Market Grows for Senior Downsizing Services

Entrepreneurs are starting business niches to help the growing number of baby boomers who are moving their aging parents, The Wall Street Journal reports.

These firms assist with the entire process: clearing out a home and choosing what to throw away, donate, or sell; packing and moving; holding estate sales; and preparing houses for sale.

“There is more business than we can handle,” said Kimberly McMahon, co-founder of Let’s Move, which caters to downsizing seniors in the Washington, D.C., area. McMahon told The Wall Street Journal that her company has grown an average of 50 percent a year for the past decade. “The industry is booming.”

Her company helps consumers move out and also get settled into their new homes by hanging pictures and making beds to ease the transition.

Changing demographics are key to the growth of these downsizing niches, says Mary Kay Buysse, executive director of the National Association of Senior Move Managers. Baby boomers want to help their parents downsize and relocate. However, they are often too busy juggling their own family or work. They may want to bring in a third-party professional to help.

“Going through a lifetime of possessions and taking a house that’s 2,500 square feet and moving to a 400-square-foot assisted-living community, it’s not easy work. It’s draining for everybody,” Buysse told The Wall Street Journal. And sometimes having an unbiased party involved can help, too.

Some retirement communities are even offering to cover downsizing and relocation services in order to attract new residents, Buysse says.

Demand for these types of companies is expected to grow further.

“We’re still five to seven years away from critical mass,” Buysse says. The oldest boomers of the 79 million baby boomers are currently 71 years old, she adds.

As for the costs of these services, they vary but tend to range from $40 to $125 per hour, Buysse says.

Source: “Ready to Downsize? There’s Plenty of Help,” The Wall Street Journal

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The #1 Reason to List Your House Today!

Many people believe that selling their house during “the spring buyers’ market” is the best thing to do. Their reasoning is that there will be more buyers than there are during the winter months and, therefore, their house will sell quicker and for a higher price.

Historically, this made sense. However, today’s real estate market is not following the rules of the past.

The National Association of Realtors (NAR) measures buyer “foot traffic” each month. It receives data on the number of properties shown to a prospective purchaser by a Realtor® (based on the number of lockboxes used). The data reveals the number of buyers out actively looking for a home, not just window shopping on the internet. NAR explains:

“Foot traffic has a strong correlation with future contracts and home sales, so it can be viewed as a peek ahead at sales trends two to three months into the future.”

According to the latest Foot Traffic Report, buyer traffic is greater now than it was during this year’s spring market and there are more buyers out now than at any other time in the last five years (March of 2012).

The chart below shows that buyer activity over the last three months (blue bars) was greater than it was during this past spring market (green bars).

The #1 Reason to List Your House Today! | Keeping Current Matters

Bottom Line

If you are waiting for next spring to list your home because you think that’s when the buyers will be out in force, perhaps you should reconsider. Buyers are out right now!

5 Housing Trends to Watch for 2018

Home shoppers may have it easier in 2018. Inventory constraints of for-sale homes and rising home prices may finally start to ease next year, according to realtor.com®’s 2018 National Housing Forecast.

“Next year will set the stage for a significant inflection point in the housing shortage,” says Javier Vivas, director of economic research for realtor.com®. “Inventory increases will be felt in higher priced segments after spring home buying season, which we expect to take hold and begin to provide relief for buyers and drive sales growth in 2019 and beyond.”

But the big wild card for 2018 will be any impact from the proposed tax reform legislation, which is currently being debated by Congress, realtor.com® adds.

Here’s a closer look at realtor.com®’s five housing prediction trends for 2018:

1. Inventory to start increasing: Realtor.com® projects positive year-over-year inventory growth by the fall of 2018—which will be the first time since 2015. “Inventory declines are expected to decelerate slowly throughout the year, reaching a 4 percent year-over-year decline in March before increasing in early fall, after the peak home-buying months,” realtor.com® notes in its report. The cities expected to see inventory levels recover first are Boston; Detroit; Kansas City, Mo.; Nashville; and Philadelphia. The majority of this growth will be in the mid- to upper-tier price points (which includes homes priced above $350,000). On the other hand, recovery in the starter home market likely will linger since levels are “significantly depleted by first time buyers,” realtor.com® notes.

2. Price appreciation to slow: Home buyers likely will see home prices moderate in the new year. Realtor.com® forecasts home prices to slow to a 3.2 percent growth year over year nationwide. For comparison, home prices in 2017 posted a 5.5 percent increase. The majority of the slowing price appreciation will be centered in the higher-priced ranges as more inventory becomes available. Entry-level homes, on the other hand, likely will continue to see price gains due to a larger potential buyer pool as well as a more limited number of homes available for sale in this price range.

3. Millennials to gain market share: Finally, the long-held predictions may hold true. Millennials may reach 43 percent of home buyers taking out a mortgage by the end of 2018, up from an estimated 40 percent in 2017, realtor.com® projects. The largest cohort of millennials are expected to turn 30 in 2020. “Millennials are a driving force in today’s housing market,” Vivas says. “They already dominate lower price home mortgage and are getting close to overtaking older generations for mid- and upper-tier mortgages. While financially secure in general, their debt to income ratios have started to increase as they compete for higher priced homes.”

4. The South to lead in sales growth: Realtor.com® forecasts that Southern cities will top national averages in home sales growth in 2018. Markets like Tulsa, Okla.; Little Rock, Ark.; Dallas; and Charlotte, N.C., are expected to be the highest performers.  Sales in these markets are predicted to increase by 6 percent or more. Nationally, sales growths are predicted to grow by 2.5 percent. “The majority of this growth can be attributed to healthy building levels combating the housing shortage,” realtor.com® notes in its report. “With inventory growth just around the corner, these areas are primed for sales gains in years to come.”

5. Tax reform wild card: Tax reform could dampen 2018 sales and price forecasts, realtor.com® reports. The U.S. House has passed a tax bill, and the Senate likely will vote on one soon. “While the ultimate impact of tax reform will depend on the details of the plan that is finally adopted, both versions include provisions that are likely to decrease incentives for mobility and reduce ownership tax benefits,” realtor.com® reports. “On the flip side, some taxpayers, including renters, are likely to see tax cuts. While more disposable income for buyers is positive for housing, the loss of tax benefits for owners could lead to fewer sales and impact prices negatively over time with the largest impact on markets with higher prices and incomes.” Read more: Tax Reform Proposals Threaten Homeowners and REALTORS® Square Up After House Passes Tax Bill

Source: realtor.com®

Millennials: We Don’t Want to Be Renters

Though many are stuck renting out of financial necessity, millennials show the same desire for homeownership as their parents and grandparents—and traditional suburban properties appeal to them more than renting or buying in cities, Bloomberg reports.

Many economists have acknowledged that the slow path to homeownership for young adults is contributing to record-low homeownership rates. But for two consecutive quarters, the homeownership rate among those ages 35 and younger has been on the rise. Some economists predict that millennials will eventually own homes at similar rates as their parents.

Rents, however, are taking a bigger bite out of household budgets, making it difficult for young adults to save enough for a down payment. Student loan debt is also delaying homeownership by up to five years, according to a 2016 study by the National Association of REALTORS®. Millennials also have less job security than prior generations, and their careers are more likely to require relocation.

“You go back 20 or 30 years, people would get a job in their late 20s, early 30s, with the idea that they might work there until retirement,” Dean Baker, codirector of the Center for Economic and Policy Research, told Bloomberg. “People aren’t in that boat today.”

Young adults who are ready for homeownership are also facing a shortage of homes in the market. “The result is that price gains continue to exceed income growth through scarcity, particularly in that smaller home market, which is the hardest market for a builder to essentially reach and build to these days,” Robert Dietz, chief economist at the National Association of Home Builders, told Bloomberg.

Overall, though, economists seem to be upbeat about millennials. They’re getting married and having children later than their parents did, but they are starting to “cross barriers typically associated with buying,” Bloomberg reports.

“Right now, probably a third of our housing business is young couples coming out of the apartments,” Chris Nelson, a builder in Simsbury, Conn., told Bloomberg. “We really think that’s just the beginning—that over the next three to five years, we’re going to see a ton of people coming out of the apartments, buying homes.”

Source: “Millennials Want to Own Homes Too, if U.S. Economy Would Consent,” Bloomberg (Nov. 26, 2017)

The Front Porch Is in Demand

he front porch—a classic feature of American homes—is making a comeback but with a twist.

Younger crowds are literally turning porches into stages. “Porchfest” is growing in popularity across the country, in which neighborhood music festivals pop up that are enjoyed from homeowners’ front porches.

The Atlantic Monthly’s CityLab reports: “In the Instagram age, the front steps have become places to see and be seen, throw a rocking concert or party, and to foster metropolitan community in a walk-by, stop-in-for-wine sense.”

Shelley Glica in Niagara Falls, Ontario, told CityLab how she organized a Porchfest in her community and how in warmer months she’ll also host a “Stories From the Porch” series of speakers on art, history, and culture. Glica and others represent a generational rethinking of the front porch, CityLab reports.

Porches are growing in demand across the country. Twenty-three percent more new homes are being constructed with a front porch than two decades ago. The number of new homes built with porches was at 65 percent last year, according to the National Association of Home Builders. In the Southeast, that figure jumps to 86 percent. An NAHB survey from 2016 also shows that millennials—more than any other age group—say they want a porch.

The front porch was once a celebrated signature of Federal architecture. In the 1800s, past presidents had launched successful front-porch political campaigns. For homeowners, front porches were a place to do chores, such as shuck beans, or to get fresh air on hot days before air conditioners. But once air conditioning was invented, Americans showed less need for cooling porches in the middle of the 20th century. The invention of televisions also pushed homeowners inside more.

Nowadays, younger generations are finding the porch can be an enjoyable hangout spot. Scott Doyon, who organized a Porchfest in the Atlanta area, says the front porch is now being used as a place to host friends over for hors d’oeuvres or even sharing a concert on Instagram or other social media.

“I try to find ways to plug those old ways of living into the modern world,” Doyon says. “I still believe in the value of porches as a conduit to community-building—it just unfolds in a different way now.”

Source: “America Rediscovers Its Love of the Front Porch,” CityLab.com/The Atlantic Monthly (Nov. 20, 2017)

Why Getting Pre-Approved Should Be Your First Step

Why Getting Pre-Approved Should Be Your First Step | Keeping Current Matters

In many markets across the country, the number of buyers searching for their dream homes greatly outnumbers the number of homes for sale. This has led to a competitive marketplace where buyers often need to stand out. One way to show you are serious about buying your dream home is to get pre-qualified or pre-approved for a mortgage before starting your search.

Even if you are in a market that is not as competitive, knowing your budget will give you the confidence of knowing if your dream home is within your reach.

Freddie Mac lays out the advantages of pre-approval in the ‘My Home’ section of their website:

“It’s highly recommended that you work with your lender to get pre-approved before you begin house hunting. Pre-approval will tell you how much home you can afford and can help you move faster, and with greater confidence, in competitive markets.”

One of the many advantages of working with a local real estate professional is that many have relationships with lenders who will be able to help you with this process. Once you have selected a lender, you will need to fill out their loan application and provide them with important information regarding “your credit, debt, work history, down payment and residential history.”

Freddie Mac describes the ‘4 Cs’ that help determine the amount you will be qualified to borrow:

  1. Capacity: Your current and future ability to make your payments
  2. Capital or cash reserves: The money, savings, and investments you have that can be sold quickly for cash
  3. Collateral: The home, or type of home, that you would like to purchase
  4. Credit: Your history of paying bills and other debts on time

Getting pre-approved is one of many steps that will show home sellers that you are serious about buying, and it often helps speed up the process once your offer has been accepted.

Bottom Line

Many potential home buyers overestimate the down payment and credit scores needed to qualify for a mortgage today. If you are ready and willing to buy, you may be pleasantly surprised at your ability to do so as well.

How to Find Your Perfect First Home

Buying your first family home can be a monumental event, but it can also be stressful. After all, you may be focused on finding the perfect home to move into that is affordable for your budget. With many factors at play, it may seem challenging to find the ideal new space to call home; however, by using these tips, you could more easily locate the perfect starter home to move into.

Determine Your Budget
Your budget is a critical element that you do not want to overlook. There are two primary aspects of your budget to focus on: your down payment amount and your monthly housing payment. Both factors should be comfortable for you to manage without stressing your finances. Remember that you may want to estimate on the higher end and shoot for keeping expenses as low as possible. In many cases, expenses and payments may be higher than anticipated, so always aim for a lower figure when possible.

Define Needs and Wants
It is easy to let your mind wander as you imagine how grand your new home may be; however, when buying a starter home on a budget, you may need to carefully define the features that you absolutely need versus those that you want. This can help you to more quickly and easily find homes that meet your absolute needs within the budget you have in mind, and you may even benefit from having a few bonus items included in the home you firmly settle on.

Think About Suburban Communities
Many homebuyers who are looking for their first home may be turned off by homes located in the heart of urban areas or in otherwise expensive and high-end communities. If you are having trouble finding a desirable home that meets your needs in the confined search area you selected, consider expanding your search area to different suburban communities. In some cases, suburbs are much more affordable to live in.

Consider All Types of Properties
As beneficial as homeownership can be, remember that you do not necessarily have to buy a single-family home to enjoy these benefits. Another idea is to buy a condo. These may provide you with the space and features you need, but the cost may be much more affordable. In addition, maintenance on the outside of the condo and in your yard may be provided by your condo association.

The quest to find your family’s first home can be exciting, but it can also be demanding in many ways. Rather than get frustrated with your current situation, use these tips to more quickly and easily find the ideal property to move into.

By Hannah Whittenly

Seller Negotiation Tactics That Can Backfire

Homeowners should not become overconfident in a seller’s market, or they might end up sabotaging their sale. Realtor.com® recently featured common home seller negotiation tactics that can backfire, including:

Starting a bidding war.

“If mishandled, people may assume the worst, and the best offer may walk away,” Sep Niakan, broker-owner at HB Roswell Realty in Miami, told realtor.com®. For example, bidding war problems can surface when failing to clearly explain up front how you intend to handle multiple offers or when you give an offer deadline that is too many days away (some buyers may just move on).

Arguing over repairs.

Buyers may walk if sellers refuse to make repairs that turn up during a home inspection. The seller needs to carefully consider how good the offer is before refusing to make repairs, says Lucas Machado, president of House Heroes in Miami. “When the buyer’s offer is high, and the seller tries to negotiate away from legitimate repairs, the buyer may feel the seller is taking advantage of them,” he says.

Staying adamant about the closing date. 

Sellers may be trying to make the closing date so it perfectly aligns when they move into their new home. But buyers have scheduling issues of their own, too. “Sellers need to understand that they may have to move twice, since buyer and seller schedules seldom work out perfectly,” says John Powell, chief development officer at Help-U-Sell Real Estate in Tucson, Ariz.

Getting greedy over fixtures.

Fixture feuds are common ones. Sellers and their real estate agents need to carefully review before they list their home on what stays and what goes with the home. The buyer might “get so upset that a fixture they fell in love with is now missing that they won’t buy the home,” says Michael Hottman, associate broker at Keller Williams Richmond West in Richmond, Va. Replace anything valuable to sellers that won’t be staying with the house before showing it, or be willing to negotiate a comparable replacement. Read more: Fixture Feuds 

Read more negotiation tactics that could sabotage a deal.

Source: “Hardball Fouls: 6 Home-Selling Negotiation Strategies That Can Backfire,” realtor.com® (Nov. 1, 2017)

SBA Lowers 7(a) Equity Requirement

The SBA has finalized a standard operating procedure (SOP) update relating to equity requirements for 7(a) loans from 25% to 10%, beginning on January 1, 2018. This reduction in the equity requirements will open up the program to many more small business borrowers, and may spur small business growth around the country. Though it remains to be seen how the lenders themselves will respond to the lower equity requirements, this will potentially provide greater flexibility and more lending for small businesses who work with the SBA.

The SBA 7(a) loan program is the agency’s most popular program, providing loans of up to $5 million to fund startup costs, including purchasing new land (including construction costs), purchase or expand an existing business, and refinance existing debt. NAR Commercial members frequently work with small businesses as clients, and according to NAR’s Commercial Real Estate Lending Trends 2017 report, 6% worked with the SBA loan programs and 16% used the SBA refinance program. NAR frequently collaborates with the SBA to provide feedback on lending programs and raise awareness among REALTORS® of the options the agency provides.