Check Out These 8 Surprising Predictors of Housing Prices

Oh this was a fun article to share – we call it the TJ effect.  

Enjoy – Sabrina 

Check Out These 8 Surprising Predictors of Housing Prices

Like investors in the stock market, 1933 Saint Gaudens Double Eagle coins, or orange juice futures, home buyers and owners want to know which way prices are heading. Are valuations heading up, up, up, making it the perfect time to buy? Or are they beginning a precipitous decline from their peak—making it high time to sell? To read the tea leaves, they might focus on the latest jobs reports, check out what’s going on in other markets, or scrutinize the writings of economists.

But when it comes to nailing the best deal in real estate, you can get a jump on the competition! Inside-track insights can be found in the most unusual places—such as on a grocery run, or at the gas pump. We’ve rounded up eight surprising indicators of change in home prices. Do they play a role in pushing the numbers skyward or down into the dirt? Or are they false prophets? We’re here to help you sort it out!

  1. Gas prices

Sure, it feels fantastic to fill up your car with gas for just $35 when it used to cost almost $50. But if you’re looking to buy a home, the financial benefit of cheap gas might be overrated—as gas prices fall, home prices inevitably go up. And homes sell faster, too, which takes a toll on available inventory.

For every $1 decrease in gas prices, home prices increase by roughly $4,000 and the average time to sell a property decreases by 25 days, according to a study by Longwood University and Florida Atlantic University.

Lower gas prices lead to increased consumer confidence and more disposable income for potential buyers, Longwood professor Bennie Waller explains. In addition, the listing broker—who has to travel between properties—is more likely to market more aggressively and have more showings when gas is cheap.

  1. Trader Joe’s vs. Whole Foods

When it comes to healthy eats, cost-conscious gourmet market Trader Joe’s and pricey, environmentally conscious Whole Foods each have their own massive cult following. But it turns out, if you’re seeking a neighborhood where homes are worth more—and gaining in value—you’d better know which store to look for.

Homes near the two foodie superstores significantly trump the national average home value, but homes near a Trader Joe’s are worth 5% more than homes near a Whole Foods, according to RealtyTrac. So close, Whole Foods!

Homes near a Trader Joe’s also appreciate faster, with an average appreciation rate of 40% from the time of purchase. Meanwhile, homes near a Whole Foods appreciated 34%, the same as the national average. So even if you do tend to shop at “Whole Paycheck,” you’d probably do better to buy a home near TJ’s—and load up on some Two-Buck Chuck while you’re at it.

  1. Sports facilities

Walking distance to the big game? Score! Living near a stadium clearly is not a hard sell for sports fans, but even those without an obsessive rooting interest in the local teams should pay close attention if there’s a major sports facility nearby.

Moving a residential housing unit one mile closer to a professional sports facility increases its value by $793. But the effect disappears after four miles, according to researchers at the College of William and Mary and University of Alberta, who extracted property data within 5 miles of every NFL, NBA, MLB, and NHL facility in the U.S. So sidle up to that stadium—just be sure you have a dedicated parking space.

  1. Marijuana

The legalization of marijuana was predicted to have a major impact on state tax revenues, and with people relocating to take advantage of its medical benefits or just because they enjoy a regular toke, some have suggested that legal pot might also push up real estate values.

Marijuana’s impact on housing is a tale of two states: Colorado and Washington, the only ones that have legalized the sale of recreational marijuana.

The buzz is felt more in the real estate market of Colorado. Since the doors opened for recreational sales in January 2014, housing prices have appreciated 20.4%, much higher than the 15.2% across the country over the same period.

Marijuana sales in Washington are more modest, and so is the real estate growth. The state’s housing prices have risen by 7.3% since it launched its legal marijuana market in July 2014—the height of the yearly housing market—while at the national level, they increased 6.5% over the same period. (Keep in mind that housing prices are generally lower in the winter and higher in the summer, the purpose is not to compare the numbers of Colorado to Washington).

Of course, it’s hard to say whether the legalization of marijuana is really driving those numbers. After all, both Denver and Seattle are hubs for tech businesses that are fueling employment, which in turn fuels the housing market. But if you already own a home in Colorado or Washington, you’ve got plenty of reasons to be mellow and to listen to “Dark Side of the Moon” on a continuous loop.

  1. Temperature change

Global warming affects not only nature, but also our daily lives and housing decisions. The National Association of Realtors® looked at home prices and temperature change over the past four years and found what seemed to be a negative correlation between temperature increase and housing prices.

National Association of Realtors

Out of the 82 markets studied, those with the highest gains in housing prices typically had a small increase in temperature (up to 2 degrees Fahrenheit). For example, in Atlanta, GA, the temperature increased 1 degree while house prices increased 78%. But markets where the temperature rose more than 3 degrees did not experience significant price gains, such as Little Rock, AR.

  1. Casinos

Part of Las Vegas’ legendary success story is that casinos brought wild prosperity to a barren desert area. But in fact, Sin City is an American anomaly in just about every way imaginable, not the least of which are real estate valuations. The truth is, casinos across the country, from riverboats to Native American reservations, usually have a negative impact on surrounding home values—by 2% to 10%, according to various studies.

One case study showed that in Henderson, NV, properties within a mile of a proposed large-scale casino would see their values fall by $9,200. Snake eyes!

  1. Highways

Is it a good idea to live close to the highway? Yes … and no. It depends on just how close we’re talking.

A case study of the Superstition Freeway (U.S. Route 60) corridor in Mesa and Gilbert, AZ, showed that single-family homes within 0.5 miles of the freeway were adversely impacted. But the negative impacts were more than offset by housing price appreciation in the surrounding areas. Average sales price appreciation for homes within 5 miles of the freeway (including negatively affected properties) was higher than the whole metropolitan area. So while you probably don’t want to buy right by an exit ramp, easy access to a transportation corridor is definitely a strong selling point.

  1. Trees on the street

Everyone knows that stately old-growth trees add major charm to a neighborhood—and are probably an indicator of more expensive homes. But did you know just how expensive? A recent study found that houses on streets where there were trees fetched an average of $7,130 more than houses on treeless streets. Maybe it’s time to consider branching out.

What do you think improves a homes value in your area?  Let The Caton Team know – we’d like to hear your opinion!  

 

I read this article at: http://www.realtor.com/news/trends/eight-surprising-things-that-impact-property-values/

Remember to follow our Blog at: https://therealestatebeat.wordpress.com/

Got Questions? – The Caton Team is here to help.  

Email Sabrina & Susan at: Info@TheCatonTeam.com

Call us at: 650-568-5522

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Connect with us professionally at LinkedIn: http://www.linkedin.com/profile/view?id=6588013&trk=tab_pro

Please enjoy my personal journey through homeownership at:

http://ajourneythroughhomeownership.wordpress.com

Thanks for reading – Sabrina

The Caton Team – Susan & Sabrina – A Family of Realtors

Berkshire Hathaway HomeServices – Drysdale Properties

Sabrina BRE# 01413526 / Susan BRE #01238225 / Team BRE# 70000218/ Office BRE #01499008

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Here’s why 2016 will bring good news for potential homebuyers…

I find it important to share articles I come across to educate my clients and readers.  I often write my own blog entry – but find sharing information much more powerful than standing on a soap box.  Enjoy this article from Redfin found on Housingwire.  ENJOY! – Sabrina I’ve added my 2 cents in bold italics.

Here’s why 2016 will bring good news for potential homebuyers

Next year isn’t predicted to bring any giant hoopla to set off the market. However, moderate growth is more sustainable, and better for buyers.

According to Redfin’s forecast for 2016, “Most economists agree that housing prices and sales will continue to grow in 2016, just at a slower pace. Call it a slowdown, but not bad news.”

The New Year doesn’t bring all good news, with some bad tossed in the mixed. Overall, Redfin said, “All things considered, we see a fairly uneventful housing market next year.”

Here are Redfin’s five housing market predictions for 2016:

  1. Prices and sales will grow half as fast

As price growth ebbs and mortgage rates rise, more homeowners will stay put. Sales will grow about half as fast as they did this year and prices will rise at a more normal 3.5% to 4.5%, down from almost 6% this year.

According to a recent report from RealtyTrac, for more than a third of the nation’s major metro areas, home prices have reached all-time highs in 2015.

Here on the SF Peninsula housing demand is very high with so much job growth and inventory is very low.  I expect more of the same in 2016.

  1. Easier Credit

Americans for whom a mortgage has been just out of reach will have a better shot at qualifying for one in 2016.

Lenders will embrace new ways to measure creditworthiness and mortgages will evolve to serve a changing American household. For example, credit scores will better evaluate a person’s rental history and utility bill payments. More loans will allow buyers to include income from room rentals, live-in parents and extended-family members.

In a significant move for housing regulation, last week a bill was introduced in the House of Representatives that would allow Fannie Mae and Freddie Mac to consider alternative credit-scoring models beyond the FICO credit score the government-sponsored enterprises currently use when determining what loans to purchase.

Yes, since the housing crash years back, lending as improved.  That doesn’t mean it is easy – it is tedious to say the least.  But it is for the overall well being of our market.  If you are thinking about buying a home – please get a full pre-approval completed with your lender of choice.  Understand your budget and adjust your wants/needs list accordingly.  

  1. More (and older) first-time buyers

We expect first-timers to make up a bigger portion of the market than they did this year. The reason is simple: The market will be more welcoming to them thanks to the aforementioned slowing price growth and easier access to loans. This year’s market dropouts have saved for bigger down payments and will be ready to give the market another shot early next year. And more of those millennials who had been holding off on buying for various reasons will finally be ready and able to in 2016.

In the Mortgage Bankers Association’s housing report that looks at the future decade, Lynn Fisher, MBA’s vice president of Research and Economics, said, “Improving employment markets will build on major demographic trends – including maturing of Baby Boomers, Hispanics and Millennials – to create strong growth in both owner and rental housing markets over the next decade.”

Oh yes, as those effected by the crash heal their credit and save their money – there will be a new influx of buyer coming into the market – again for the very first time.  We will also see millennial buyers investing in real estate.

  1. Slower market, slowing closings

The 2015 housing market was the fastest we’ve seen at Redfin. From January to October, the typical home was on the market for 36 days, four days faster than the same period in 2014. We expect the market to slow in 2016 as government-backed loans become more common and cash sales become less so. Because of low inventory, bidding wars will still be in force next year, but there will be a lower ceiling on price escalation as 2016 buyers won’t be willing or able to go as high as buyers have in recent years.

To help, here are a few tips from Minnesota Realtor Craig Kamman to help win a bidding war. On example he listed is to offer full price or more. Money is a major factor in a seller’s decision, but not the only one.

I also feel the changes in lending, that went into effect in October of 2015 – will slow down the pace of the market a tad.  Though we do see many all cash buyers on the SF peninsula who will not be tied to loan regulations.  That doesn’t mean cash is supreme king – but it does mean buyers with loans will have to set themselves apart.  The Caton Team as a tool box of tactics we use to help our buyers.  

  1. Continuing inventory shortage

The biggest risk to the 2016 market will be the continuation of inventory shortage, especially in the affordable segment of the market. The number of homes for sale shrank from 2014 to 2015 in 45 of the 60 metro tracked by Redfin. Inventory across all 60 metros is down 4 percent from a year ago.

The most recent pending home sales report from the National Association of Realtors said that sales have plateaued this fall as buyers struggle to overcome a scant number of available homes for sale and prices that are rising too fast in some markets.

The SF Peninsula has limited land.  I have already seen many homeowners add onto their existing homes instead of jumping into the buyer pool  Which also effects our inventory.  

My advice – if you want to be a SF Peninsula owner – do not give up so easy.  Each home on the market is a unique opportunity and should be treated as such.  It is a journey – not a race.  Call or click The Caton Team to learn more about buying and owning property in Silicon Valley.

I read this article at: http://www.housingwire.com/articles/35823-heres-why-2016-will-bring-good-news-for-potential-homebuyers

Remember to follow our Blog at: https://therealestatebeat.wordpress.com/

Got Questions? – The Caton Team is here to help.  

Email Sabrina & Susan at: Info@TheCatonTeam.com

Call us at: 650-568-5522

Want Real Estate Info on the Go? Download our FREE Real Estate App:  http://thecatonteam.com/mobileapp

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Connect with us professionally at LinkedIn: http://www.linkedin.com/profile/view?id=6588013&trk=tab_pro

Please enjoy my personal journey through homeownership at:

http://ajourneythroughhomeownership.wordpress.com

Thanks for reading – Sabrina

The Caton Team – Susan & Sabrina – A Family of Realtors

Berkshire Hathaway HomeServices – Drysdale Properties

Sabrina BRE# 01413526 / Susan BRE #01238225 / Team BRE# 70000218/ Office BRE #01499008

 

Renters Are Not Saving To Buy a House

When I read the above title – my jaw dropped.  How can renters not be saving for a home?  The statement alone broke my heart.  Owning a home – to me – means long term security.  More than a place to live!  A long term investment!  Read on and share your thoughts!

-Sabrina

Renters aren’t saving to buy a house

Looking across the vast spectrum of housing surveys today, most will claim that the majority of renters want to buy a home eventually. That may be, but they’re not saving to do that.

In fact, saving for a down payment to buy a house ranks fourth on their list of priorities, according to a survey conducted in October by Harris Poll for Freddie Mac, which helps fund loans to homeowners and apartment developers.

When asked about their savings priorities, more renters said they consider saving for emergencies (59 percent), retirement (51 percent) and children’s education (50 percent) an “essential/high priority.” Only 39 percent said saving for a down payment. This is particularly surprising given fast-rising rents.

Rising rents, up over 5 percent annually nationwide, are affecting how renters spend their money more today compared with just a few months ago. More renters say they are making changes to spending or plans due to those higher rents. Just over half of those surveyed who have seen a rent increase in the past year say they are living payday to payday.

“We know rents are rising faster than incomes, and now we have data to show that many renters don’t have enough to pay all their debts each month, which is forcing them to make tradeoffs, such as cutting spending on other items,” said David Brickman, executive vice president of Freddie Mac Multifamily.

The share of renters who say they now have to put off plans to purchase a home rose to 55 percent in October from 44 percent in the last Freddie Mac renter survey in June. This occurred even as more said they would like to buy a home and have started looking.

Add it up and the lack of affordability is the answer. Renters may be looking, but they’re not buying because they are faced with rising home prices and rising mortgage interest rates.

When asked the main reason they expect to still be renting three years from now, the top three answers had to do with affordability. The fourth was not good enough credit.

There is a growing divide, however, between those who rent a single-family home and those who rent in a multifamily apartment building. Seven in 10 multifamily renters said they expect to continue renting, up from 64 percent in the previous quarter. Renters of single-family homes say they are more likely to buy a home.

“Growth in the renter segment will most likely occur through multifamily properties as more than half of those currently renting single-family properties are planning to become homeowners in the near future,” said Brickman. “The data shows single-family renters are increasingly more dissatisfied than multifamily renters.”

That does not bode well for the growing number of investors in single-family rental homes. Even as large-scale institutional investors slow their purchases of homes to rent, smaller-scale and individual investors are picking up the slack. The number of single-family rental homes rose 35 percent since 2006, to 15.1 million from 11.2 million, according to John Burns Real Estate Consulting. Roughly 3.9 million owner-occupied homes became rentals in that time.

Either apartment managers are doing a better job of serving their tenants than single-family rental managers, or more renters simply prefer the apartment model, which usually offers additional amenities and better locations.

“Right now we’re in the golden age of the fundamentals of the multifamily business,” apartment developer Richard LeFrak said on CNBC’s Squawk Box. “You have a drive toward urbanization where more and more people want to live in cities.”

The survey of 2,020 adults was conducted online within the United States between Oct. 8-12. Of those surveyed, 703 were renters.

I read this article at: http://www.cnbc.com/2015/11/18/renters-arent-saving-to-buy-a-house.html

Remember to follow our Blog at: https://therealestatebeat.wordpress.com/

Got Questions? – The Caton Team is here to help.  

Email Sabrina & Susan at: Info@TheCatonTeam.com

Call us at: 650-568-5522

Want Real Estate Info on the Go? Download our FREE Real Estate App:  http://thecatonteam.com/mobileapp

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Or Yelp me: http://www.yelp.com/user_details_thanx?userid=gpbsls-_RLpPiE9bv3Zygw

Connect with us professionally at LinkedIn: http://www.linkedin.com/profile/view?id=6588013&trk=tab_pro

Please enjoy my personal journey through homeownership at:

http://ajourneythroughhomeownership.wordpress.com

Thanks for reading – Sabrina

The Caton Team – Susan & Sabrina – A Family of Realtors

Berkshire Hathaway HomeServices – Drysdale Properties

Sabrina BRE# 01413526 / Susan BRE #01238225 / Team BRE# 70000218/ Office BRE #01499008

 

6 ‘Tacky’ Home Décor Trends – Had to share this post holiday!

6 ‘Tacky’ Home Décor Trends

Trends come and go, and the folks at realtor.com® recently compiled a list of a few of those faded home design trends they hope never come back in style. Make sure your listing isn’t an offender!

Here are a few of what realtor.com® recently dubbed as the “tackiest home décor trends” of all time:

  1. Plastic furniture covers: While you may be trying to keep the furniture clean, those thick layers of clear vinyl all over furnishings will not make guests feel welcome or comfortable as they squish into a Saran-wrapped chair.
  2. Popcorn ceilings: Textured ceilings scream 70s and 80s décor. But besides a passé look, they also can absorb odors and discolor more easily too.
  3. Wall-to-wall shag carpet: Sure, it’s more affordable than wood flooring but shag carpet can be tough to clean (getting stuck in a roll in your vacuum) and it can feel like your walking on yarn, according to realtor.com®’s list.
  4. U-shaped toilet rugs and covers: Remove those U-shaped covers along the bases of toilets and the matching toilet seat cover. They can make the bathroom appear unclean – by trapping moisture and bacteria.
  5. Fabric overload: Floral prints and copious fabric in every corner of a room may have been on trend in the 1980s, but it may be long overtime to weed out some of those prints. Ruffled skirts on pieces of furniture and floral curtains just may be too much for home buyers’ tastes nowadays.
  6. Hanging plants: Hanging houseplants from your ceiling can make a home look like a “jungle.” Instead, keep the greenery in a pot on the table or shelf.

View more tacky décor trends at realtor.com® or offer your alone in the comment section below.

Source: “10 Tackiest Home Décor Trends We Hope Never Return,” realtor.com® (Nov. 20, 2015)

I read this article at: http://realtormag.realtor.org/daily-news/2015/11/23/6-tacky-home-d-cor-trends?om_rid=AACmlZ&om_mid=_BWU4xkB9IQpriG&om_ntype=RMODaily

Remember to follow our Blog at: https://therealestatebeat.wordpress.com/

Got Questions? – The Caton Team is here to help.  

Email Sabrina & Susan at: Info@TheCatonTeam.com

Call us at: 650-568-5522

Want Real Estate Info on the Go? Download our FREE Real Estate App:  http://thecatonteam.com/mobileapp

Visit our Website at:   http://thecatonteam.com/

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Connect with us professionally at LinkedIn: http://www.linkedin.com/profile/view?id=6588013&trk=tab_pro

Please enjoy my personal journey through homeownership at:

http://ajourneythroughhomeownership.wordpress.com

Thanks for reading – Sabrina

The Caton Team – Susan & Sabrina – A Family of Realtors

Berkshire Hathaway HomeServices – Drysdale Properties

Sabrina BRE# 01413526 / Susan BRE #01238225 / Team BRE# 70000218/ Office BRE #01499008

 

Bay Area rental crisis squeezing out middle class

Before you read this article – please note I will share my insight on how to work around this rental crisis in next weeks blog installment.   Next weeks blog – http://wp.me/p1GGbd-j9

Bay Area rental crisis squeezing out middle class

Diane Nesom rents a tiny cottage — just 600 square foot and one-bedroom — at the end of a cul-de-sac in Fremont for $1,400 a month. And while that eats up about 50 percent of her take-home pay, the 35-year-old accountant regards it as “a steal” and can’t imagine moving up to a larger rental in the current runaway market.

“I earn too much income to qualify for any kind of affordable housing,” she said, “but not enough income to actually afford anything else, so I’m stuck in this middle craziness. It’s not a fun place to be.”

Maxed out on her budget — “if anything goes wrong, I’m ruined” — Nesom is among the legions of professionals who struggle to navigate the Bay Area’s escalating rental market, where it’s no longer unusual for high-end apartments to fetch $4,000 or $5,000 per month and sometimes more, especially in Silicon Valley hot-pockets like Palo Alto and Mountain View.

Though thousands of new apartments were completed around the region in the last year, the inventory can’t keep up with tech-fueled job growth. With vacancy rates at about half the national average, the demand for housing has sent rents through the roof, creating a sense of desperation for many who are being priced out. According to the most recent data, an average two-bedroom apartment now costs $2,884 in San Mateo County, $2,552 in Santa Clara County and $2,172 in Alameda County. Contra Costa County is a relative bargain at $1,835, though bets are on for how long that will last.

For most of the region, rental prices are up about 50 percent since 2010, and up about 10 percent in the last year, according to the Marcus and Millichap real estate brokerage firm, which crunched the data for this story with help from the MPF Research group.

“Rents are at a historic high,” said Caryll-Lynn Taylor, executive director of Neighbors Helping Neighbors, a Peninsula-based nonprofit that educates clients about the increasingly complex rental market and helps them navigate it. Landlords typically ask tenants to show annual income that’s triple the cost of rent. As a result, many middle-income workers are imperiled. A $2,500 two-bedroom apartment requires $7,500 in monthly income, or $90,000 per year.

“So you rule out our school teachers, most of our firefighters, many of our tech workers,” Taylor said. “And where do they go to rent and live?”

Many displaced tenants spend half a year or more searching for new apartments, she said. Of the approximately 4,900 households with incomes between $50,000 and $160,000 that the agency serves, about 370 are living in their vehicles, mostly in Mountain View and Palo Alto.

Elected officials and citizens groups from San Jose to Richmond are putting new energy behind rent control measures and related efforts to stabilize rents and prohibit unjustified evictions. Richmond has been considering strict rent control and eviction policies, while Berkeley, San Francisco, Oakland, San Jose and a handful of other local municipalities already have rent control ordinances. But many observers believe a long-term solution to the rent crisis requires a pronounced regional effort to increase housing supply, bringing it into better balance with the rate of job growth.

The pent-up demand for housing is taking a toll on Mark and Caitlin Fisch, who live with their three young children in a 2-bedroom apartment in Mountain View that rents for $2,575. A well-paid private schoolteacher, Mark has so far been able to make his payments, while Caitlin home-schools the kids. But with their lease expiring in September, they learned this month that the rent is going up — way up — to $3,600. Their options: sign a new one-year lease at the new rate, go month-to-month at $6,566, or leave. The family expects to do the latter.

“We always knew that there would probably be a raise in rent,” Caitlin Fisch said, “because that seems to be the trend. But we were thinking something on the order of 10 percent.” She suspects the hike is “spurred by the inflated salaries at the tech giants” in town, most notably Google.

Failing to negotiate “the crazy maze” of rentals has led Andrea and Frazier Hubbard to unexpected living quarters: their 26-foot trailer, in which they have camped for the last eight months on the grounds of a church in Palo Alto. Andrea is a Stanford office administrator. Frazier is a business analyst with a firm on the Peninsula. Their combined income is just shy of $100,000, Andrea said, “but you can’t really save when you’re paying thousands of dollars a month for a little apartment.”

By living rent-free in their trailer, they hope to build their savings and eventually buy a house in the somewhat more affordable East Bay.

The rental market is “super-tight,” said John Chang, of Marcus and Millichap. He drew this picture: With so many jobs being created in the last year in Silicon Valley and San Francisco, the Oakland metropolitan area has emerged as “a more affordable alternative” for renters. It’s an “overflow market,” Chang said, “where people looking for better affordability are going. The housing demands in the East Bay are not so much driven by the growth of the employment there, as by the growth in the entire region.”

He cited these numbers: In the last year, San Jose metro led the region in job growth with 59,300 new positions, a 5.9 percent jump that’s nearly triple the national increase of 2.1 percent. San Francisco registered 47,500 new jobs, Oakland metro another 20,900. There is simply not enough housing stock being added to absorb that many people, so they are either doubling up or moving to neighboring areas. And even those “overflow” cities like Oakland are starting to feel overwhelmed.

Joe McCarthy, senior project manager for San Francisco-based Bridge Housing, didn’t know what to expect when the affordable housing developer opened the application process in June for 68 units at the new AveVista Apartments on Lake Merritt in Oakland. For two weeks, lines circled the block as more than 3,700 people applied to live in the apartments, half of which will rent for between $785 and $1,399 per month. The other half, governed by Section 8 subsidies, will rent for about 30 percent of a resident’s income.

“It was the busiest lease-up we’ve ever experienced,” said McCarthy, who attributes the unusual level of interest to “the job generator that has started up in Alameda County and Oakland. We’re seeing a lot more folks looking for housing.”

Nesom, the Fremont accountant, can attest to that.

She recently went apartment hunting with her best friend, Molly Darling, who must leave her $1,300 rental in Alameda this fall. The house Darling lives in has been sold and the new landlord is likely raising the rent.

The duo checked out an open house “for a tiny — and I mean tiny — one bedroom cottage in Alameda,” Nesom recounted. “I mean, it could barely fit a twin bed. And the rent was like $1,500 a month, and there must have been at least 12 people in line when we got there.”

A $1,300 rental is just about the limit for Darling, who works as an office manager: “I can probably push it a little more than that,” she said, “but it’d eat into my groceries. My wages haven’t gone up, but the rents have exploded to the point that I can’t afford to live by myself. I’m boxed in.”

Contact Richard Scheinin, read his stories at www.mercurynews.com/richard-scheinin and follow him at www.twitter.com/RealEstateRag.

I read this article at: http://www.mercurynews.com/business/ci_28585609/bay-area-rental-crisis-squeezing-out-middle-class

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The Caton Team – Susan & Sabrina – A Family of Realtors

Berkshire Hathaway HomeServices – Drysdale Properties

Sabrina BRE# 01413526 / Susan BRE #01238225 / Team BRE# 70000218/ Office BRE #01499008

 

Millennials Seek Out Communal Living Spaces

Millennials Seek Out Communal Living Spaces

DAILY REAL ESTATE NEWS

Co-living spaces with dorm-style apartments are becoming a rising trend among millennials, and the businesses that offer these living arrangements have one goal in common: to create and foster community.

Though the idea of cohousing is not new, many businesses are trying to market to younger generations by advertising not only a unique community but a chance to network, share resources, and make friends.

Pure House is one such business that tries to attract people who want to be a part of a certain type of community—although the apartment rentals often come with expensive, unconventional lease agreements.

The community rental company requires that anyone seeking to live in any of its nine fully-furnished residential apartments located in Williamsburg, Brooklyn fill out an application that asks questions such as, “What are your passions?” and “Why do you think you’ll thrive in a communal living space?”

The application process is meant to select individuals who are socially similar and have like-minded worldviews. Residents pay $1,600-$4,000 per month after signing a 30-day membership agreement, which includes communal activities and amenities such as work out classes, maid services, and bicycles.

Businesses with co-living arrangements like Pure House often act as property managers rather than owners of the building.

However, these businesses could run into trouble with city and state laws that prohibit individual room rentals, and they may not be economically feasible, especially for millennials. Campus, which had co-living arrangements in California and New York, will shut down at the end of this month due to economic reasons.

Still, some businesses with a mission of bringing together young, like-minded people are thriving, and others have even announced timelines to open more communal living spaces.

Here is a list of current and up-and-coming co-living businesses:

Common: Opening renovated apartments for rent this fall in Crown Heights and Bedford-Stuyvesant, Brooklyn, N.Y., Common offers community-minded living spaces in major cities with traditional leases. Residents must first apply for a living space to receive a cleaning service and participate in community events.

Krash: The co-living spaces, or “Krash” houses, require an application process and membership with 3-12 month leases. The company has houses in Boston, New York, and Washington, D.C. and is catered toward entrepreneurs, innovators, and founders.

Open Door: With six housing projects, the company acquires and renovates properties and partners with other property owners to create more affordable housing for unique and visionary individuals.

the co.space: Focusing on creating “positive change in the world,” the co.space puts undergraduate students and young professionals under one roof to encourage shared ideas and networking through community events such as house retreats and mentor dinners.

Stage 3 Properties: The real estate company’s mission is to “disrupting the housing industry by reimagining its process, product and price points” while creating housing for the creative class. It has begun construction on 180 co-living units, which will house 400 people by 2017. The leases will be 12 months long.

Source: “The Millennial Commune,”The New York Times (July 31, 2015)

I read this article at: http://realtormag.realtor.org/daily-news/2015/08/04/millennials-seek-out-communal-living-spaces?om_rid=AACmlZ&om_mid=_BVwQu3B9EOtOGt&om_ntype=RMODaily

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How to buy a house without a 20% down payment

How to buy a house without a 20% down payment

 

If you’re thinking about buying a home, you may need less money than you think.

Here’s how to figure out the amount of cash you need to buy a home, and what you can do to buy a home using as little money down as possible.

Contrary to popular belief, you don’t need 20% down. The minimum down payment you need to buy a home is 3.5% down with an FHA loan on a 30-year fixed-rate mortgage. This 3.5% down payment is a factor of the home price on a loan size up to the high-balance FHA county loan limit — which in most places is $417,000.

However, it can be higher depending on the area. For example, in Sonoma County, Calif., it’s up to $520,950, and in some higher-cost areas, such as Marin County or San Francisco County, that number goes up to $625,500 for a single-family residence.

Alternatively, on a conventional loan you need only a 5% down payment on up to a $417,000 loan size. Should your loan size exceed $417,000, another 5% down payment kicks in, for a total of 10% down needed all the way to the maximum conforming loan limit in your county.

What to expect when buying with little money down

First, if you’re buying a home with less money down, know that your mortgage payment will be higher than if you put more down. The three drivers that inflate a mortgage payment are: interest rate, larger loan size, and private mortgage insurance.

You should have manageable monthly debts — including credit cards, car loans, and any form of payment obligations — in relation to your income. Your income will need to be high enough to include the proposed mortgage payment for the purchase price you are seeking, as well as being able to cover your other debt payments.

The down payment percentages are important to know, though it is significantly easier to work with the monies you have or have access to, than to get wrapped around the axle about down payment percentages. Make no mistake, the mortgage company can work this calculation out for you very easily, or you can do it yourself. You can take the amount of money you have and divide that number by the purchase prices in your area to determine the exact dollar percentage.

Let’s say you have $30,000 to spend on buying a home and you know that housing prices in your area are $450,000. That means you have a 6.7% down payment, enough for an FHA Loan. If your loan professional asks you how much money you have to spend on buying a home in terms of your own funds and possible gift funds, the answer should be some sort of dollar amount, not “How much do I need?”

The reason is this: How much you’ll need to buy a home is going to be predicated on the purchase price of the property and is a continual variable until you get into contract. Start with the monies you have. Assuming you have $30,000 to spend on a $450,000 home example, closing costs on a $450,000 home will easily equate to $10,000, so of the $30,000, $10,000 would come right off the top for closing costs leaving you with $20,000 as a down payment, still meeting the cash to close requirements on an FHA loan.

No-money-down options

  • The VA loan program allows for no-money-down, 100% financing, for U.S. military veterans only.
  • The USDA loan program also allows for no-money-down, 100% financing, as long as you are purchasing a home in a rural area and you meet the USDA’s annual low-income thresholds.

Other sources of money

Alternatively, gift monies can be used to purchase a home. Typically, lenders like gift monies to come from a blood relative, but check with your lender for specifics. Here are additional funds that can be used for the acquisition of a home, though they each come with their own individual downsides and may not be a good fit for you. Consider all of your options:

  • Stocks, bonds, IRA and 401(k) monies can be pulled from these accounts to purchase a home, usually with special provisions.
  • Gift money, as long as it can be documented in some form of a bank account can also be used, along with an executed gift letter.
  • Selling of personal property — a boat or a motorcycle, for example, can be used for a down payment and/or closing costs — documented with a bill of sale and paper trailing of the funds.
  • A security deposit refund on you current rental obligation can also be used, but needs to be planned for on the front end so as to properly communicate timeframe expectations with your landlord.
  • Tax return refund.
  • Cash can be used as long as the funds have been seasonedin some form of a bank account for the past 60 days.

If want to buy a home or want to get on the path of doing so in the future, here are some steps to consider to help meet this goal:

  • Identify what monies you have in the bank now, and from what sources.
  • Next, get “read” on what housing prices are like in your area, through online research or connecting with a good local real estate agent
  • Take the amount of cash you have and divide that figure by an estimated sales price range in your area so you can get a feel for how much cash you will need to purchase XYZ home. Closing costs become another crucial factor, but the main goal is determining if you have enough cash to play with. Based upon these action steps, talking with a mortgage lender about getting qualified or how much money you’ll need to save in the longer-term picture can be a prudent step in making your future home purchase a success.

Another factor that can affect how much home you can afford is your credit score, because that is a major factor in determining your interest rate. Checking your credit at least several months in advance of starting the home buying process can show you where you stand and help you consider whether you should take steps to improve your credit in the coming months. You can get your credit reports for free once a year from AnnualCreditReport.com, and there are many ways to get your credit scores for free, including through Credit.com.

More from Credit.com

Read the original article on Credit.com. Copyright 2015.

 

I read this article at: http://www.businessinsider.com/how-to-buy-a-house-without-a-20-down-payment-2015-9

Remember to follow our Blog at: https://therealestatebeat.wordpress.com/

Got Questions? – The Caton Team is here to help.  

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Please enjoy my personal journey through homeownership at:

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Thanks for reading – Sabrina

 

The Caton Team – Susan & Sabrina – A Family of Realtors

Berkshire Hathaway HomeServices – Drysdale Properties

Sabrina BRE# 01413526 / Susan BRE #01238225 / Team BRE# 70000218/ Office BRE #01499008