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3 Real Estate Issues to Watch in 2016

What will happen with real estate this year? A few predictions are fairly common – rising mortgage interest rates, values, and prices. Read any business article on real estate, and you’ll see something like this.

There’s more to real estate than interest rates, values, and prices, though. Take a look at these three real estate issues to watch in 2016.

More Sellers Means More Inventory

Inventory has been shrinking for more than a year. In some price points, this has lowered sales dramatically as there are not enough available homes for sales for the buyers who want to own a new home. But there is good news. In a recent study by Fannie Mae, the Home Purchase Sentiment Index, 40 percent said now was a good time to sell a home.

For the second time in the study’s history, 85 percent of people said they weren’t worried about losing their jobs, while 15 percent said their income was significantly higher than the year before. This spells good news for potential buyers out there wondering where the inventory may be, and if they’ll find the home of their dreams.

First-Time Home Buyers May Remain Low

Historically, first-time home buyers make up nearly 40 percent of all home buyers in a given year. Since the recession, that number has dropped dramatically and hovers closer to 30 percent. This is important because new home buyers help drive real estate sales.

Millennials now surpass Baby Boomers as the largest demographic in the United States. Due to high student loan debt when they graduate college and rising rental costs, saving for a downpayment has become more and more difficult. Younger buyers want to buy homes but are waiting longer.

Rent-to-Own May Become More Popular

As rental costs rise and potential buyers must wait longer to save up the money they need, programs are popping up around the country to help renters become owners. Rent-to-own organizations, like Home Partners for America, Invitation Home, and American Homes 4 Rent, most common in larger metropolitan areas, buy the homes and rent them with the understanding that over time, the renter will buy the home from the organization.

While not common in places like the Emerald Coast, we may start seeing more and more of this become available for renters to help them buy their dream home. Each organization has their own criteria and not everyone will qualify. For those who do, they’re likely to live in nicer homes in better neighborhoods, making the ability to eventually own the home much more attractive.

For those who watch real estate trends and follow along with what’s happening in the industry, you know that no one thing makes or breaks real estate sales and home values or prices. These emerging issues may mak

6 Ways to Make Your Home Smarter

Image via Kozzi

Who remembers watching the Jetsons and wishing for their own flying car? We’re not quite at that point just yet, even though plenty of spaces have moving sidewalks and robots aren’t unusual anymore, although I’m sure most of us wouldn’t mind our own Rosie. We might not be able to make our cartoon memories a reality (yet) but there are plenty of ways to make your home a little smarter.

Keyless Technology

Try something like the August Smart Lock and you’ll be able to use your phone to let people into your home, unlock your door as you carry seven bags of groceries (in one hand), and even keep a record of who’s coming and going and at what times throughout the day.

Lighting

Who wants to be blinded when you turn on your lights in the morning? With products like Phillips Hue, you can use smart lighting to have your lights come on gradually when you first wake up. If that’s not enough of a reason, smart lighting also lets you set times when your lights should turn on or off throughout the day.

Home Automation

Full home-automation system, like Insteon, give you remote control from a web browser or your mobile device to control your heating and air conditioning, irrigation systems (no need to run the sprinklers if it’s already raining), your lights, and even your appliances.

Smart TVs

Walk through a big box store, and you’ll see more and more smart televisions. Who sits down in front of the TV just to watch a show anymore? Now you can get online, check your Facebook page, and do almost everything you’d do on your computer – from your TV and with a great picture, too.

Smart Appliances

Whether it’s the smart dishwasher from Bosch or the smart washer and dryer from LG, even our appliances are getting smarter and more high-tech. Use less energy, start your load from anywhere, and keep track of the cycles and usage even when you’re not at home.

Thermostats

Whether it’s a smart thermostat by Carrier or the Nest Thermostat from Google, keeping your home warm or cool keeps getting easier. Smart thermostats adapt to your movements, let you monitor energy use, and can be pre-set to create the right temperature you need when you wake up, get home, and right before bed. Best of all, you can do it all from your phone or tablet.

Smart technology makes your life easier, and when you’re ready to sell, it can help increase the value of your home. Just a tip – when you put your home on the market, show your real estate agent how to use your smart technology. It’s hard to show off the great features of a home when we don’t know how to turn the lights on!

Source:

9 Ways to Turn Your House into a Smart Home, BobVila.com

How to Make a Smart Home from a Dumb One, PCMag.com

Want to Buy a Home in 2016? Do These 5 Things To Get Ready

Image via Kozzi

It’s a new year – a time to think about what you want to accomplish in the weeks and months ahead. If one of your New Year’s resolutions is to buy a home at some point in 2016, there are a few things you’ll need to do before you look for a house.

Take a look at this list, and get yourself ready to find the home of your dreams this year!

Check your credit. Everyone is entitled to one free report from each of the three major credit bureaus each year. Get yours now, and look for mistakes, errors, or old debt you’ve forgotten about. Start dealing with any issues now so that you’ll qualify for a good interest rate on your mortgage later.

Be realistic about your budget. Ideally, your housing costs shouldn’t exceed 30 percent of your income. This includes mortgage, taxes, insurance, maintenance, and even utilities. If your ideal home is out of your price range, you can do a few things:

Save more for a larger down payment.
Adjust your expectations and find something within your budget.
Wait until your income increases.

Don’t try to buy a home that will leave you house poor and with no extra income for emergencies or even the occasional latte.

Look into assistance programs. Most buyer assistance programs are for first-time homebuyers. If you haven’t owned a home for several years, you may qualify, too. Find out if you qualify and what you need to do before you start shopping. The Escambia County Housing Finance Authority offers assistance in Escambia, Santa Rosa, Okaloosa, and Walton counties.

Take a look at your savings. Even if you qualify for a three or five percent down payment with your mortgage, you’ll need to have enough in savings to cover additional closing costs and still have some left over. Most lenders don’t like to see your entire savings account wiped out when you purchase a home. Keep saving, and don’t stop – even after you’ve moved in.

Talk to a lender before you start looking for a house. Every lender is a little different, and most will be happy to talk to you about the prequalification and preapproval process. Neither is a guarantee of a loan but will give you an idea of the possible interest rate and loan amount you may qualify for. It’s a good idea to shop around to find the best possible rate and mortgage instead of sticking with the first company you find.

In today’s market with lower inventory and high quality homes selling quickly – and receiving multiple offers – it pays to have your finances in order before you even start looking. When you know how much you can afford and what kind of mortgage you may qualify for, you’ll be in a better position to buy the home of your dreams.

Dollars and Sense: Teaching Your Children How to Manage Money

One of the most important things parents can do for their children is teach them the value of a dollar. Helping them learn the skills necessary to manage money effectively can be done at any age, and it’s much easier than you think. Take steps to educate your child about personal finance with these four tips from experts at Parents Magazine.

1. Give a weekly allowance.
How much to give your child depends on your own financial situation, but a good rule of thumb is to give them an amount equal to half their age (i.e., $4.50 for a 9-year-old). It’s also important that this allowance doesn’t rely on whether or not a child completes his or her chores – helping out around the house is something children should do anyway, regardless of an incentive. You can always give them opportunities to earn extra cash with other chores outside of their expected routine.

2. Set savings goals.
If your child expresses interest in a big-ticket item, help him or her set a savings goal. Your child will not only learn the rewards of saving, but also see firsthand how transactions work. Try to hold back your opinion if you think your child is wasting money – buyer’s remorse is another great lesson for kids to learn, and it will help them become much more conscious of their spending.

3. Be a role model.
It’s important to lead by example. Your children will never know how to be responsible with money if you aren’t. A trip to the grocery store is the perfect opportunity to demonstrate sensible money management in several areas – budgeting, using credit cards, and purchasing sale items, for instance.

4. Make it fun.
Becoming skilled at managing finances doesn’t have to feel like school. Board games like The Game of Life and Monopoly Jr. can be especially helpful when teaching some of the basics. In addition, try to keep any serious money conversations away from your child’s ears – it’s never a good idea to associate money and stress!

10 Housing Trends Coming Your Way in 2016

It’s been nearly a decade since the housing bubble burst and home values have yet to come back. But 2015 offered great strides toward full recovery, with small reminders of a still-recuperating market.

Home prices are up year-over-year and new home sales are on track for the best year since 2007. But the share of first-time homebuyers remains at the lowest level on record, while the homeownership rate slumped to a 48-year low earlier this year.

What will 2016 hold for homebuyers, sellers and renters? Here are the top real estate trends to watch for next year.

Home prices will continue to rise…moderately.
Economists and housing experts surveyed by Zillow expect home values to grow an average of 3.5 percent with most markets experiencing modest gains. That’s closer to historical averages and more sustainable than double-digit increases. However, some economists are worried that price appreciation may be approaching bubble territory in some hot markets like San Francisco, Denver, and Dallas.
Interest rates will inch up.
Economists widely agree that the Fed will increase its fed funds rate gradually throughout the year. Rates on adjustable-rate mortgages, which are tied to the prime rate that tracks the fed rate, will react immediately to a Fed hike. The rate on the 30-year fixed mortgage will increase slower, because it follows the yield on the 10-year Treasury, rather than the fed rate.

Rates on a 30-year mortgage currently stand at about 4 percent, up from record lows but still extremely attractive by historical measures. The Mortgage Bankers Association expects rates to reach 4.5 percent in 2016.

While some worry that higher interest rates would dampen the housing market, job security and wage growth are larger factors on home activity than interest rates.

First-time buyers will continue to struggle.
Part of the reason for the muted housing recovery is the lack of first-time buyers. These buyers—who traditionally fuel the market—have had difficulty saving for a down-payment due to stagnant wages and high rents. “The investors came in and helped accelerate the housing recovery by being willing to buy when the market was bleeding, but they have pushed up home prices rapidly in some markets, and all of the sudden those markets are unaffordable for the traditional, first-time buyers,” says Daren Blomquist, vice president at RealtyTrac.

The median age of first-time homebuyers—currently at a record-high 33—will head even higher next year, according to Zillow. Another headwind facing first-time homebuyers: Prices for entry-level homes are increasing faster than prices at any other price level, according to CoreLogic. That’s because developers have been building larger, more expensive houses rather than starter homes.

Credit will get—a little—looser.
While the days of no-doc loans and drive-by appraisals will likely never return, the pendulum is inching closer to center after several years of tight credit restrictions. The average FICO score on all closed loans in the third quarter was 723, the lowest level in at least four years, according to Ellie Mae. Two years ago, the average score for denied applications was 729.

Banks may be even more willing to work with homebuyers over the next year as the volume of refinances falls as interest rates rise. “There will be more competition for borrowers,” says Frank Nothaft, chief economist at CoreLogic. “We may start to see more flexibility in credit standards and underwriting.”

It will still be cheaper to buy than rent.
Rental rates have risen even faster than home prices in some markets. Buying a home is 36 percent cheaper than renting nationwide for millennials and now is the best time to buy since 2012, according to Trulia. Buying is cheaper than renting in every one of the country’s 100 largest metro areas. The disparity could likely grow as rents are expected to increase by 8 percent next year, according to a Rent.com survey of property managers.
The suburbs will make a comeback.
The suburbs are once again becoming a potential destination for buyers as downtown living increases and Millennials start families, according to a new report from the Urban Land Institute. The most attractive suburbs are close to a city and have walkable Main Streets, job opportunities and public transportation. In the largest metro areas, more than four out of five jobs are located outside of the center-city core.
Buyers will want green and smart homes.
Despite the higher costs, home builders and remodelers are increasingly incorporating eco-friendly features into projects to meet growing demand largely from affluent Baby Boomers who prioritize energy efficiency, a healthier indoor environment and durability. More than half of builders and 39 percent of remodelers say they are working on green projects, according to a study from Dodge Data & Analytics for the National Association of Home Builders.Those percentages are expected to rise over the next five years.

Sellers that don’t want to invest in full-scale renovations are turning to smart thermostats and lights that can be controlled by smartphones to pump up their eco appeal. “It’s a great way for sellers to differentiate their properties from others on the market,” says Budge Husky, chief executive officer at Coldwell Banker Real Estate. “You’re not only getting the energy savings, but it becomes a lifestyle feature.”

Videos will be the new photos.
High-quality, professional photographs have become the norm for online listings. To stand out in today’s market, more sellers are working with their real estate agents to create virtual tours and videos to highlight their properties.

Videos can help create positive reactions and emotional connections to younger buyers accustomed to sharing photos and videos on social media. Los Angeles real estate agent Scott Tamkin has been using video game-like 3D tours to allow potential buyers who may be abroad to virtually “walk through” a property to get a real feel for it.

All-cash sales will continue to decrease.
About a third of home sales in August went to all-cash buyers, down form a high of more than 46 percent in January 2011, according to CoreLogic. That share will likely continue to decline in 2016, which is good news for mortgage-dependent buyers who have had trouble competing with all-cash offers in some markets.
New homes will come back big time.
New home construction was one of the hardest-hit industries after the housing bust. At their lowest point in 2009, developers had scaled back production by nearly 79 percent. They’re finally starting to ramp up again. Single-family starts increased 10 percent this year and are expected to rise another 23 percent in 2016, according to the National Association of Home Builders. That coincides with healthy sales. New home sales grew 15 percent this year and are forecast to jump 26 percent in 2016.

Thank you,

November 2015: Single Family Home Sales Strong Across Emerald Coast

Single family home sales increased across the Emerald Coast in November, while inventory levels continue to drop. Walton County condo sales dipped over last year, while Okaloosa County condo sales remained strong. All sales statistics below compare November 2015 to November 2014.

Single Family Home Sales

Emerald Coast

Closed sales increased 5.1%
Pending sales decreased 1.3%
Median prices increased 6.8%
Inventory decreased 9.7%
Months supply decreased 23.6% to 5.9 months of inventory, the lowest since current reporting began in 2011

Okaloosa County

Closed sales increased 1.8%
Pending sales saw no change from last year
Median prices increased 9.5%
Inventory decreased 9.3%
Months supply decreased 24.2% to 4.8 months of inventory, the lowest since current reporting began in 2011

Walton County

Closed sales increased 11.2%
Pending sales increased 6.9%
Median prices decreased 1.8%
Inventory decreased 10.1%
Months supply decreased 22.9% to 7.1 months of inventory, the lowest since current reporting began in 2011

Townhouse and Condo Sales

Emerald Coast

Closed sales increased 5.8%
Pending sales decreased 2.8%
Median prices increased 6.5%
Inventory decreased 1.2%
Months supply decreased 10.4% to 8.9 months of inventory, the lowest level all year

Okaloosa County

Closed sales increased 3.7%
Pending sales decreased 9.4%
Median prices increased 17%
Inventory decreased 2.2%
Months supply decreased 6.2% to 10.1 months of inventory, the lowest level all year

Walton County

Closed sales decreased 18.8%
Pending sales decreased 14.5%
Median prices increased 3.7%
Inventory decreased 8.7%
Months supply decreased 18.3% to 7.8 months of inventory, the lowest since current reporting began in 2011.

A few things to remember…

As inventory continues to shrink and the months’ supply of homes for sale decreases, home sales may slow down as less options are available for buyers. We may also experience price increases as buyers are forced to compete for available properties.

A healthy real estate market (meaning neither buyer nor sellers have an “advantage”) is a six to eight month inventory. Below six months, it’s thought to be a seller’s market and above eight months is considered a buyer’s market.

Pending sales are only an indication of the month ahead. In months with an increase in pending sales, you can expect sales to increase for the following month. A decline in pending sales may be an indication of lower sales the next month. It is not an automatic as sales often take more than 30 days to close.

All sales data is from the Emerald Coast Association of Realtors ® (ECAR) Multiple Listing Service (MLS) and is compiled by Florida Realtors®, the state association for Florida. The Emerald Coast statistics cover both Okaloosa and Walton counties as well as surrounding areas based on the listings entered into the MLS by ECAR MLS participant