Homeownership Aspiration Remains Strong Among Americans
A new study released recently by Fannie Mae finds that most Americans strongly aspire to own a home and to maintain homeownership, despite ongoing turmoil in the housing market. However, demographic trends such as fewer married couples and less families with children resulting in shrinking households, combined with financial caution among consumers, are contributing to an increased willingness to rent.
According to the study findings, 51 percent of current owners and renters say that the housing crisis has not affected their overall willingness to buy a home. However, while homeownership aspirations are high for the long-term, Americans have near-term doubts about buying. Overall, according to Fannie Mae’s National Housing Survey third quarter results, one-third of Americans (33 percent) would be more likely to rent their next home than buy. Among renters, 59 percent said they would continue to rent in their next move, compared to 54 percent in January 2010.
Fifty-one percent of those surveyed reported the housing crisis had little or no impact on their intentions to buy or rent, versus 27 percent who said they are more likely to buy and 19 percent who said they are more likely to rent.
The substantial majority of homeowners (89 percent), as well as nearly half of renters (44 percent) believe they would be better off owning their homes, given their current financial situations.
Lifestyle considerations are more likely to influence consumers’ decision to buy a home, while the decision to rent is driven primarily by financial considerations. More than half (57 percent) of renters believe financial benefits are the best reason for renting a home. Based solely on current household finances, 52 percent believe they are better off renting, compared to 24 percent among the population at large. From January 2010 to third quarter 2010, the percentage of renters who say they will probably continue to rent in their next move increased from 54 percent to 59 percent.
Per Fannie Mae calculations, 64 percent of renters who do not plan to own and half (50 percent) of those who do plan to own probably do not have sufficient income to qualify for the mortgage on a median-priced home.
Single (unmarried) respondents are least likely to own and report the lowest level of satisfaction with their housing choices. After controlling for age, income, wealth and a number of other factors, regression analysis indicates that married/partnered couples are 2.5 times more likely to own than other respondents. Respondents with children generally have higher homeownership rates than those without children after controlling for age and income, and having children is cited as a major reason to buy a home by approximately three quarters (76 percent) of the general population.
Americans 50 and older are more likely to believe they are better off owning than renting than any other age group, and are increasingly able to realize homeownership aspirations as they age. A person age 65-74 is 3.5 times more likely to own than a person under 25.
The housing crisis has had the greatest impact on younger Americans. Since the housing crisis, homeownership for those 25 to 29 years has declined 11 percent since peak rates, compared with a decline of 5 percent among those 35 to 44 and less for those 45 and older.
Married couples, statistically most likely to own a home, represent a shrinking portion of the population– 50 percent of households in 2009, compared with 56 percent in 1990. Although having children increases consumers’ propensity to own a home, renters are more likely than owners to have children under 18 living at home. In particular, 58 percent of single mothers rent, versus 32 percent overall for households with children under the age of 18. The percentage of families with children is declining overall, and reached an all-time low of 45 percent in 2009.
Top Tips to Save Money on Landscaping
As any homeowner knows, landscaping can cost much more than one might initially expect. You can save money and have a beautifully landscaped home by doing more yourself and with these tips:
1. Hire a consultant – Hiring a landscape designer can be an expensive proposition. Save money by creating and drawing your own plan then hire a landscape designer to review your plan. There are many sites on the web you can go to that will also help you design and visualize what your home could look like with some more foliage. A specialist, as well as books, web sites and your local garden center can help you find plants that will thrive in Westminster CO high plain climate. Try to vary plant size, texture and color to provide an interesting pallet throughout the season. You could even try a Moonlight garden which consists of all white plants that really make your yard pop in the evening if that is when you entertain.
2. Divide and trade – If you like plants and/or trees that your neighbor has, ask if you can divide plants and trade with them. Dividing plants helps out a neighbor whos garden is overgrown. It also gives you a variety that grows well in Westminster. Some older neighborhood have more unique heirloom plants that have been in gardens for generations.
You can also offer to have seed exchanges with neighbors. After plants have bloomed and the flower has dried, you can scatter the seeds in your garden or give them to neighbors who have admired your plantings. What a great way to meet neighbors and interact with your community in Westminster.
3. Buy small – Oftentimes it is less expensive to buy a number of smaller plants than one larger one. Buy smaller, save money and watch your plants grow over the coming couple of of seasons. If you have ever notice an overgrown yard, you can see what happens by buying too many plants or varieties that grow too large for the area you planted them in.
4. Check alternative sources – Do some research to find alternative sources for trees and plants. Some cities and foundations give away free trees. Oftentimes botanical gardens and plant societies have plant sales and giveaways. In some areas, even HOA associations will replace a boulevard tree that has died. At the end of the summer, many garden centers offer trees at deeply discounted prices so they don’t have to carry them through the winter. In Westminster CO, you may need to supplement the natural water as some winters tend to be very dry. You don’t want to lose something after all the work you did to get it planted.
5. Compost – Save money on buying soil and fertilizer by composting. All you’ll need is a small, fenced off area of your yard cordoned off with chicken wire and 2 x 4’s. Garden Centers and even have the pre-made variety. This can save a lot on fertilized and reduces the amount of chemicals in our environment.
6. Use what you have- Work with the plants and trees you already have. If a tree, plant or shrub is not thriving as you like it to, take time to do some research. You can find pruning and plant care advice online or ask your favorite garden retailer. If it is small enough, you can move it to another location in your yard where it can thrive. As folige grows denser, you may not have as much sun light coming to your plants. Pruning or relocation is a great way to change the percentage of sun in your yard.
7. Take a phased approach – Keep in mind that you don’t have to create your dream design all at once. Split your plan into affordable phases and complete each phase as time and money permit. You’ll save money on financing costs and have time to adjust your plan and shop for the best prices as you go along.
From time to time the IRS releases tips designed to help people with their taxes. Some of these are quite useful. The agency released “Ten Tax Tips for Individuals Selling Their Home,” (IRS Summertime Tax Tip 2011-15).
As a real estate agent or broker, it is not my job to give home sellers tax advice. Instead, I refer sellers to this list of IRS tips. It’s a good starting place for them to begin to understand this often complex area of tax law. Print it out and hand it to anyone who asks you about these issues.
Here are the IRS’s top 10 tax tips for home sellers:
1. In general, you are eligible to exclude the gain from income if you have owned and used your home as your main home for two years out of the five years prior to the date of its sale.
2. If you have a gain from the sale of your main home, you may be able to exclude up to $250,000 of the gain from your income ($500,000 on a joint return in most cases).
3. You are not eligible for the exclusion if you excluded the gain from the sale of another home during the two-year period prior to the sale of your home.
4. If you can exclude all of the gain, you do not need to report the sale on your tax return.
5. If you have a gain that cannot be excluded, it is taxable. You must report it on Form 1040, Schedule D, Capital Gains and Losses.
6. You cannot deduct a loss from the sale of your main home.
7. Worksheets are included in Publication 523, Selling Your Home, to help you figure the adjusted basis of the home you sold, the gain (or loss) on the sale, and the gain that you can exclude.
8. If you have more than one home, you can exclude a gain only from the sale of your main home. You must pay tax on the gain from selling any other home. If you have two homes and live in both of them, your main home is ordinarily the one you live in most of the time.
9. If you received the first-time home buyer credit and within 36 months of the date of purchase, the property is no longer used as your principal residence, you are required to repay the credit. Repayment of the full credit is due with the income tax return for the year the home ceased to be your principal residence, using Form 5405, First-Time Home Buyer Credit and Repayment of the Credit. The full amount of the credit is reflected as additional tax on that year’s tax return.
10. When you move, be sure to update your address with the IRS and the U.S. Postal Service to ensure you receive refunds or correspondence from the IRS. Use Form 8822, Change of Address, to notify the IRS of your address change.
These tips can be found on the IRS website at http://www.irs.gov/newsroom/content/0,,id=104608,00.html.
Every January I like to review what the real estate market experienced in the past year and see where we think it’ll head in the New Year. Overall, I’m extremely pleased with what we’ve experienced in the past 12 months and am bullish on the future. I expect the economy to continue to improve and our metro Denver housing market to stay strong but, critically, not overheat. Here are a few different metrics I use to evaluate the market and help you understand it better. For each, I’ll briefly describe what 2014 looked like and where I think we’re headed.
Market strength – 2014 was a strong sellers’ market. We still have near record low inventory of homes for sale which is keeping the demand for housing strong. Prices are up about 9 percent in 2014 making homeowners (and real estate investors!) very happy. I expect 2014 to continue to be a sellers’ market but I see no sign of a major imbalance in the market that could lead to any sort of ugly peak and crash. Overall, I expect home prices to continue to rise but at a somewhat slower pace in 2015, about the long-term average of 6 percent.
Rental Vacancies – The rental market is as strong as it has ever been in metro Denver. The vacancy rate for 1-4 unit properties is at a near record low 2 percent. Rents are rising faster than they ever have in the past. As a result of the rising rents, we are beginning to see more renters deciding it’s time to buy instead of suffering through continual rent increases and tougher application processes. In addition, more and more homeowners who experienced hardships during the downturn, lost their homes and have been renting ever since, are now able to purchase a home again as their ability to finance a purchase recovers. This is great news for the market and will certainly lead to more sales in 2015, continuing to support our sellers’ market. It’s very interesting to study the relationship between the rental market and the sales market: the tighter the rental market, the faster rents go up, the more likely renters are going to become buyers, the more it strengthens the sales market.
Interest rates – We had a big jump in interest rates in June 2013 as the economy showed signs of improvement. But, much to everyone’s surprise it didn’t put much of a damper on the housing market. Since then rates have drifted downward helping to keep homes relatively affordable. No one knows exactly what interest rates will do in the future, despite what all the screeching cable news networks say! I foresee continued improvement in the economy, both locally and nationally, over the next year so my best guess is that interest rates may rise a little in 2015, but only a little. 2015 is still going to be a great year to buy a home. Someday down the road we’ll see interest rate hikes, but for the foreseeable future I don’t predict any major jump in rates.
The Economy – Let’s talk a bit more about the economy. The metro Denver economy is very strong, with unemployment down to 4.1 percent. Despite the fear of a spike in inflation it has stayed extremely low, in the range of 1-2 percent. Consumer confidence is at its highest point in five years and will continue rising. Nothing can be better for our housing market than a slowly but surely improving economy. In a steadily improving economy buyers and sellers behave rationally and buy and sell in a controlled environment, based on solid personal, financial, and economic reasons. At the same time it avoids the problems associated with an overheated market where prices pop then crash like we experienced during the last downturn. This is what real estate market dreams are made of.
When all’s said and done, I can’t wait for 2015!
NEW YORK (CNNMoney)
Even though the housing market has been steadily recovering for a few years now, one thing has been keeping it from making a real comeback: first-time homebuyers.
But that will soon change, according to Realtor.com.
As the jobs picture improves, Millennials are going to be returning to the housing market, said Jonathan Smoke, the realty site’s chief economist.
Related: Best cities for Millennial homebuyers
Smoke predicts that new home sales will climb by 25% next year. And in some markets, the influx of young first-time buyers will be especially significant.
Realtor.com crunched more than 15 data points, including population growth, affordability and employment, to come up with a list of 10 housing markets that will record the fastest sales growth in 2015 and beyond.
Located on the edge of the Rockies, Denver lures many active young, health conscious adults.
- Median home price: $288,000
- Job growth: 2.7%
The Mile High City beckons young 20- and 30-somethings who love the city’s easy access to world class skiing, camping, hiking and mountain sports.
But it’s the city’s startup scene and high-growth industries that really lure them in.
Denver has become of the best places to start a business in the nation, according to the Denver Metro Chamber of Commerce.
Related: 10 fastest growing cities
An oil boom and growth in the healthcare and business services sectors has also helped to attract young professionals and boost area wages.
With median household income almost 20% higher than the national median, many buyers can afford Denver’s higher than average home prices, according to NAR.
Article from CNN
Remember that it is better to be respected than being liked if you are a landlord. By delivering what you have promised and being very clear in stating what you are expecting from your tenants, you can create a good relationship with them right at the start. By laying down the groundwork for a good relationship with a good tenant, you are on the right path to success.
In performing your duties as a landlord, you should not be too personal. The best way to go about it is to think of yourself as a property manager instead of the owner of the property. If you have an idea how rental property managers act, always ask yourself in any situation regarding the running of your business what would a property manager do. For example, when collecting rent from your tenants, ask yourself how property managers would go about doing it.
The reason why you should do this is that property managers are known for their businesslike manner. They operate in an efficient way without allowing personal feelings get in the way of doing their jobs. Granted, it is easier said than done but if you believe in what you are doing and if you want the best for your business, you can learn how to act like they do easily enough.
Basically, you do not want to be too personally involved with your tenants in any way. Small chats when you are collecting rent would not hurt but be careful that your tenant does not misinterpret your actions. Sometimes, tenants would think that because you are very friendly with them, they can ask for favors that would violate the terms of your agreement. Obviously, you have to be tactful in responding to cases like this as you do not want to come off as being arrogant.
When declining any favor being asked by your tenant, make sure that they understand why you are declining. If they respect you, they would not think differently of you. In fact, if you do it in a nice way, they could respect you even more.
credit to Kamryn Ruth on her article
Fall house staging needs to be done because your listing has to sell if you want to close before the end of this year.
Here five ways buyers can make their home stand out and get their home sold before the holiday season hits!
1. Suggest Shopping Ahead
These days many sellers are selling to move on to another property. Chances are, homeowners have a vision for both the property want and the new furnishings to make the new space into their dream. For sellers who have the budget, encourage them to shop ahead. The dream furniture and non-permanent fixtures for their new space may help their current property sell faster.
2. The “I Have a Dream Speech”
Before you think about house repairs, find out what you have always wanted to do with your home and never got around to completing. This, sometimes emotional, trip down missed-out memory lane can help you make the case for improvements you know will make the home sell.
Sometimes homeowners revisit their dreams for a property can unlock easy ways to market it as the dream home for someone else.
3. Tally Up the Tax Write-Off
Decluttering always sounds good to do, but many sellers need incentive to part with their stuff.
Well, little motivation can compete with money in these situations. If a homeowner needs to let go of large amounts of stuff, the idea of a big tax credit for donating your extras may ease the burden. Take inventory and tally up the value of the items you think you can part with. Showing the the tax savings using the Salvation Army or Goodwill donation calculators, especially in extreme situations, may be the motivation to help you let go.
4. List the Inside of it on Craigslist
For your relocating or downsizing, professional photos can do double duty. To help motivate you to stage, list the contents you need to get rid of on Craigslist or in yard sale advertising. If you know the photos are going to get a lot of mileage and will end in some easy cash, you may be more apt to clean up for the lisying photo shoot and showings.
5. Group the Groupons to Make the Plan Happen
Last but not least, the real downside of staging for many is the cost and the effort. You can overcome this hurdle. Search discount sites like Groupon and LivingSocial for deals on the cleaning, painting, and other tedious to-dos to be done. The ability to affordably outsource the un-fun projects may get you closer to showing-ready home a lot faster.
Are you thinking about selling? Best to consider these factors and avoid the following traps.
1. Profit has been maximised: When a property has reached maximum value, there is little value in holding onto it for longer. Do not wait until the market is turning downward. Then all you are doing is lowering the price to try and catch a buyer. Therefore, the upper part of the appreciation curve is generally considered the optimum time to sell.
2. Property has not performed: Having cash or equity tied up in an investment that has not performed (over a reasonable time period) can prevent an investor from reaching their financial goals.
3. Better opportunity elsewhere: Investors should know how each of their properties are performing relative to
a. Others in their portfolio
b. Those in the market place.
If another opportunity presents itself with greater investment prospects then it should be considered.
4. Depreciation has been maximised: Depreciation on a property lasts for up to 30 years or whatever your accountant set up) from the time of purchase. Over time the value of depreciation recedes. This could weaken a property’s cash-flow position to the degree that it becomes better to sell.
While a forced exit can cause investors to panic and make easily avoidable mistakes, there are a number of traps that any investor wanting to exit a property needs to be aware of, according to experts.
-Selling too soon – before the market has started moving. This can impact on capital gains and, thus, the profit made.
-Holding for too long until demand has dropped off and the market is going down. This can prolong the sales process and result in a lower price.
-Selling to buy in a rising market, but then sitting on the sidelines. If an investor sells in this scenario, they shouldn’t then neglect to buy a property as intended.
-Forgetting to factor in selling costs (eg: agent commissions, legal costs and the like).
-Cross-collateral implications with lenders: Selling might trigger the need for valuations on other properties in a portfolio. This, in turn, could impact on the value of the portfolio.
It is important to contact all your financial partners such as accountants, bankers, lawyers or anyone who has set up your will or trust account. Remember a licenced Real Estate agent is always your best friend when determining value. Feel free to call Nancy Mikoda at 720-331-2444 or email email@example.com for further information.
On today’s market, every savvy seller wants to know what turns buyers off, so they can get their homes sold as quickly as possible, for as much as possible. But buyers, take note – there is a minefield of seller turn-offs you can trigger that hold the potential to keep you from getting the home you want at the best price and terms, or to unnecessarily complicate dealings with your home’s seller.
If you think all of today’s sellers are under the gun and will just put up with whatever behavior buyers dish out, be aware that there are still many multiple offer situations in which buyers have to compete with each other to get a home – buyers who trigger these turnoffs tend to lose in those scenarios. Also, avoiding these seller turnoffs can create a transactional environment of cooperation and avoid things turning adversarial. That, in turn, can empower you to score a better price, get extra items you want thrown into the deal, and even negotiate more flexibility around your escrow and move-in timelines – all perks that can make your life easier and your budget go further.
For sellers, these turnoffs pose the potential of irritating you out of an otherwise good deal – maybe even the only deal you have!
Here’s a few of the most common buyer-perpetuated seller turnoffs, with tips for sellers on how to keep an emotional (and economic) even keel, even if your home’s buyer makes some of these waves:
1. Trash-talking. Trash-talkers are the home buyers who think they’re going to negotiate the list price down by slamming the house, telling the sellers how little it is really worth, how the house across the street sold for nothing, why the school on the corner should make them desperate to give the place away, etc. This strategy never works; in fact, when you attack a seller and their home, you only cause them to be defensive, and think up all the reasons that (a) their home is not what you say it is, and (b) they shouldn’t sell their home to you!
Sometimes this happens with buyers who actually love a house and just walk around it fantasizing about all the ways they would customize it to their tastes while a seller is there. Sellers: avoid being at home while your home is being shown. Buyers: save your commentary for your agent; if you do encounter the seller in person keep your conversation respectful and avoid critiquing the house or the list price.
2. Being unqualified for mortgage financing. When a seller signs a buyer’s offer, most often the seller agrees to effectively pull the home off the market, forgoing other buyers who might be interested. As such, the only thing worse than getting no offers on your home is getting an offer, getting into contract, then having the whole thing fall apart when the buyer’s loan falls through – especially if that could have been predicted or avoided up front.
Sellers: Work with your agent to vet your home’s buyers’ qualifications, including their loan approval, down payment and earnest money deposit – before you sign a contract. It’s not overkill for your agent to call the buyers’ mortgage pro before you sign the contract and get a level of comfort for how robust their qualifications are. Buyers: Get pre-approved. Seriously. And make sure that you don’t buy a car, quit your job, deposit lottery winnings or do any other financial twitchery between the time you get loan approval and the time you close escrow on your home.
3. Making unjustified lowball offers. No one likes to feel like they are being taken advantage of. And sellers generally know the ballpark amount that their home is worth, as well as what they need to sell it for to get their mortgage paid off. Yes – the price you pay for a home should be driven by its fair market value, rather than the seller’s financial needs, and deals are more available in a market like the current one, in which supply so vastly outpaces demand. But just throwing uber-lowball offers out at sellers hoping one will hit the spot is not generally a successful strategy, especially if you really, really want a given property.
Sellers: Don’t get overly emotional about receiving a lowball offer; counter at the price you and your agent decide makes sense based on the total circumstances, including your motivation level, recent comps and the interest/activity level your listing is receiving. Buyers: Work through the similar, nearby homes that have recently sold (a/k/a comparables) before you make an offer to factor the home’s fair market value into your offer price – also factor in how much you want the place, too. Don’t be amazed if you make an offer far below asking, and don’t get a response.
4. Renegotiating mid-stream. Sellers plan their finances, moves and – to some extent – their lives around the purchase price a buyer agrees to pay for their home. If you get into contract to buy a home, find out during inspections that costly repairs need to be made, then propose a lower sale price, repair credit or even actual repairs to the seller, that’s sensible and fair. But if you were aware that the property needed a lot of work before you made an offer on it, then you come back asking for beaucoup bucks’ worth of credit or price reductions midstream, expect the seller to cry foul. And holding the seller up two weeks into the transaction because you caught a case of buyer’s remorse? Not cool, and not likely to foster the spirit of cooperation you may need to get your deal closed.
Sellers: avoid mid-stream price renegotiations by having a full set of inspection reports and repair bids at hand when you list your home. Buyers: try to avoid renegotiating the entire deal unless you get some major surprises at your inspections or inflating small repairs to try to justify a major price cut.
5. Misleading or setting the seller up. Remember when we talked about buyer turn-offs? Being misled by listing photos or very fluffy property descriptions was high on the list. The same goes for sellers.Offering way over asking with the plan to hammer the seller for a reduction when the house doesn’t appraise at the purchase price? #LAME Making an as-is offer planning the whole time to come back and ask for every penny ante repair called out by the inspectors? Lame squared.
Sellers: If you get multiple offers and are tempted to take a sky-high one or one that claims to be all cash, consider requesting proof that the buyer has sufficient funds to make up the difference between what you think the home will appraise for and the actual sale price, and statements showing the cash truly exists. Buyers: Don’t be lame. I’m not saying you have to tell the seller exactly what your top dollar is, but making offers with terms designed to intentionally mislead is really, really bad form – and can result in losing the home entirely if and when your bluff gets called.
P.S. – You should follow Trulia and Tara on Facebook, too!