priced home s from $40,869 for the metro area down to just $29,036 in Kansas City proper.
For more information on potentially affordable neighborhoods report here.

Buyers Snag Homes Sight Unseen

Some home shoppers are feeling hopeless this spring and making 

competitive moves in order to get a home. They’re reportedly rushing to making offers without seeing homes first, bidding well above the asking price, or waiving inspections entirely to get sellers to find their offer the most alluring. 

“For home buyers, this is shaping up to be one of the most difficult years in recent memory,” Record low supplies of homes for sale are driving up prices across the country.

As for sellers, they may find some big profits when they do sell. “It’s going to have the feel of a hot market” with multiple offers and bidding wars, says Lawrence Yun, the chief economist for the National Association of REALTORS®. 

Still, Yun expects sales to be flat compared to a year ago due to the shortage of homes for sale as well as reduced affordability for many house hunters. 

There was a 3.4-month supply of existing homes nationwide in February—the lowest on record for a February, NAR reports. The median home price, meanwhile, was up 5.9 percent from a year earlier to $241,700, according to NAR. Yet, average yearly income growth has held at about 2.5 percent. 

Mortgage Rates Ease This Week, Borrowers found some relief for the second consecutive week with lower mortgage rates.

 “After ping earlier this week on trade-related anxiety in financial markets, the 10-year Treasury stabilized on Wednesday, but at a level slightly lower than from the start of last week,”  “Mortgage rates followed and fell for the second consecutive week. …Though rates on the 30-year fixed mortgage are up 0.3 percentage points from the same week a year ago, a robust labor market is helping home purchase demand weather modestly higher rates.”

 If you’re interested on a wealth of information to help you get started visit Precision Realty & Assoc. LLC or if you prefer a more personal touch, reach out to a us, CALL 801-809-9866 today. The decision to buy or sell is a personal one that depends on your financial situation, future plans and lifestyle.


Source: NAR

March Listing Prices Surpass 2017

The median list price for homes nationwide this March have now topped a 

record high set in 2017. The median list price was $280,000, up 8 percent year over year in March, topping last July’s record of $275,000, reports.

Not only are home prices higher but homes are also selling faster this year. Days on the market ped 7 percent compared to last year, reaching a median of 63 days in March. 

There are also fewer homes for sale, with inventories of homes for sale ping 8 percent, according to report, which is based on for-sale data culled from U.S. MLSs. 

'Our latest inventory data tells us buyers are out in full force this spring. Never in history have there been more eyes on fewer homes than today. At the end of March, we observed price gains that put us on pace for half of the homes listed this summer to be above $300,000. Buyers are not just paying more for the same home; the mix of homes in the market is rapidly changing.

“Never in history have there been more eyes on fewer homes than today.” 

“Buyers are not just paying more for the same home; the mix of homes in the market is rapidly changing,” he adds. 

Housing inventories between $200,000 and $350,000 remain low, and homes under $200,000 are even harder to find, realtor.com® notes. 

March housing trends show the inventory depletion we've seen over the last two buying seasons is carrying over to this year. It's going to be a languid search for buyers this season as they face the harshest, most competitive buying conditions yet. 

While days on market and total listings are decreasing at a slower rate than before, 36 of the largest 100 markets in the country are still seeing inventory move at least a week faster than this time last year. This includes cold weather markets that are thawing faster than expected and quickly catching up to the rest of the country.'

It’s going to be a languid search for buyers this season as they face the harshest, most competitive buying conditions yet.”

Are you ready Buy or Sell? The decision to Sell or buy is a personal one that depends on your financial situation, future plans and lifestyle. If you’re interested on a wealth of information to help you get started visit Precision Realty & Assoc. LL or if you prefer a more personal touch, reach out to a us, CALL 801-809-9866 today.

Source: realtor.com®

Budgeting for Homeownership

A new home often means making significant adjustments to how people spend their money. Expenses such as

• mortgage payments
• property taxes, insurance
• utilities
• maintenance

add up quickly and can easily throw the best of financial intentions out of whack. Creating and following a budget is a great way to stay on track while cutting down on financial stress at the same time.

 

Having a budget gives homeowners a road map for their financial needs and goals. Yes, their monthly home-related expenses need to be met, but they’ll also need to consider much more: food, clothing, education, healthcare, transportation, and savings for both retirement and emergency expenses.

 

Homeowners will definitely have unexpected costs that arise at inconvenient times – the water heater needs replacing, or the roof needs repair right away. Having a way to cover these expenses is critical not only to the home but for peace of mind.

 

Homeowners should start budget planning by examining their household income against expenses.

 

• First, list the monthly income – take-home pay if they get a paycheck, self-employment income, and any other outside sources of income. This amount will form the basis of the budget.

• Next, make a list of the monthly fixed expenses. These include the mortgage payment, car payments, phone and internet service, trash collection, etc. For expenses that are typically billed less frequently, such as property taxes, home insurance, and school tuition, divide the total yearly amount by 12. Fluctuating costs such as gas and electric bills can be averaged to a monthly total and added to this list as well. If there are carried balances on credit cards, those payments will need to be factored in, too. Importantly, savings should be considered fixed expenses – making this commitment to the future will pay off, literally, in the years to come.

• Next, list the variable expenses. These are expenses over which homeowners have some control: food, clothing, cable or satellite TV, online subscriptions, gasoline, entertainment, gym memberships, and even haircuts are some typical examples. Track these expenses for a few months to arrive at accurate numbers to work with. It’s very important to be realistic about what is currently being spent, because once the overall expense budget is developed, they may need to look for reductions in these variable items.

 

Add the fixed and variable expenses together and compare them to the total monthly net income. If the income is enough to cover everything, homeowners can still look for ways to budget in their favor. Reducing some variable expenses and shifting the difference into savings, for example, is a great way to boost one’s financial situation without making major changes.

 

And if expenses exceed income? If an increase in income isn’t on the horizon, they’ll need to reduce expenses so that they’re in line with what they can actually afford. First, go to the list of variable expenses and closely consider each line item. Is that upper-tier cable TV package really necessary? Can more meals be prepared at home? Go to the movies less often? Reducing expenses in these categories can really add up on a monthly basis.

 

If reducing the variable costs still isn’t enough, they’ll need to look at the fixed expenses. Consider trading down to a car with affordable payments and raising the deductibles on home and auto insurance. Check into cheaper plans for mobile devices. The differences can be significant over the course of a year.

 

No matter how careful the budget planning, it won’t work if the budget isn’t followed. Personal finance software can be helpful in tracking cashflow, and adjustments can continue to be made over time. By keeping to a budget, homeowners will come out ahead and better at night, too.

Rentals on the Rise

With home prices continuing to skyrocket in many markets, and inventory shortages plaguing many of those same areas, single-family rental homes 

are primed for continued growth...and bigger opportunities for investors in this sector.

Single-family rentals are on the rise, Single-family rentals are climbing at a rate of 2.1 percent year-over-year, compared to the 1.5 percent growth of multifamily rentals. Additionally, Rent Index shows a higher price point on average of multifamily rentals compared to single-family rentals, as the median multifamily rental sits at $1,563, compared to the single-family median price of $1,420. 

However, with more renters looking to single-family options, the median rental price of these homes is sure to go up.

Around 45 percent of renters have considered single-family rentals over multifamily apartments. However, the disparity in price may be due to the fact that most multifamily rental units are in urban areas, where rent tends to be significantly higher than other areas. Urban areas are hot spots for rentals. Note that 57.1 percent of urban rental listings in February were for multifamily units, and 36.8 percent of multifamily listings were in urban zip codes.

The break from multifamily to single-family could be due to shifting needs among renters. Previous indicated that, next to the price, having extra room is the most important factor renters consider. Apartments offer limited amounts of space, but rental houses offer the additional space that 60 percent of renters look for, without being too expensive. Renters with children will also look for more bathrooms and outdoor space, which is more likely to be found in a house rather than an apartment.

Single-family rentals are less expensive overall, but out of a list of the 100 most populated metro areas in the U.S. found that the lowest median single-family rental prices can be found in Youngstown, Ohio ($828 a month); Augusta, Georgia, at $946; Wichita, Kansa ($966); El Paso, Texas ($1,002); and McAllen, Texas ($1,013).


Source: DSNews.com

Buyers Want This Type of House

The typical spring home buyer this year is on the hunt for a three-bedroom, 

two-bathroom house with a garage and updated kitchen, according to a new realtor.com® survey of more than 1,000 home shoppers. Forty-four percent of respondents say they want a three-bedroom home, and 93 percent say they want a home with at least two bathrooms. 

But the garage is becoming increasingly important to home shoppers, too, with 27 percent rating it as one of the most important home features, even above an updated kitchen (24 percent) and open floor plan (20 percent). 

Privacy is driving the purchase decisions of many older buyers, with more than 20 percent of those 55 and older saying that having a space of their own is their main goal, followed by the physical comforts and stability of homeownership. On the other hand, 17 percent of millennial buyers placed the highest weight on family needs when house hunting, followed by stability (14 percent) and personal expression (13 percent). Only 12 percent of buyers younger than 55 cited privacy as their chief priority. 

Rising Rents Push Millennials to Become Homeowners, Realtor.com®’s survey also shows that increasing rental costs are pushing more young adults toward homeownership, with 23 percent of buyers between the ages of 18 and 34 reporting rising rents as a trigger for their recent home purchase.

“Although record-low inventory and high prices make this housing market unique, some classic features still top most shoppers’ wish lists.”  “At the same time, we found some clear differences in priorities. For instance, older buyers are concerned with privacy and being able to age comfortably, while millennials place more emphasis on family needs, stability, and personal expression.”

Millennials Like Contemporary and Colonial Homes; Older Buyers Prefer Ranches, Among millennials who expressed a home-style preference – 11 percent didn’t – contemporary and colonial homes took the top spots, each favored by 10 percent of respondents.

On the other hand, ranch homes, which feature single-story living, are the most popular home style for buyers 55 and older, favored by 28 percent.  Ranch homes are followed distantly by contemporary homes, preferred by 12 percent of buyers aged 55 and over. Only 6 percent of millennials favor ranch homes.

FIND THE RIGHT HOME 

Source: realtor.com®

Sky-High Prices Got You Down?

Here Are the Top Middle-Class Housing Meccas. And then there's perhaps the biggest pain point of all: record-high housing costs in many parts of the country. So much for the middle-class miracle.

But wait—there are still places where the middle class reigns supreme, at least when it comes to housing. And the data team set out to find them. We figured out which metros have the highest share of homes on the market that are priced just right for that area's middle-income earners—and, at the other end of the spectrum, the markets that have the least housing available for this grand swatch of buyers, whether it's priced substantially above or below their needs.

“These people don’t have steady, good-paying jobs, and they can’t get financing at that price—it can be very hard for them to buy a house,' adds Peter Temin, an economics professor at the Massachusetts Institute of Technology and author of the 2017 book titled 'The Vanishing Middle Class: Prejudice and Power in a Dual Economy.'

'That spells trouble for them later in life: Owning a home is one way to build wealth,' Temin says. 'So they don't have a good way to save.They're kind of trapped.”

Now let’s channel our best Goldilocks and head off into the woods to find America's true middle-class meccas—places with homes that are not too swanky, not too dilapidated, but just right.

Best metros for the middle class Downtown Provo, Utah.

1. Provo, UT
Median household income*: $72,700
Middle-class home price range*: $211,700 to $553,100
Percentage of middle-class homes on the market*: 76%

The startup you founded with your tech buddies in Seattle or Silicon Valley might make it big and rake in the cash one day. But in the meantime, you're going to blow through quite a bit of cash on housing. That's why affordably priced Provo, a 45-minute drive from way-pricier Salt Lake City, has become a thriving tech hub. And all of that middle-class housing makes it an appealing destination for other companies looking to open up shop as well.
Ancestry is based there, as is Brigham Young University. Provo also has one of the highest percentages of computer programmers in the country.

Provo has lots of suburban, cookie-cutter homes, with more going up all over town, They tend to be priced between $250,000 to $400,000. 'They’re just going like hotcakes.” 

Vineyard is one of the hottest middle-class suburbs in the area. About 15 minutes outside of Provo and the banks of the Utah Lake, it's filled with family-friendly, three- and four-bedroom homes outfitted with two-car garages.

And it's not only in Vineyard where buyers can score quite a bit of space. More than 70% of the Provo-area homes listed on realtor.com boast 3,000 square feet or more of space—the highest rate in the country among the largest markets.

Mortgage Rates Ease Slightly This Week:

If you’re interested on a wealth of information to help you get started visit Precision Realty & Assoc. LLC or if you prefer a more personal touch, reach out to a us, CALL 801-809-9866 today. The decision to buy or sell is a personal one that depends on your financial situation, future plans and lifestyle.

Source Realtor.com