Rents Spike in New Zillow Report

The median monthly rent has climbed 3% year-over-year in June, reaching $1,483 in the U.S. today.

This is an all-time high. Home values, on the other hand, have slowed down in their appreciation to 5.2% from the 7.6% recorded back in 2018.

According to the Zillow report, rents were held back by the increase in supply, which has been ultimately digested.

What the report found also was that “Rent was up year-over-year in 49 of the nation’s top 50 markets (Milwaukee is the only exception).”

The rents were growing fastest in the following regions:
Las Vegas + 10%
Phoenix + 8.4%
Orlando + 7.4%
Jacksonville + 6.6%
Riverside + 6.3%

This is the first time that rent growth has hit 3% since 2016.

To get a better view of this trend, back in 2011, the average U. S. rent was approximately $1,250; in 2014 it reach $1,300 and it broke $1,400 in late 2016 with annual rent growth accelerating in each of the past nine months compared to the month prior.

What the numbers might represent is that as homes become more expensive, and more households are formed, demand for rents has begun to grow accordingly.

The Zillow report stated, “The median U.S. home value grew 5.2% year-over-year in June, to $227,700 – down markedly from 8.1% annual growth in January.”

In addition, the scarcity of home inventory will continue to put pressure on both buyers and renters; the number of homes for sale nationwide has fallen year-over-year in each of the past four months.

Home Price Trend Higher

Home prices nationwide came in at 3.4% in June 2019 according to the recent CoreLogic analysis. This increase exceeds the inflation rate but still is manageable and in no way reflects the overheated real estate market of 2006-7. This is also a far slower pace of appreciation than the current stock market, which in 2019 is approximately 19%.
As long as the current positive economic climate continues into 2020, CoreLogic sees home prices increasing by 5.2% year-over-year. CoreLogic also sees the average home price increasing by .5% from June 2019 to July 2019.
The market niche for home appreciation appears to be strongest in the lower-priced home range, which is exactly where first-time home buyers are buying. First time home buyers also are benefiting from a reduction in the overall average mortgage rates by .8% points from where they were back in 2018.
Approximately 45% of older Millennials, ages 32-39, indicate that they have purchased a home in the last 3 years. Among these older Millennials, another 25% indicate that they are likely to purchase a home within the next year. Affordability continues to provide some barrier to entry for Millennials looking to own rather than rent, but the strong economy appears to be giving them the additional boost necessary to take the plunge.
Within the top 100 largest metropolitan areas that CoreLogic tracks, 38% of the cities have receive Corelogic’s overvalued designation; this includes the New York – New Jersey metropolitan area. Only 24% of the top 100 metropolitan areas are deemed to be undervalued.

Refis Surge

Refinances accounted for 12% of the loans for the week, increasing by 116% from 2018. Total mortgage application volume increased 5.3% from the prior week, with volume surging by 46.5% from 2018. 

According to the Mortgage Bankers Association [MBA], the average contract interest rate for the 30-year fixed-rate mortgage with conforming loan balances ($484,350 or less) decreased slightly to 4.01% from 4.08%. That rate was 83 basis points higher one year ago. “The 30-year fixed rate mortgage fell to its lowest level since November 2016. We fully expect that refinance volume will jump even higher this week given the further drop in rates,” said Mike Fratantoni, MBA senior vice president and chief economist.

New mortgage applications to purchase a home did not reflect a jump, falling 2% for the week, even though rates have fallen for four straight weeks. Still, the purchase volume came in at 7% higher than in 2018.

There is some concern that the inventory shortage, the inability of builders to build homes for the first-time buyer and certain rocky trends, including the trade war and Brexit, giving buyers some pause.

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

Counsellors Title Agency, www.counsellorstitle.net, founded in 1996, is one of New Jersey’s most respected title agencies, serving all 21 New Jersey counties with title insurance, clearing title, escrow, tidelands searches, and closing and settlement services for commercial or industrial properties, waterfront properties and marinas, condominiums, townhouses or residential single family homes. Counsellors Title also features its own Attorney Settlement Assistance Program™ [ASAP], which is an individual resource customized to fit the needs specifically of real estate attorneys, including, Documentation, Preparation, Disbursement of Funds, Attendance at Closing, HUD Preparation or Post-Closing Matters.

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Negative Equity Falls to 4.1%

Key Findings on the Economic Influence of Housing

The number of homes with negative equity has decreased.

Total percent of homes underwater went from 25.9% in the first quarter of 2010 to 4.1% in the first quarter of 2019.

Total home equity hits new record
At the end of the first quarter of 2019, total home equity reached $15.8 trillion, up from $6.1 trillion in the first quarter of 2009. Between the first quarter of 2010 and the first quarter of 2019, the average equity per borrower increased from approximately $75,000 to approximately $171,000.

Since 2010, the housing flip rate has increased significantly.
In the first quarter of 2018, the number of properties bought and sold again within a two-year period reached its highest point at 11.4%.

Strong recovery for home prices and rents
Since June 2009, home prices and rents have continued to grow. Through May 2019, home prices increased a cumulative 50% and single-family rents increased 33% in the United States.

Monmouth and Middlesex Schools Recognized

New Jersey’s state education commissioner Lamont Repollet recognized 11 public schools as Lighthouse Districts.

As part of the state’s effort to keep on top of schools and their students’ educational progress, every year the state sees fit to identify certain school districts as Lighthouse Districts.

Such recognition is based upon the school demonstrating that they have excelled in helping their students achieve distinguishable academic gains.

Such designated schools then share their strategies and successes with the other New Jersey school districts.

Two of the eleven districts singled out were located in Monmouth County and one was in Middlesex County:
Perth Amboy School District (Middlesex County)
Long Branch School District (Monmouth County)
Red Bank Borough School District (Monmouth County)

Bergen and Essex County Sales

Bergen County
Single Family Homes for June
Key Metrics    2018   2019   Change
New Listings  1,334   1,195 – 10.4%
Closed Sales     814     728   – 10.6%
DOM*              52        52        0.0%
Median PX     $515K $513.5K – 0.3%
% of PX        98.4%   98.6%    + 0.2%
Inventory   3,964  3,382   – 14.7%
Months Supply   6.5   5.5     – 15.4%
*Days on Market

Essex County
Single Family Homes for June
Key Metrics      2018     2019    Change
New Listings    778    742    – 4.6%
Closed Sales       567      496     – 12.5%
DOM*                49           45      – 8.2%
Median PX       $472K   $480K    + 1.7%
% PX Rec’d    103%     101.3%   – 1.7%
Inventory        2,004       1,704      – 15.0%
Month Supply   4.9           3.9       – 20.4%
*Days on Market

In New Jersey, Summer’s a Beach

By recent estimates, New Jersey is home to 60 beaches and 141 miles of coastline.  Photo by Anthony DiMaio

Back in the day, before air-conditioning, the Internet and jet travel, New Jersey was a summer destination for many seeking relief from the heat of summer, drawing from New York and Philadelphia.

The Jersey Shore continues to thrive as an artisan hub as well as a party-capital for singles due to its abundance of beaches and boardwalks. Monmouth County saw two of its beaches listed in the top 10, Bradley Beach and Manasquan, with Asbury Park in the top 15.  “The Jersey Shore is lined with over 40 different towns and communities, each with a different character and flavor. Many cater extensively to summer tourists, others are completely full-year residential communities, while some are a mix of both.” [Wikipedia]

Beaches
21 beaches in Monmouth
3 beaches in Middlesex
21 beaches in Ocean
5 beaches in Atlantic
10 beaches in Cape May

In 2018, visitation to New Jersey was up 7.4% from 2017 to 111 million people and  the beaches are the big reason why. Recently the top 10 beaches in New Jersey were listed in an NJ.com article, featuring these locations:

  1. Cape May
  2. Beach Haven
  3. Ocean City
  4. Lavallette
  5. Ship Bottom
  6. Manasquan
  7. Cape May Point
  8. Bradley Beach
  9. Harvey Cedars
  10. Stone Harbor

https://www.nj.com/entertainment/2018/06/ranking_all_the_beaches_in_new_jersey_because_some.html

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

Counsellors Title Agency, www.counsellorstitle.net, founded in 1996, is one of New Jersey’s most respected title agencies, serving all 21 New Jersey counties with title insurance, clearing title, escrow, tidelands searches, and closing and settlement services for commercial or industrial properties, waterfront properties and marinas, condominiums, townhouses or residential single family homes. Counsellors Title also features its own Attorney Settlement Assistance Program™ [ASAP], which is an individual resource customized to fit the needs specifically of real estate attorneys, including, Documentation, Preparation, Disbursement of Funds, Attendance at Closing, HUD Preparation or Post-Closing Matters.

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Median Sale Hits New Record Part 2

As the median sales price continues to rise, homeowners are staying longer before they move, and inventory remains at critically low levels. There are other factors that are impacting the growth of the industry, such as home seller profits, reduced cash sales and growth of institutional purchases. Here are some of these stats:

Average Home Seller Gains
U.S. homeowners selling in Q2 2019 realized an average home price gain since purchase of $67,500, an average 33.9% return from the original purchase price. The results from Q2 2019 is an increase from an average gain of $57,706 reported in Q1 2019 and is also an improvement from the average gain of $60,100 reported in Q2 2018.

Cash Sales by Percentage Decrease Annually
Domestic all-cash sales represented 25% of all single family and condo sales in Q2 2019, which is down 26.9% of all from sales in Q2 2018 of and from 27.7% of all sales from Q1 2019.

Institutional Investor Sales
The share of institutional investor sales of U.S. single family homes and condos sold (entities buying at least 10 properties in a calendar year) came in at 2.2% in Q2 2019, which is up from 1.9% in Q1 2019 but down from 2.4% in Q2 2019. The annual slow-down might be attributed to the increase in the median sales price. The metro areas with the highest institutional purchases were in Atlanta, Charlotte, and Memphis; reporting 7.9%, 6.7%, and 6.4%, respectively.

Homeowner Tenure
The period of time homeowners remained in the property before selling in Q2 2019 averaged 8.09 years. This was a new high, up 3% from Q1 2019 and up 4% from Q2 2018. The homeownership tenure has nearly doubled from the average of 4.21 years recorded nationwide between Q1 2000 and Q3 2007, but has slowly increased from the Great Recession.

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

Counsellors Title Agency, www.counsellorstitle.net, founded in 1996, is one of New Jersey’s most respected title agencies, serving all 21 New Jersey counties with title insurance, clearing title, escrow, tidelands searches, and closing and settlement services for commercial or industrial properties, waterfront properties and marinas, condominiums, townhouses or residential single family homes. Counsellors Title also features its own Attorney Settlement Assistance Program™ [ASAP], which is an individual resource customized to fit the needs specifically of real estate attorneys, including, Documentation, Preparation, Disbursement of Funds, Attendance at Closing, HUD Preparation or Post-Closing Matters.

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Gen Z – A Homebuying Profile

The oldest segment of Generation Z [Gen Z] is 24. While Millennials represent the largest segment of today’s homebuyers, this Gen Z niche appears ready to roll. 
Statistically, they comprise a larger size as compared to Millennials. Gen Z was born 1997 and later and represents 90.55 million individuals, whereas Millennials (born 1981-1996) comprise 72.06 million individuals.
Millennials account for about a third of the U.S. homebuying market; Gen Zers represents 27% of the population of homebuyers. It is projected that the Gen Zers will represent the largest U.S. demographic homebuying group of 82 million individuals. According to a Home.com survey, 87% of Gen Zers want to buy a home before the age of 35. This represents a higher percentage as compared with the total U.S. homeownership.
One reason for the strong appetite for homeownership from Gen Z is they have grown up within an economy that has gradually improved over the last 11 years. Gen Z’s perception of economy is more through the prosperity lens.
Other Factors from the Survey
■ 48% of Gen Z buyers are racial and ethnic minorities
■ 58% of the survey respondents said they’d prefer to live in a racially and ethnically diverse neighborhood
■ Gen Zers surveyed were also more likely to be unmarried (either singles or couples)
■ They want to live close to where they work
■ 70% of Gen Zers viewed proximity to work as the top factor affecting their homebuying locations
■ Gen Z homebuyers are also concerned with housing affordability
■ Gen Z homebuyers understand that they will have to save

 

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

Counsellors Title Agency, www.counsellorstitle.net, founded in 1996, is one of New Jersey’s most respected title agencies, serving all 21 New Jersey counties with title insurance, clearing title, escrow, tidelands searches, and closing and settlement services for commercial or industrial properties, waterfront properties and marinas, condominiums, townhouses or residential single family homes. Counsellors Title also features its own Attorney Settlement Assistance Program™ [ASAP], which is an individual resource customized to fit the needs specifically of real estate attorneys, including, Documentation, Preparation, Disbursement of Funds, Attendance at Closing, HUD Preparation or Post-Closing Matters.

LET’S CONNECT ONLINE!

Connect with Ralph on Facebook: https://www.facebook.com/CounsellorsTitleAgency/

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Understanding Title Insurance

The purchase of a home for many represents the most valuable asset.  

When you are buying the physical structure as well as the land it is built upon, the land is defined by the deed or property title. Such a title involves its legal history, as it is identified in the title. Should there be a problem with the title that was not disclosed or known or resolved prior to the closing, that problem or defect is the buyer’s responsibility.

Title insurance protects against loss resulting from matters affecting the title to real property. The title insurance policy is an agreement to indemnify the insured for any loss sustained as a result of defects in, or liens upon, the title to real property, which were in existence on the date of the title insurance policy, but were not excluded from coverage by the terms of the policy.

When title insurance is purchased, the title company and its agency should have reviewed the prior history of deed before the purchase of the property. The evaluation of the history of the property ensures that nothing in “the chain of title” will result in a loss to the insured. Often, the title search will reveal a defect. Such a defect must “be cured” prior to the policy date or shown as an exception on the policy.

Since 80% of buyers finance their purchases, most lenders require a title insurance policy to be purchased in the lender’s name, called the loan policy. The loan policy is for the lender and terminates once the loan is paid off. Even though the purchaser pays for the policy at the closing, it does not protect the buyer.

The buyer must purchase a separate policy called the owner’s policy to protect themselves from any defect in the title of that property. Such a policy provides the coverage for the buyer not just for the time you own the property, but for as long as you might be liable to any future owner. Title insurance only requires a single one-time premium payment.

Real estate transactions can be complicated and time consuming, and may involve some degree of risk. If you have questions about purchasing property and title insurance, you should seek advice from an attorney.

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

Counsellors Title Agency, www.counsellorstitle.net, founded in 1996, is one of New Jersey’s most respected title agencies, serving all 21 New Jersey counties with title insurance, clearing title, escrow, tidelands searches, and closing and settlement services for commercial or industrial properties, waterfront properties and marinas, condominiums, townhouses or residential single family homes. Counsellors Title also features its own Attorney Settlement Assistance Program™ [ASAP], which is an individual resource customized to fit the needs specifically of real estate attorneys, including, Documentation, Preparation, Disbursement of Funds, Attendance at Closing, HUD Preparation or Post-Closing Matters.

LET’S CONNECT ONLINE!

Connect with Ralph on Facebook: https://www.facebook.com/CounsellorsTitleAgency/

Connect with Ralph on LinkedIn: https://www.linkedin.com/in/ralphaponte/
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