8 Trends in Real Estate in 2017

JANUARY 11, 2017

Eight Real Estate Trends to Watch in 2017

By Jeff Detwiler, President & COO, The Long & Foster Companies.

This year could bring more commercial properties being revamped into residential developments.

Price appreciation and low inventory dominated real estate news in 2016. Looking ahead, housing market experts foresee a moderating yet healthy real estate market in 2017. The two largest population groups—millennials and baby boomers—are anticipated to have the biggest impact on real estate, along with rising mortgage rates and increased access to credit.

Here are some of the top trends to watch this year.

Rising prices and rising net worth: While rising prices challenge first-time buyers, homeowners benefit from increased home equity and a higher net worth. According toCoreLogic, home values were up 7.1 percent year-over-year in November 2016, and home equity wealth accumulated by Americans has nearly doubled in the past five years as a result. Values have been rising for a few years and CoreLogic says the average homeowner gained $11,000 in home equity in the past year. A total of $1 trillion could be added this year if home prices continue to rise by the company’s projected 5.2 percent. Even if the gains come in lower—Moody’s predicts a 3.5 percent rise and Realtor.com, a 3.9 percent—the outcome is still positive for the year.

Higher mortgage rates: Mortgage rates jumped to just over 4 percent after the Presidential election in November. They are anticipated to stay between 4-5 percent in 2017, which is higher than recent rates but still comparatively low historically. Older borrowers may remember rates of 18 percent in the 1980s, so even 5 percent seems like a bargain to that. Homeowners who want to refinance and prospective buyers should consider locking in a loan as soon as possible since mortgage rates are not expected to drop this year.

Loosening of mortgage restrictions: According to the Mortgage Bankers Association’s Mortgage Credit Availability Index, mortgage approvals are easier to get, with the pendulum slowly swinging back from overly restrictive guidelines. In addition, low down payment loans are more readily available than in recent years. Jumbo loans also are easier to qualify for and have competitive interest rates with conforming loans. Higher mortgage rates mean lenders will get more competitive for purchase loans as their refinance business fades. Lenders also anticipate looser regulations from the new administration.

Inventory remains tight: The lack of homes for sale has been driving prices up for the past several years and frustrating buyers, and the issue shows no sign of easing this year. TheNational Association of Realtors says nationwide inventory was down 9.3 percent year-over-year in November and has continually fallen for the past 18 months. At the end of 2016, there was a four-month supply of homes for sale, far below the six months of supply that is considered a healthy market. In the Philadelphia metro area, for example, inventory was down 23 percent year-over-year in November, according to Long & Foster’s Market Conditions. Similarly, inventory was down in the Washington, D.C., area by 23 percent and in Richmond, Virginia, by 19 percent.

Repurposing of buildings for residential use: With urban areas and close-in suburbs lacking space for residential development, 2017 will bring more commercial properties being revamped into residential developments. Washington, D.C., has already seen a few office buildings converting into mixed-use developments with both office space and residential space. The Adele, a new residence in downtown D.C., is a great example of this type of transition. Churches in Baltimore and D.C. whose congregations have shrunk or moved to the suburbs are also being sold for redevelopment into unique condos.

Millennials in the market: The number of first-time buyers, most of whom are millennials, increased to 35 percent of all buyers, according to the National Association of Realtor’s 2016 Profile of Home Buyers and Sellers, up from 32 percent in 2015. While that doesn’t quite reach the norm of 40 percent of the market, housing experts anticipate that more millennials and first-time buyers will purchase homes this year. Not only is job security increasing for this demographic group, but also more millennials are beginning to form households, marry and have children, all of which trigger a home purchase.

Baby boomers on the move: The second-largest demographic group—the baby boomers are reaching retirement age in record numbers, with 10,000 turning 65 each day. As their home equity increases, more of these boomers are anticipated to move, sometimes to new markets. Among the popular destinations for retirees, North Carolina and South Carolina offers numerous communities that appeal to residents of the Mid-Atlantic and Northeast who are looking for warmer weather and, most importantly, tax advantages. North Carolina residents, for example, are exempt from paying state income taxes on federal and military retirement benefits thanks to a tax settlement known as the Bailey exclusion.

A return to the suburbs: Census data released in 2016 showed that more people moved to the suburbs than into cities in 2015, with urban counties growing by 0.8 percent to about 77 million people and suburban counties growing by nearly 1 percent to about 159 million residents. That trend is expected to continue in 2017, particularly as first-time buyers and downsizing baby boomers look for affordable homes. But the suburbs are changing, with the development of more mixed-use, walkable neighborhoods with urban-style amenities. The John Burns Consulting Group says 80 percent of new homes are being built in what they term “surban” areas, which offer the safety and good schools of suburbia along with the walkability and excitement of the city.

Overall, a strong market is expected in 2017, and professional Realtors at Long & Foster | Christie’s International are here to help you, whether you’re planning to buy your first home or retire to a new location. Contact us today at LongandFoster.com.

Low Cost - High Return Home Renovations

JANUARY 20, 2017

Low-Cost Home Updates with the Highest Return

By Suzanne Whitenight Pilcher, Marketing Coordinator, Long & Foster Companies.

If you are planning to sell your home, it’s hard to know what improvements you can do now that will add value to it – without spending a fortune. To help, each year Remodeling magazine releases their Cost vs. Value Report, which estimates the average cost of a project and the percentage of the investment that will be recouped if the home is sold within a year.

Based on the 2017 report, here are four of the least expensive projects, costing less than $10,000 with the highest return at resale.

• Attic Insulation
  • Adding fiberglass attic insulation produced the top return on cost in this year’s survey. With an average cost of $1,343, it would return 107.7 percent of its cost.
• Front Door Replacement
  • A new steel entry door with an average cost of $1,413 will recoup 90.7 percent of its cost.
• Stone Veneer
  • Replacing the bottom third of your home with manufactured stone veneer costs an average of $7,851, and you’ll see an 89.4 percent return on your investment.
• Garage Door Replacement
  • Traditionally ranked as one of the highest returns on your investment, the average cost is $1,749 and you’ll recover 76.9 percent of the cost.

Home Safety Recalls - Is Your Home Safe?

Home Safety Update: Major Recalls Impact Millions

 FROM:  Home Actions - Albert Clark

Home Safety Update: Major Recalls Impact Millions

Certain items in your home may have been recalled. If you have purchased any of these, you'll want to make sure that you contact the company and get the item fixed as soon as possible or that you receive your money back. Take a look at these items that have recently been recalled.

8 Million Cuisinart Food Processors Recalled

The food processor’s riveted blade can crack over time and small metal pieces of the blade can break off into the processed food. This poses a laceration hazard to consumers. Click HERE for what to do next.

Baby Bath Seats/Chairs Recalled Due to Drowning Hazard

The bath seats/chairs fail to meet the federal safety standard, including requirements for stability and the bath seats can tip over while a baby is in it, posing a drowning hazard to babies. All the details are HERE

IKEA MALM Dresser

After child fatalities, IKEA has recalled 29 million MALM and other models of chests and dressers because of the tip-over hazard the furniture poses. If you own an IKEA MALM dresser, you need to anchor the chests and drawers or return it for a refund. The chests and dressers do not comply with the performance requirements of the U.S. voluntary industry standard. Learn more about the recall here.

Pacific Cycle Jogging Strollers

Pacific Cycle has recalled over 217,000 jogging strollers due to a defective front wheel. The front wheel can become loose and detach from certain Schwinn and Instep stroller models. There have been over 200 injuries from cuts on the head to sprains due to the faulty front wheel. Consumers are asked to stop using the strollers and contact the company to receive a repair kit to secure the front wheel. Find out more details here.

Hoverboards

More than 500,000 hoverboards from ten different companies have been recalled due to the reports of serious injuries. There have been at least 18 injuries reported such as burns to the legs, arms and neck after hoverboard battery packs have exploded or caught fire. Swagway had the most recalled hoverboards with 267,000 being recalled. Swagway's X1 hoverboards also have the most injuries reported at 16. Find out more about the recallhere.

Brightening Up Your Basement for Winter and Beyond

Ask the Expert: How Can I Brighten Up My Basement for Winter?

RISMEDIA, Friday, November 25, 2016— Today’s Ask the Expert column features Dan Steward, president of Pillar To Post Home Inspectors. 

Q: How can homeowners brighten up a basement to fully utilize the space as they prepare to spend more time indoors this winter?

A: Before turning to cosmetic fixes, make sure basic safety and inspection issues are covered. Check the following issues and address them first:

• If your basement or crawlspace smells musty, it’s likely due to a moisture problem. The smell is usually caused by the growth of mold and mildew, which thrive in damp environments. Allergies, difficulty breathing and low-threshold headaches are all symptoms that can be triggered by mold and mildew. 
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• Water can make its way into the basement through cracks in the walls, or oversaturated soil seeping water through the wall itself. If the basement is finished, look for discoloration on the drywall, as this is a sign that water is coming in. 
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• When paint is exposed to water or extreme moisture, it may bubble or begin to peel off the walls and floor. Painting over the affected area—even with waterproof paint—only masks the issue, allowing the underlying problem more time to become worse. 
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• Efflorescence is a chalky white substance that has the potential to develop a budding crystallized appearance over a period of time. In either case, it’s an indication of a water issue that must be addressed. 
• Rust on metal surfaces in the basement is an indication of moisture. 
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• Moisture attracts insects such as roaches, centipedes, earwigs, carpenter ants and termites, in addition to rodents such as mice. Water problems must be corrected before attempting to remove pests, or they’ll likely return. 
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• Large cracks or waves in the foundation can be a sign of structural problems that require attention. 

After all is structurally sound, it’s time to brighten the area up and add some decorative items. Low ceilings, limited light and general dreariness can make the basement a hard spot to hang out in, but the following tips will go a long way toward brightening things up:

• Paint the walls a light shade. To give the illusion of height, paint the ceiling an even lighter shade. 
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• Use various lighting sources (wall sconces, lamps, etc.) layered at different heights to brighten up the space. When choosing lighting sources, go for LED bulbs, as they’re typically brighter and cheaper. 
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• Place mirrors across from windows in order to maximize the effect of natural light. 
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• Don’t break up the space by incorporating different flooring materials. Pick solid, continuous flooring to help make the space appear larger. 
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• Look into decorative wall murals, which can be found on a variety of websites. 

These are just a few simple ways to transform your basement from dark and dreary to bright and beautiful. Before you know it, your basement will become an alternative area for hanging out at home.

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

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Specialized Homes: What Makes a Home Foundation Sound?

Structural Standpoint: What Makes a Home Foundation Sound?

RISMEDIA, Wednesday, November 30, 2016— Now that the American real estate market is enjoying a solid rebound, residential construction and custom-homebuilding are on the upswing. Prospective homeowners are once again interested in specialized homes, which entails making certain decisions about how the property should be built.
 

When it comes to choosing home foundations, future homeowners should think of the following:

Concrete Blocks vs. Poured Concrete
Although masonry is an honored craft that has served humanity well for many centuries, stone and block foundations have been largely replaced by poured concrete. In some cases, a combination of concrete block and poured concrete can be used to support different parts of the house, but many builders these days mostly prefer poured foundations because they are known to reduce the potential for cracks and leaks.

Soil Analysis
This step takes place before forming, and is one of the most important. The soil analysis takes into account water tables, ground conditions, potential impact of flood plains, and porosity. Choosing the right mix of backfill according to the soil analysis is crucial, particularly in areas where the ground is known to be very fertile, which means that it is rich in organic matter and bound to expand during the rainy season.

Types of Home Foundations
Builders settle on the types of foundations they will use according to local building codes and the practicality of construction. In warm climates, a raised slab of poured concrete can be formed into a single unit that combines the footing with the actual foundation elements. A more unusual type of foundation involves building the home entirely on concrete piers; however, building codes now call for footing and pier foundations.

Materials Testing
Laying out foundations primarily made of poured concrete is a laborious process. For this reason, it is not uncommon to run into situations whereby laborers may not lay a perfect foundation on the first attempt. Material testing is essential in residential construction, particularly in areas that are rich in aquifers or of high seismicity. Builders use concrete monitoring equipment, like the products found at Certified Material Testing Products, after the concrete mix has been poured and set to measure possible displacement and cracks caused by shifting of the foundation, backfill or soil. It is not unusual to repair foundations after pouring. Not all cracks or imperfections are caused by improper forming, and thus builders wait a few days to monitor how the concrete cures and sets.

In the future, precast foundations and concrete forming made of advanced polyethylene material will make home foundations sturdier than they are today, and they will also make the construction process easier.

This was originally published on RISMedia’s blog, Housecall. Visit the blog daily for housing and real estate tips and trends. Like Housecall on Facebook and follow @HousecallBlog on Twitter.

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Bling Your Bathroom - sleek, fancy space

5 Items to Bling Out Your Bathroom

RISMEDIA, Saturday, October 22, 2016— Are you looking to create a sleek, fancy bathing space just begging for a selfie photo-thon? Below are five items to bling out your bathroom.

Saucy Soaker



Finally, a tub fit for a queen—or a retired 90s pop star. This Swarovski-encrusted tub, also known as the “Crystal Bateau”, is priced at £150,000, for it takes over 200 man hours to place the crystals on by hand.

Glitter Throne



You can feel jazzy on this glittery Jemal Wright throne, which will only set you back about 75k.

Gilded Throne



Not into the sparkle and shine seat? How about this Jemal Wright gilded toilet, which will surely have you muttering “I love gold” as you go about your business...



Icy Sink



For only $750, you can grab yourself this custom ICY Couture faucet with Swarovski crystals. Sounds like a worthy investment, huh?

Glitter Grout



Don't worry, you need not drop tons of dough to make your bathroom shine. Now you can cheaply bedazzle any space with glitter grout! Go crazy! Make your bathroom look like the face of a fifteen year old en route to a Miley Cyrus show.

So, how do you make your home shine bright like a diamond?

This was originally published on RISMedia’s blog, Housecall. Visit the blog daily for housing and real estate tips and trends.

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Our Economy will be reshaped by Millennials Who Are Not Big Spenders

Millennials Aren't Big Spenders or Risk Takers, and That's Going to Reshape the Economy

RISMEDIA, Tuesday, October 18, 2016— (TNS)—They’re known for bouncing around jobs, delaying marriage and holing up in their parents’ basements.

Dubbed recently as the “children of the Great Recession” by Democratic presidential nominee Hillary Clinton, millennials are the best educated and most diverse population of young people in U.S. history. They are also perhaps the most coddled, some would say spoiled.

As they emerge this year as the United States’ largest demographic group—some 75 million strong—millennials are taking up the mantle as the most impactful generation since the baby boomers.

Their influence has started slowly, due largely to the economic instability that has left many struggling to find good-paying jobs and saddled with staggering student loan debt.

But millennials—adults under 35—are certain to shape the economy for decades to come. And their coming of age in the midst of the worst financial crisis since the Great Depression has bred distinct traits that could pose special challenges for the nation’s future growth and prosperity.

For starters, millennials are not big spenders, at least not in the traditional sense.

Millennials tend to prefer experiences over buying things and accumulating stuff. To them, an impressive selfie capturing a memorable moment is, in some sense, as enviable as a new car or fancy watch was to their parents.

Neil Howe, an economist and demographer who coined the term “millennials” with co-author William Strauss, sees it as part of a redefining of American conspicuous consumption.

Instead of material wealth, millennials show off through their travels, hobbies and even meals, which get photographed and posted on Facebook, Instagram and other social media.

“If you’re a foodie, you can go out and have some incredible dining experience, and then you can curate it almost as if it were a thing,” Howe said. Millennials are one reason restaurants have been doing well—and hiring so many workers.

Dominick Ardis, 29, typifies his generation. In between jobs this year, the Tallahassee, Fla., resident scrounged money from family and friends so he could immerse himself in Hebrew studies this summer at Middlebury College in Vermont. Last year it was the art of glass-blowing. And before that he was getting voice lessons.

“Music is such an emotional and experiential event,” he said. Ardis is interested in his career and making money, too. It’s just that he’s got other things on his mind, like taking a trip to Cuba next year.

Such priorities may well give Ardis and his fellow millennials a more fulfilling, well-balanced life than, say, workaholic boomers. But that may not be great for a U.S. economy driven by consumer spending, which accounts for two-thirds of the nation’s gross domestic product.

Young Americans are unusually optimistic, which could propel purchases—and economic growth—as their disposable income increases. But they’re still not likely to have as much left over because so much is going to skyrocketing rents and education expenses.

The low home-buying rate of young adults already has been a big factor in the slow housing market. The homeownership rate for those under 35 slipped to a low of 34 percent this year, compared with around 40 percent for young adults in the prior three decades. And people today are getting married and having children later, which will weigh on home sales in the future.

“I don’t believe they’re going to catch up,” said John Burns, an Irvine, Calif.-based national real estate consultant.

Like other millennials, Summer Lollie is keenly interested in having her own place. She wants something close to her parents’ two-story, four-bedroom house in the Dallas suburb of Mesquite where she grew up and currently lives, she says. But the 27-year-old community organizer can’t imagine how she will be able to save up for a down payment and afford a mortgage.

While Lollie’s parents never finished college, she graduated from Washington and Lee University, a well-regarded school in Lexington, Va. But with more than $35,000 in student debt and a car loan to boot, she has struggled to make ends meet. She moved back with Mom and Dad in April 2015, paying a little rent to them.

There’s more than economics behind the living-at-home phenomenon, however. Lollie doesn’t mind the arrangement at all because she likes being with her parents—something more common among millennials than people of their age in previous generations. Experts think that reflects their protective upbringing and more frequent exchanges, thanks in part to the rise of texting and social media.

“I have loving parents here,” Lollie said.

Another key difference with their predecessors, particularly Generation X, is that millennials are not big risk takers. That seems especially true when it comes to starting businesses.

The rate of new startups is higher today than 10 or 20 years ago for every major age group—except those between 20 and 34 years old, according to the Kauffman Foundation’s latest annual study of entrepreneurship.

The result is that the composition of new business formation, already turning grayer with the aging of baby boomers, has shifted even more sharply to older adults in recent years.

Two decades ago, a little more than 34 percent of all new entrepreneurs in the U.S. were younger than 34 years old. Today it’s just 25 percent.

“This could be really troubling,” says Arnobio Moreli, a senior research analyst at Kauffman.

Startups represent dynamism in the economy. New and young businesses have long created the bulk of new jobs in America, and are critical for productivity growth, too.

Moreli believes some would-be entrepreneurs are being held back by their heavy student debt load. Nonetheless, he finds it puzzling that there seems to be relatively less entrepreneurial zeal among millennials, particularly since they grew up in an era when people like Facebook founder and millennial Mark Zuckerberg, 32, have been celebrated in business schools and popular culture.
                                           
In fact, however, there’s evidence that young adults today would rather work for big companies than take their chances at budding firms or in their own garages. Compared to boomers, millennials are more interested in having the same job through most of their life, says Jean Twenge, a San Diego State University psychologist and author of “Generation Me.”

Their relative risk-aversion may have something to do with the protective environment that parents and schools created for millennials, emphasizing participation over winning. Said Twenge: “Everybody got a trophy.”

Partly because of such pampering, Twenge argues, millennials are more self-absorbed than prior generations, even narcissistic. But at the same time, research suggests that young adults today are also very community-minded.

If baby boomers were known as the “me” generation, millennials might be called the “we” generation.

©2016 Tribune Co.
Distributed by Tribune Content Agency, LLC.

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