It seems everyone is jumping on the rustic-chic bandwagon, but what exactly is “modern farmhouse” style, and how do you discern which of its characteristics have lasting impact? Here’s the short answer: Study the classics. Incorporating the following three time-honored design elements into your home will help you achieve this popular look and ensure that your style remains desirable for years to come. Let’s take a look at the elements separately, and then see how they work together.
1. Shiplap. Shiplap is an architectural staple that was around long before it started filling up your Houzz ideabooks. It blends into almost any aesthetic and can be incorporated into virtually any room in your home.
For one of our projects (shown here), our clients wanted to take a more contemporary direction, so we kept the lines of the shiplap sharp and precise. We paired it with more streamlined furnishings as well, including a midcentury modern accent chair and a crisp white sofa.
Continuing the horizontal lines straight from the walls onto the sliding door of this Charlotte, North Carolina, kitchen makes for an integrated look, proving that shiplap should not be limited to walls alone. The choice to use “barn door” hardware is also a great way to echo a farmhouse motif without going overboard.
Bathrooms, living rooms, kitchens, bedrooms — shiplap looks great anywhere. The key is to be selective and try not to use it everywhere at the same time.
In this particular setting, we love the way the window and the shiplap entice you to slow down and appreciate the surroundings. Perhaps the architect drew inspiration from an old church and then brought the exterior to the interior. Who wouldn’t want to spend an hour soaking in that tub?
From the smallest reading nook to the largest living room, shiplap looks at home and adds character. It fits in equally well in a coastal cottage or a little house on the prairie.
If you are renovating an older home or building a new one from scratch, don’t underestimate the power of architectural elements like shiplap to bring the charm. This entryway is automatically more interesting because of its shiplapped walls, which allow the handrail and balusters of the stairs to remain straightforward and understated.
2. Antiques. Nothing creates a space that feels cozy and collected over time quite like an antique.
Whether passed down through the family for generations or found at a local flea market, that perfectly ageless piece really helps finish off any vignette.
Something old creatively becomes something new again when reimagined with a different function. Relocating a chest of drawers from a bedroom to a bathroom morphs it into a vanity with tons of great storage — and lends beautiful patina.
Transforming artifacts into art is a common trick of the modern farmhouse trade. For example, the lamps on these nightstands were relics that once probably held oil or water. But now, they are a lovely source of task and ambient lighting as well as a welcome textural addition in this master retreat.
Antique furnishings have a distinct way of packing a visual punch as demonstrated by the gorgeous yoke-back chair in this design.
Often, an antique becomes the focal point of a seating group or furniture arrangement because it doesn’t necessarily fit in with the other pieces around it.
If it looks like a nostalgic memento from the American dream, or a piece of ancient history from an exotic land, don’t shy away from introducing a piece of the world’s past into your present.
3. Industrial lighting. It’s not often that the adjectives “rough” and “imperfect” are sought-after qualities. However, light fixtures with an industrial edge certainly make a good case. Nowadays, we find old-fashioned warehouse pendants being plucked straight from an actual warehouse and dropped directly above a kitchen island.
Authentic farmhouse light fixtures are typically more concerned with fulfilling a function rather than making a fashionable statement. But the modern take on industrial lighting works hard and brings the wow factor. This space was designed for a teen to have plenty of room to spread out his schoolwork, but it also serves as a hip hangout for his friends.
There’s an endless array of colors and finishes available on the market, so you shouldn’t have any trouble finding an industrial-style light that fits your needs and budget. Choose a color that complements the other elements in your space. In this mudroom, the black shade of the ceiling light echoes the black pulls on the upper built-in cabinetry.
Put It All Together
Industrial lighting and antiques.Reclaimed ceiling beams and deconstructed armchairs bring the rustic charm to this scene. Balancing out those more raw features with modern sconces (and swoon-worthy steel windows) updates the look and prevents it from leaning too Shabby Chic.
Industrial lighting and shiplap.This bathroom is a great example of popular modern farmhouse style thanks to a shiplap wall and industrial sconces. Though the vanity itself does not appear to be a true antique, it does have an aged look, and the warm stain is a welcome foil to the cooler tiles found in the shower and on the floor.
Shiplap, antiques and industrial lighting. This cozy nook displays a modern farmhouse trifecta. The antique chest, pharmacy-style floor lamp and shiplapped walls converge for a space that feels both modern and carefully collected over time. Keeping the overall color palette white and bright allows the chest to steal the show.
A rustic lantern, clean shiplap walls and an antique farmhouse table create an ideal setting for a relaxed meal. Top it off with hydrangeas and buffalo check pillows and it’s downright dreamy.
Finally, this kitchen sings with the harmonizing trio of modern farmhouse style. The consistent lines of the shiplapped walls act as an excellent backdrop for a collection of accessories that exude old-fashioned sophistication. The antique Oushak runner is a soft counterpoint to the angular lines of the industrial sconces above. This kitchen has classic appeal that the homeowners are sure to love for many years.
By Marie Flanigan, Houzz
The down payment has been a big obstacle in recent years for renters looking to buy their first homes. A new mortgage offering aims to ease the burden.
Home Partners of America, a rent to own company, is offering a new mortgage product to tenants that applies some of the appreciation in their home’s value during the time they have lived there toward reducing the down payment. In areas with even modest home-price appreciation, that could reduce the down payment requirement to almost nothing.
To qualify, tenants must have paid their rent on time for two consecutive years and be considered first-time buyers, meaning they haven’t owned a home in the last three years.
The program harkens back to the housing bubble, when millions of Americans received mortgages for homes they couldn’t afford with little or no down payment.
Bill Young, co-founder and chief executive of Home Partners, said a critical distinction with his company’s program is that prospective buyers have been paying their monthly rent on the same home over a long period, demonstrating they can afford it and are committed to staying there.
“Their skin in the game is they’ve proven they can pay their rent on time for 24 months,” Mr. Young said.
Check the latest mortgage rates on Home Partners, which was started about five years ago and has purchased nearly 8,000 homes in more than 50 metropolitan areas, plans to offer the product to current tenants and those who sign a lease over the next two years, the duration of the pilot program. The company won’t make the loans itself, but is working with New Penn Financial, a Pennsylvania-based lender.
The loans will be backed by mortgage company Fannie Mae, which recently has been experimenting with programs designed to ease credit for young buyers who are missing out on a recent surge in home prices because they haven’t saved enough for a down payment. Other pilots include a program under which Lennar Corp. will pay off a significant chunk of the student loan of a borrower who purchases a home from the Miami home builder. In another, buyers can receive up to $50,000 for a down payment if they agree to rent a room in their home on Airbnb.
Rent-to-own companies have a poor reputation in the housing industry for taking nonrefundable deposits from tenants who clearly won’t ever be able to qualify for a mortgage or afford a home. Home Partners doesn’t take a nonrefundable deposit, so if the home’s value declines or they decide not to buy for any other reason renters can simply walk away.
By Laura Kusisto | Wall Street Journal
Every human being makes up each morning thinking that they are the center of their own personal universe. Do you think that sounds cynical? Well let’s play through the following scenario.
You are driving to work listening to the radio and suddenly you hear about an accident on the route you're taking to get to your destination. Is your first thought, “Oh my God, I hope those poor people are alright?”
More likely your reaction is, “Now I’m going to be 30 minutes late for my first meeting!” That's because we all see life through our unique set of lenses in which we're the star of our own show.
In order to build positive strategic relationships, we need to turn human nature on its head. Instead of thinking about what’s in it for me, great relationship managers focus their thoughts and efforts on what’s in it for the people with whom they work.
It’s rare to come across people who don’t have their own personal agenda. Truth be told, we all do. However, great leaders and great relationship managers are willing and able to subjugate their personal agenda for the good of their teams and their stakeholders. Some people refer to this as "servant leadership."
Early in my tenure, I told my teams that they didn’t work for me, but rather that I worked for them. Of course, I got the expected smirks and eye rolls when I uttered those words. But over time, many of them came to realize that I meant it. My goal was their success. My focus was on supporting their efforts.
When we collaborate with our business colleagues and partners, are we thinking about our objectives or theirs?
How many of us have made calls with sales executives who were clearly focused on selling their product or making their quota? How did that feel? And how did it feel on the rare occasions when you encountered a sales executive whose focus was on helping you solve a business problem? How different did that feel?
True servant leaders focus on the needs of their clients, their team, their management and their shareholders. They look at life through the prism of helping others succeed. These leaders realize that all ships rise with the tide.
They also realize that it’s very rare for a player on a last-place team to win the MVP award in their sport. These awards are usually given to the players whose teams have won championships.
Perhaps the greatest athlete of all time (certainly the greatest in my lifetime) is Michael Jordan. One of the most important things people always said about him was that he made everyone around him better.
Are we focused on making others better and helping them succeed? Or are we focused on hitting our personal bonus metrics? Remember, the question we should ask in all personal engagements is not, "What's in it for me?" but "What’s in it for them?"
By Larry Bonfante, CIOInsight.com
1. Will I live there in 3 years?
Renting has one advantage over buying - mobility. Otherwise you should be buying in most markets, but can you ask yourself if you'd want to be there 2 or 3 years from now. In some real estate markets the average person moves so often they think they may not want to be there. Still even with (Arizona's) unique growth and sprawl, the rent rates make it an almost given that you should be buying. 3 years is the number that basically helps a home buyer break even with appreciation helping cover the initial costs.
2. What's My Real Budget?
If you've been renting it makes sense to buy, but a lot of buyers just see what they can get vs what they can afford. It's very common to see first time home buyers end up "house poor" where they can't afford to furnish the home. While quite possibly the worst way to buy all other items, using a monthly budget is ideal for real estate. It's good to work on this monthly budget before talking to a loan officer for a pre-approval.
3. Will I use more than the internet to shop
Not shopping / interviewing is a (HUGE!!!) mistake that most buyers make (in fact, it is for most. According to an NAR Study, 85% of home buyers and sellers pick the very first agent they talk to). In addition, they often choose the first vendor they interact with, whether that's a real estate agent, attorney, inspector, the list goes on. It's so worth it to get good people. The same goes for picking a home.
In addition, many home buyers use sites like Zillow that have one goal. Traffic. They convert this traffic into advertising dollars for real estate agents. It doesn't matter whether a home sold or that their Zestimate of is off by 20% or even if they are misrepresenting a listing. It's worth it to use an agent here.
4. More Money Question
As in "do I have enough money to pay for the cost of purchasing (closing costs, appraisals, inspections)... and do I have enough to actually furnish the home?" Going back to the house poor questions, but basically there is a cost to owning a home and there's a cost to decorating it. If you're thinking of buying a home you should consider these costs. That isn't to scare you but rather prepare you.
If you can answer these questions confidently, then the only other question is where do you want to buy?
In an effort to reach out to homebuyers and owners juggling student loan and mortgage payments, Fannie Mae announced several new policies that ease some of the challenges these people face.
There are three major changes that are expected to make obtaining a residential mortgage easier for borrowers with student debt.
Three new rule changes
The first is the student loan cash-out refinance. This allows borrowers to refinance a current mortgage to use the funds to pay down the remainder of their student loans. They could also potentially get a lower mortgage rate in the process.
“44.2 million Americans are paying down student debt.”
The second change applies to borrowers who have some debt that’s paid by others, such as a borrower whose parents pay down the monthly credit card, auto loan or student loan payments.
Under the old rule, these balances would be included in a borrower’s debt-to-income ratio – a measure lenders look at as one way to determine the risk associated with a potential borrower. The new rules state that they can be excluded from the DTI calculation, as long as they meet two requirements:
According to Student Loan Hero, 44,2 million Americans are paying down student debt, and the typical graduate is leaving college with around $30,000 in debt; 1% of this amount would be $300. While the average monthly student loan payment is higher than this – $351 – the median monthly student loan payment is just $203.
Many times, factoring in an amount that was different than borrowers’ actual loan payments artificially increased their DTI calculation and disqualified them from getting an affordable home loan with many lenders.
Addressing a growing trend
Fannie Mae announced these rules in response to an obstacle many prospective homebuyers have encountered in recent years. While there are many ways people can balance student loan debt and mortgage payments, it isn’t easy. The National Association of Realtors found that 13 percent of homebuyers in 2016 said saving for a down payment was the hardest part of the homebuying process. Nearly half of these respondents said it was student loans that held them back.
“We understand the significant role that a monthly student loan payment plays in a potential home buyer’s consideration to take on a mortgage, and we want to be a part of the solution,” Jonathan Lawless, Fannie Mae’s vice president of customer solutions, explained in a statement. “These new policies provide three flexible payment solutions to future and current homeowners and, in turn, allow lenders to serve more borrowers.”
While these new rules are designed to aid borrowers, there is always a risk associated with new programs such as these. Some worry that, by changing the DTI formula, lenders won't get an as accurate a picture of a borrower’s actual ability to pay down their mortgage, The Washington Post reported. In reality, these rules will likely be a wonderful help for some borrowers, but not quite the right solution for others. To determine whether any of them are a good option for you, reach out to Academy Mortgage.
Information courtesy of Paige Diamond or Academy Mortgage.
Selling your home can be a stressful situation. It’s more about the unknown that bothers most sellers than actually moving and packing. One mystery that has to be addressed fairly early in the transaction is the home inspection. I equate the experience to being told that you are going to have a pop quiz that you weren’t prepared for. Well, the home inspection process can feel like that.
You May Be Interested in the Article: Top 15 Must Know FHA Guidelines When Selling
So, what do you do when you have a bad home inspection? First, it may look like a bad inspection, but is it really? Every home, new or old has something wrong with it. In 20 years of selling homes, I have never seen a clean home inspection, ever.
What a Home Inspector Does:
A home inspector must thoroughly go through your home to evaluate the major mechanical, structural, roof, interior and pest. He or she will also check in the attic, outbuilding(s) and electrical. As a result of the findings, the inspector usually categorizes the defects found in your home three ways. First is the maintenance items. Second on the list are minor repairs. Third are major defects found in the home which may affect health and safety.
This report usually comes with photos and is broken down into sections. The last page will be the defective items list. Sometimes, inspectors will itemize and attach a value to the listed repairs, which I do not care for. Why, because this is a home inspector, not a licensed contractor. When I see an estimate for repairs, in my experience it seems like the repair values are not realistic and higher. Usually, you can find a local, reputable contractor who will do the job for less money than what the inspector quoted.
What Do You Do When You Have a Bad Home Inspection:
In most states, like Florida, if the buyer is requesting the seller to repair, replace or reduce the home value as a result of the home inspection, you (seller) are entitled to a full inspection report. If you have a copy of the report and it shows either a laundry list of repairs, some major, the first thing you should do is sit down with your agent and find out what the buyer wants. I have seen buyers take the property as is with all the known defects. Just because you have an inspection report showing all kinds of things wrong with your house doesn’t mean the buyer isn’t going to accept the property as is.
However, if you are reading this, it is probably because the buyer either wants you to repair your home, give the buyer money in lieu of repairs or wants to terminate the contract with you. Remember, as the seller, you are not forced to do any repairs and the home inspection report should not be used as a list to make your house perfect. With that being said, like most sellers, you probably want to move on to the next step in your life and that includes selling your home.
If you are considering doing some of the repairs, first make sure that they buyers are not out of contract for the home inspection and response. Your purchase agreement has a section that specifies how long the buyer has to conduct the inspection and make a response time. If the buyer has exceeded the time frame, they may have to take the property in as is or run the risk of losing their deposit.
Repairs Can Be Negotiated-So Can Price:
If the buyer is within the time frame of the home inspection period and is requesting repairs before you make a decision regarding repairs, have your Realtor contact the buyer’s Realtor to get a feel for what they buyer is willing to accept. This is when you want a strong, experienced agent to be on your side.
Keep in mind how you priced your home to sell. If you priced your home below market value for a quick sale, then doing any requested repairs may not be in your best interest. However, if you sold your home at today’s current market value, then doing repairs may just be bringing your home up to current market standards in that price point. Deciding how to price your home, basically, sets the expectations for an as is sale vs a repaired value.
If you sold your home below market value (wholesale price) the buyer may still try to negotiate repairs, you can always say no. Or, you could do the repairs and negotiate the price to reflect your investment.
Major defects like an unknown septic problem that requires an entirely new septic system may be a repair that requires the price to be raised. For example, a septic system once installed lasts for years and will be enjoyed by the new home owners and therefore may be a repair that can be split between the buyer and seller by adjusting the price accordingly.
Mortgage Types May Determine Repairs:
What kind of mortgage the buyer is using will also determine what and if the repairs the buyer is requesting need to be completed by you. Most mortgages have an appraisal contingency, which means the funding of the loan is contingent upon your home meeting the appraisal standards as well as value. If the appraiser requires repairs, and you are unwilling to do them, the buyer may not be able to move forward with the purchase of your home. For instance, FHA and VA mortgages have a set of requirements the home must meet in order for the financing to be completed. If your home, for instance, has rotting exterior wood or chipped and peeling paint (and was built prior to 1978), those issues must be addressed by you prior to closing.
Although the appraisal normally is scheduled after the home inspection period has passed, the buyer’s mortgage lender can provide some help regarding what is acceptable for underwriting standards.
Guideline for Repairs Requested by Buyers Breakdown the Repairs
If you Just Say No: You Must Disclose:
Depending upon the inspection clause in your purchase agreement, saying no to the buyer may allow the buyer to withdraw from the contract. Even if the buyer accepts your home with no repairs, your home may fail the appraisal. As a result, the buyer will not be able to complete the transaction due to the lack of funding. Either way, if the purchase does not come to fruition and you put your home back on the market, you must disclose the known defects if you decided not to repair them.
Licensed Agents Must Disclose Defects:
Most States have requirements for licensed agents engaged in selling real estate when it comes to known property defects. For instance, in Florida, if a licensed agent is aware of any known defects whether found in the home inspection or disclosed by the homeowner, they are required to disclose those issues. A seasoned agent will more than likely have some type of disclosure signed by the buyer and seller specifically addressing the known issues to protect all parties. Regardless of loyalty or agency agreement, telling the truth overrules any fiduciary responsibilities when it comes to defect disclosures.
Selling your home can be a complex transaction. Knowing how to treat the outcome of a home inspection while responding to the buyer's requests can mean the difference between closing or putting your home back up for sale. Have a strategy and put your ego aside. If your goal is to sell the house, a little compromise can go a long way.
By Sandy Williams, RealtyTimes.com
Springtime is always a pivotal time for the housing sector as it accounts for an out-sized portion of sales activity. Sellers don’t want prospective buyers tramping snow and mud through their homes in the winter, and buyers often don’t want to actually move until the kids are out of school – but do want to be settled before the new school year starts.
Existing home sales hit a post-recession high in the month of March despite very tight availability (just 3.8 months’ supply versus a normal 6.0 months). Tight supply and strong demand of course is the recipe for higher prices and the median price for an existing home, at $236,400, was 7% above year-ago levels in the first quarter.
The upper price points of the market also enjoy better availability. Homes in the $100k to $250k segment accounted for the bulk of March sales (42.5% of total) but were only 5% higher versus year-ago sales. Homes in the $250k to $500k range were 19% higher yr./yr. while sales $500k and above were up 29% higher. All data is sourced from the National Association of Realtors.
By: Ameriprise Financial Senior Economist, Russell Price, CFA.
Even though they’re becoming more optimistic about their financial situations, more people who rent their homes are foregoing buying a house.
One in five renters now say they have no interest in ever owning a home, up from 13% in January 2016, according to a report released this week by Freddie Mac. And nearly 60% of current renters expect to rent their next property when they make their next move, up from 55% in September.
This shift toward renting versus buying is occurring despite a relative improvement in the financial situations for many renters: 41% of them say they have enough funds to go beyond each payday, as opposed to living paycheck to paycheck or not having enough money for basic necessities, the highest level since October 2015, Freddie Mac found. Harris Poll surveyed more than 4,000 adults on Freddie Mac’s behalf, of which 1,282 were renters, to help produce the report.
And yet a sizable chunk of people are unhappy with renting. Nearly 40% of people Freddie Mac surveyed were dissatisfied to some extent with their rental experience, with young and urban renters — who are likely to be living in smaller, more expensive spaces — more likely to be displeased.
So why are they not buying? People’s attitudes toward affordability, which cut across generations, is a big factor. “Although their finances are better, renters are comfortable with continuing to rent with many believing renting will be more affordable or stay the same for them in the next 12 months,” Freddie Mac noted.
In particular, rising home values have hurt many would-be homebuyers. A recent report from real-estate website Zillow found that more than two-thirds of renters cite the down payment as the biggest obstacle in home a home. Indeed, it can take more than a typical year’s salary in some markets to be able to afford one.
At the same time, rental markets have stabilized recently. “Rents have been relatively flat over the last year and we don’t expect them to rise much in the next year in most areas,” Svenja Gudell, chief economist at Zillow, said. “That urgency that once existed is not there anymore.”
Affordability is just one factor though — the availability of homes also plays a role. “Even if you were to go out and try to buy a home, inventory is so constrained you’ll have trouble to find one,” Gudell said. “If there’s not much advantage to owning a home versus renting, people will feel comfortable in the decision to continue to rent.”
Ah, the things people do for their kids. One of the biggies? Buying a megamansion with a massive backyard perched in a stellar school district so they can give their offspring the best life possible—even if they’re mortgaged to the hilt. And yet, making real estate decisions solely for the sake of your kids can be a recipe for regret that can actually undermine your family’s happiness.
“People get idealistic and sometimes irrational when they choose the home they plan to raise their kids in,” says Holly Breville, a McEnearney Associates real estate agent in Washington, DC. As proof, just check out some real-life home-buying mistakes so that you can avoid falling into the parent trap.
MISTAKE NO. 1: BUYING TOO BIG
“Expectant parents often want more space,” says Breville. “They want an extra bedroom for visiting grandparents, or they might want every child to have their room.”
They might also want expansion room in case they have more kids down the road. But affording a big home usually means buying in a more remote area, which isn’t always worth the trade-off—something San Francisco mom Abbe Clemons learned the hard way.
“When I was pregnant with our second child, I was convinced we needed a bigger home, so we sold our bungalow in a great neighborhood where we could walk everywhere and bought a big, cavernous house in the hills, where we had to get in the car to go anywhere,” says Clemons. She regretted the decision as soon as her second child arrived.
“I felt totally isolated and, with two tiny kids, we lived on top of each other in a couple of rooms, so a big house was unnecessary.” Breville encourages clients to think hard about whether more space is worth what they’ll sacrifice for it.
“If a larger home means moving a half-hour away from your friends and community, or to an area where you can’t walk anywhere, the impact on your quality of life might not be worth the extra bedroom,” she says.
“And ask yourself if a guest room is worth the money. How often will family members really stay with you? Do you even like having your in-laws stay with you?”
It might make sense to put them in a hotel for their brief visits rather than straining your budget for a bigger home.
Mistake No. 2: Buying before you can afford it
Blame it on hormonal nesting instincts or societal programming, but new parents (or parents-to-be) can become fixated on owning a home, without regard to financial practicalities.
“The moment I found out I was pregnant, I wanted to buy a house. It was an overwhelming ‘I have to do this or I’m going to freak out’ desire,” says Amy Klein of Eugene, OR. “Everything in our price range was old or ugly, so we wound up maxing out our budget on a home 12 miles out of town. I didn’t care that the interest rate was 5.75%. I didn’t care that I had to drive on somewhat of a dangerous road to get to work. All we cared [about] was that we had a house. But now I care a whole lot.”
The reality: Having a new baby can be stressful enough without a backbreaking house payment, so you’d better think hard about whether homeownership is right for you at this point. Here’s how you can figure out how much home you can afford.
Mistake No. 3: Buying for a school district
A home with top-rated schools is the holy grail for parents, but keep in mind that great public schools aren’t truly free.
“Homes in highly regarded school districts usually come at a premium in terms of home prices and property taxes,” says Breville. “So you need to factor in how long you will stay in the area, how many children you have, if your children will definitely use the public schools, and for how long.” Maureen Legac learned firsthand that buying for a school district doesn’t always work out as planned.
“When we relocated to Florida, we were determined to buy in a great school district. We bought a home near A-rated schools, but it was 40 minutes from the beach, and 10 miles to the closest grocery store or gas station,” she says. “Then our children decided to participate in an International Baccalaureate program, which was located at the worst school in the district and had us driving across town past the A-rated schools to go to a D-rated one that happened to house the IB program. We wouldn’t have moved to an area so far from town and the beach if we’d known they wouldn’t be using the schools anyway.”
It might make sense to test out that great school district by renting in the area before you commit.
Mistake No. 4: Renovating for the age they are now, and not for the future.
Coleen Christian Burke knocked down walls to four rooms on her main floor because she thought it would be easier to keep track of her kids in the house. “It turned out fabulous,” she recalls, at least while the children were young. Once they became teenagers, “I learned that they hate open-concept,” she says. “There wasn’t space for them to have privacy when their friends came over, and they spent more time at the houses of friends who had 1970s-style dens and basements. They call our house the fishbowl!”
Lesson learned? Children grow up fast, and their habits and tastes change, too. That backyard play structure that seems so desirable when your kids are in kindergarten will never get used once sports or video games become their entertainment of choice. So try to imagine how any renovations might suit who they are now, and who they’ll become.
By Celeste Perron, Realtor.com
“You can never have too much of a good thing,” or so the saying goes.
But that’s not true when it comes to residential real estate in Metro Phoenix.
“Arizona continues to have a shortage of listing inventory, especially less than $300,000,” says Trudy Moore, designated broker at HomeSmart. “First-time home buyers make up a large sector of the market and there are just not enough listings to fulfill the need. If a property is listed under $300,000 and it is in good condition, it will probably have multiple offers within a few days.”
Phoenix isn’t just hot, it’s sizzling when it comes to residential real estate. Realtor.com named Metro Phoenix the No. 1 residential real estate market in the country, predicting Valley home prices will jump 5.9 percent and the number of sales will jump by 7.2 percent this year. And while the luxury market — those homes priced over $750,000 — picked up substantially in the second half of 2016, it’s the lower-priced homes that experts say will drive a healthy housing industry over the next year.
Everything’s new again
“Opening price-point homes in the high $100,000s and low $200,000s will become plentiful in the outlying areas of Metro Phoenix,” says Doug Fulton, CEO of Fulton Homes.
According to Ken Peterson, Shea Homes Arizona’s vice president of sales and marketing, the Valley has only about a 2.4-months supply of resale home inventory, which is down significantly since the downturn of the market.
“Rising resale prices make new homes more attractive to many potential buyers,” Peterson says.
Fulton says some of the areas that will capitalize on the demand for sub-$300,000 new homes are Maricopa, Buckeye, Laveen, Goodyear, San Tan Valley and Casa Grande.
“These homes will be pre-built speculation inventory and will bode well for the first-time or finally-back-in-the-market homebuyers,” Fulton says.
The impact of this trend, Fulton says, is that sales of these homes will push the “new home vs. resale” closing ratios in Metro Phoenix from 14 percent closer to 20 percent of all home closings.
“Our projection is for 16 percent more new home demand in 2017 and significant appreciation — 7 percent to 9 percent,” says Jim Belfiore, owner of Belfiore Real Estate Consulting. “The rise in demand is already underway. The appreciation is due to inflation, and while we project this growth in home prices, the question is whether or not it will actually take hold?”
What is more clear, Belfiore says, is that builders need appreciation to cover the cost of new land, lots and higher building costs.
“Over the last two years, construction costs have climbed 25 percent to 30 percent for production homes and 30 percent to 35 percent for multifamily,” Belfiore says. “The result has been downward pressure on homebuilder balance sheets. The response, we believe, will be a strong move towards greater profitability in 2017 and 2018. Builders are likely to push prices upward.”
But the bright outlook for new homes sales comes with concerns.
“If we see a sudden increase in sales activity, we’re concerned that the current labor force may not be able to adequately meet the demand,” Peterson says.
But some homebuilders see a solution in sight for the labor crisis.
“If President Trump builds the wall that he promised during his campaign and gives a path to citizenship to those willing to abide by the law and immigrate legally, the building industry’s labor issues will get resolved very quickly and jobs will be created to help support the Arizona economy,” Fulton says.
The flies in the ointment of getting a handle on the outlook for residential real estate in Arizona will be Millennials. According to the National Association of Realtors, 2016 marked the third straight year that Millennials made up the largest group of homebuyers at 35 percent. Generation X accounted for 26 percent of sales.
“Millennials will play a big role in generating hot neighborhoods,” says Tom Davis, vice president of Pioneer Title Agency. “Areas that are close to the light rail and hip local eateries and clubs, as well as proximity to downtown, will push that demand.”
That Millennial mindset is why many experts say that while the outlying neighborhoods may be hot for new homes, Central Phoenix will see the highest appreciation in values.
“Arcadia is still likely the most desirable neighborhood, but it continues to get pricier,” says Christopher Sailus, vice president and NorthEast Arizona Division manager for Washington Federal. “For a good investment, I think the Central Phoenix neighborhoods where culture and gentrification of more historical housing neighborhoods is happening is likely best spot for (a higher) percentage return (on investment) as prices increase there.”
All that said, experts agree that the outlook for residential real estate is as bright as the Arizona sunshine.
“Given the health and affordability of our current market, we have nothing but optimism for the residential real estate market here in Arizona for 2017,” says Rich Simon, owner of Huzing.com.
By Michael Gossie- AZBigMedia.com