Millennials Are Redefining Home-Buying Standards—and Gen Z Is Next

The home-buying approach varies from generation to generation—and in order to overcome down payment hurdles, millennial buyers are transforming the standards of homeownership set by baby boomers, according to the 2017 Zillow Group Report. In fact, less than half (39 percent) of millennials submit offers with the recommended 20 percent down payment. Twenty-one percent put down the minimum: 5 percent or less.

The financial challenges don’t stop at down payments. Thirty-three percent of millennial buyers report having difficulty qualifying for a loan, and 43 percent have trouble finding out what they can afford. These complications likely stem from a lack of experience, as 71 percent of millennial buyers are purchasing their first home.

“In many cities across the U.S., the housing market is extremely competitive, especially for first-time buyers who are looking to purchase a starter home,” says Zillow Chief Economist Dr. Svenja Gudell. “Young buyers often start their careers in fast-growing cities in which the market is particularly tough—and they’re trying to save for a down payment while making record-high rent payments.”

Most millennials are not confident in their buying power. Sixty-two percent simultaneously search for rentals as a back-up in case of challenges in their home search, such as finding suitable properties in their price range or within their required time frame.

Millennials will, however, look for creative ways to achieve the home-buying dream. Twenty-nine percent of millennial buyers ask friends or family for down payment help, often coming up with the full amount using various sources.

Millennials will also jump on the opportunity to claim a home. They do not shy away from multiple offer situations, and are not afraid to go over budget. More than 53 percent of first-time millennial buyers make multiple offers on the homes they want, and 37 percent don’t keep to their financial plan. This can prevent future plans to sell if market conditions don’t allow the sale of the home to cover remaining mortgage balances. The typical homeowner still owes 62 percent of their home’s value and 46 percent of millennial sellers won’t sell their home in their desired price range.

The economic landscape may or may not change for the next generation, but they will likely tackle these financial challenges in their own way, the report shows. Generation Z is just now starting to enter the housing market as renters.

“It’s encouraging to see that Generation Z is inheriting the same notion of what home means as their parents and millennial siblings,” says Jeremy Wacksman, chief marketing officer at Zillow Group. “These tech-savvy yet risk-averse renters are bringing their social personalities home, desiring communal amenities geared toward bringing people together.”

While Generation Z buyers embrace homeownership as fundamental to achieving the American Dream, high rent prices may stand in the way when it comes time for them to buy. Thirty-seven percent of renters who didn’t move in the past year state that lack of affordability is the main reason for staying put.

Since 47 percent of Generation Z identifies as non-white, it is the most racially and ethnically diverse generation in U.S. history, the report shows. This may bring to light challenges facing minority buyers today. Thirty-seven percent of African American/black buyers, 33 percent of Asian/Pacific Islander buyers and 25 percent of Hispanic/Latino buyers indicate they are dissatisfied with the home-buying process. This is due mainly to higher denial rates for minority buyers on pre-approvals and mortgages.

The millennial generation is redefining the way homeownership is approached, and Generation Z will have its own impact on the housing market in a few years, the report shows—especially since they will likely outnumber millennials by nearly 1 million people by 2020.

“As they mature and look toward homeownership, it will be interesting to see how their aspirations and preferences will shape the housing market,” says Wacksman.

For more information, please visit www.zillow.com.

Liz Dominguez is RISMedia’s associate content editor. Email her your real estate news ideas at ldominguez@rismedia.com.

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5 Quick Curb Appeal Projects

Need to add some curb appeal to your home to get it ready for market? Or are you just in the mood for a quick refresh? Here are five easy DIY projects to help dress up your home using lightweight, decorative millwork accessories or architectural elements. The composition and durability of the products make them a long-lasting, low-maintenance way to dress up your home for years to come.

Entry Door - Make a front entry door 'pop' by surrounding it on both sides with a set of decorative pilasters and topping it off with a pediment. Select from simple peaked pediments or more ornate acorn or rams-head pediments.

Brackets - Install lightweight decorative brackets to a porch or under an eave for a fast way to personalize a home.

Windows - Add a simple header directly over the exterior of a window frame to add more visual appeal to the window. Select from straight or arched headers for the style that best matches your home.

Column Wraps - If your home has worn or boring porch posts, hide them with PVC column wraps. These decorative pieces fit right over a post for an instant makeover.

Shutters - If your shutters are suffering from peeling paint or worn finishes, consider replacing them with UV-resistant polyurethane shutters. Made to resist moisture and insects, such shutters can be quickly installed and will maintain their curb appeal for years to come.
 
If you’d like more homeowner information, please contact me.

Commercial Real Estate to Soften, but Still on Solid Footing

Commercial real estate price growth in large markets is expected to flatten over the next year, but strong leasing demand and investor appetite in smaller markets should keep the sector on solid ground, according to the latest National Association of REALTORS® (NAR) quarterly commercial real estate forecast.

Backed by the ongoing stretch of outstanding job creation in recent years, national office vacancy rates are forecast by REALTORS® to retreat 1.1 percent to 11.9 percent over the coming year. The vacancy rate for industrial space is expected to decline 1.1 percent to 7.8 percent, and retail availability is to decrease 0.4 percent to 11.4 percent. Even as new apartment completions bring more supply to many markets, the multifamily sector will still likely see a vacancy rate decline from 6.6 percent to 6.1 percent.

Lawrence Yun, NAR chief economist, says the U.S. economy is on stable footing and is chugging along at a decent but unspectacular pace.

“A very healthy labor market and stronger confidence and spending from both consumers and businesses boosted economic expansion to a solid 3.0 percent last quarter,” says Yun. “There’s legs for more of the same growth to close out the year, which bodes well for sustained interest in all types of commercial space.”

According to Yun, the appetite for commercial property is high, but investment activity does appear to be entering the maturation phase of the current cycle. The investor shift away from large markets to smaller ones is creating a divergence in sales activity. In the second quarter, large markets saw a 5 percent annual decline in sales, while REALTORS® reported a sales boost of 4 percent in small markets.

“While inventory shortages are still driving prices higher in most markets, shrinking cap rates and the higher interest rate environment are expected to lead to a plateau in price growth over the next year, especially for Class A assets in large markets,” Yun says. “As a result, investors will continue to look to small and tertiary markets for properties that have the best opportunity to provide stability and generate solid returns.”

Led by the industrial and multifamily sectors, REALTORS® continue to report that leasing fundamentals for the four major commercial sectors are strong. Last quarter, the considerable appetite for industrial space—primarily from ecommerce and trade— resulted in distribution warehouses and logistic centers driving close to 70 percent of new construction leasing. Although 225.4 million square feet of additional space is currently in the pipeline, vacancy rates are still expected to trend downward as supply slowly catches up with demand.

In the apartment sector, the pace of new construction is finally slowing in many markets after considerable building in recent years. However, rising household formation and the supply and affordability barriers to homeownership will continue to keep vacancies low and cause rents to maintain their trajectory of outpacing incomes.

“The economy is healthy for the most part, but headwinds abound in the short term,” says Yun. “A temporary slowdown in areas severely impacted by Hurricanes Harvey and Irma, geopolitical tensions abroad and any minor correction in the financial markets could temporarily knock the economy slightly off course in coming months.”

NAR’s latest Business Creation Index (BCI), which launched in August 2016, showed ongoing positive developments for smaller commercial businesses in local communities. Over half of REALTORS® have reported an increase in business openings and fewer closings every month since December, with food and beverage and retail making up the bulk of new businesses.

For more information, please visit www.nar.realtor.

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7 Essentials Every Millennial Needs in Their First Home

More and more millennials are buying homes, representing around 45 percent of all purchase loans, and most first-time millennial home buyers are on a limited budget. While you may not be able to find the perfect home that checks every box on your “dream home” list, you can find a great starter house you can improve on or add to over time.

As you hunt for your first home and make the big purchasing decision, make sure your checklist of new home essentials includes the following seven musts.

1. Energy-Efficient Features

Not only is energy efficiency trendy, but it also saves you money on your power bill and reduces your carbon footprint. When viewing homes on the market, look for energy-efficient features like double-paned windows, solar panels, attic insulation, LED lighting, and ENERGY STAR®appliances. When you move in to your new domicile, invest in the Nest Learning Thermostat, which helps save you money on your energy bill and allows you to control your house’s temperature from your phone.

2. An Entertainment Center 

Moving from an apartment to a home means more room, so celebrate with an entertainment space. Equip a portion of your living room with a comfy couch, a big screen TV, and a stereo system. Don’t forget a TV package and a streaming stick to access your favorite channels, such as HBO and Starz, and streaming services, including Netflix and Hulu. Trust us—your friends will thank you, and your home will be everyone’s favorite hangout.

3. Smoke Alarms and Carbon Monoxide Detectors

A smoke alarm and carbon monoxide detector should be on every level of a house, especially near bedrooms. While walking through homes, check to see if a property has up-to-date smoke alarms and carbon monoxide detectors. You may want to install smart versions, like the Nest Protect, a stylish and sleek smoke and carbon monoxide alarm. The system checks its batteries and performs silent tests on a regular basis so you don’t have to.

4. A Home Security System

Burglary rates have been steadily increasing over time, but installing a security system can help you feel safer and protect your new home. If you buy a house that doesn’t have a home security system, you can easily install the necessary equipment with options such as the Scout Home Security System. You can connect a door panel, access sensor, motion sensor, video camera, and more depending on your needs.

5. A Home Improvement Magazine Subscription

Whether you like it or not, owning a home comes with a lot more responsibility than renting. You’ll occasionally spend weekends and afternoons fixing something or working on a home project. Even though just about every project type is available on the internet, subscribing to a home improvement magazine, like Better Homes & Gardens, serves as a homeowner’s initiation to all house-centric projects. Along with tips for home maintenance, you can also find inspiration for your next project in the leaves of these handy prints.

6. Wallpaper

No, we’re not back in the 1960s. Wallpaper is back and trendier than ever. If you find a home with wallpaper, don’t leave screaming. Depending on the style, you may be able to make it look modern. Or, if a room is boring and you aren’t sure how to spruce it up without breaking the bank, try a modern wallpaper trend, such as a marble pattern. If you aren’t sold on the idea, try temporary wallpapers that are easy to remove.

7. Plants

Greenery is one of the biggest home décor trends, so bring the outdoors inside with houseplants. Not only do they clean the air but they’re also inexpensive ways to decorate a room and brighten up even the darkest of spaces. For a small room, decorate with a tall cactus or fiddle leaf fig treeto make the area look bigger. Don’t have a green thumb? Try a faux plant, which only requires occasional dusting.

These must-haves are just a few to add to your checklist for an ideal dwelling. Think we missed something? Share what other essentials you think should be on every millennial’s new home list.

By Monique Serbu

Efforts Underway to House Displaced Harvey Victims

The Federal Emergency Management Agency (FEMA) and the U.S. Department of Housing and Urban Development (HUD), as well as other organizations at various levels, have begun efforts to house those displaced by Hurricane Harvey. These initiatives include:

Short-Term

• For those who are eligible for FEMA assistance, FEMA transitional housing assistance provides lodging to displaced survivors who need a place immediately. FEMA pays the hotel/motel directly for this assistance.
  

• Local communities, the American Red Cross, and other voluntary and faith-based agencies are providing emergency shelter to those displaced by the storm and subsequent flooding.

• AmeriCorps and other voluntary and faith-based organizations are helping to clean out flood-damage to homes.  
  

• HUD is immediately assisting those displaced from public housing and multifamily subsidized rental units. Immediate foreclosure relief may also be available for Texas residents. HUD is granting a 90-day moratorium on foreclosures and forbearance on foreclosures of Federal Housing Administration (FHA)-insured home mortgages.

Intermediate and Long-Term

HUD is giving communities in Presidentially-declared disaster areas the flexibility to redirect millions of dollars in annual CDBG and HOME formula funding to address critical needs, including housing and services for disaster survivors. In addition, HUD is:

• Making mortgage insurance available: HUD provides FHA insurance to disaster victims who have lost their homes and are facing the daunting task of rebuilding or buying another home. Borrowers from participating FHA-approved lenders may be eligible for 100 percent financing;
• Making insurance available for both mortgages and home rehabilitation: HUD’s Section 203(k) loan program enables those who have lost their homes to finance the purchase or refinance of a house, along with its repair, through a single mortgage. It also allows homeowners who have damaged houses to finance the rehabilitation of their existing single-family home; and
• Offering Section 108 loan guarantee assistance: HUD will offer state and local governments federally guaranteed loans for housing rehabilitation, economic development and repair of public infrastructure.
  

FEMA’s Individuals and Households Program provides financial assistance in the form of grants to survivors with uninsured or under-insured flood related losses. To date, more than 176,000 individuals and households have been approved for more than $141 million in assistance. Of that amount, $50 million is approved for housing assistance, such as rental assistance. Survivors may use the rental assistance to obtain temporary housing such as a house, apartment, hotel, motel, or other readily-available dwelling for rent by the public.

The U.S. Small Business Administration (SBA) provides low-interest loans to cover residential losses not fully compensated by insurance. Loans are available up to $200,000 for primary residence; $40,000 for personal property, including renter losses. As of Sept. 1, the SBA has received 2,118 disaster loan applications, primarily for homes. The SBA has fielded 5,221 calls and completed 451 property damage inspections.

Insurance proceeds help insured homeowners and renters to repair hurricane-damaged, or flood-damaged property more quickly. The National Flood Insurance Program is authorizing advance payments of certain NFIP claims to expedite recovery. Call your insurance agent to find out more or to file a flood insurance claim under the NFIP.

For more information, please visit www.fema.gov/hurricane-harvey.

Source: U.S. Department of Housing and Urban Development (HUD)

Staging the Most Important Rooms in Your Listing

Staging every room in a for-sale listing may sound ideal; however, it may be a daunting task to both the seller and the listing agent. If your seller can’t afford to invest in staging the entire home, it’s OK to scale down—after all, it’s better to do a good job on a few rooms than to do nothing at all. When deciding which rooms to cut and which to keep, remember that not every room is created equally and that half the battle is decluttering.

Why Stage?
Because it’s primarily individuals rather than companies who buy homes, it’s important to appeal to the largest number and widest range of buyers possible. Even the most basic DIY staging (like having your client pack up their extensive porcelain doll collection or take down their numerous hunting trophies) can help buyers without those specific interests envision themselves in the home.

When buyers can picture themselves in the home, they’re willing to pay more. NAR’s 2017 Profile of Home Staging reported that 29 percent of seller’s agents reported a 1 to 5 percent increase in offer amount compared to similar homes. A further 21 percent reported a 6 to 10 percent increase in their offer amount. Staging also decreases the amount of time a listing will spend on the market. Photos of a nicely staged home make people more willing to walk through a property they found online.

What to Stage
You don’t have to stage every room in a house to get good results. For example, it’s far more important to stage the living room than the laundry room. Here are the most popular rooms to stage, according to the 2017 Profile of Home Staging, as well as some ideas of what you can do in each:

Living Room
Remove the oversized couch and other bulky furniture and substitute smaller, narrower options. This will make the whole room feel larger. Also, remove all personal photos and enough books, movies and knickknacks to give the shelves extra room, emphasizing how the home offers plenty of “room to grow.”

Kitchen
Pack up all the small appliances and do-dads cluttering up the counter, from the coffee pot to the can opener. Clear off the top of the fridge and get rid of all coupons, magnets, personal bulletins, etc. Once all the useful but non-decorative clutter is gone, consider adding a fruit bowl or flowers to add some color to the kitchen. It’s also important to declutter inside the cabinets to make them seem more spacious when interested buyers start poking around.

Master Bedroom
Again, start by decluttering. The only things on the floor should be furniture and maybe a rug. Most bedrooms don’t need much more than the bed, dresser, end tables, and a mirror. Make sure the surfaces of the furniture are cleared of all personal items. Remove any laundry baskets, TVs, and items visible under the bed. Dress the end tables up with a nice decorative lamp and make sure the bed is neatly and attractively made. If the master bedroom is particularly large, you can also add a comfy sitting area.

Dining Room
Dress the table up with a nice centerpiece and some simple but attractive place settings, but don’t make the table feel cluttered. If the table sits six, lay out four places. If it sits four, lay out two. This will ensure the table looks spacious and inviting. Remove any extra chairs that are gathered around the room, and make sure there is plenty of light, as well.

Bathroom
If you want the bathroom to appeal to buyers, make sure it is spotless. Everything from the tub to the walls should look fresh and clean. You should also remove any medications from the bathroom and put out fresh rugs and towels. Adding a few decorative candles or jars to the shelves will help create a more spa-like environment, as well.

Outside
The first thing a buyer sees when they visit your listing is the outside. Make sure the lawn is freshly mown, the bushes are trimmed, the driveway is clear of leaves and weeds, the windows are clean, and you have an inviting threshold.

Child’s Bedroom
Start by packing up anything that will identify who the child in the room is, such as school memorabilia, sports jerseys, trophies or photos. Most of the toys and all electronics devices should go, as well. Try to emphasize the child’s bedroom as a creative space. A desk or table can help with this. Keep the center of the room clear to emphasize plenty of play space, and use a gender-neutral color scheme to help buyers imagine their children in the room.

Once your client’s home is staged, it’s your turn to step up to the plate and get it sold. Homes.com makes it easy to find interested buyers and sellers with Featured Agent ads, which display your listings at the top of Homes.com, just one click away from popular Google searches.

By Mark Mathis, General Manager of Broker and Agent Sales for Homes.com

For more information, please visit connect.homes.com.

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Affordable Upgrades for Your Starter Home

You’ve just moved into your starter home. Congratulations! That’s awesome! But spare cash is limited, and you are eager to show your new home off to advantage.

Start with a few cosmetic changes, advise the money editors at Bankrate.com, who offer five easy upgrade projects that can help spruce up a tired living space for a few hundred dollars or less:

1. Start with a power-wash – It won’t cost much, but having your home’s exterior professionally power-washed will give it a fresh, bright look – and since curb appeal counts, make sure the lawn is edged, hedges are trimmed, and weeds are pulled.
2. Freshen the front door – A new fiberglass door can cost $1,000 or more, but you can get a snazzy new look by simply painting the old door and/or replacing any worn-looking hardware. (While you’re at it, you might replace a tired-looking mailbox.)
3. Paint the interior – For a minimal investment, fresh paint makes any room look cleaner and brighter. It’s your space now, so cover those interior walls with the neutral shades or bolder colors that appeal to you.
4. Improve the lighting – Replace old ceiling fixtures with inexpensive new designs from the home store that may cost less than you imagined. While you’re there, check out modestly priced DIY track lighting, spotlights, and accent lights that can brighten and modernize any room.
5. Spruce up the kitchen – Short of replacing cabinets or countertops, you can give your kitchen a new look on a limited budget by painting the existing woodwork and/or changing outdated door and drawer pulls. If your kitchen appliances don’t match, check with the manufacturer about ordering new doors or face panels.
6. Buff up the bath – Adding a pedestal sink can radically and economically change the look of an older bathroom. While you’re thinking economically, you can install a new toilet for less than $200. It will not only look good, but today’s low-flush models will save you money on the water bill.
7. Expand your storage space – Older homes are notoriously short on closet space. A quick trip to the home store can net you a variety of inexpensive closet organizers that may not add much to the look of your home, but will save you from crying over too-cramped closets.

I hope you found these tips helpful. Contact me today with your real estate questions!

7 Ways to Cut Costs Without Cramping Your Lifestyle

Yes, you can slash your monthly expenses by cutting out that Starbucks stop every morning – or by cooking in more and eating out less. But, says Sharon Lechter, a contributor to the American Institute of CPA’s book, “Save Wisely, Spend Happily,” there are plenty of other ways to cut costs without making painful sacrifices.

Put it on paper. Write down every dollar you spend in a month, whether it’s paying a bill, paying for lunch, or buying a new pair of shoes. When you can see exactly where your money is going, you can pinpoint areas that can be cut down or cut out.

Shop from a list. Impulse buying gets expensive, so work out your meal plan for the week according to what’s on sale and shop for groceries from a list. (You may also save on gas by making fewer trips to the store.)

Pack your lunch. You can make it more fun by lunch-pooling with a few colleagues at work, taking turns to provide the main course for all.

Cancel your email sales alerts. When opening an email alert tempts you to spend money on something you hadn’t planned to buy, it’s time to cancel the alert.

Shop second-hand. Get out of the mindset that everything you buy has to be new. Shop Craigslist, e-Bay and local thrift stores for great buys on used kitchen gear, furniture, and more – including near-new or gently used clothing.

Ask for rate reductions. If you have a decent payment record, asking for a lower rate is often all it takes to get a lower rate on credit card interest, service subscriptions and memberships.

Save before you spend. Skim five or 10 percent off the top of every paycheck and bank it before you pay any bills or make any purchases. It will be there if you absolutely need if before your next check – or make it the basis for your savings.