Lower mortgage rates and moderating home prices are making purchasing a home over renting more tempting in several of the nation’s metros, according to realtor.com®’s newly released Rent vs. Buy report. While the gap is starting to narrow between buying and renting nationwide, it is still more expensive to purchase a home in the majority of larger metros than rent.
The median monthly cost to purchase a U.S. home was $1,600 in the fourth quarter of 2019, about 30% of the national median household income. Meanwhile, the median monthly rent was $1,319, which represents about 25% of the median household income.
Continue… https://magazine.realtor/daily-news/2020/01/29/cost-gap-narrows-between-buying-vs-renting

What Stresses Out Young People the Most About Buying

January 28, 2020

Young adults may be eager to buy, but 75% of first-time home buyers say they’re overwhelmed about the purchase process, according to TD Bank’s First-Time Homebuyer Pulse of more than 850 millennial buyers between the ages of 23 to 38.

Many have not taken the first step to talk with a lender before they start actively looking. Only 30% of respondents say they have spoken to a mortgage lender before starting their house hunt. “To put the cart before the horse is to pursue a significant life decision with possibly incomplete or inaccurate information,” says Rick Bechtel, head of U.S. residential lending at TD Bank.

Young adults have a lot on their mind. They’re concerned about their job stability (51%) and the stability of their relationship with their significant other (35%). They’re also concerned about the economy (57%) and potential changes in policies due to the 2020 election (47%).

Pushing Through the Hurdles

Stop First-Time Buyers From Making Mistakes

The housing crisis still lingers in their minds too. Forty-seven percent of respondents say that growing up during the housing crisis has made them more nervous to buy a home. After all, more than half—55%—say that their family or a family they knew had lost their house during the housing crisis.Source: TD Bank

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As rents increase, more people may take on roommates to try to curb costs. At least one in three adults live with at least one adult roommate who isn’t their romantic partner or a college student, according to a 2018 Pew Research Center study.
But who makes up the perfect roommate? Apartment Guide surveyed more than 1,000 Americans to find the perfect—or not-so-perfect—traits.
In general, researchers found that people who had more than one roommate tended to be less satisfied with their living situation than those who just had one roommate. Those living with their friends, family (32%), and co-workers (about 30%) were the most likely to be happy with their roommates.
Continue…https://magazine.realtor/daily-news/2020/01/23/survey-reveals-the-most-common-roommate-gripes

Older Americans may not realize that they can still qualify for a mortgage, even though the Equal Credit Opportunity Act forbids discrimination in the mortgage market on the basis of age.
Yet, Mary Babinski, a senior loan officer with Motto Mortgage Champions in Trinity, Fla., told The Wall Street Journal that when a 97-year-old applicant came to inquire about a mortgage, he was even surprised he could still qualify for a 30-year mortgage. Older borrowers are eligible to get loans that will expire even up to their 130th birthdays.
Continue…https://magazine.realtor/daily-news/2020/01/21/97-year-olds-can-still-get-a-30-year-mortgage

A home costs more than just the sale price. For example, closing costs—which make up about 2% to 5% of the home’s purchase price—are a major added expense. Michael Hyman, a research data specialist at the National Association of REALTORS®, shares the charges that make up closing costs in a post at the association’s Economists’ Outlook blog so that home buyers can be prepared.
Lenders provide a Closing Disclosure at least three business days prior to closing on a mortgage. But buyers will need to budget for these added costs ahead of time to avoid sticker shock days before closing.
Origination fees. This is the fee charged by lenders for processing the application and underwriting it. The fee typically ranges from about 0.5% to 1% of the borrower’s mortgage. Sometimes, it’s higher for smaller loans because “the fixed costs are a higher percentage of a smaller balance,” Hyman notes.
Continue… https://magazine.realtor/daily-news/2020/01/17/what-exactly-do-closing-costs-cover

5 Tricks to Keep Your Pipes from Exploding This Winter

Paint firm Sherwin Williams surveyed 700 professional interior designers to learn the three major trends that they want to leave in the last decade. Here are the trends they said they’re most tired of:
Macramé
The boho trend of last year is fading fast, and one of the signatures of the look–macramé—is quickly losing fans. Twenty-two percent of designers chose macramé as their least favorite design trend in the last decade.
Continue… https://magazine.realtor/daily-news/2020/01/16/3-trends-designers-want-to-leave-in-the-2010s

10 Predictions for Real Estate in 2020

Ryan Gorman, Coldwell Banker’s incoming CEO, gives industry predictions for the new year and beyond. December 23, 2019 by Nicole Slaughter Graham

When he was a teenager, Ryan Gorman, incoming CEO of Coldwell Banker, found great joy in picking up the real estate section and browsing through the homes for sale in his area. He and his then-girlfriend, now wife, used to attend open houses for fun.

“I always wondered what they thought about a couple of teenagers in high school touring homes,” he reflects.

Needless to say, Gorman has had an interest in real estate for just about his entire life. His post–high school studies took him on a detour into the world of finance and insurance, but it all set a solid foundation for his entrance into real estate.

“I kind of took the back door into real estate through the title insurance business,” he says. “I figured if I actually liked title insurance—and I genuinely did like it—then I would definitely love real estate.”

He was right, and ever since, he’s been making a name for himself. He joined the world of real estate in 2004 at Realogy Corp. as the corporate senior vice president and head of strategic development. In that role, Gorman oversaw some of the company’s most profitable mergers and acquisitions. In 2012, he joined NRT, one of Realogy’s subsidiaries, and within six years, had moved up the ranks to president and CEO. Strategy, operations, and where the two intersect is Gorman’s specialty, and that’s what he plans to bring to Coldwell Banker in 2020 as CEO.

As Gorman begins his new role, here are his predictions for the industry in 2020 and beyond:

1. Return to realism. In 2019, the industry was too focused on the newest, shiniest thing, Gorman says. New technology that was thought to bring in leads or streamline the job made it easy for brokers and agents to overpromise and underdeliver. In 2020, brokerages will likely focus more on technology as a tool rather than a quick fix or magic wand.

2. Splitting in two. The industry is seeing an influx in “skinny bundle” brokerages, or brokerages that offer a DIY approach at a lower cost. Gorman predicts that these services will continue to gain traction and will cause a market split. Consumers will have the option to work with a full-service brokerage or a skinny bundle brokerage, depending on what they want and need.

3. Expectation changes. As the buying and selling markets continue to change and younger people are looking to enter the market, brokerages will need to adjust accordingly. Gorman says that means meeting customers where they are and making the process easier for them.

4. Embracing agility. The need for agility isn’t necessarily something new, but with the speed at which the industry is changing—thanks to technology and younger buyers—brokerages and agents will need to let go of what hasn’t been working for them in the past. They’ll also need to embrace speed, as customers have more options than ever to buy and sell, and the fast-paced world requires an uptick in response time and service in the real estate business.

5. Coming up with new solutions will be paramount. Right now, services like OpenDoor and firms willing to offer cash for homes are enticing, but usually, these offers are good for only a few days. Innovation will be key, Gorman says, citing a new service from Coldwell Banker as an example. The company will start offering RealSure, which will provide buyers with a cash offer and marketing package good for 45 days, rather than three to five days like other services. This gives customers the time to do market research before committing to an offer.

6. Local tax rates will make a difference in area markets. Recent changes to the tax code mean higher local taxes in some areas, which is prompting some people to relocate sooner than they normally would. This will affect the market in 2020, Gorman says, and will be something to consider in the future.

7. Strong markets will stay strong. Gorman says a huge downturn or leveling of the market is unlikely. He anticipates that strong markets will remain strong. This is because the housing markets that are doing well have strong economies in general, Gorman explains. Jobs are plentiful and opportunities are available, and he expects that to continue. Likewise, though, weaker markets will likely continue to weaken, causing people to move to new areas.

8. Communicating value instead of price. With so many options to buy and sell homes today, Gorman says brokerages and agents will have to do a really good job of selling value over price in 2020. It’s imperative that those in the real estate business are able to communicate what they bring to the table and how they’re assets to the customer’s experience.

9. Partner with the best in tech. In 2020, agents will continue to seek technology that best serves their needs. The right tech equates to less busy work for your agents and more time with clients. For example, Coldwell Banker has what it calls its CBx Technology Suite, which helps agents find sellers, win listings, and locate buyers. The suite’s three products use machine learning to deliver leads, allow agents to create stunning listing presentations, and use big data to identify likely buyers, helping agents market properties more efficiently.

10. Focusing on a tried and true formula for success. When it comes to building longtime relationships and referrals in this business, what’s worked in the past will continue to work in the future, Gorman says. A lot of time has been spent on what’s new and innovative, and there’s some need for that, but consistent follow-through, integrity, and a brokerage with agents willing to invest in themselves will always prevail, Gorman asserts.

Most buyers have “hardwood floors” and “granite countertops” on their minds when reading listing ad copy, but their preferences can differ somewhat after that. Depending on where consumers live, they may be more apt to be drawn to listing ads that point out the “cozy fireplace,” “pool,” or “brick home.”
Point2 Homes, an online real estate marketplace, analyzed more than 1.2 million listings in July 2019 to see the most common words that agents used when describing the homes they’re selling.
Continue…https://magazine.realtor/daily-news/2020/01/13/the-key-listing-ad-words-that-attract-buyers