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Kevin McVicker

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You Don’t Need 20% Down

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No… You Do Not Need 20% Down to Buy NOW!

No… You Do Not Need 20% Down to Buy NOW! | MyKCM

The Aspiring Home Buyers Profile from the National Association of Realtors (NAR) found that the American public is still somewhat confused about what is required to qualify for a home mortgage loan in today’s housing market. The results of the survey show that non-homeowners cite the main reason for not currently owning a home, as not being able to afford one.

This brings us to two major misconceptions that we want to address today.

1. Down Payment

NAR’s survey revealed that consumers overestimate the down payment funds needed to qualify for a home loan. According to the report, 39% of non-homeowners say they believe they need more than 20% for a down payment on a home purchase. In actuality, there are many loans written with a down payment of 3% or less.

Many renters may actually be able to enter the housing market sooner than they ever imagined with new programs that have emerged allowing less cash out of pocket.

2. FICO® Scores

An Ipson survey revealed that 62% of respondents believe they need excellent credit to buy a home, with 43% thinking a “good credit score” is over 780. In actuality, the average FICO® scores of approved conventional and FHA mortgages are much lower.

The average conventional loan closed in August had a credit score of 752, while FHA mortgages closed with a score of 683. The average across all loans closed in August was 724. The chart below shows the distribution of FICO® Scores for all loans approved in August.

No… You Do Not Need 20% Down to Buy NOW! | MyKCM

Bottom Line

If you are a prospective buyer who is ‘ready’ and ‘willing’ to act now, but are not sure if you are ‘able’ to, let’s sit down to help you understand your true options.

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The Truth About Homeowner Equity

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The Truth About Homeowner Equity | MyKCM

A recent article from a reputable news source was titled: Here's why some homeowners still can't sell. In the opening bullets of the article, the author claimed, “Negative equity is one of the main reasons why there are so few homes for sale.” The article then goes on to soften that stance but we want to bring better clarity to the equity situation.

A recent report from CoreLogic (which was quoted in the article) revealed that over 80% of all homes now have “significant equity,” which means the home has over 20% equity. That level of equity allows the homeowner to sell their home if they so desire. (There was no reference to significant equity in the article.)

If eight out of ten homeowners now have significant equity in their homes, it is hard to make the claim that lack of equity is “one of the main reasons why there are so few homes for sale.”

Here is a map showing the percentage of homes in each state which currently have significant equity:

The Truth About Homeowner Equity | MyKCM

Bottom Line

If you are one of many homeowners who is debating selling your home and are wondering how much equity you have accumulated, let’s get together to determine if now is the time to list.

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Americans Still Believe Real Estate Is Best Long-Term Investment

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According to Bankrate’s latest Financial Security Index Poll, Americans who have money to set aside for the next 10 years would rather invest in real estate than any other type of investment.

Bankrate asked Americans to answer the following question:

“What is the best way to invest money you wouldn’t need for 10 years or more?”

Real Estate came in as the top choice with 28% of all respondents (3% higher than last year), while cash investments – such as savings accounts and CD’s – came in second with 23% (the same as last year). The chart below shows the full results:

Best Investment | Simplifying The Market

The article points out several reasons for these results:

“After bottoming out at the end of 2011 following the worst housing collapse in generations, home prices have gone gangbusters recently, climbing back above their record pre-crisis levels. Prices jumped 6.6 percent during the 12 months that ended in May, according to CoreLogic.

Toss in persistently low interest rates, tax goodies that come with owning a mortgage, and the psychological payoff from planting your roots, and maybe it’s no wonder real estate remains popular.”

The article also revealed that:

“Bankrate’s Financial Security Index — based on survey questions about how people feel about their debt, savings, net worth, job security and overall financial situation — has hit its third-highest level since the poll’s inception in December 2010.”

Bottom Line

I have often written about the financial and non-financial reasons homeownership makes sense. It is nice to see that Americans still believe in homeownership as the best investment.

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Your Home Is An Oasis In The Inventory Desert

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Homebuyers are flocking to the Triangle market by the thousands to find their dream homes. Unfortunately for many, the inventory of starter and trade-up homes in the the Triangle has struggled to keep up with demand!

According to the National Association of Realtors (NAR), the inventory of homes for sale dropped 7.1% year-over-year to a 4.3-month supply.  That’s down for the 25th consecutive month.

Some homeowners may be hesitant to list their homes for sale. They are worried that it will difficult finding a home to buy and move in to. This is a legitimate concern; no one wants to sell their home quickly and not have anywhere to live.

But there is good news! If you are thinking of moving up to a luxury or premium home, there is more inventory available in these markets. You may even get a great deal on a home that has been on the market for a while.

If you are looking to move into a trade-up home, or if you are just looking to relocate to a new area in a home of the same size, there is still hope!

In many markets, homeowners are building contingency plans into their contracts. This means that the homeowner builds in extra time before they close in order to find their dream home. Sellers are upfront about the contingency with any buyers who come to see the house.

Your home is an oasis to buyers who are searching for homes in today’s market. The right buyers will sympathize and wait for you and your family to find your next home.

Bottom Line

Don’t let the fear of not finding a home to move in to stop you from moving on with your life. Let’s get together to discuss ways to set expectations with potential buyers from the start.

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10 Anti-Burglary Tips For Homeowners

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After Christmas, many people put the empty boxes their expensive gifts came in out on the curb. What do you think that says to potential burglars? It screams, “I just got a brand-new TV! Come and rob me!”

That’s just one example of some unwise habits homeowners have. If those owners are sellers opening their doors to the public for showings, habits such as these put them in even greater danger.

 

National Snapshot of Burglaries

A burglary is committed every 20 seconds, with nearly 1.6 million such crimes nationwide annually, according to the FBI’s 2015 Crime in the United States report. That’s down 7.8 percent from 2014. Total property crime, which includes arson, larceny theft, and motor vehicle theft, reached nearly 8 million instances in 2015, down 2.6 percent from 2014.

  1. Maintain your property. Especially in the wintertime, many people stay indoors and neglect issues such as peeling trim or an overgrown yard. But if the home looks unkempt, thieves may think it’s abandoned and, therefore, an easy target. Shoveling your walkways to clear them of snow and debris and removing holiday decorations and fallen tree branches in a timely manner will signal that the home is occupied.
  2. Know your neighbors. Many people don’t really know their neighbors; it’s more than just saying hi and being friendly. Invite them over to see your home before it goes on the market, and introduce them to the people they may see regularly stopping by during this time (especially your agent). Then they’ll know who is and isn’t supposed to be at your home and can better assess when there may be a threat while you’re gone.
  3. Assess your home’s vulnerability. Walk to the curb and face your house. Ask yourself, “How would I get in if I were locked out?” The first thing you think of, whether it’s the window with a broken lock or the door that won’t shut all the way, is exactly how a thief will get in. Think like a burglar, and then address the issues that come to mind.
  4. Respect the power of lighting. Criminals are cowards, and they don’t want to be seen. The house that is well-lit at night provides a deterrent because thieves don’t want the attention and the potential to be caught by witnesses. It’s wise to invest in tools that make nighttime light automation easy. That includes dusk-to-dawn adapters that go into existing light fixtures and motion detectors. But beware of leaving your exterior lights on at all times, which signifies the occupant is gone for an extended period of time.
  5. Use technology to make your home look occupied. In addition to lighting, smart-home technology has made it easier to make it appear like people are home, even when they’re not. Systems that remotely control lighting, music, and appliances such as a thermostat can help you achieve this. Though not considered smart-home tech, simple lamp timing devices available at hardware stores are also good for this purpose.
  6. Yes, it has to be said: Lock your doors. It’s amazing how many people think they live in a safe-enough neighborhood not to have to lock their doors when they leave. Some facts sellers should know: In 30 percent of burglaries, the criminals access the home through an unlocked door or window; 34 percent of burglars use the front door to get inside; and 22 percent use the back door, according to the FBI Uniform Crime Report.
  7. Reinforce your locks. A good door lock is nothing without a solid frame. Invest in a solid door jam and strike plate first, and then invest in good locks. Know the difference between a single-cylinder and a double-cylinder deadbolt. Double-cylinder deadbolts are recommended because they require a key to get in and out. For safety and emergency escape purposes, you must leave the key in when you are home. But double-cylinder locks are against regulations in some places, so check with your local police department’s crime prevention office.
  8. Blare the sirens. Burglars are usually in and out in less than five minutes, and they know police can’t respond to an alarm that quickly. Their bigger concern is witnesses to their crime. For that reason, an external siren is invaluable, whether as part of a monitored security system or a DIY alarm. Even if you don’t have an alarm, it’s not a bad idea to invest in fake security signs and post them near doors.
  9. Consider surveillance cameras. The Los Angeles Police Department started a program encouraging homeowners to install a device called Ring, a doorbell with video surveillance capability that allows homeowners to view what’s outside their door on their smartphone, in a neighborhood that was a target for burglaries. After Ring was installed in hundreds of homes, the burglary rate dropped by 55 percent, according to reports. Most state and local regulations require posting a warning that people are being recorded. (But again, this can be effective even if you don’t actually have the cameras installed!)
  10. Mark your valuables and record details. Use invisible-ink pens or engravers to mark identifying information (driver’s license or state ID numbers) on items. Log serial numbers and take photos of your belongings. Check to see if your police department participates in the Operation Identification program. They will have stickers for you to place on doors or windows warning would-be thieves that your items are marked. These steps may prevent them from pawning or selling stolen items and can help you reclaim recovered belongings.
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Planning To Sell Your Home

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4 Ways To Make Your Home More
 Attractive To Home Buyers

Email: kevin@kevinmcvicker.com Phone: (919) 369-4926

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The Importance of Staging

One of the essential steps that must be taken to quickly sell your home is to stage it well. It’s surprising how many folks overlook this necessary part, but the presentation of your home is of the utmost importance. I know, it sounds scary even thinking of tackling such a huge project, but just trust me on this. You’ll be glad that you did.

I'm going to give you a few tips and tricks that will help folks get past just viewing your home as a potential and dreaming of it as their picture perfect nest. I know what you’re thinking. You’ve seen all of these articles and blogs about revamping your house to make it sellable, but you just don’t have that kind of cash. It’s okay. Stay calm and take a deep breath, because the fact is that we can lead you to staging your home perfectly know matter how large or small your budget is!

Essential Tip #1: Make it Sparkling Clean

The very first, and possibly most important tip we’re going to give you is to simply clean, clean and clean some more. We all get used to our homes. Most of us don’t keep show places in our day to day lives. We really, truly, actually live in them. That usually means stacks of mail on the table, unfolded laundry on the dryer and hidden unknowns in closets. Did we mention the kid’s toys and litter box? That’s what living in a house is all about, right? Right, but the goal is to convince another couple or family that your home is just perfect for them. That’s tough when they’re surrounded by your stuff.

You see, living in your home also means that you don’t see your home as potential homebuyers might. You just don’t notice what you stare at every single day, but take our word for it, people trying to see if this could be there new haven do notice and are turned off by seemingly innocuous clutter. Not a problem, because this is a task that we can manage with just some elbow grease and time.

First of all, get out your pad and pencil. Start at your front door and do a walk through just as though you were being shown around by your friendly, neighborhood realtor. Put on your fresh eyes and take notes of everything you notice that is unpleasing. It’s not a bad idea to keep track of what you find that is quite pleasant to look at, as well.

Typically, you’ll be starting in the foyer or entrance. Simply make a list entitled foyer, and note everything that needs to be tackled. For example:

Foyer To Do's:

  • Cobwebs in the corner
  • Fingerprints on mirror
  • Spot on carpet
  • Declutter junk basket
  • Take down all but one photo frame
  • Polish table
  • Put up shoes
  • Keep fresh flowers looking and smelling nice

Hall closet To Do's:

  • Funny smell – Go through old shoes and air out
  • Clean off shelf
  • Get rid of mouse trap

See how that works? It’s really simple. You’re quickly taking note of all of the things that need cleaning, straightening and decluttering. Go through your entire house this way, making your notes and keeping your fresh eyes open to the possibilities. Envision just how beautiful your home can really be with a little sprucing up. After all, you want your potential buyers to envision your current home as their future one. Your stinky socks and sneakers won’t help with that, but a bright and shiny entrance will!

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Now, once you’ve made your extensive To Do list, you need to make a second list of the supplies that you need to accomplish your tasks. Cleaners, garbage bags, paper towels, polish and even light bulbs might be on this list. The best part is that you’re going to have almost everything that you need on hand, so this spectacular and important tip is nearly cost-free!

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Handy Tip: Smell Matters

Smell is incredibly important when you’re trying to sell your home. Some would even say that people buy homes with their noses. It doesn’t matter how beautiful something is, if it smells bad, it just isn’t inviting. You’ve got a handle on this, though. Follow these tips for a home that smells as lovely as it looks.

  • If you’re a smoker, consider going outside for smoke breaks until your home is sold. Non-smokers have noses like bloodhounds, and they often detest that lingering scent.
  • Avoid cooking greasy or incredibly spicy dishes, particularly if you know someone is coming to view your home soon. Stick with the oven! It’ll be better for you, too.
  • Empty the garbage religiously. We all forget sometimes, but make that concerted effort to get it outside every single day from every single room. Make sure fresh bags are in the cans before a viewer is scheduled to visit.
  • Watch the pooches. Believe it or not, some folks just aren’t animal people and they detest the smell of dogs, hamsters and litter boxes. We know you can’t just throw your babies out! Just make adjustments as you can until your home is sold.
  • Keep scented candles handy. Light them a couple of hours before you’re expecting someone to help mask all of those scents that are hard to get rid of. Keep in mind that you don’t want your home to look as though you’re about to have a séance. Just a candle or two will do nicely.
  • Another way to get a pleasant aroma without going into overbearing mode is to add a little cinnamon or vanilla to a tea kettle of water and warm it. It’s lovely.
  • Shampoo the carpet. Some smells just linger, and they get into your carpets just to stay put and torture you. If you don’t have a shampooer, they can be rented fairly inexpensively at department stores, or you can buy a low-end one for about a hundred bucks.
  • Wash the curtains. It’s the same principal as the carpets. Smells linger in fabrics, so if you can, wash your curtains and any other offending fabrics, such as linens, that can trap odors.

Essential Tip #2: Don’t Forget the Yard

Again, this is an important step in the staging of your home and many people simply fail to really see their yardfor what it is. It’s okay. Get out your handy dandy list again, and go to town with your newfound note-taking abilities. Maybe even do a drive-by, since that is the first impression a potential homebuyer is going to have. The neighbors might think you’re a little odd at first, stalking your own house and all, but you’re on a mission. After all, they won’t be your neighbors much longer!

Drive by slowly and just drink it all in. Are the bushes neat? How does the grass look? Is there debris lying around? What you’re trying to see is whether or not your home and yard look like invitations to come on in and have a look inside. Or, on the other hand, if they look as though they would send a potential buyer screaming for the nearest exit out of your neighborhood. Chances are there are areas that need some improvement, and that’s just fine. You’ve got those kinds of skills, after all. If you can declutter a whole house, you can absolutely make your yard inviting.

Keep in mind, that neat and simple landscaping is much preferred to elaborate landscaping that is a mess. Don’t feel compelled to put tons of money into this project, but rather declutter and clean just as you did inside of your home already. After all, you want to make as much money off of this sell as possible. Investing tons of money into something that isn’t necessary is essentially eating away at your eventual profit. With that being said, neat shrubs and fresh mulch go a long, long way.

Don’t misunderstand. There may be areas that require a little monetary push. For instance, if your porch light no longer works, it’s advisable to update that. Your steps are broken in a place or two? Go ahead and replace them.  You see where we’re going with this?

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Handy Tip

  • Start at the curb. Is it clean, neat and well kept? Is it littered with garbage, cigarette butts and grass clippings? Clean it up, because this is the first glimpse potential buyers get of your home.
  • We’ve already mentioned checking your bushes for trimming needs, but go a step further. Are your flower beds overgrown? If so, weed them out. Make sure and trim away all dead foliage, as well. It just isn’t pleasing to the eye.
  • Do your walkways need repair? Often, walkways can be mended rather than having to be completely replaced if there’s just crack or two.
  • Take a good look at your outdoor furniture. It can either make or break the look of a patio or porch. A good washing with bleach water might be all that they need to look like new, or they might need a fresh dose of paint. A small amount of cash and effort can go a long way with this.
  • Wash down the outside of your home. Unless you’ve already done so recently, it can likely use a going over. If you don’t have a pressure washer handy, a garden sprayer with bleach water, a hose and sponge mop work great.
  • Don’t forget your outbuildings! Wash them down, as well. Make sure everything is nice and tidy around them.
  • Put up the toys every single day. It can be tough to keep a yard neat and still give the children a place to play. But simply putting unused toys neatly out of the way can make a yard look much more groomed, and more like a home for couples who don’t have children.

Essential Tip #3: Home Improvements to Boost Value

Believe it or not, just the cleaning and simple mending of a yard and home go a long way to making its salability rise dramatically. However, in some cases it may be advisable to take that next step and do some quick updating. This could be advisable in areas where many homes are on the market similar to yours, and you need yours to be distinctive.

For times like these, you are prepared. The single most inexpensive project you can take on that will both improve the look and the value of your home is fresh paint. You can do it yourself if you’re on a budget, or you can hire painters if you’d rather not tackle such a time consuming affair.

It is essential to remember that you are selling this house, so you need to make sure you choose colors that are going to sell rather than cater to your personal tastes. Neutrals tend to work best. They are clean, open spaces up and allow a fresh pallet where potential buyer’s minds can play out their home ownership fantasies. Neutral, mind you, does not mean all white. Sure white is a neutral sort of color, but it is also sterile. You want your buyers to feel homey rather than hospital-like. Warm it up a bit. Beiges and creams work well. Greys are also nice and seem to be the newest go-to in this area.

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Handy Tips

Here’s the conundrum. What do you do if you’re on a tight budget and you need to make some of these higher cost projects happen? Well, it is going to take more money, and there’s no way around that. However, you can cut your costs by being frugal and using your imagination.

  • Shop the paints that have been mixed incorrectly for other customers. They’re often half the price of original paint, and the colors aren’t necessarily horrific, but rather not specifically what someone else wanted. The worst that can happen is that there is nothing of use to you when you browse.
  • Buy paint, rollers and accoutrements in bulk. Did you know you can buy a five gallon jug of paint? You can, and it costs less than buying five separate gallons.


Essential Tip #4: Going Above and Beyond

Believe it or not, just the cleaning and simple mending of a yard and home go a long way to making its salability rise dramatically. However, in some cases it may be advisable to take that next step and do some serious updating. This could be advisable in areas where many homes are on the market similar to yours, and you need yours to be distinctive.

Another thing that you can look at updating that carries a little more bang for your buck is replacing old worn floor coverings with hardwood. No, this is not dirt cheap. However, if you really need to raise the value of your home, this is a great way to do it.

Don’t be afraid to shop for flooring on social media either. Countless times there are people who have bought excessive flooring and want to sell it inexpensively just to get it out of the way. There are even moments where folks just up and change their minds about the floor they want to put down, and they sell huge lots on the cheap.

Other ways to update your home is to include new appliances, update lighting fixtures and install new kitchen and bath hardware.

These tips and tricks can absolutely help you to make your home a buyer’s palace. You won't be able to do it all in a weekend, but the end result will be completely worth it!

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We’d love to help you out with any other questions that you might have. We’re here for you, and we want to see your house sell. Not only do we want to see it move, we want to see it go as fast as humanly possible. Give us a call if we can be of any further assistance to you.

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Job growth study: Raleigh No. 2 in technology

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Research Triangle Park, N.C. — A new study finds that the Raleigh metro area ranks just behind Austin in technology job growth over the past decade. But North Carolina’s capital area is No. 1 in job growth related to STEM (science, technology, engineering and math) skills. The news comes as GSK donated $1M to kick start a N.C. STEM initiative on Wednesday.

The study, which was published by Forbes, is based on a review of various economic data for each of the largest 52 metropolitan areas across the U.S. from 2004-2014.

Technology-related job growth in Raleigh grew 62.3 percent to 38,853, according to data compiled by Praxis Strategy Group.

STEM-related jobs grew at 39 percent to 49,593.

GSK hopes to give STEM jobs a boost in the state with its $1 million donation to a “STEMAccelerator” program being launched by North Carolina New Schools. Gov. Pat McCrory was on hand for the announcement.

The initiative comes just over a year after a report projected nearly 240,000 STEM jobs would become available in the state but North Carolina was not producing enough students to fill the positions.

“High quality STEM education is critical to North Carolina’s future prosperity,” McrCrory said of the initiative. “To address the gap in education and workforce needs, we must provide resources and support for teachers’ professional growth – especially in the critical areas of science and mathematics. The STEMAccelerator will help us meet one of my administration’s goals of transforming the teaching profession into a rewarding, long-term career.”

The STEMAccelerator will launch in three phases, according to the New Schools organization:

Phase 1 – “Research and development: NC New Schools will bring together educators, higher education and industry partners to design new instructional programs focused on the emerging needs of the STEM economy. Co-development will ensure alignment between education and the workplace.
Phase 2 – “Pilot: Newly developed programming will be piloted with a core group of educators to validate and refine the content and delivery methodology. Specific emphasis will be placed on developing a virtual delivery component to support rapid, low-cost scaling.
Phase 3 – “Roll-out: Refined final programs will be scaled across North Carolina to deliver next generation learning for all students.”

Breaking down the study

Austin – Raleigh’s rival in many areas of technology job recruitment – led the way in tech job growth at 73.9 percent to 53,118 jobs. STEM jobs grew at a 36.4 percent rate to 86,189 over the decade. That was good for No. 2 behind Raleigh.

Both cities topped overall growth rate of San Jose in Silicon Valley where tech jobs grew at 70.2 percent to 153,546 but STEM job growth lagged at 25.8 percent and 168,652 jobs.

Forbes did, however, cite a caveat for the Raleigh area STEM growth: “[T]he fastest growth in the nation, albeit from a smaller base than many of the other biggest metro areas.

Nationally, Raleigh and Austin both exceeded the overall average of STEM job growth at 11.4 percent and tech jobs at 31 percent.

Job growth in other fields lagged considerably at 4.5 percent, Forbes reported.

The rankings

The top 10 cities:

1. Austin

2. Raleigh

3. San Jose

4. Houston

5. San Francisco

6. Salt Lake

7. Seattle

8. Nashville

9. Jacksonville, Fla.

10. Memphis

Interesting points in study

Forbes points out that all tech jobs are not at high-tech focused firms such as Raleigh-based Red Hat and Cary-based SAS.

As an example: “Just 7% of the nation’s 1.5 million software developers and programmers work at software firms — the vast majority are employed in industries as disparate as manufacturing, finance, and business services.”

The methodology

Forbes spelled out how the study was conducted:

“To determine the metro areas that are generating the most tech jobs, Mark Schill of Praxis Strategy Group examined employment data in two different categories. Half our ranking is based on changes in employment at companies in high-technology industries, such as software and engineering. (This includes all workers at these companies, some of whom, like janitors or receptionists, do not perform tech functions). Half is based on changes in the number of workers classified as being in STEM occupations, which captures tech workers who are employed in all industries, including those not primarily associated with technology, such as finance or business services. We ranked the 52 largest U.S. metropolitan statistical areas by the growth in tech and STEM employment from 2004 to 2014, as well as for their more near-term growth from 2012 to 2014 to give credit for current momentum.”

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Consumer Optimism Gains Momentum

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Consumers’ Positive Financial Attitudes a Good Sign for Housing

  

Consumer optimism toward the housing market gained some momentum last month following a dip in December, likely getting a boost from their increasingly positive financial outlook, according to results from Fannie Mae's January 2015 National Housing Survey™. The share of respondents who said their household income is significantly higher than it was 12 months ago rose 4 percentage points to 29 percent, and the share expecting their personal financial situation to improve over the next year increased to 48 percent – both all-time survey highs. After dropping in December, the share who said it is a good time to buy a home increased 3 percentage points to 67 percent, and the share saying they would buy rather than rent if they were to move jumped 5 percentage points to 66 percent, marking the first increase since September 2014.

                                                               "Consumers are as positive about their personal finances at the start of 2015 as they have been since we launched the National Housing Survey in 2010, and this optimism seems to be spilling over into housing market attitudes," said Doug Duncan, senior vice president and chief economist at Fannie Mae.





"Consumers are more optimistic about the environment both for buying and for selling a home today, and the share who plan to own on their next move has jumped back up, reversing a three-month trend toward renting. These results are in line with lender optimism about future growth in their mortgage origination business, as shown in our Mortgage Lender Sentiment Survey™. Overall, these are good signs to start off 2015 and are consistent with our expectation that strengthening employment and economic activity will boost the speed of the housing recovery."

Your Local Source for Real Estate News

Please visit us again for more valuable updates on the current state of the national housing market and how they can affect you as buyers and sellers.

We pride ourselves on offering you relevant and reliable information that will help you make the best real estate decision possible for you and your family!

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Raleigh Housing Update

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Increased Demand For Housing In Raleigh

suebee65/iStock/Thinkstock

This was a big week for housing data, with more signs pointing toward demand building. The key question for the Raleigh housing market will be whether new and existing home supply will follow suit.

At the national level, new construction starts in December were up 4.4%, inching closer to an annualized rate of 1.1 million, which we have not seen since 2007. The increase was driven by single-family, which is a good early sign that homebuilders are gearing production for greater demand in the spring. The December pace of single-family starts was 728,000 units, the highest number since March 2008.

Builders remain positive about the future. The January reading of the NAHB Housing Market Index reported this week reflects that builders are confident about their prospects.

Low mortgage rates spurring applications

Mortgage rates again made the news this week as rates hit new lows for the year. The lower rates are a gift to consumers from the global financial markets. When investors heavily buy U.S. Treasury bonds, the higher prices they pay move interest rates lower. As a result, mortgage application activity rose to its highest level since June 2013.

Consumers should not bank on rates staying low for very much longer, though, as the Federal Reserve is “staying on track to start raising short-term interest rates later this year,” the Wall Street Journal reports. In fact, after European Central Bank actions to support European economies were announced on Thursday, U.S. Treasury bonds have declined in price. That means mortgage rates will soon be on the rise again.

Today’s report on existing home sales from the National Association of REALTORS® affirms that demand has been growing. The annual pace of existing home sales was 5.04 million in December, which was 2.4% higher than November and 3.5% higher than last year.

Supply of homes could be an issue

Supply is quickly becoming the biggest concern for healthy growth in home sales in 2015. According to the NAR’s December data, the inventory declined, representing only a 4.4-month supply at the current sales pace. A six-month supply would be more typical of a market in balance.

The NAR data align well with the listings on realtor.com. Total listings in December declined 7% from November and 6% from last year. Only a few notable markets, such as Pittsburgh, PA, Jacksonville, FL, Tampa, FL, and Virginia Beach, VA, saw inventories build in a healthy way in December.  Raleigh and the Triangle will need to see listing growth over the next several weeks to keep appreciation at healthy, normal levels.

With three years of positive price appreciation behind them, existing-home owners in Raleigh and Charlotte should see conditions as very favorable for trading up.

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Your Local Source for Real Estate News

Please visit us again for more valuable updates on the current state of the national housing market and how they can affect you as buyers and sellers.

We pride ourselves on offering you relevant and reliable information that will help you make the best real estate decision possible for you and your family!

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Investors Benefitting From Rental Shortage

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Corporate landlords are benefiting from the worst rental-housing shortage in more than a decade as construction trails demand and more Americans opt to lease rather than buy.

There’s an undersupply of single-family houses and apartments to rent for the first time since 2001, according to an analysis by Frank Nothaft, chief economist at mortgage buyer Freddie Mac, based on available inventory and historic vacancy rates. The deficit in the third quarter was about 350,000, the most in records dating back 14 years.

The shortage is giving the upper hand to institutional investors who spent more than $25 billion since 2012 buying single-family homes to rent. While the market for apartments has been in favor of landlords for five years, owners of houses are now able to increase rents and reduce turnover to boost profits.

“It’s that supply-demand equation that allows us to get aggressive about raising rents,” Stephen Schmitz, chief executive officer of American Residential Properties Inc., a landlord with more than 8,500 homes, said at an investor conference this month. “Three years ago, you would go to raise somebody’s rent and they could say, ‘I’ll go down the street and pay $100 less than I’m paying you now.’ But today they can’t because all those houses down the street are occupied.”

The U.S. rental-vacancy rate fell to 7.4% in the third quarter, according to Census Bureau data. The market is considered balanced, with neither landlords nor tenants having the upper hand when it comes to rents, at a vacancy rate of 8.2%, based on the average from 1994 through 2003, according to Freddie Mac’s Nothaft.

The housing surplus peaked at almost 2 million units, including 1.2 million rentals, in the third quarter of 2009, when foreclosures were soaring and years of speculative construction led to a glut of empty houses.

“The surplus of vacant housing has shrunk over the last few years because there has been household growth and limited new construction,” Nothaft said in a telephone interview. “In most markets and in the national data, what we’ve observed is that rents have been rising faster than inflation.”

Rents on all single-family homes and multifamily units are expected to climb 3.5% next year, compared with a 2.5% increase for home purchase prices, according to estimates this month by Zillow Inc. Chief Economist Stan Humphries. The U.S. inflation rate was 1.3% in November, with a goal of 2% set by the Federal Reserve.

Wall Street-backed landlords already are enjoying higher rents for single-family homes in markets hit hardest by the housing crash, where they first started buying in bulk.

The average monthly rent for a three-bedroom home in Phoenix surged more than 9% this year to $1,158, data from Westminster, Colo.-based RentRange LLC show. Houses now lease about 10 days faster than apartments, according to a report from the Center for Real Estate Theory and Practice at Arizona State University.

In Las Vegas, rents on houses rose more than 3% to a median of $1,248 in the 12 months through November, according to RentRange. In Orlando, Fla., they climbed 5% the same month to $1,294.

A reviving job market is driving household formation and fueling demand for homes faster than builders are delivering them. In the Orlando area, for example, 56,000 jobs were added in the 12 months through October, benefiting landlords such as Aaron Edelheit, chief executive officer of Atlanta-based American Home, a rental company with 2,500 houses, including about 200 in central Florida.

“They’re not producing many entry-level homes,” he said in a telephone interview. “That’s what creates housing shortages, and it’s going to drive up the price of rents.”

Raising rents is likely to become a higher priority for institutional single-family landlords next year as they get a better grip on operations and how higher rates affect their pace of leasing, said Anthony Paolone, an analyst with JPMorgan Chase & Co. who follows real estate investment trusts including American Homes 4 Rent and Silver Bay Realty Trust Corp.

Investors have positioned themselves to house some of the former owners of 5 million homes lost to foreclosure since the real estate crash, according to research company CoreLogic Inc. Many of those former owners prefer houses over apartments because they want more space for their children and pets. Landlords also are getting a boost from some of the 75 million millennials — 18-to-34-year-olds — who are starting out as renters rather than buyers.

The typical family renting a house from American Homes 4 Rent, an Agoura Hills, California-based REIT with more than 30,000 single-family homes, is in their mid-thirties with an annual income of $80,400, enough to afford to buy if they wanted to, according to CEO David Singelyn.

“Many of these kids saw their parents lose their home, and they’re a little bit disillusioned,” Singelyn said at the Information Management Network Single Family Rental Investment Forum in Scottsdale, Ariz., earlier this month. “How long will that last? I don’t know. But today there’s a significant movement to becoming a renter nation as opposed to an owner nation.”

Those tenants often pay a premium to rent from new firms like American Homes 4 Rent, which mostly owns houses less than 12 years old near good schools and provides better service than mom-and-pop landlords, Singelyn said. They also move less often, with 68% of tenants opting to stay in the most recent quarter when their lease came up for renewal, compared with less than 50% for apartments, he said.

Blackstone Group LP’s Invitation Homes, the largest single-family landlord, with more than 46,000 properties, as of Sept. 30 raised rents an average of 1.8% to $1,474 from a year earlier on 3,200 homes that were financed through the industry’s first mortgage-backed security deal, according to Kroll Bond Rating Agency.

“We’ve seen strong demand for our homes in all 14 markets we operate,” said Denise Dunckel, a spokeswoman for Dallas-based Invitation Homes. “That’s just an indication that there’s a large market that likes the flexibility that renting provides.”

American Homes 4 Rent raised rents 3% on renewals and 4% for new tenants in the third quarter, Singelyn said during a Nov. 3 conference call. American Residential Properties increased rents an average of 3.4% from a year earlier on renewals, while Silver Bay’s rents rose 3% on renewals.

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Doctor Loan Program

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Raleigh #1 For Business and Careers

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The U.S. economic recovery has been an uneven one. Overall, the recent numbers look great. The Bureau of Labor Statistics announced U.S. employers added 288,000 jobs in June. The unemployment rate fell to 6.1%, the lowest it has been since the financial crisis peaked in the fall of 2008. A total of 1.4 million jobs were added in the past six months, which marks the best showing since 2006. The stock market has continued its meteoric rise, with the Dow Jones topping 17,000 for the first time on the news.

But the news is not great everywhere. Unemployment remains stubbornly high in some areas, with a dozen metro areas still mired in double-digit unemployment — dozens more if you include the underemployed. Income growth has been almost nonexistent over the past five years, with more than half of the metropolitan areas in the U.S. showing negative real income growth.

Forbes crunched the numbers on every metro area to figure who has the best and worst business climates. The result is our 16th annual look at the Best Places for Business and Careers.

Raleigh, N.C., ranks first this year, moving up from third in 2013. The North Carolina capital previously ranked first in 2011 and had a three-year run in the top spot from 2007 to 2009. It is the only East Coast city that made the top 10.

Fueling Raleigh’s consistent results are business costs that are 18% below the national average, and an adult population where 42% have a college degree, the 12th best rate in the U.S. (30% is the national average). Raleigh is home to North Carolina State University and nearby schools include Duke University and the University of North Carolina at Chapel Hill. The area’s appeal has led to a strong inflow of new residents to the city, which boasts the sixth fastest net migration rate over the past five years.

Research Triangle Park continues to fuel significant development in the area. The park is located at the core of the Raleigh-Durham-Cary Combined Statistical Area, and it is the largest research park in the country. It features roughly 170 companies that employ 39,000 full-time, mostly high-tech workers. There have been 1,800 start-up companies created at RTP since 1970.

Networking giant Cisco Systems CSCO -2.65% announced plans last month to add 550 jobs in RTP by the end of 2017, in addition to the 4,600 already in the area. “By expanding our presence and hiring the best talent, we will continue developing technology solutions that will enable the Internet of Everything and fuel innovation here in RTP,” said Cisco President Gary Moore in a statement announcing the news. Other top employers in the park include IBM IBM -0.04%, GlaxoSmithKline GlaxoSmithKline, Fidelity Investments Fidelity Investments, Biogen Idec BIIB +0.73%, Credit Suisse and BASF BASF.

Raleigh also prospers from small businesses facing low regulatory hurdles compared to other cities. Projected annual job growth for the Raleigh area is 3.7% through 2016, which ranks seventh best among the 200 biggest metro areas (see “Naples, Austin Head List Of Best Cities For Job Growth”).

Last year’s top-ranked city, Des Moines, drops back to second. The Iowa capital is a financial services hub with major employers including Marsh, Nationwide, Principal Financial and Wells Fargo WFC +0.78%. High tech firms have also been making their way to the heartland to take advantage of Iowa’s low energy costs. Microsoft MSFT +0.42% announced plans in April to invest $1.1 billion in a new data center, which brings the company’s total investment in West Des Moines to nearly $2 billion. Facebook has four data centers in the area.

Des Moines employers and employees can take advantage of business costs 17% below the U.S. average and living costs that are 6% lower than the national average. The city’s $38 billion economy is projected to grow at a robust 4% annual rate over the next three years, according to Moody’s Analytics.

Provo, Utah, ranks third overall this year and leads a trio of Utah places near the top with Salt Lake City at No. 8 and Ogden ranked No. 11. Brigham Young University brings a stabilizing presence to the $19 billion Provo economy. Job growth for Provo was tops in the country last year, and it ranks seventh best over the past five years. Global multilevel marketing firm Nu Skin Enterprises, which is based in Provo, opened a new $100 million headquarters in the city in October.

Rounding out the top five are a pair of Colorado metro areas: Denver and Fort Collins. Both feature highly educated workforces and strong net migration patterns. Denver’s business and living costs are higher than any other city in the top five, but its diverse economy and significant outdoor recreational options continue to attract educated, young professionals. Many high-tech companies including Hewlett-Packard HPQ +0.82%, Intel INTC -0.44% and AMD have relocated operations to Fort Collins in part to take advantage of the resources of Colorado State University and its research facilities. Fort Collins has the highest level of high school attainment (95% of the adult population) and ranks ninth best for college attainment at 45%.

To gauge the best places for business in the U.S., we rate the 200 largest metro areas on a dozen factors related to jobs, costs (business and living), income growth, quality of life and education of the labor force. Forbes uses data from economic research firm Moody’s Analytics, the U.S. Census and demographer Bert Sperling, who runs Sperling’s BestPlaces (click here for a more detailed methodology).

Atlantic City brings up the rear for the second straight year, ranking No. 200 (see “Atlantic City Heads Worst Cities For Business And Careers”). The New Jersey gambling and convention destination was hammered by the economic downturn and increasing gambling options in surrounding states. AC gaming revenues are down 45% since their 2006 peak. Potentially four of the city’s 12 casinos will close in 2014. There has been a steady net migration out of the area since 2007 and it is expected to continue through at least 2016.

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Raleigh Tops Forbes List

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Forbes 13th Annual List: The Best Places For Business and Careers
The recession spared few U.S. cities, wiping out 9.4 million jobs between November 2007 and August 2009. Many will never return, and those that do you probably won’t find on the East or West Coast. For the most active areas of job creation (and lower costs of doing business) you have to go to the heartland, home to 80% of the top 25 regions on our list of Best Places for Business.
In most of these hot hubs you’ll find a strong university or two, providing rich cultural life and the kind of technology transfer that sparks entrepreneurial activity—giving that educated population lots of reasons to stick around.
Topping our 13th annual list of the Best Places for Business and Careers is Raleigh, N.C. It is one of those locales with a strong university presence helping fuel growth in the area (albeit in an East Coast state, a rarity in the upper part of the list). Raleigh and nearby Durham (ranked No. 31) get a strong boost from three elite schools in the surrounding area in University of North Carolina, Duke University and North Carolina State.
Raleigh ranks No. 1 after dipping to third last year. Low business costs (18% below the national average) and a smart labor force (42% have a college degree) make North Carolina’s capital an attractive spot for employers like First Citizens Bank and Progress Energy. Job seekers get it: The net migration rate to Raleigh was the second highest in the U.S. over the past five years.
Our look at America’s Best Places for Business showcases the stark contrast between Texas—with its low-cost, pro-business regulatory environment (5 cities among the top 25, led by Austin at No. 7)—and overregulated and wildly expensive California (home to 8 cities that rank in the bottom 25, including No. 200 Merced). Texas was one of the last economies to succumb to the recession and one of the first to bounce back, while California is limping along with an unemployment rate of 11.7% (only Nevada’s is worse).
Besides Austin, Texas also placed San Antonio and Dallas in the top 10. San Antonio, ranked No. 8, is among the fastest-growing metro areas in the U.S. (the population increased 25% since 2000). It has been buoyed by defense spending and hiring at Toyota Motor’s truck assembly plant. Dallas (No. 10) has been one of the most resilient economies during the recession and could add 190,000 jobs in the next three years.
It’s not all bad in the Golden State. Aside from nice weather, California does have bright spots in San Jose (No. 35) and San Francisco (No. 37), both of which made the top 40 thanks to a rich arsenal of educated and talented workers.
Demographer Bert Sperling argues that much of the recent success of the heartland can be attributed to “extractive industries” like oil, gas and mining as well as record-high crop prices that have provided jobs and revenue to the center of the U.S. “These economies run in cycles, and these booms and busts are often decades in the making,” he says.
Our ranking of Best Places looks at the 200 largest metropolitan statistical areas in the U.S. These range in size from the New York City metro, with to 11.6 million people, to Laredo, Texas, home to 252,000 people (click here for a list of the Best Small Places for Business). We consider 12 metrics relating to job growth (past and projected), costs (business and living), income growth, educational attainment and projected economic growth.
We also factor in quality of life issues like crime rates, cultural and recreational opportunities and net migration patterns. Lastly we included the number of highly ranked colleges in an area per our annual college rankings. A tip of the cap to Moody’s Economy.com, which provided much of the data, including the economic forecasts. Bert Sperling, founder of Sperling’s BestPlaces, put together a culture and leisure index for Forbes and also crunched the crime numbers for us. College attainment data is compiled by the Census Bureau.
Des Moines, Iowa, last year’s No. 1 dropped one spot as employment fell 0.9% in 2010. The area still has plenty to offer with business costs 16% below the national average and household incomes that are expected to increase 4.2% annually through 2013, eighth best in the U.S. Workers at big employers like Principal Financial and Wells Fargo enjoy cheap housing (median price $148,600) and 20-minute average commutes.
Another big metro that made the top 10, in addition to the three Texas locales, is Denver, which ranks No. 9. U.S. economic growth has been tepid since the recession ended, but Denver’s economy grew 3.9% last year and is expected to grow 3.9% annually through 2013 according to Economy.com. Denver’s great quality of life and educated workforce make it a favorite with companies in industries from aerospace and bioscience to energy, financial services and information technology. Major employers include IBM, Lockheed Martin and Wells Fargo.
A big mover in the rankings this year is the New York metro, which ranked No. 45, up from No. 99 in 2010. Yes it is still the most expensive place to do business in the U.S. at 51% above the national average, but the job and economic forecasts are much improved for the area. The economy is forecast to expand 4.5% per year and household income are expected to increase 4.1% annually the next three years, 12th best in the U.S.
New York also scores well on quality-of-life issues. It ranks first on Sperling’s index among cities for culture and recreation, and its crime rate is 11th-lowest in the country. The biggest draw might be its talented, educated work force with 36% having a college degree–only Washington, D.C. is higher among the 10 largest metros. The concentration of big firms is unmatched as well. It is the corporate home for 80 public companies with more than $1 billion in sales.

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Best Places To Live

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Durham at No. 5 on magazine’s list of best places to live

 

Durham has won the attention of U.S. News and World Report.

The Bull City has been placed fifth on the magazine’s Best Places to Live 2009 ranking released Tuesday.

The magazine praised the town’s rebirth as a medical and tech hub for its strong performance, saying: “Once a tobacco town, Durham, N.C., has evolved into a world-class center of all things advanced.”

Albuquerque, N.M., topped the list, which was determined by studying a database of 2,000 locales that contained crime rates, local economies, living costs and entertainment options, among other factors.

The other cities on the top 10 list were Auburn, Ala.; Austin, Texas; Boise, Idaho; La Crosse, Wis.; Loveland, Colo.; San Luis Obispo, Calif.; St. Augustine, Fla. and Upper St. Clair, Pa.

 

To see the entire article,  click the link below.

 

http://www.usnews.com/articles/business/real-estate/2009/06/08/best-places-to-live-2009.html?PageNr=2

 

Charlotte ranks as Southeast’s No. 3 city

 

A new study ranks Charlotte third among nine Southeastern metro areas on a range of factors affecting economic growth.

 

The benchmarking index was compiled by Harrison Campbell, associate professor of geography at UNC Charlotte.

He ranked the metro areas on employment and labor; income and productivity; livability and connectivity; new economy; and equity and diversity in a report prepared for the Charlotte Chamber.

The report, dubbed Benchmark Charlotte 2009, ranked the Charlotte area first for income and productivity and second for livability and connectivity.

Charlotte fared worse, however, on having a new economy (fifth place), employment and work force (fifth place), and equity and diversity (sixth place).

The Raleigh-Durham area achieved the No. 1 overall ranking, followed by Austin, Texas. The Atlanta area ranked No. 4, followed in order by Dallas; Richmond, Va.; Nashville, Tenn.; Tampa, Fla.; and Jacksonville, Fla.

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Forbes ranks Raleigh #1 for Relocation Destination

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Raleigh is #1 in the country !
Charlotte is #3 in the country!

U.S. migration may be down overall, but these vibrant metro areas are still attracting newcomers.

In Depth: 10 Cities Where Americans Are Relocating Unemployment is on the rise, credit is tight, and consumers aren’t spending–which means they aren’t picking up and moving much either. Very few places in America saw significant population growth in 2008.

But the buzzing metropolitan area of Denver bucked that trend. Its population increased by 2.17% in 2008. In 2007, it increased by 2.09%. In 2008, Denver was the 10th-fastest growing metro area in the U.S.

Despite the overall economic slowdown, some parts of the country keep on moving ahead, attracting more and more newcomers–even if it’s at a slower pace than in more sound economic times. These places still offer a semblance of stability, as well as great weather, cultural life and, in many cases, affordability.

Behind the Numbers
To determine the fastest-growing metro areas in the country, we used 2008 population estimates for metropolitan statistical areas with a population over 1 million, released March 19, 2009, by the U.S. Census Bureau. MSAs are geographic entities defined by the U.S. Office of Management and Budget for use by federal agencies in collecting, tabulating and publishing federal statistics.

We then compared the 2008 population estimates to the previous year’s data to see which areas had grown the most, percentage-wise.

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Nine places fared even better than Denver, though they share similar qualities: more business opportunities, better weather and more affordable housing. The top three areas according to the data are Raleigh, N.C., ranking first, which jumped 4.29% to nearly 1.9 million; Austin, Texas, which came in second, with a 3.77% increase to almost 1.7 million; and Charlotte, N.C., which moved up 3.36% to 1.7 million.

Read the entire report by clicking the link below:

Top Ten List

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