MOST MILLENNIALS UNAWARE OF CLOSING COSTS

| Patrick Carmichael

A new survey by ClosingCorp reveals that approximately two-thirds of millennials who plan to buy a home are unaware of closing costs. The survey also found that across all adult age brackets, more than one-third of potential homeowners are “Not Very” or “Not At All” aware of closing costs. The survey of more than 1,000 […]

A new survey by ClosingCorp reveals that approximately two-thirds of millennials who plan to buy a home are unaware of closing costs. The survey also found that across all adult age brackets, more than one-third of potential homeowners are “Not Very” or “Not At All” aware of closing costs.

The survey of more than 1,000 adults also found that most people learn about closing costs from their real estate agent, or by doing their own research. In fact, millennial homeowners are more likely to learn about closing costs from their agent as opposed to a lender by a ratio of nearly two-to-one.

“This study is very interesting in that it shows millennials are more dependent on REALTORS® than previously presumed,” said Brian Benson, CEO of ClosingCorp. “We know they are more tech-savvy than their predecessors, so we believe this really highlights the complexity of a residential real estate transaction. Whether they are researching a home on their own or getting help from an interested third party, the bottom line is that people need access to the correct information, and it needs to be simple for them to understand. With the upcoming changes to the disclosure process being made by the Consumer Financial Protection Bureau this August, we as an industry should be stepping up our proactive education efforts to ensure homebuyers are fully prepared to make the most significant financial transaction of their lives.”

HOME STAGING CAN HELP SELL HOME FOR MORE

| Patrick Carmichael

Most homeowners know it is important to keep a home clean, bright, and free from clutter while it is on the market for sale. But sometimes, REALTORS® say, taking the extra step to stage a home can make a difference in how a buyer values it and the price a seller might get for it, […]

Most homeowners know it is important to keep a home clean, bright, and free from clutter while it is on the market for sale. But sometimes, REALTORS® say, taking the extra step to stage a home can make a difference in how a buyer values it and the price a seller might get for it, according to the NATIONAL ASSOCIATION OF REALTORS® 2015 Profile of Home Staging.

The report, the first of its kind from NAR, found that 49 percent of surveyed REALTORS® who work with buyers believe staging usually has an effect on the buyer’s view of the home. Another 47 percent believe that staging only sometimes has an impact on a buyer’s view of the home only. Only 4 percent of REALTORS® said staging has no impact on buyer perceptions.

REALTORS® on the buyer side believe that staging makes an impact in several ways:
• Eight-one percent said staging helps buyers visualize the property as a future home
• More than 45 percent said it makes prospective buyers more willing to walk through a home they saw online
• Forty-five percent said a home decorated to a buyer’s tastes positively impacts its value;
• Ten percent of REALTORS® said a home decorated against a buyer’s tastes could negatively impact the home’s value
From the seller side, a majority of Realtors® utilize staging as a tool in at least some instances.
• Just over one-third of REALTORS® (34 percent) utilize staging on all homes
• Thirteen percent tend to stage only those homes difficult to sell
• Four percent will do staging only for higher priced homes.
• The median cost spent on staging a home is $675. Sixty-two percent of REALTORS® representing sellers say they offer home staging service to sellers, while 39 percent say the seller pays before listing the home.

CONSUMER CONFIDENCE INDEX INCREASED SHARPLY IN JANUARY

| Patrick Carmichael

The Conference Board Consumer Confidence Index, which had increased in December, rose sharply in January. The Index now stands at 102.9 (1985=100), up from 93.1 in December. The Present Situation Index rose to 112.6 from 99.9, while the Expectations Index increased to 96.4 from 88.5 in December. Consumers’ assessment of present-day conditions was considerably more […]

The Conference Board Consumer Confidence Index, which had increased in December, rose sharply in January. The Index now stands at 102.9 (1985=100), up from 93.1 in December. The Present Situation Index rose to 112.6 from 99.9, while the Expectations Index increased to 96.4 from 88.5 in December.
Consumers’ assessment of present-day conditions was considerably more favorable in January than in December, with those saying business conditions are “good” increasing from 24.7 percent to 28.1 percent, and those claiming business conditions are “bad” decreasing from 18.9 percent to 16.8 percent. Consumers were also much more positive in their assessment of the job market. Those stating jobs are “plentiful” increased from 17.2 percent to 20.5 percent. Those claiming jobs are “hard to get” decreased from 27.3 percent to 25.7 percent.
Consumers’ optimism about the short-term outlook improved in January. The percentage of consumers expecting business conditions to improve over the next six months rose from 17.8 percent to 18.4 percent, while those expecting business conditions to worsen declined from 9.9 percent to 7.7 percent.

CASH SALES MADE UP 35 PERCENT OF TOTAL HOME SALES IN OCTOBER 2014

| Patrick Carmichael

Cash sales accounted for 35.5 percent of total home sales in October 2014, down from 38.7 percent in October 2013, according to CoreLogic. The year-over-year share has fallen each month since January 2013, making October the 22nd consecutive month of declines. Month over month, the cash sales share ticked up by half of a percentage […]

Cash sales accounted for 35.5 percent of total home sales in October 2014, down from 38.7 percent in October 2013, according to CoreLogic. The year-over-year share has fallen each month since January 2013, making October the 22nd consecutive month of declines. Month over month, the cash sales share ticked up by half of a percentage point, as is typical for the fall and winter months. Due to seasonality in the housing market, comparisons with the share of cash sales should be made on a year-over-year basis to ensure accuracy.

The peak of cash sales occurred in January 2011, when cash transactions made up 46.4 percent of total home sales. Prior to the housing crisis, the share of cash sales averaged approximately 25 percent. At the current rate of year-over-year decrease, the cash sales share should be back to pre-crisis levels in 2017.

Real estate owned (REO) sales had the largest cash sales share in October 2014 at 58.7 percent, followed by resales (35 percent), short sales (33 percent), and newly constructed homes (16.8 percent). While the percentage of REO sales that were cash transactions remained high, REO transactions made up only 7.9 percent of total sales in October and, therefore, did not have a large influence on the overall cash sales share. In January 2011, when the cash sales share was at its peak, REO sales made up 23.9 percent of total sales.

MILLENNIALS EXPECTED TO BE BIGGEST HOMEBUYING GROUP IN 2015

| Patrick Carmichael

Due to an expected increase in rent prices next year, Zillow predicts more millennials will enter the housing market and be the biggest homebuying group. Zillow predicts the following for 2015: • U.S. rents will outpace home values by the end of the year • Builders will begin constructing more less expensive homes • Millennials […]

Due to an expected increase in rent prices next year, Zillow predicts more millennials will enter the housing market and be the biggest homebuying group.

Zillow predicts the following for 2015:
• U.S. rents will outpace home values by the end of the year
• Builders will begin constructing more less expensive homes
• Millennials will overtake Generation X as the largest group of home buyers
• Home buyers will have more negotiating power in 2015
First-time home buyers will be a critical part of the housing market next year, and certain markets will have more favorable conditions than others for buyers looking for that perfect entry-level home, according to Zillow. Markets most favorable to first-time buyers are those with strong income growth among 23-34 year olds, significant growth in the number of entry-level homes on the market and home prices that won’t take a big chunk out of buyers’ paychecks.

Zillow predicts the best markets for first-time buyers in 2015 will be: Pittsburgh; Hartford, Conn.; Chicago; Las Vegas; and Atlanta.

Nationwide, home values will increase by 2.5 percent, while rents will grow around 3.5 percent.