Who Is the Typical New-Home Buyer?

 Data from the National Association of Home Builders and Metrostudy collected for new-home closings over the past year offers up a closer look at the average new-home buyer and the prices of homes purchase...d by region.

Northeast
Of a total 222,177 closings recorded year-to-date in 2014, 7,977 were new-home sales in the Northeast. The average Northeast buyer paid a median of $343,777.78 ($164.40 per square foot) for a new home. About 64 percent of new-home buyers in the Northeast are married and have one or two children, with an average household age of 46. The leading builder in the Northeast during the first two quarters is NVR.

West
Of a total of 569,900 closings year-to-date this year, 39,693 were new-home closings. The median closing price for a new home is $316,007.69 ($176.08 per square foot). About 63 percent of new-home buyers in the West are married, averaging about two children, and the average household age is 42.6. The leading builder in the West during the first two quarters is DR Horton, which also is the year-to-date leading builder by closings nationwide.

Midwest
Of a total of 421,745 closings this year, 15,134 have been new-home closings. The median closing price in the Midwest is the lowest of all four U.S. regions: $272,190.91 for a new home ($144.09 per square foot). Sixty-seven percent of new-home buyers are married, have an average of two children, and the average household age is 42.2. The year-to-date leading builder for the region is Pulte-Del Webb-Centex.

South
Of a total of 963,189 closings this year, 87,833 have been new-home closings. The median closing price for a new home is $275,035.29 ($143.47 per square foot). Fifty-six percent of new-home buyers are married (the lowest marriage rate of new-home buyers in the country), and average new-home households have one or two children. New-home buyers are youngest in the South, with the average household age at 40.2. The leading builder in the region this year is D.R. Horton. Source: “Running the Region: Who Is the Average Home Buyer in Each Corner of the U.S.?” Builder Online (July 23, 2014)

What do you look like? It could be you.
Rick Funk Century 21 Alpha
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(408)629-6099
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Zillow to Pay $3.5B in Trulia Acquisition:

 

 

 Zillow, Inc. announced today that it has entered into a definitive agreement to acquire Trulia, Inc. for $3.5 billion in a stock-for-stock transaction, which is expected to close in 2015. The comb...ined company will keep both the Zillow and Trulia consumer brands and will see Trulia CEO Pete Flint maintaining his position, though he will report to Zillow CEO Spencer Rascoff.

Zillow’s announcement noted that both brands “are primarily media companies, generating the majority of revenue through advertising sales to real estate professionals.” By combining, they are hoping to save $100 million in costs by 2016.

The National Association of REALTORS® noted that, regardless of the moves of the two websites, REALTORS® themselves remain integral to the process of buying and selling a home.

“This proposed merger doesn’t change anything,” said NAR President Steve Brown. “This is just one of many online resources available to consumers. The REALTOR® remains central to the real estate transaction, and NAR is committed to making sure that remains the case.”

Zillow's move is another sign of the growing importance of online sources of real estate data. In the past, Trulia has struggled to compete with Zillow and realtor.com®, and its $355 million acquisition of Market Leader late last year was questioned by some analysts.

In June, Trulia laid off 85 Market Leader employees. Initially, Inman news reported that they would be retiring the brand, but Trulia clarified later that they would maintain Market Leader products.

Panos Mourdoukoutas wrote in Forbes that the two companies don’t necessarily have as much power as may seem now.

“Zillow’s weak spot is that listing agencies have the upper hand,” Mourdoukoutas wrote, noting that the combined companies may be able to increase what they charge agents for ads, but that they ultimately need data from agents, some of whom may not be willing to pay higher prices. “That could explain the Zillow’s negative operating margins, and the large short positions. As of May 2014, 45 percent of Zillow’s shares were short—Trulia’s short position was even worse, with 52 percent of its shares being short.”

Still the best place to find your dream home is "Right Here" using my IDX search engine. No hassles and no traps.
Century 21 Alpha Rick Funk
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Sell as is, or fix up and sell, or fix up and stay for a while.

 Remodeling Rising: More Home Owners Spruce Up Properties: An index that measures the state of the remodeling market rose three points in the second quarter of this year, regai...ning the momentum started in 2013 but lost in the first quarter of this year, according to the National Association of Home Builders’ Remodeling Market Index. It marked the fifth consecutive quarter for the index to have a reading over 50. Any reading above 50 indicates more remodelers are reporting that market activity is higher than lower.

"With many home owners on better financial footing, home remodeling has become more popular," says Paul Sullivan, NAHB’s Remodelers chair. "The completion of postponed work has helped remodelers in all regions regain confidence in the remodeling market."
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• Stay Put and Remodel – or Move?

Remodeling jobs valued at $25,000 or more rebounded to 54 on the index, which is the same level at the end of 2013. Smaller remodeling jobs and maintenance and repair jobs were at reading s of 56 and 58, respectively, on the index. Remodelers reported more favorable conditions on calls for bids, amount of work committed for the next three months, backlog of jobs, and appointments for proposals.

"The recent improvement in the job market has helped restore remodelers' confidence after a dip in the first quarter that was probably in part weather-related,” says David Crowe, NAHB’s chief economist. “As home owners feel more secure about their economic situation, they become more willing to undertake remodeling projects – especially larger, discretionary projects. In addition, fewer new home builders are looking to remodeling as a way supplement their revenue, and this has somewhat reduced competition for remodeling projects."

A recent realtor.com® survey of more than 1,500 home owners showed that 67 percent of consumers say they’re planning a home renovation within the next six months, and they’re planning to spend more money on their renovations than last year. The most common budget range for home improvements was between $2,001 and $5,000 and the most popular areas to renovate were the kitchen, bathrooms, backyards or patios, and the exterior of the home, according to realtor.com®’s Home Improvement Survey. Source: National Association of Home Builders and “Majority of Home Owners Planning to Renovate,” REALTOR® Magazine Daily News (July 18, 2014)

Call me to discuss the most probable outcome or results from making a remodel or upgrade to you existing home.
Rick Funk Century 21 Alpha
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(408)629-6099

 

OPEN HOUSE!

Please plan to attend my OPEN HOUSE, Saturday from 11:30 a.m. to 3:30 p.m. at: 2552 Klein Road, San Jose CA 95148. Details shown below.
Rick Funk Century 21 Alpha
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OPEN HOUSE! Saturday 11:30 a.m. to 3:30 p.m.

 Hard to find, 1 acre parcel with custom 3 bedroom plus den can be fourth bedroom. Large master with great bath area and jetted tub and separate shower, Jack and Jill bedrooms. Gourmet Kitchen ...Separate living, dining, and Family areas. Beautiful private rear patio, bbq, spa. Large veranda in front makes this the perfect home to entertain your guest. Separate guest house with 1 bedroom and 1 bath and kitchen. Tons of extra parking and separate 2nd drive way. Separate in-laws or guest house can rent for $750 per month. Views galore relaxing bbq area and spa all with Valley Views to the South bay area.
Asking $1,175,000.

Rick Funk Century 21 Alpha
C21Funk@aol.com Or (408)629-6099 WWW.RickFunk.com

What Consumers Want Smart Homes to Do:

  When it comes to smart homes, consumers are more interested in their security features than the gadgets that control the homes' appliances. New research by Icontrol Networks, a home technology company..., shows that 90 percent of 932 respondents recently surveyed say that security is one of the most important reasons for using a smart-home system. In fact, 67 percent rank it the No.1 reason, and the majority of consumers say security is a must-have in any home automation, according to Icontrol's 2014 State of the Smart Home Report.

Fire and carbon monoxide alarms, as well as gas leak alarms, were listed as top security features, according to the survey.

"For now, safety and security are driving initial mass market adoption," says Jim Johnson, executive vice president of Icontrol Networks. "But the convenience associated with a connected home will likely play a greater role as consumers realize how much easier automation makes their lives."

Seventy-eight percent of respondents also ranked energy management as one of the top features that matter most to them in a smart home. HVAC heating and cooling management was cited as the most important feature in helping to reduce utility bills. Nearly 43 percent of respondents say they'd be interested in replacing their thermostat with a "smart thermostat," one that automatically adjusts when the home is occupied.

Would home owners be willing to pay for the extra costs in making their homes smarter and more connected? The survey found that 51 percent of respondents would be willing to pay up to $500 for a fully equipped smart home; 32 percent say they'd pay $500 to $3,000. Source: “What Consumers Want in Home Automation,” Builder (July 17, 2014)

Smart Homes, and Smart home owners agree the best decision they ever made was to call Rick Funk And Century 21 Alpha
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5 Mistakes First-Time Home Buyers Make:

First-timers can be eager to jump into home ownership. But real estate experts say they see them committing the same mistakes, time and time again. Here are some of the most common ones, as identified by experts in a recent CNBC article:
1. They’re unprepared to compete against all-cash offers. Buyers need to be ready to make a quick decision if they’re housing market is heating up. Buying a home is “really like finding a job – it’s going to take a lot of time to prepare,” says Cara Pierce, a certified housing counselor with ClearPoint Credit Counseling Solutions. “That way, when the deal comes along, you’re ready to pounce on it.” Housing experts say buyers should have already saved as much as possible for a downpayment, repaired any credit report blemishes, and gotten preapproved for a loan as they start their house hunt to put them in a better position to compete.
2. They place a car ahead of the home. Lenders are going to scrutinize applicants’ debt-to-income ratio when assessing how well they can afford a mortgage payment. Consumers’ debt has gone on average from $40,000 in 2010 to $51,000 today, according to David Norris, president and COO of loanDepot, a non-bank mortgage lender. "It would be much easier to own a home if you can show a history of saving and not have gotten yourself into too much debt," Norris told CNBC.
3. They place too much emphasis on online loan information. Online sites can be good for finding out general information about loan products and estimated costs, but experts recommend visiting with mortgage lenders face-to-face to help demystify some of the process and to take into account your specific situation. Go to different places and talk to loan officers to get a feel for what the differences are between similar types of loans," says Pierce. "Sometimes a company won't charge an origination fee, but then the interest rate is higher … and in some cases you can put many of the upfront costs—closing costs, title insurance—into the loan, which makes your balance larger."
4. They bank too much on online home values. Some real estate websites are giving buyers a false sense of home values, the CNBC article notes. "If a buyer believes that the actual value of the property is $1.1 million [as listed online] when it's really $1.3 million, it's a real disservice to the client,” says John Barrentine, co-founder and CEO of RED Real Estate Group. “You really should [spend time] with someone that understands the market, someone who's there day in and day out." Home buyers can get the best feel of the market by working with a real estate agent and driving around neighborhoods and get a sense of things about homes that may be less valuable or even more valuable than perceived online.
5. They forgo the home inspection. About 10 percent of homes recently purchased weren’t inspected by a home inspector, according to Bill Loden, president of the American Society of Home Inspectors. Some buyers were trying to cut down on the costs of hiring an inspector to investigate a home – which usually averages about $450 — but defects uncovered later could potentially result in the loss of thousands of dollars. "It takes a trained eye to be able to see the problems that can exist in a home," Loden said. "The inspection can also give the first-time buyer a bit of a schooling on the house and how to maintain it." Buyers should also be prepared to ask questions about conditions that are common to specific areas, such as radon in Midwest; sewers in California; and active clay soils in Dallas that can lead to foundation issues, the CNBC article notes. The home may require additional inspection from a specialist to rule out potential problems. Source: “8 Biggest Mistakes First-Time Homebuyers Make,” CNBC (July 17, 2014)
Let me help you make the purchase experience a good one.
Call Rick Funk at Century 21 Alpha (408)629-6099
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Billionaire.... what is the best way to get there? ......

  Home Ownership Still the Best Investment: John Paulson, a billionaire hedge fund manager, says that for those looking for the best investment possible, they need to look toward home ownership.


At the Delivering Alpha confer...ence, presented by CNBC and Institutional Investor, Paulson said: "I still think, from an individual perspective, the best-deal investment you can make is to buy a primary residence that you're the owner-occupier of. Today, financing costs are extraordinarily low. You can get a 30-year mortgage somewhere around 4.5 percent. And if you put down, let's say, 10 percent and the house is up 5 percent, which is the latest data, then you would be up 50 percent on your investment. And you've locked in the cost over the next 30 years. And today the cost of owning is somewhat less than the cost of renting. And if you rent, the rent goes up every year. But if you buy a 30-year mortgage, the cost is fixed."

Paulson stressed that an owner-occupied home — not a home bought to be a rental — is what he views as the best investment individuals can make right now.

"To buy it as an investment and rent it out — I'm not so enamored with that concept," he said. Source: “Paulson: Buying a House Still Best Investment,” CNBC (July 17, 2014)

To get you started in your pursute of your 1st billion, call or write me
Rick Funk Century 21 Alpha C21Funk@aol.com (408)629-6099
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Housing Affordability Continues to Soften as Prices Rise:

  Rising home prices pushed housing affordability down in May compared with last year, making homes a little less affordable to the average family, according to the National Associat...ion of REALTORS®' latest Housing Affordability Index.

The median price for a single-family home rose to $213,600 in May, up 4.9 percent from a year ago. However, the affordability picture may improve in the coming months as price gain slow. Meanwhile, mortgage rates rose 77 basis points from last year (with one percentage point equal to 100 basis points).

“While jobs and income levels are up slightly from last year, they are not growing fast enough to offset price increases,” writes Michael Hyman, an NAR research assistant, on NAR’s Economists’ Outlook blog. “Having money for a down payment can still be a big hurdle for potential home buyers who already pay comparable rent payments.”

Affordability was down in May in all regions of the country, with the South posting the largest drop in affordability in the month, but the West saw the largest slump in affordability year-over-year after seeing the largest price gain of 8.4 percent. Source: “Latest Housing Affordability Index Release,” National Association of REALTORS® Economists’ Outlook Blog (July 15, 2014)

As interest rates rise, the amount of home you can purchase for the same payment goes down.

Call me today, to take action...
Rick Funk at Century 21 Alpha (408)629-6099 C21Funk@aol.com
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Yellen: Rates May Rise Sooner Than Expected:

 Federal Reserve Chairwoman Janet Yellen said that the Fed may need to raise interest rates sooner than expected, but it all will hinge on the labor market.

“If the labor market continues to im...prove more quickly than anticipated by the Federal Open Market Committee, resulting in faster convergence toward our dual objectives, then increases in the federal funds rate target likely would occur sooner and be more rapid than currently envisioned,” Yellen testified to the Senate Banking Committee on Tuesday. On the other hand, “if economic performance is disappointing, then the future path of interest rates likely would be more accommodative than currently anticipated.”

Currently, the majority of Fed officials expect the central bank to begin raising interest rates about a year from now. The Fed’s benchmark short-term rate has stayed near zero since December 2008, which has helped to keep interest rates near historical lows.

Recently, the unemployment rate has fallen rapidly, reaching 6.1 percent in June. But wage growth has remained weak, Yellen noted.

Also, Yellen said, the housing market remains sluggish, which she said could slow the economic recovery.

"The housing sector has shown little recent progress,” Yellen testified to the Senate. “While this sector has recovered notably from its earlier trough, housing activity leveled off in the wake of last year's increase in mortgage rates, and readings this year have, overall, continued to be disappointing. The recent flattening out in housing activity could prove more protracted than currently expected rather than resuming its earlier pace of recovery.” Source: “Yellen: Economy Uncertain, Housing Disappoints, and Rate Hikes Are Coming,” HousingWire (July 15, 2014) and “Yellen: Fed May Move Sooner if Labor Market Keeps Surprising,” The Wall Street Journal (July 15, 2014)

What goes down must come back up with the market.
Call me today to schedule your no hassle no obligation meeting to discuss what the market conditions are and how they may effect your Real Estate needs. I want to help you before the rates effect your affordability of your dream home.
Century 21 Alpha Rick Funk (408)629-6099 C21Funk@aol.com
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