The Bottom Line is Supply & Demand

#WESTCHESTERCOUNTYREALESTATE …. If you are thinking of buying your dream home Let’s Talk Real Estate In Westchester County

The Supply & Demand Problem Plaguing New Construction

The Supply & Demand Problem Plaguing New Construction | MyKCM

Many real estate economists have called on new home builders to ramp up production to help relieve the shortage of inventory of homes for sale throughout the United States. The added inventory would no doubt aid buyers in their search to secure their dream home, while also helping to ease price increases throughout the country.

Unfortunately for builders, there are many forces that are making it difficult for them to do just that!

Last week at the National Association of Real Estate Editors 51st Annual Conference, CoreLogic’s Chief Economist Frank Nothaft broke down the 4 ‘L’s of New Home Construction: Lots, Labor, Lumber, and Lending.

The concept of supply and demand is ripe in the new home construction industry. The four ‘L’s of new home construction are each suffering a supply problem, and with that comes added costs. Let’s break it down!

Lots – There is a shortage of land near metros at an affordable price, causing builders to move farther and farther away from cities to keep costs down. This isn’t always an attractive option for those who want to stay close to work.

Labor – The Great Recession forced many skilled construction and trade workers to find other sources of income once their jobs were lost at the time of the crash. Even though the overall housing market has recovered, these workers have not returned. Those who remain are starting to age out and retire, causing even more of a shortage and additional costs.

Lumber – The cost to build a new home is directly tied to the cost of the lot and the cost of the supplies needed to build the home. Lumber costs continue to escalate due to policies restricting the importation of Canadian lumber, making larger luxury homes an attractive option to recoup costs when selling, rather than building smaller single-family homes and making less profit.

Below is a graph showing the increase in cost of 1,000 board feet of framing lumber.

The Supply & Demand Problem Plaguing New Construction | MyKCM

Year-over-year, lumber costs are up 13% after reaching a high of $433 in the second week of April.

Lending – During the Great Recession, many small community banks were forced to close their doors. These banks were a great source of capital and lending for builders looking to borrow money at a low interest rate in the community in which they were building. Tougher lending standards have made borrowing funds more expensive and more difficult for builders.

Bottom Line

Additional costs across all 4 ‘L’s have made building luxury properties more attractive to builders as they are able to make a larger margin with the higher sales price. The move to scale down to starter and trade up homes to help with supply will mean any additional costs are absorbed by the builders unless the supply of the 4 ‘L’s can increase!

Good News For Homeowners #Equity

Do You Know How Much Equity You Have in Your Home?

#Let’s Talk Westchester County Real Estate with www.ReneeStengel.HoulihanLawrence.com

Do You Know How Much Equity You Have in Your Home? | MyKCM

CoreLogic’s latest Equity Report revealed that 91,000 properties regained equity in the first quarter of 2017. This is great news for the country, as 48.2 million of all mortgaged properties are now in a positive equity situation.

Price Appreciation = Good News for Homeowners

Frank Nothaft, CoreLogic’s Chief Economist, explains:

One million borrowers achieved positive equity over the last year, which means risk continues to steadily decline as a result of increasing home prices.”

Frank Martell, President and CEO of CoreLogic, believes this is a great sign for the market in 2017 as well, as he had this to say:

Homeowner equity increased by $766 billion over the last year, the largest increase since Q2 2014. The rising cushion of home equity is one of the main drivers of improved mortgage performance. Since home equity is the largest source of homeowner wealth, the increase in home equity also supports consumer balance sheets, spending and the broader economy.”

The Best Renovations for ROI #Let’sTalkRealEstateInWestchesterCounty,NY

Thinking of Selling your Home…. www.ReneeStengel.HoulihanLawrence.com

 

Top Home Renovations for Maximum ROI [INFOGRAPHIC]

Top Home Renovations for Maximum ROI [INFOGRAPHIC] | Simplifying The Market

Some Highlights:

  • Whether you are selling your home, just purchased your first home, or are a homeowner planning to stay put for a while, there is value in knowing which home improvement projects will net you the most Return On Investment (ROI).
  • While big projects like adding a bathroom or a complete kitchen remodel are popular ways to increase a home’s value, something as simple as updating landscaping and curb appeal can have a quick impact on a home’s value.
  • For more information about top renovation projects that net you the most ROI, you can check out the complete list here.

Buying vs Renting in Westchester County

If you are thinking of purchasing a home in Westchester County, NY,#LET’STALKREALESTATE in Armonk, Bedford, Mount Kisco, Lewisboro and Chappaqua…. www.ReneeStengel.HoulihanLawrence.com

The TRUTH Behind the RENT vs. BUY Debate

The TRUTH Behind the RENT vs. BUY Debate | MyKCM

In a blog post published last Friday, CNBC’s Diana Olnick reported on the latest results of the FAU Buy vs. Rent Index. The index examines the entire US housing market and then isolates 23 major markets for comparison. The researchers at FAU use a “‘horse race’ comparison between an individual that is buying a home and an individual that rents a similar-quality home and reinvests all monies otherwise invested in homeownership.”

Having read both the index and the blog post, we would like to clear up any confusion that may exist. There are three major points that we would like to counter:

1. The Title

The CNBC blog post was titled, “Don’t put your money in a house, says a new report.” The title of the press release about the report on FAU’s website was “FAU Buy vs. Rent Index Shows Rising Prices and Mortgage Rates Moving Housing Markets in the Direction of Renting.”

Now, we all know headlines can attract readers and the stronger the headline the more readership you can attract, but after dissecting the report, this headline may have gone too far. The FAU report notes that rising home prices and the threat of increasing mortgage rates could make the decision of whether to rent or to buy a harder one in three metros, but does not say not to buy a home.

2. Mortgage Interest Rates are Rising

According to Freddie Mac, mortgage interest rates reached their lowest mark of 2017 last week at 3.89%. Interest rates have hovered around 4% for the majority of 2017, giving many buyers relief from rising home prices and helping with affordability.

While experts predict that rates will increase by the end of 2017, the latest projections have softened, with Freddie Mac predicting that rates will rise to 4.3% in Q4.

3. “Renting may be a better option than buying, according to the report.”

Of the 23 metros that the study reports on, 11 of them are firmly in buy territory, including New York, Boston, Chicago, Cleveland, and more. This means that in nearly half of all the major cities in the US, it makes more financial sense to buy a home than to continue renting one.

In 9 of the remaining metros, the decision as to whether to rent or buy is closer to a toss-up right now. This means that all things being equal, the cost to rent or buy is nearly the same. That leaves the decision up to the individual or family as to whether they want to renew their lease or buy a home of their own.

The 3 remaining metros Dallas, Denver and Houston, have experienced high levels of price appreciation and have been reported to be in rent territory for well over a year now, so that’s not news…

Beer & Cookies

One of the three authors of the study, Dr. Ken Johnson has long reported on homeownership and the decision between renting and buying a home. The methodology behind the report goes on to explain that even in a market where a renter would be able to spend less on housing, they would have to be disciplined enough to reinvest their remaining income in stocks/bonds/other investments for renting a home to be a more attractive alternative to buying.

Johnson himself has said:

“However, in perhaps a more realistic setting where renters can spend on consumption (beer, cookies, education, healthcare, etc.), ownership is the clear winner in wealth accumulation. Said another way, homeownership is a self-imposed savings plan on the part of those that choose to own.” 

Bottom Line

In the end, you and your family are the only ones who can decide if homeownership is the right path to go down. Real estate is local and every market is different. Let’s get together to discuss what’s really going on in your area and how we can help you make the best, most informed decision for you and your family.

 

Let’s Talk Real Estate in Westchester County

The American Dream Forecast For 2017

Will Housing Become Better under Trump? Half of Americans Think So

 RisMediaENews

Will Housing Become Better under Trump? Half of Americans Think So

Americans are “cautiously optimistic” about the housing market, with 69 percent recently surveyed by ValueInsured believing 2017 will be a better year for real estate than 2016, and 52 percent believing housing will become more favorable under the Trump Administration.

The outlook is primarily felt among millennials who are not homeowners. According to the survey, 62 percent of millennials believe the housing market will turn in their favor this year, while the level of confidence held by millennial non-homeowners has gone up the most in the past quarter, to a score of 61.3 in the ValueInsured Housing Confidence Index. (The Index is based on a 100-point scale.) The Index overall, however, has trended downward to 68.0 since September 2016—the first decline since March 2016, driven largely by homeowners.

The sentiment comes in contrast to the drop in share of first-time homebuyers who plan to purchase a home during the spring real estate season this year. A recent report by realtor.com® reveals the percentage of first-time homebuyers who plan to enter the housing market this spring has gone down 10 percent since October 2016—before the presidential election—due to concerns over higher mortgage rates. Mortgage rates rose for the first time in 2017 last week, after falling since the start of the year. 

Forty-four percent of millennial non-homeowners in the survey are also confident they can afford a down payment, and 41 percent are expecting it to be easier to buy a home. Research out of Freddie Mac bears out a related trend, showing 40 percent of millennial non-homeowners are making saving for a down payment a priority. (Affording the ideal 20 percent—which ensures better mortgage loan terms—remains elusive.)

Attitudes toward home value, as well, have shifted, with homeowners feeling less confident home prices in their market will rise and their homes are worth what they paid for them, according to the survey. Zillow reports home values grew at an annual rate of 6.8 percent in December 2016.

Still, with the new administration, more than three-quarters of those surveyed believe owning a home is essential to the American Dream, and buying a home, ultimately, is better than renting one.

LOW INVENTORY EQUALS A SELLERS BENEFIT

Forget What You Know: This Year, Sellers May Benefit From Listing Early

| Jan 13, 2017

Conventional wisdom in real estate holds that sellers should time the market to maximize their price. Why? Because home sales are extremely seasonal: They peak in spring and summer, when prices peak as well. That’s why in most markets, most years, the optimal time to list is in the spring, so that the maximum number of potential buyers view the home.

But we’re in an era in which conventional wisdom is becoming an ever-sketchier concept. So why should real estate be immune from all this topsy-turviness? This year, the conventional wisdom of buying and selling may need to change.

Inventory levels at the beginning of 2017 are at multiyear lows. Sellers now face very little competition.

The Agent your choose works for you

Let’s talk Selling your home in Westchester

Renee S. Stengel
Associate Real Estate Broker
Houlihan Lawrence
Licensed in New York State and the State of Connecticut
www.rstengel@houlihanlawrence.com

Signs Your Selling Agent Is Wrong for You

By Ryan Tyson

5 Signs Your Selling Agent Is Wrong for You

A world of difference lies between a good selling agent and a bad selling agent. Unfortunately, for first-time home sellers, determining the difference can be difficult. You might have to interview several real estate agents before you find someone who works for you, so be sure you’re asking the right questions before you start.

No References
You should always check references before signing on with a selling agent. Talk to people whose homes the agent recently sold, not the best sales of their careers that may have happened years ago. You don’t need to talk to everyone the agent sold for in the past year (in fact, many of them won’t give out their information to strangers) but the agent should have a couple people willing to give them a good reference. If not, look elsewhere.

Part-Time Work
Your selling agent should be a full-time real estate agent. Doing everything required to sell a house well is a full-time job. A lot more goes into it than just showing it to a few potential buyers and determining a good listing price. A part-time agent will have divided attention between selling real estate and another job. Hire someone who spends their entire work week in the real estate industry.

Unrealistic Advice
A good selling agent will have advice for you about improvements your home needs before you list it for sale. Unless your entire home has been renovated in the last year, you must take care of some things. Outdated appliances have an impact on how potential buyers see your home. If your agent tells you, for example, that repairing a 20-year-old AC unit instead of replacing it is adequate, they’re not giving you the best advice about preparing your home for sale.

Lowest Commission
Commissions are not like interest rates. You don’t necessarily want to go with the person who offers you the very lowest. Most agents in your area work for the same commission percentage. Commissions are negotiable, but if someone is willing to negotiate down too readily, they might not have the negotiating chops to represent you well while selling your home.

A Friend or Family Member
It’s often better to go into business with someone you don’t know personally. If problems arise or you have disagreements with your agent, do you want this to turn into a fight that could damage a friendship or a relationship with a family member? You can certainly interview your friends or family members to see if they’re the best for the job, but they need to understand that you’ll pick the agent that’s right for you, and not choose them because of your existing relationship.

With the wrong selling agent, your house might sit on the market for too long. Choosing your agent is an important step in selling your home, because the right selling agent will get you the right price on a timeline that works for you.

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.

Let’s Talk Real & Adding To Your Homes Value

#1

 Let’s Talk Real Estate Values In Westchester County

By Mike Putnam by Ris Media

increase valueNo matter what the real estate industry is doing as a whole, you want to get the most value out of your home when you sell. While you can’t control the housing market, you do have control over maximizing your property’s worth. Here are five ways you can get more money out of your home.

1. Get a Home Inspection

Don’t wait for the buyer to request a home inspection after you’re under contract. Hire an inspector before you list your home to find out about any problems. It only costs a few hundred dollars, and you would have time to fix any issues that could lower your property value. You can ask your trusted real estate agent to recommend someone.

Many hidden problems can lead to serious damage, which will result in a lower price for your home. Hidden water leaks, pest infestations and electrical problems should all be checked out and dealt with before you put your home on the market.

2. Paint the Walls

It sounds too good to be true, but adding a new coat of paint to the walls of your home can enhance the value. Paint makes a room feel fresh and new, and buyers are willing to pay more for real estate that doesn’t require any work.

Select neutrals for your walls to appeal to a larger audience. If you have brightly colored walls, make sure you paint over them to improve the way your home shows to buyers.

3. Improve Energy Efficiency

Buyers like the idea of saving money over the long-term, so they will pay more for a house that is energy efficient. You can find ways to do this regardless of your budget. Install new appliances that require less energy to run. Replace old windows with new ones that are better sealed to prevent air leaks.

You can ask for an audit of your home from your local utility company to find out where you can make improvements. They will show you areas that need to be repaired, enabling you to make changes before you list your property.

4. Work on Curb Appeal

Landscaping can improve your home’s value. This is another area where you can make changes regardless of your budget. Start with trimming overgrown bushes and trees. Clean up your lawn and re-sod any patchy areas. Add interest by planting flowers, shrubs and other greenery.

If you don’t consider yourself a creative person, hire a landscaper to design your outdoor area. They can select plants that are low maintenance and enhance your space.

5. Update the Bathroom and Kitchen

It’s often been said that the kitchen sells a home. A bathroom is also a high priority for most buyers who expect an updated space. Whether you can afford to do a major remodel or only have the budget for a few small changes, these two areas are where you should place your focus.

Even something as minor as updating the hardware on your cabinets can yield positive results. If you can’t afford to replace your cabinets, purchase new doors or paint your current ones. If you’re working with a limited budget, focus on the areas that will get the most attention. This includes the lighting, faucets, countertops and cabinets. A coat of paint will make the rooms look and feel brand new as well.

You don’t have to spend a lot of money to increase the value of your home. Focus instead on spending what you can afford wisely. When you make the right changes, you will find buyers who are willing to pay more for your home, and that is key in any real estate market.

News You Can Use About the STAR Program

STAR rebate to undergo major change

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ALBANY — New homeowners in New York will receive a rebate check for a portion of their school-property taxes instead of receiving it as an upfront savings in their tax bill.

The change was a compromise on the issue reached between Gov. Andrew Cuomo and the state Legislature as part of the state budget deal last week.

“STAR is a tax-relief program so this change is to achieve consistency with how other state tax cuts are provided,” said Cuomo’s budget spokesman Morris Peters. “There is no change to the amount of the STAR credit for taxpayers, only the mechanism used to claim the credit.”

Originally, Cuomo’s sought to require new homeowners to pay their taxes upfront and get the STAR rebate on their school taxes when they file their income taxes.

In the budget deal, new homeowners or people who move will get a rebate check each fall for the portion of their school taxes covered by STAR. Then they would have to claim the money on their income taxes the following year.

The move is expected to save the state about $180 million a year when fully implemented in 2018, and the Cuomo administration has argued that the plan would better streamline the process of getting the STAR rebates.

The program costs the state $3 billion a year and comes as an upfront break when people pay their school taxes each September. Then the state reimburses schools for the cost of the rebate.

Lawmakers opposed the proposal, but the measure made into the final budget agreement — which included $24.8 billion in school aid, a higher minimum wage and a 12-week, paid-family leave program.

The Legislature was successful in beating back some of Cuomo’s other proposed changes to STAR, such as a freeze in the rebate rather than let it grow 2 percent a year for STAR and Enhanced STAR, which is for senior citizens.

Households with income under $500,000 are eligible for STAR. They get an exemption from the first $30,000 of the full value of their primary home from school taxes.

Homeowners 65 and older get a larger tax break for Enhanced STAR: The first $65,300 of their home value is exempt from school taxes.

Assemblyman Kenneth Zebrowski, D-New City, Rockland County, said he was disappointed the budget included the changes. He said he will look to beat back the plan before the legislative session ends in mid-June.

“We preserved the increase, and we prevented it from being an income-tax deduction, but it did morph into a check for new homeowners,” Zebrowski said. “We felt we were able to protect the program, but I’m not happy.”

The state has sought to crack down on abuses in the program, such as people getting the break on more than one home and if they exceed the income limit.

The change from a credit to a rebate check is more aimed at helping the state’s ledger to pay for new spending in the state budget, such as a $1 billion income-tax cut, said E.J. McMahon, president of the Empire Center, an Albany-based conservative think tank.

“Every year, it’s actually going to steadily erode the apparent cost of STAR because every year, as houses change hands, more and more of STAR will shift from the spending side to the revenue side of the budget,” he said.

New York already gives out rebate checks to homeowners through several programs: There a rebate on the growth in property taxes and a rebate check this fall based on home values.

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