Virtual reality lets you redecorate from the couch

Virtual reality lets you redecorate from the couch



Virtual reality lets you redecorate from the couch

 
NEW YORK (AP) – Aug. 3, 2016 – Stop moving around the new sofa to try to figure out where it fits. Forget about trying to judge a paint color from tiny samples against the wall. New tools like virtual reality measuring apps and online mood boards are trying to help consumers find easier and quicker ways to decorate homes and apartments.
The expanded services and online tools come as traditional retailers like J.C. Penney and Target are focusing more on home improvement – bringing back major appliances, creating in-store home vignettes. The interest is happening in the wake of improving technology and increased consumer spending on the home fueled by a strong real estate market.
But those creating the new tools say the future of home decor is in ways to let people envision new wall colors, furniture and curtains without having to take them home.
At a new technology lab in Boston, online home retailer Wayfair.com is digitizing its catalog and testing augmented reality and virtual reality apps, as well as 3D models of its products. It’s a move toward “constantly raising the bar to create the best possible shopping experience for the home, adapted to how consumers shop today and in the future,” says Steve Conine, the company’s co-chairman and co-founder.
The all-in-one site Houzz.com not only help shoppers get inspiration and narrow their choices down from its more than five million products from over 10,000 sellers, it also helps people find local professionals to install the curtains they just bought. And Houzz.com just launched an augmented reality app called “View in My Room” that allows shoppers to experiment with home decor options by virtually placing products from its online store into their home before you buy. It seems to be converting browsers into buyers. Fifty percent of users who made purchases in the latest version of the Houzz app used “View in My Room” to preview the product in their home, the company says.
Above all, though, says Allyson Rees, a senior editor at global forecast firm WGSN, shoppers should do their homework.

“Have a game plan, and set a budget. And decide how hands on you want to be,” says Rees. She also notes, “Know the key items you want.”
Here are three ways to redecorate from your current couch.
• Get inspired: Great ideas can still be found by flipping through home decor magazines or store catalogs, or by scrolling around on Pinterest and making mood boards, an arrangement of images to convey the design style you want to achieve. Olioboard.com lets people create two- and three-dimensional designs using products from their favorite brands, which then link to retailers’ sites for purchase. It says it also offers a community of home decor experts.
Also, check out stores’ mobile apps. Two years ago, TJX Co.’s HomeGoods launched a mobile app called The Goods for smartphones. It helps customers see photos of new items that just arrived at their local HomeGoods stores.
• Embrace new technology: More apps and online tools are using augmented reality and virtual reality technology, which Rees expects to become even more widespread. That means no more buying extra paint for samples or paying return fees on a chair that turns out to be too big for the room.
Wayfair is set to release in September an augmented reality app for Google Tango, which uses software and sensors to track motions and size up the contours of rooms. The Wayfair tool lets people see how pieces of furniture and decor will look and fit in their homes through the display on a smartphone. In Wayfair’s virtual reality experience, shoppers use headgear like an Oculus Rift that allows them to customize a room by setting the model, material and layout of the furnishings. Right now, the items for the virtual reality app are limited to patio furniture but that will be expanded eventually.
Home Depot has an app that lets customers upload a picture of the room and thumb through thousands of paint and stain colors until they arrive at one that’s right. The app can detect the lighting, shadows and other variables in the space or project and adapt the color to fit.
• Connect with local pros: Adding to free review sites like Yelp and membership programs like Angie’s List, Amazon.com has launched a service in key cities like Atlanta, San Diego and New York that lets customers locate nearby professionals for jobs like painting and even interior design. The options for finding local professionals online are growing.
Wayfair also has teamed up with the Porch.com directory to connect shoppers with home professionals in more than a dozen markets. Shoppers who need help with tasks will be able to set up an appointment with contractors, electricians, painters and more to pay for the services when they check out. Porch also is working with Lowe’s at the home improvement retailer’s 1,700 stores nationwide. Lowe’s features Porch.com signage in its stores, and Lowe’s workers pitch the Porch.com website to shoppers looking for a professional.
Houzz.com offers access to one million professionals, including interior designers to contractors.
Candace Corlette, president of WSL Strategic Retail, says all these tools are good news for shoppers.
“It enables (shoppers) to dream so much bigger and more often,” she said.
AP Logo Copyright 2016 The Associated Press, Anne D’Innocenzio. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Average 30-year mortgage rate falls to new 2016 lows

Average 30-year mortgage rate falls to new 2016 lows



Average 30-year mortgage rate falls to new 2016 lows

 
Mortgage Rate Trend Index
Most experts (56%) polled by Bankrate.com this week think rates will head even lower, and only 11% predict an increase over the short term. The remaining 33% foresee little change.
WASHINGTON (AP) – July 8, 2016 – Long-term U.S. mortgage rates fell this week to the lowest level since May 2013, driven down by financial tumult in Europe.
Mortgage giant Freddie Mac says the average 30-year fixed rate mortgage fell to 3.41 percent from 3.48 percent a week ago. A year ago, the 30-year rate stood at 4.04 percent. The 15-year mortgage rate dropped to 2.74 percent, down from 2.78 percent last week and 3.20 percent a year ago.
After Britain's recent vote to leave the European Union, worried investors fled to the safety of U.S. Treasury bonds. Long-term mortgage rates tend to track the yield on 10-year Treasury notes, which fell to 1.37 percent Wednesday from 1.75 percent before the Brexit vote.
The 30-year fixed rate is now close to its all-time low of 3.31 percent in November 2012.
To calculate average mortgage rates, Freddie Mac surveys lenders across the country at the beginning of each week. The average doesn't include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.
The average fee for a 30-year mortgage remained at 0.5 point this week. The fee for a 15-year loan was unchanged at 0.4 point.
Rates on adjustable five-year mortgages averaged 2.68 percent this week, down from 2.70 percent last week. The fee remained at 0.5 percent.
AP Logo Copyright 2016 The Associated Press, Paul Wiseman. 

Mortgage rates in free fall since Brexit vote

Mortgage rates in free fall since Brexit vote

 
NEW YORK – June 29, 2016 – Ever since Britain's surprise vote to leave the European Union, U.S. homebuyers and homeowners have been reaping an expected benefit – quickly dropping mortgage rates. The cost of the average fixed-rate mortgage is hitting its lowest point in more than three years – and economists expect them to head even lower.
On Monday, the 30-year fixed-rate mortgage averaged 3.46 percent, near the lowest average since late 2012, realtor.com reports.
"Lower rates produce lower monthly payments and greater buying power – those who are well qualified can afford a home that's 8 percent more expensive than at the beginning of the year," says Jonathan Smoke, realtor.com's chief economist. "That's more than enough to offset the rise in prices during that time."
That said, low mortgage rates could prompt lenders to get stricter with underwriting standards, Smoke adds.
"As mortgage rates declined this year, we've seen that credit access has gone down too," he notes. "That's because lenders have become more risk-averse as their profit margins have been whittled down by the double whammy of lower rates and higher origination and servicing costs."
Source: "Thanks, Brexit! Well-Qualified U.S. Buyers Reap a Windfall," realtor.com® (June 28, 2016)
© Copyright 2016 INFORMATION, INC. Bethesda, MD (301) 215-4688


Mortgage rates in free fall since Brexit vote

‘Brexit’ could boost U.S. real estate – and drive down mortgage rates

‘Brexit’ could boost U.S. real estate – or not

 
ORLANDO, Fla. – June 27, 2016 – Britain's vote to exit the European Union (EU) will likely have a long-term impact on the world economy – but in the short-term, U.S. real estate could be flooded with investors flocking to the U.S. as a safe haven, pushing up the dollar and sending down mortgage rates.
"Demand for U.S. real estate could rise," says NAR Chief Economist Lawrence Yun.
On the commercial side, global corporations could show additional interest in U.S. real estate as they come to see the U.K. as a less certain place to set up or maintain their businesses, Yun says, "especially in London as it becomes a less attractive place to conduct global business."
While a rise in the dollar could hurt U.S. exports, it's also expected to put downward pressure on long-term mortgage interest rates.
"Mortgage rates will tumble," says Greg McBride, chief financial analyst at Bankrate.com, "possibly hitting new record lows. If you're a borrower, don't wait to lock in your rate, as this opportunity may not last long."
However, Fannie Mae Chief Economist Doug Duncan says low rates could last for a while. "The Fed will very likely be on hold for some time as it observes the impact on U.S. and global financial markets and economic activity," he says.
If mortgage rates – already at historic lows – drop even further, that could help drive up sales of all types of U.S. real estate, including on the residential side.
In addition, foreign households who might have otherwise looked to London to buy might turn to U.S. residential real estate, although U.K. citizens, who historically are among the top buyers of investment and vacation homes in the U.S., could pull back. "The British economy will be disrupted, and hence we should expect fewer Brits able to buy in the U.S.," Yun says.
Steve Rick, chief economist at CUNA Mutual Group, was quoted in a Bankrate.com article saying a further drop in mortgage interest rates could give new life to home-mortgage refinancing, which started to cool early this year after several years of big growth. "This would create another mini-refinance mortgage boom at financial institutions, as homeowners rush to lock in near-historic low interest rates," he said.
In the long run, though, the uncertainty stemming from the vote could cause broad global weakening, which would hurt jobs, income and consumer confidence. That would be a net-negative for U.S. real estate, even if it sees gains in the short-term.
Source: Robert Freedman, Realtor® Magazine


© 2016 Florida Realtors®
‘Brexit’ could boost U.S. real estate – or not

Building laws go into effect July 1

TALLAHASSEE, Fla. – June 7, 2016 – Florida bills effective July 1 revise some rules in Fla.'s building code, regulate private-residence elevators and authorize officials to create fumigation rules.
SB 1602 creates rules for new elevators in private residences, saying they must:
  • Meet minimum distance requirements between the hoistway (elevator shaft) doors and the edge of the landing sill for swinging and sliding doors
  • Have doors or gates that can withstand a force of 75 pounds
  • Meet minimum distance requirements between the landing door and the car door or gate
  • Include a device that stops downward motion of the elevator car under certain circumstances
HB 535 makes a number of changes to Florida's building code. The bill creates more than 30 changes to the building code, and Floridians who may be impacted are encouraged to read the full text. Some examples:
  • Employees of apartment communities with 100 or more units are exempt from contractor licensing requirements if making minor repairs to existing electric water heaters or existing electric heating, ventilation and air conditioning if they meet certain criteria and the repair parts cost less than $1,000
  • Allows some low-voltage landscape lighting to be installed by a non-licensed electrical contractor
  • Confirms that a specific type of pool alarm meets the safety requirements for residential pools – a type of alarm that's placed in the pool and makes a sound when it detects an accidental or unauthorized entrance into the water
  • Requires a contractor and alarm system monitoring company to tell a property owner about any obligations to register their alarm system, if applicable
  • Exempts Wi-Fi smoke alarms and those that contain multiple sensors, such as those combined with carbon monoxide alarms, from a 10-year, non-removable, non-replaceable battery provision
  • Requires the Florida Building Code to mandate two fire service access elevators in all buildings above a certain height
HB 1205 could lead to changes in Florida fumigation procedures. However, the bill itself only empowers the Department of Agriculture and Consumer Services to adopt safety procedures for residential structures before reoccupation. While the law is effective July 1, it will have no impact on fumigation rules unless the department acts on it.
© 2016 Florida Realtors®
Building laws go into effect July 1

Fla.’s housing market: Median prices, new listings rise in April 2016

Fla.’s housing market: Median prices, new listings rise in April 2016



Fla.’s housing market: Median prices, new listings rise in April 2016

 
NAR: Existing-home sales rise in April for 2nd straight month
ORLANDO, Fla. – May 20, 2016 – Florida's housing market reported increased new listings, rising median prices, fewer days to a contract and fewer cash closed sales in April, according to the latest housing data released by Florida Realtors®. With inventory still constrained, statewide closed sales eased last month: Single-family home sales totaled 24,144, remaining relatively the same (down 0.6 percent) as April 2015.
"Still-low mortgage interest rates and a strong jobs outlook are positive trends for Florida's housing market," says2016 Florida Realtors®President Matey H. Veissi, broker and co-owner of Veissi & Associates in Miami. "We're also seeing a rising number of new listings added to the market, which is a trend that needs to continue as many areas still face a shortage of supply, particularly for single-family homes. New listings for existing single-family homes rose 3.1 percent compared to a year ago while new listings for townhouse-condo properties rose 3.7 percent."
Meanwhile, sellers continued to get more of their original asking price at the closing table. Sellers of existing single-family homes in April received 95.9 percent (median percentage) of their original listing price, while those selling townhouse-condo properties received 94.5 percent (median percentage).
The statewide median sales price for single-family existing homes last month was $213,000, up 9.2 percent from the previous year, according to data from Florida Realtors Industry Data and Analysis department in partnership with local Realtor boards/associations. Thestatewide median price for townhouse-condo properties in April was $160,000, up 4.4 percent over the year-ago figure.
In April, statewide median sales prices for both single-family homes and townhouse-condo properties rose year-over-year for the 53rd month in a row, Veissi noted. The median is the midpoint; half the homes sold for more, half for less.
Accordingto the National Association of Realtors®(NAR), thenational median sales price for existing single-family homes in March 2016 was $224,300, up 5.8 percent from the previous yearthenational median existing condo price was $209,600.In California, the statewide median sales price for single-family existing homes in March was$483,280; in Massachusetts, it was $329,505; in Maryland, it was $252,068; and in New York, it was $230,000.
Looking at Florida's townhouse-condo market, statewide closed sales totaled 10,738 last month, down 5.3 percent compared to April 2015. However, the closed sales data reflected fewer short sales and cash-only sales in April: Short sales for townhouse-condo properties declined 43.2 percent while short sales for single-family homes dropped 35.9 percent. Closed sales may occur from 30 to 90-plus days after sales contracts are written.
"The positive growth we're seeing in sales for homes priced above the $150,000 mark is being offset by a continuing decline of homes for sale in the most affordable price ranges," says Florida Realtors®Chief Economist Brad O'Connor. "This trend is due in part to the ongoing decline in sales of distressed properties. In April, distressed sales accounted for less than 12 percent of all closed Multiple Listing Service (MLS) sales in Florida – the lowest such percentage we've recorded since the initial stages of the downturn last decade."
Inventory was at a 4.5-months' supply in April for single-family homes and at a 6.3-months' supply for townhouse-condo properties, according to Florida Realtors.
According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 3.61 percent in April 2016, down from the 3.67 percent average recorded during the same month a year earlier.
Realtors also have access to local market stats (password protected) on Florida Realtors' website.
© 2016 Florida Realtors®

NAR: New condo rules may help student debt challenge

NAR: New condo rules may help student debt challenge



NAR: New condo rules may help student debt challenge

 
WASHINGTON – May 11, 2016 – Many young adults struggle to become homeowners, with the student-debt burden delaying, in part, their ability to buy, according to speakers at a regulatory issues forum on student debt and homeownership at the 2016 Realtors® Legislative Meetings & Trade Expo going on this week in Washington, D.C.
U.S. Housing and Urban Development (HUD) Secretary Julián Castro led the session on student loan debt and its impact on first-time buyers. During his remarks, Castro announced that some regulatory changes were coming soon for young men and women, many of whom are currently repaying loans they borrowed to earn a college degree.
Castro said the prescription to the American Dream has always been working hard, saving money and investing in yourself, often by getting a great education. What has changed in recent times: The third step – getting a great education – is more expensive than ever.
Castro highlighted a change in condo financing that could have an outsized effect on Florida due to state's high number of condos.
Castro noted that the Federal Housing Administration (FHA) announced changes to condo rules last November that address a complex recertification process, owner-occupancy requirements, and limits on the types of property insurance that FHA considers acceptable coverage. According to Castro, the proposed condo rule has left the HUD building and is at the Office of Management and Budget for review.
"Today's exciting news about the big changes coming to condos are a long-fought win for Realtors, and we're eager to see it come to fruition," said NAR President Tom Salomone, broker-owner of Real Estate II Inc. in Coral Springs, Florida. "Realtors know that condos are an important option for buyers, especially for first-time buyers looking for affordable options in the marketplace."
"Realtors help make the dream of homeownership for so many Americans a reality, and HUD is committed to partnering with them to ensure that the hard-won progress we're seeing in our housing market continues to grow for many years to come," Castro concluded.
A panel discussion followed Castro's presentation, led by Rohit Chopra, a senior official at the U.S. Department of Education; Meta Brown, senior economist at the Federal Reserve Bank of New York; Jessica Lautz, NAR managing director of survey research; and Mabel Guzman, chairwoman of NAR's student loan debt work group.
The panel agreed that affordability concerns, inventory shortages and lifestyle factors such as marrying later and having to student loan debt, burden a segment of creditworthy buyers by making it difficult to save for a downpayment.
Chopra discusses some of the ways the Education Department is addressing student loan debt. He said income-based repayment options and holding student loan servicers more accountable during the repayment process would help. "We need to make sure the pillars of the American Dream of graduating from college and owning a home go together – and not compete with each other," he said.
Sharing research from the New York Fed, Brown explained how student debt has defied the current business cycle of the past 10 years. Non-mortgage debt balances, such as debt from auto loans and credit cards, declined immediately after the Great Recession, and have since either flatlined or rebounded slowly. Student debt balances, however, have been the exception and ballooned from about $300 billion at the end of 2004 to over $1.2 trillion debt today.
Brown concluded that high student debt is likely creating a growing share of young student borrowers who are retreating from the housing market and ultimately having to live with their parents.
Pointing to NAR survey data, Lautz said even with the numerous obstacles they face, millennials do make up the largest share of buyers among all generations, and over 90 percent of them currently renting have indicated a desire to become homeowners in the future.
"With home prices and rents on the rise, saving for the downpayment is a challenge for many would-be buyers," said Lautz. "Unfortunately, among other factors, repaying student debt is delaying a typical individuals' path to homeownership by roughly five years."
The final speaker, Guzman, said that in addition to Congress passing legislation that helps ease borrowers' debt burden, Realtors can play a big role by working with their young clients at the beginning stages of their housing needs, particularly during the leasing process when they're renting their first place.
"Realtors can be a resourceful advocate for their young clients repaying student debt by educating them about their housing options and pointing them to credible resources, such as the Consumer Financial Protection Bureau's information on student debt," said Guzman. "The urge to be a homeowner is not lost among young adults, and we can all work together early in the process to make sure they're able to buy when they're ready."
© 2016 Florida Realtors®

NAR: Military niche has younger buyers, bigger homes

NAR: Military niche has younger buyers, bigger homes

WASHINGTON – May 3, 2016 – Out of all adults younger than 35, the share of active-service military members who buy a home significantly outpaces the share of non-military homebuyers.
According to the National Association of Realtors® (NAR) first-ever study of military clients, the 2016 Veterans & Active Military Home Buyers and Sellers Profile, young military buyers jump into the market due to household demographics and affordable financing options.
The survey also found that while nearly all veteran and non-military buyers and sellers use an agent, usage is practically universal among military members who are still on active duty.
NAR's survey compared military buyers and sellers to the general population. Of all homebuyers, 18 percent identified as veterans and three percent as active-military. Of all home sellers, 21 percent identified as veterans and one percent as active-military.
The results revealed quite a few contrasts, NAR says. At a median age of 34 years old, the typical active-service buyer was a lot younger than non-military buyers (40 years old) and more likely to be married and have multiple children living in their household. As a result, they typically bought a larger home that cost more than those purchased by both non-military buyers and veterans.
Active-service buyers (ages 18-35) bought homes at a far greater rate (51 percent) than non-military buyers (34 percent), says Lawrence Yun, NAR chief economist.
"More stable job security and no-downpayment financing options give aspiring homeowners in the military a deserving advantage over their civilian peers," says Yun. "Furthermore, their tendencies to marry and raise a family at an earlier age and carry less student debt make buying a home a more desirable and achievable option."
Veterans Affairs (VA) loans – which offer over 100 percent financing for veteran and active-service homebuyers – were the most popular loan type for active-service and veteran buyers, leading to the majority of active-service buyers financing their entire home purchase and veterans putting down a median downpayment of 5 percent. For non-military buyers, the median downpayment was 11 percent.
"Current data shows that VA loans perform remarkably well and are a safe and affordable choice," says Yun. "Their current seriously delinquent and homes in foreclosure rate is 2.78 percent versus 3.44 percent for non-VA loans."
A place to call home is often times one of the few constants for the families of the brave men and women defending our country, says NAR President Tom Salomone, broker-owner of Real Estate II Inc. in Coral Springs, Florida. "That's why it's so important to ensure that homeownership opportunities and affordable financing options exist for qualified military personnel, veterans and their families."
Only five percent of veterans and three percent of active-service buyers said saving for a downpayment was the most difficult step. Of those, only four percent of veterans and 13 percent of active-service buyers said student loan debt delayed saving. Sixty-two percent of veterans cited having other types of debt and 43 percent of active-service military referenced credit card debt.
While a larger share of active-service military buyers had student loan debt compared to non-military buyers and veterans, their debt balances were typically lower. Among active-service members, 37 percent had student loan debt under $10,000 compared to 21 percent for those who've never served.
Active-service buyers prefer large single-family homes
The median income of veteran and active service member homebuyers in the survey was slightly lower than buyers who've never served in the military, which was $86,500. Active-service buyers typically bought a 2,170-square-foot home that cost more ($226,000) than those purchased by non-military buyers and veterans. Veteran buyers had a median income of $84,000, and they typically bought a 1,980-square-foot home costing $220,000.
Mirroring the general population of buyers, over 80 percent of both veterans and active-service buyers purchased a single-family home, with those currently serving purchasing single-family homes at the highest rate (87 percent).
The primary reason for the home purchase for active-service military was job relocation, followed closely by the desire to own a home of their own. Compared to non-military buyers, veterans were more likely to want to be closer to friends and family or moving for retirement.
Active service and veteran buyers and sellers rely on real estate agents
Veterans and active-service buyers purchased a home a lot further away from their previous residence (at 75 miles and 28 miles, respectively) than buyers who never served in the military (10 miles). Among the biggest factors influencing neighborhood choice, veterans were most influenced by the quality of the neighborhood, while active-service members desired convenience to their job the most.
While nearly all buyers predominantly used the Internet and a real estate agent during their home search, active-duty buyers used a real estate agent at an even higher rate (95 percent versus 88 percent for non-military buyers). As a group, they were also most likely to use mobile or tablet search engines and relocation companies during their search.
"Many Realtors are veterans themselves, and they understand the unique housing needs of those serving our country," says Salomone. "Whether it's relocating to a completely new area across the country or needing to sell their home in a short timeframe, Realtors are committed to helping active-service members and veterans succeed in their homeownership goals."
Some of the characteristics of active-service sellers differed from non-military sellers:
  • Military sellers were younger, far more likely to have multiple children living in their household and sold a home in a suburban area at a far higher rate.
  • The use of an agent was highest for active-service military sellers (94 percent), who – likely dealing with relocating to a new area in a short timeframe – cited both wanting help marketing the home to potential buyers and help negotiating and dealing with buyers at a far higher rate than non-military sellers and veterans.
  • 89 percent of veterans used an agent, on par with non-military sellers (90 percent).
  • For non-military sellers, the most commonly cited reason for selling their home was that it was too small (18 percent), while the most common reason cited by veterans was to be closer to friends and family (23 percent).
  • Job relocation for active-service military sellers was the most common reason for selling (43 percent).
© 2016 Florida Realtors®  

Home Construction Surges in Feb.

Home construction surges in Feb.



Home construction surges in Feb.

 
WASHINGTON (AP) – March 16, 2016 – Construction of new homes rose in February to the highest level in five months, but applications for new construction were weak for a third month.
Housing starts rose 5.2 percent last month to a seasonally adjusted annual rate of 1.18 million units, the Commerce Department reported Wednesday. Construction had fallen in January in December, declines that had been blamed in part on winter weather.
Applications for building permits, a gauge of future activity, fell 3.1 percent to an annual rate of 1.17 million units after a flat reading in January and a drop in December.
The decline in building permits, unless reversed, could signal future trouble in an industry that was a bright spot for the economy last year.
But Bricklin Dwyer, an economist with BNP Paribas, said the slump in building permit applications should only translate into a brief construction slowdown given the solid fundamentals supporting housing.
"We see a resilient labor market as supportive of a continued slow and steady housing recovery and low housing inventory should continue to bolster residential construction ahead," Dwyer said.
For February, construction of single-family homes rose 7.2 percent to an annual rate of 822,000 units. Construction in the smaller apartment sector edged up a slight 0.8 percent to a rate of 356,000 units.
Regionally, construction activity plunged 51.3 percent in the Northeast but showed strength in all other regions. Construction rose 19.9 percent in the Midwest, 7.1 percent in the South and 26.1 percent in the West.
The National Association of Homebuilders/Wells Fargo builder sentiment index held steady at 58 for March. Readings above 50 indicate more builders view sales conditions as good rather than poor.
Sales of new homes surged 14.5 percent last year to 501,000, marking the strongest year for this segment of the housing market since 2007.
Economists are forecasting another good year for housing as strong employment gains led more people to decide to purchase homes. Strength in home construction was a pillar of growth for the economy last year.
AP Logo Copyright © 2016 The Associated Press, Martin Crutsinger. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.  

Realtor.com prediction: Strong spring housing market

CHICAGO – March 4, 2016 – Recent housing and economic reports predict solid spring home sales, says Jonathan Smoke, realtor.com®'s chief economist. Smoke notes the following signs that suggest an upswing:
  • Jobs: "Job creation – arguably the most important factor in housing demand – is moving apace," Smoke says. In January, the U.S. created 151,000 jobs; in February, it created 242,000. Unemployment is near 10-year lows. Smoke predicts that the latest employment growth should translate into a 3 percent boost to home sales this year.
  • Home sales: Existing-home sales from January 2015 to January 2016 grew 11 percent. Sales are taking longer close due to new truth-in-lending mortgage rules that took effect last fall, but the pace of sales is growing. New-home sales have also grown solidly year-over-year, and the median price of new homes is declining as more builders offer affordable homes rather than catering only to the luxury market.
  • Home prices: Prices are moving up and most of that has been attributed to the limited number of homes for sale. At the current pace, there's a four-month supply of homes on the market – much lower than the norms of six to seven months. "This is driving prices higher and encouraging consumers who hope to buy this year to get started as soon as possible," Smoke says.
  • Mortgage rates: Low mortgage rates are improving homebuyer affordability – for now anyway. The 30-year fixed-rate mortgage averaged under 3.7 percent in the latest week, which offers buyers nearly 5 percent more buying power than they had at the end of 2015, Smoke notes.
But as Smoke notes: "not everything is rainbows and unicorns. The biggest negative trend impacting potential demand relates to the January and February declines in stock values, which have taken a toll on consumer confidence."
Also, a tight inventory of for-sale homes could also limit sales in the spring season. But for buyers who qualify, the low mortgage rates may prove a stronger motivator than too-few homes to consider.
Source: "The Numbers Are In: Yup, 2016 Is Off to a Good Start in Home Sales," realtor.com® (Feb. 26, 2016)

© Copyright 2016 INFORMATION, INC. Bethesda, MD (301) 215-4688

Goal Setting for Commercial Real Estate

I took a break on these blogs to think about this one as it is one of the most important processes that we go through with anything, and investing in real estate involves a lot of time, money, and a fair amount of risk.

To begin, I want you to consider what category you fall into. 1) Are you investing for a source of passive income (income that you do not directly work for like rent). 2) Are you investing to increase the opportunities for your current business... Have you outgrown your location? Are you leasing in a building that is for sale? Are you looking for a place to start a business or another location to add to a business? or 3) Are you investing for the sake of appreciation/flipping such as development opportunities or buying old and renovating to make a profit off the resulting better product? 

From the work that I come across, these three areas are the categories of investing that I normally see. Understanding where you are in one of those categories can help you define your goals as your locations, ratios, time frames, and limitations are all very different depending on which category you fit into. Deciding the type of investing you want to do allows you to face realities of today in order to make better decisions for tomorrow, and knowing the realities can help you make a goal that is written, attainable, and has a deadline. 

From the book, How to Win in Commercial Real Estate Investing (Coppola, 2014), real estate goal setting is easily done by focusing on four parameters: product type, location, money, and investment structure. The product type is developed from the categories I referred to above meaning you need an office building, retail, multi-family, flipper, etc based on how you see your needs. 

The next is location. Location is extremely important because it is a large determinant of future value and economic relevance. Have you ever noticed why many fast food restaurants are located on one side of a street and there are much fewer on the other side? Well, one factor is that many breakfast serving restaurants like to be on the same side of the street as the traffic that is moving toward the large employers/draws because they know they will get more customers with ease of access. For example, look at Eglin Pkwy leading to Eglin AFB in Fort Walton Beach. Every fast food joint that serves breakfast is located on the east side of Eglin Pkwy because they all know that it is an easier access for the military personnel going to work (Even Starbucks failed in Shalimar because it was on the wrong side of the street!). So, if you are in the owner occupied business and looking to relocate, you may want to consider if you are a drop off/swing in type of business that would need morning access or if you are a stop off after work type of business that needs better access in the afternoon. If you think that you are both, follow the fast food guys and bank on the morning people. 

Money is the next item to consider. You cannot invest in real estate without money, and if you are then the person/group/entity who is backing you is taking an enormous risk. Nearly all investors want to know that you have skin in the game and are not being foolish with their money on your "big" idea. However, remember that the money you invest into real estate should not be your first investment dollar. Learn to be patient, sacrifice, and save to get your investment dollars. 

The last point you will need to consider your investment structure. Do you want to pay cash, get a loan, or possibly take on partners, etc. This is a personal decision, but a good strategy is to start with loans/partners and keep putting money aside from every deal until you have the ability to do your own deals without a bank or partner. These are the people that make their margin/fall back cushion bigger with each deal and do not end up losing all of their wealth in the cycles of real estate because they have staying power. Staying power results in big, long term wins. You can win big in real estate if you have staying power and that longevity in the business will build wisdom from which you will gain even more and make even better decisions. 

In conclusion, you need to decide what your realities are, what class of investor you are, and where you fit into the goal setting categories. I am going to conclude this blog by quoting Coppola because this paragraph really sums up investing best to me in the sense that true investors are not looking for perfect fits and home runs, they are looking for workable situations within their ratios and goals. "You'll find real estate is less about finding something that can make money, and more about narrowing down the options until you arrive at the best one that can make you money. There's a big difference. Finding the right investment has an element of chance and implies that there is only one right investment. Narrowing down the options until you locate the best one puts you in control, implies that there are lots of good opportunities out there, and prepares you when a great opportunity comes your way." (Coppola, 2014)

Tools of the Trade for Commercial Real Estate Investing

We are on to Blog 2 on investing in commercial real estate. This blog while fairly simple and somewhat obvious is very important for all of the future aspects of what we will discuss. Today we are going to discuss tools of the trade. 

There are hundreds of real estate tools, books, apps, etc and any one of them can prove very useful for a variety of different things, but here I want to get in to some of the hard tools that we'll need. 

The first tool we need is a financial calculator. I like the webgota 12c Financial Calclulator Premium App for my iphone. It is basically the app version of the Hewlett Packard HP12C calculator. For calculating mortgage payments quickly, I'll use zillow mortgage because it is simple, but the financial calculators allow us to calculate all of the items like capitalization rates, amortization, cash flows, net present values, internal rates of return, etc. If we were back in college or high school, you would need to know the math behind all of those, but really all we need to do is know which buttons to punch on the calculator, which we'll get to later. 

You will become familiar with the calculators the more you use them, but there are online tutorials (HP has some) and even youtube can teach you a lot. 

The second tool is the demographic data. This information tells us a lot about the areas that we are considering investing such as household incomes, growth rates, economic activity, etc. This data is simple to come by for appraisers, but we can go on loopnet.com or costar.com and find out a myriad of information about demographics as well as specific information on the buildings that we are considering. CoStar also tries to keep track of commercial leasing data allowing us to initially analyze many buildings without ever inquiring to the owners or realtors on a piece of property. However, the information is not always accurate, so the online information should be used as a starting point and not necessarily the basis for making decisions... the same goes with using information to look at what your home or a home you like is worth on Zillow. It is a very generalized picture of the value of the property and may leave out some very important other criteria that could increase or decrease the value.

The big item to remember about the usefulness of demographic data is that real estate is similar to buying futures in the investment world. You need to have a good idea of what is happening in the area of your investment, and you need to feel comfortable that your investment makes sense years from now, not just today. Real estate investments should always be considered long term because this is a game of staying power. If you or your investment has the wherewithal to stay put through the slumps, then you can do well. If you are banking on flipping a property and do not feel comfortable carrying a property for the long term, then you are playing a very risky game. This is not to say that you should not sell your property when the price makes a flip worth it, but do not make the investment with that mindset. 

The third item is maps. Maps are an incredible tool to let you see properties from above and even the street view without every leaving your office or home. Google Maps and Google Earth are especially useful. I use them to look at street accesses, traffic patterns, count parking spaces, scout neighborhoods, what amenities are nearby, are there big economic drivers that could impact the investment, densities, etc, etc. Never underestimate the usefulness of maps. 

Next is rather obvious, and you are already using this because of the previous two tools. But you need the internet. The internet allows you to research properties, tenants, investors and more. If you bought a commercial building, you would probably want to know in your due diligence if the tenants are having legal trouble, if their business is going up or down, and many other items that they may not readily tell or be obligated to disclose to a potential investor. The same is true for analyzing a potential investor or partner. The public records and property appraiser websites are especially useful for this, and even checking things out on the social media sites is important before laying your money on the line. All sorts of information from judgments to liens to  news articles are all easily found if you know where to go. 

Continuing on, we have software tools. I like the Google suite of products because they follow me everywhere, but Excel, Outlook, PowerPoint, or other systems are also just as useful. A real estate specific software is ARGUS. You can find it online, but it is a product that helps with all the ratios we want to look at but can also help with budgeting, sensitivities, and what if scenarios. It is not a necessary platform for the casual investor, but if you were to look at multi-million dollar projects or had a lot of properties, then it would be well worth the investment. 

Finally, we need capital. Capital can be hard to come by, but to invest in real estate you will have to have some skin in the game. Banks will require downpayments, and investors will want to see your investment even if you are only a 5-10% owner in the project. It makes the investor understand that you are not being foolish with their money and the banks are especially skittish these days after taking such a beating through the recession. On a side note, when you think of capital for real estate investing this should not be the first and/or only investments and savings that you have. You should still have bank savings and investment accounts because every thing you do has risk associated with it, and you need some principal guaranteed savings/investments. However, as you will see, if you want to invest in real estate it takes a lot of effort and homework, but the rewards can be great.

Next week, I will get into figuring out your personal goals in investing to help you consider what areas you are interested in working to become an expert. I have also decided to use a book to guide these blogs and keep me on track. I will write these somewhat as summaries of good points in the chapters but add in real experience and local knowledge to make it pertinent for Northwest FL. I will post a link to purchase on Amazon in the Outpost section of www.livinrightrealestate.com/outpost. The book is How to Win in Commercial Real Estate Investing by R. Craig Coppola.  

This blog is designed to provide competent and reliable information regarding the subject matter covered. However it is written with the understanding that the author and real estate company are not engaged in rendering legal and financial advice. If legal or other expert assistance is required, the services of a professional should be sought. The author and real estate company specifically disclaim any liability that is incurred from the use or application of the contents of this blog. 

Commercial Real Estate Investing

We're off to the start of a new year, and all of us have a lot of thoughts about how we want to make our lives better this year whether it is family, health, faith, or finances. I want to help you this year by giving some insight to commercial real estate investing, analyzing the advantages, looking for deals, and making things work. 

The first question is why invest at all seeing that the past several years have seen many losses in the real estate market as well as the stock market. These losses make us feel like it isn't safe to put our money anywhere. However, if we put our money under our mattress, then we are losing it anyway due to inflation. So, what should we do? 

Over the next several blogs, I am going to lay out what I see as advantages and strategies in investing in commercial real estate. First we need to talk about real estate versus the stock market. There is a myriad of evidence suggesting incredible growth over the long run in the stock market, but there is also evidence showing that if you missed just a small number of the best days for stock appreciation over 40yrs, then your actual returns are very low (in the 3% range). Stocks also do not generally cash flow as well as real estate. It is harder to obtain financing against and for stocks. You cannot borrow against the partial equity of a stock, and you definitely cannot get a loan against a stock without a personal guarantee, which is sometimes possible in real estate. To continue, capital gains have to be paid on any gain in the stock market but the taxes can be deferred in real estate. It is impossible to deduct business expenses from a stock dividend. The IRS allows you to depreciate real estate while it is potentially appreciating in value and still lowering your tax burden. Finally, you have control over your investment because real estate's value is derived from operations and income, and you can directly affect both of those to make your investment more valuable. These are some of the reasons that I see real estate investing as being superior to stocks for the people who take the time to invest in the knowledge and understanding of the real estate market and have the wherewithal to take action.

Finally, I have laid out some more general advantages of investing in real estate below, and we'll pick up again next week with some basic tools you'll need to begin your work on analyzing investment property.

     1) As mentioned above, there are incredible tax advantages to real estate that are hard to match with any other investment
     2) Real estate is an incredible asset during inflationary times because while the value of your dollar goes down with inflation, the value of your investment in real estate goes up
     3) Real estate investing can afford you a semi-passive occupation meaning you can have more time for you friends, families, vacations, hobbies, etc
     4) A large percentage of all the millionaires created were in real estate
     5) You get the pride of ownership in something that is physical and tangible
     6) You can personally help your investment grow instead of relying on the doings of others. 

This blog is designed to provide competent and reliable information regarding the subject matter covered. However it is written with the understanding that the author and real estate company are not engaged in rendering legal and financial advice. If legal or other expert assistance is required, the services of a professional should be sought. The author and real estate company specifically disclaim any liability that is incurred from the use or application of the contents of this blog. 

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