First-Time Buyers Fighting Uphill

As the real estate market continues to trend higher each and every month, the typical down payment is increasing right along with the rising home prices.
According to Zillow, the homebuyer of 2018 will need to save an additional $400 per month in order to save enough for a 20% down payment.
According to the same study, the median home price nationwide is projected to grow by over $6,200 in 2018.
The problem with this is that wages are not keeping up with the rise in home prices. Oddly enough, in some of the more popular regions, such as California, the median home price, according to Zillow, is expected to rise over the next 12 months to almost $36,000. This means that homebuyers will need to save an ADDITIONAL $600 per month to have enough for a 20% down payment.
How long will this keep up? No one really knows. But the good news is that the bubble seems to be finding a solid baseline. There may also be another silver lining for the new homebuyers. The Baby Boomers are now starting to sell and downsize their homeownership into smaller spaces. This will provide additional inventory for the upcoming generation to get into the market, which is already in short supply. Additionally, the home equity that the Baby Boomers will realize when they sell may ultimately end up trickling down into the pockets of the Millennials either through gifts or inheritances.
New urban market regions will probably benefit in terms of affordability, such as Philadelphia, while the extra
amount of saving will only be an extra $74 per month. Camden. New Jersey appears to also be staging a comeback, based upon the growth in new jobs.
Boston, New York and Riverside, California all are projected to cost more than $200 additional saving in order to put together a 20% down payment.
Student debt remains the biggest impediment to homeownership today, according to the recent study of the National Association of Realtors. According to the study, student loan debt is also stopping the first-time Millennials from dipping their toes into this hot market.
In addition to the rise in home prices, there is also a concomitant increase in the cost of rentals that is nipping at the heels of the prospective Millennial buyer.

3rd Quarter Quarter 2017 Commercial Originations Jump 21%

PRESS RELEASE

Mortgage Bankers Association’s (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations, reported third quarter 2017 commercial and multifamily mortgage loan originations were 21% higher than during the same period last year and 8% higher than the second quarter of 2017.

“Borrowing and lending associated with commercial and multifamily real estate increased again in the third quarter, even as sales transaction volume slowed,” said Jamie Woodwell, MBA Vice President of Commercial Real Estate Research. “Most property types and capital sources saw stronger lending activity than a year earlier, supported by solid property fundamentals and continued property value appreciation.”

A rise in originations for hotel and health care properties led the overall increase in commercial/multifamily lending volumes when compared to the third quarter of 2016.

3rd Quarter Dollar Volume Stats
■ Loans for hotel properties saw a 116% year-over-year increase
■ Loans saw a 97% increase for health care properties
■ Loans saw a 20% increase for industrial properties
■ Loans saw a 15% increase for multifamily properties
■ Loans saw an 8% increase in office property loans
■ Loans saw an 8% decrease in retail property loans

THIRD QUARTER 2017 ORIGINATIONS UP 8 PERCENT FROM SECOND QUARTER 2017
Third quarter 2017 originations for health care properties increased 120% compared to the second quarter 2017. There was a 12% increase in originations for multifamily properties, a 10 percent increase for retail properties, a 6 percent increase for hotel properties, a 4 percent decrease for office properties, and a 25 percent decrease for industrial properties from the second quarter 2017.

 

Agents Maintain Strong Position in Sales

Most buyers search for homes online…and use a real estate agent.
The National Association of Realtors’ survey showed that the Internet (95%) and real estate agents (89%) are the top two sources of information when it comes to the purchase and sale of real estate.
The survey also showed that a whopping 87% of buyers purchased their home through a real estate agent as compared to 88% in 2016.
The report showed an overwhelming majority, 88% of those who found the home they purchased online, closed on it through the help of an agent.
Buyers also relied upon agents to help negotiate the terms of the sale.
Buyers also depended upon agents for:
■ Understanding the buying process (83%)
■ Discovery of other comparable properties (60%)
■ Pointing out unnoticed property features or faults (60%)
■ Negotiating better sales terms (51%)
■ Making their first purchase
The percent share of buyers trading up increased for the third straight year, rising to 52% from 46% in 2016
The typical seller over the past year was 55 years old, had a higher household income ($103,300) than last year ($100,700) and was in the home for 10 years before selling – matching the all-time high set both in 2014 and a year ago. Prior to 2009, sellers consistently lived in their home for a median of six years before selling.
Sellers
■ Sellers realized a median equity gain of $47,500 ($43,100 in 2016) – a 26% increase.
■ Homes sold after 21 years of ownership had the largest equity gain (104%).
■ Homes purchased six or seven years ago saw a larger return (27%) than those who purchased between eight and 15 years ago (14% to 18%).
■ Sellers’ use of a real estate agent this year remained at 89%

 

ABOUT COUNSELLORS TITLE AGENCY
Since 1996, Counsellors Title Agency had provided swift, proven and knowledgeable title insurance settlement and search expertise for thousands of New Jersey’s attorneys, loan officers, Realtors, borrowers and purchasers. CTA’s detail-oriented team of professionals streamlines the complexities of a real estate transaction to make each one stress and glitch-free.

If you have any questions about this information or title insurance, please contact Ralph Aponte: 732.914.1400.

Flippers Find New Jersey Home Sweet Home Pt 6

Making $34K Per Year
Marketwatch reported that, “Some Americans who bought their homes between seven and nine years ago have made up to $235,000 over that time selling their home, or $34,000 per year, making a final return on their investment of 78%. That’s the median amount of money home sellers made after 7 years and 3 months in Oakland, Calif., real-estate site Zillow found. In Portland, Ore., sellers last year sold for $145,000 more than what they had paid 9 years earlier, a 65% gain.”

Still, the market is projected to trend higher by at least 5-7% over the next 12 months, as stated by numerous agencies. The Marketwatch story reported, “If you bought a home for $110,000 and spent $30,000 renovating it, most homeowners would want to sell it for around $200,000 to make it worth their while.”

That is making the real estate market the Gold Rush of the decade.

In 2016, 193,000 single-family homes were flipped. This compares with 276,000 homes flipped in 2006, which seems to suggest that we are still far from Bubble-Territory.

ABOUT COUNSELLORS TITLE AGENCY
Since 1996, Counsellors Title Agency had provided swift, proven and knowledgeable title insurance settlement and search expertise for thousands of New Jersey’s attorneys, loan officers, Realtors, borrowers and purchasers. CTA’s detail-oriented team of professionals streamlines the complexities of a real estate transaction to make each one stress and glitch-free.

If you have any questions about this information or title insurance, please contact Ralph Aponte: 732.914.1400.

First-Time Homebuyers Lose Ground

Currently the first-time homebuyer is wrestling to cross the threshold into homeowership,  contending with market forces including low inventory, rising prices, ferocious buyer competition and typically high amounts of student debt. Currently the share of first-time homebuyers in the housing market decreased from 35% in 2016 to 34% in 2017. The average share of new purchases made by first-timers has been 39%, according to the National Association of Realtors [NAR].

NAR Chief Economist Lawrence Yun said, “With the lower end of the market seeing the worst of the supply crunch, house hunters faced mounting odds in finding their first home.”

College debt isn’t a new thing. While student debt has been around for a long time over multiple generations, college tuition costs have become so high that getting a job and working your way through is simply no longer possible.

Back in 1993, 47% of college students graduated with student debt of about $9,450 per grad, according to the Federal Reserve Board of New York. As of 2012, that number surged to 71% of college graduates, and in 2016 the average loan amount totaled a shocking $37,172 per graduate.

NAR’s study showed 41% of first-time homebuyers held student debt of $29,000 in 2017, up from 40% of buyers with $26,000 in debt in 2016. And while only 41% had student debt while buying their home, 55% of first-time buyers said student debt delayed saving for their home purchase.

Forbes Magazine reported:
“College costs have been rising roughly at a rate of 7% per year for decades.  Since 1985, the overall consumer price index has risen 115% while the college education inflation rate has risen nearly 500%.  According to Gordon Wadsworth, author of The College Trap…if the cost of college tuition was $10,000 in 1986, it would now cost the same student over $21,500 if education had increased as much as the average inflation rate but instead education is $59,800 or over 2½ times the inflation rate.’”

Since the election, 3% growth has been realized in two of the three quarters with economists projecting the trend is expected to last at least another quarter and possibly longer.

Flippers Find New Jersey Home Sweet Home Pt 5

#5: Newark, New Jersey

Newark, located in Essex County, is an internationally recognized air, rail and shipping transportation hub. Newark’s renaissance is the result of its ability to attracting popular retailers such as Whole Foods and Nike. Newark’s fix-to flip-statistics commands an average return on investment (ROI) of 182%, the second highest percentage on this list.

  • Zip Code: 07107
  • Q1 Home Flipping Rate (Pct of Sales): 15%
  • Avg. Days to Flip: 185
  • Flipping Gross Profit: $166,500
  • Number of Flips: 12
  • Gross ROI: 182%

 

#6: Belleville, New Jersey

Belleville, also located in Essex County, is drawing plenty of investment capital. Its attraction lies in its transportation access to roads and, of course, to NYC. Belleville fix-and-flip projects represent 15% of all town wide real estate sales. Belleville’s attraction is also enhanced by its close proximity to Montclair, in the same way that Harrison is benefitting from its proximity to Newark’s train station and PATH into the World Trade Center. What is not so attractive about Belleville is the 244 days for the average flip to sell, but the average gross profit of  $132K makes for up some of the inconvenience.

  • Zip Code: 07109
  • Q1 Home Flipping Rate (Pct of Sales): 14.9%
  • Avg Days to Flip: 244
  • Flipping Gross Profit: $131,208
  • Number of Flips: 13
  • Gross ROI: 83.7%

 

#7: Toms River, New Jersey

Toms River reported one of largest number of fix-to-flip deals, 40. Currently, Toms River is one of the most active ‘farms’ in the state. In August, according to RealtyTrac, the Toms River metro area ranked number one in sales for August 2017. It recorded 86 transactions for the state of New Jersey, beating out the number two, Jersey City’s 57, by over 30%.  The present drawback with Toms River is the DOM (days on market), which stands at 222 days. Still, Ocean County has had a great deal of inventory to ‘eat through’ which was, a few years ago, over 109 for homes that required no major renovation. Ocean County’s DOM fell from 85 to 76 days, and its inventory of homes for sale collapsed from 5,458 in August 2016 to just 4,311 in 2017, a 21% drop.

  • Zip Code: 08757
  • Q1 Home Flipping Rate (Pct of Sales): 14.2%
  • Avg. Days to Flip: 222
  • Flipping Gross Profit: $108,000
  • Number of Flips: 40
  • Gross ROI: 108%

ABOUT COUNSELLORS TITLE AGENCY
Since 1996, Counsellors Title Agency had provided swift, proven and knowledgeable title insurance settlement and search expertise for thousands of New Jersey’s attorneys, loan officers, Realtors, borrowers and purchasers. CTA’s detail-oriented team of professionals streamlines the complexities of a real estate transaction to make each one stress and glitch-free.

If you have any questions about this information or title insurance, please contact Ralph Aponte: 732.914.1400.

Camden Coming Around

New hires in Camden are calculate to be 541 new jobs between 2013 and 2016, according to federal labor statistics.

But still, poverty is falling, and with recent estimates from the U.S. Census Bureau the city’s poverty rate fell 10% last year compared with the previous five-year average, bringing Camden’s poverty rate to 30%.

This represents the lowest level it’s been in over than a decade.

The U.S. Census estimate shows that Camden’s poorest residents are making about $2,000 more a year than just a few years ago. In some cases, this represents a 20% jump considering that base salary is just $12,000.

State Investments and Incentives Create 150 Jobs
As of late, New Jersey has given nearly $18 million  in tax credits to private companies who moved to Camden. Those companies, including Holtec International, have created 150 new jobs — brand new, not just new to Camden. And the way that it looks, there are more coming, lots more!!!

The $1.7 billion given to 32 companies in Camden is projected to create nearly 2,000 new jobs to the city.

ABOUT COUNSELLORS TITLE AGENCY
Since 1996, Counsellors Title Agency had provided swift, proven and knowledgeable title insurance settlement and search expertise for thousands of New Jersey’s attorneys, loan officers, Realtors, borrowers and purchasers. CTA’s detail-oriented team of professionals streamlines the complexities of a real estate transaction to make each one stress and glitch-free.

If you have any questions about this information or title insurance, please contact Ralph Aponte: 732.914.1400.

Housing Demand Surges in 2017 by 28 Percent

September marked the 28th consecutive month of year-over-year inventory declines

The new Housing Demand Index published by Refin saw housing demand skyrocket by 27.7% in 2017 as compared with 2016.

The numbers for September came in basically flat except in some regions such as Seattle for the past 4 months, making this a very sustained market, with demand higher than at any other time since February 2013.

This index is based on calculations of the number of Redfin customers requesting home tours and writing offers. This translates into 100 on the index representing the historical average for the three-year period from January 2013 to December 2015.

The report show that demand drifted higher from 126 in July to 127 in August. Refin attributes the horizontal trend to the continued housing shortage (inventory) and sustained prices for properties. The findings also indicated that the number of Redfin customers touring and writing offers was basically even from July to August, but increased year over year.

Across the 15 metros covered by the Demand Index, there were 13.9% fewer homes for sale in August than there were a year prior, and there was a 2.7% decline in new listings. August marked the 27th consecutive month of year-over-year inventory declines in these markets.

Overall, the reasons for the flat-line given by Redfin are the following conditions:
■ High consumer confidence
■ Low interest rates
■ Sustained homebuyer demand
■ Sparse inventory

Compared to 2016, 42.3% more buyers requested tours in August 2017 and there were 8.2% more offers written.

ABOUT COUNSELLORS TITLE AGENCY
Since 1996, Counsellors Title Agency had provided swift, proven and knowledgeable title insurance settlement and search expertise for thousands of New Jersey’s attorneys, loan officers, Realtors, borrowers and purchasers. CTA’s detail-oriented team of professionals streamlines the complexities of a real estate transaction to make each one stress and glitch-free.

If you have any questions about this information or title insurance, please contact Ralph Aponte: 732.914.1400.

Multiple Indexes Hit New Records Part 2

Home Prices Hit a 64-Month High

Black Knight Financial reported that home prices hit a new peak in August for the 64th consecutive month.

The new home price reached $282,000 in August. While this is a pretty significant streak, home prices increased by only 0.24% from July 2017.

New York home prices rose 1.58% month-over-month, leading all other states in monthly appreciation for the second consecutive month. New York metros made up nine of the top 10 best performing metros.

New York home prices are up 32.89% from its national trough in January 2012, and has a current HPI value of $385,000.

This is clearly a trend as this is the fifth consecutive month where growth rates have slowed.

According to Black Knight, the annual rate of appreciation is now at 6.24%.

ABOUT COUNSELLORS TITLE AGENCY
Since 1996, Counsellors Title Agency had provided swift, proven and knowledgeable title insurance settlement and search expertise for thousands of New Jersey’s attorneys, loan officers, Realtors, borrowers and purchasers. CTA’s detail-oriented team of professionals streamlines the complexities of a real estate transaction to make each one stress and glitch-free.

If you have any questions about this information or title insurance, please contact Ralph Aponte: 732.914.1400.

 

Multiple Indexes Hit New Records Part 1

S&P Home Price Index Hits New High

The S&P CoreLogic Case-Shiller Home Price Index [HPI] rose more than expected in August, hitting an all-time high.

National home prices continued to rise in August by 6.1% on an annual basis. This increase was more than expected by the consensus which projected a 5.8% increase.

David Blitzer, S&P Dow Jones Indexes managing director says, “Home price increases appear to be unstoppable…August saw the National Index annual rate tick up to 6.1%; all 20 cities followed in the report were up year-over-year while one, Atlanta, saw the seasonally adjusted monthly number slip 0.2%. Most prices across the rest of the economy are barely moving compared to housing. Over the last year the consumer price index rose 2.2%, driven largely by energy costs. Aside from oil, the only other major item with price gains close to housing was hospital services, which were up 4.6%. Wages climbed 3.6% in the year to August.“

Third-quarter GDP grew by 3%, well above the 2.5% expected by economists surveyed by Thomson Reuters and below the 2.8% in the CNBC/Moody’s Rapid Update. The third-quarter number comes on top of 3.1% growth in the second quarter, making for the best back-to-back quarters since 2014 and ending a long streak of sluggish 2% growth.

ABOUT COUNSELLORS TITLE AGENCY
Since 1996, Counsellors Title Agency had provided swift, proven and knowledgeable title insurance settlement and search expertise for thousands of New Jersey’s attorneys, loan officers, Realtors, borrowers and purchasers. CTA’s detail-oriented team of professionals streamlines the complexities of a real estate transaction to make each one stress and glitch-free.

If you have any questions about this information or title insurance, please contact Ralph Aponte: 732.914.1400.

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