Zillow’s 6 predictions for the 2018 housing market

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Slower home price growth, continued inventory issues and evolving design trends are ahead


If only we could stare into a crystal ball to see exactly what 2018 holds for the housing market. More inventory? Yes! Slower home price growth? Absolutely! Oprah giving everyone a free house? That would be a dream come true.

For now we have forecasts from top economists and housing experts. And Zillow chief economist Svenja Gudell offered hers on behalf of Zillow.

“We’re on the other side of the housing recovery, and the real estate market looks quite different than it did 15 or even five years ago,” Gudell said in a statement. “We have a huge generation entering the market. They really want to be homeowners, and they’re faced with an inventory crisis that leaves them with few options.”

“Builders won’t ignore this hungry market, and we’ll start to see a rise in new construction at the more affordable end, instead of all the luxury buildings we’ve seen lately,” she added.

“However, builders are also facing high costs, so instead of adding density in cities where zoning laws and land costs often preclude affordable building, we’ll see the suburbs grow and expand outward.”

Here are the six things Gudell expects to happen in 2018:

1. Inventory shortages will drive the housing market.

Gudell says low inventory will continue to push up home prices and serve as a barrier for first-time homebuyers who struggle to save for a down payment.

Furthermore, this demographic of buyers will struggle to compete against more seasoned buyers who have profited from a home sale and know how to negotiate their way to the top.

Lastly, Gudell says there are 12 percent fewer homes to choose from nationwide than there were a year ago, and 51 percent of for-sale properties are in the top one-third of home values, which are out of reach for first-time buyers.

2. Builders will turn their focus to entry-level homes.

Economists have said over and over again that increased residential housing starts, especially at the starter home level, are the key to bringing home prices down.

Housing starts have been well below the 50-year average of 1.2 million, but Gudell expects builders to finally hearken to the call of first-time and lower- to middle-income buyers yearning for more affordable options.

3. Millennials will move to the suburbs.

It’s no secret that the majority of millennials would rather live in urban centers with access to a plethora of entertainment and shopping options and robust tech-centered job opportunities. But most millennials, especially those without help from parents, can’t afford to live in these areas.

Gudell says 25- to 34-year-olds will begin moving to the ‘burbs in search of more affordable home prices.

4. Many homeowners will remodel rather than sell.

In addition to higher housing starts, experts have said more homeowners selling their homes would help alleviate low inventory issues. Well, homeowners, despite having high confidence about being in a seller’s market, will continue to stay still, says Gudell.

Instead of buying a new home, homeowners will invest in remodeling efforts to make their current homes feel and look brand new.

5. Baby boomers and millennials will drive home design.

Baby boomers and millennials are driving the housing market, so it’s no surprise that Gudell says they’ll be driving home design trends in 2018, too.

New starts and renovated homes will feature designs that appeal to both millennials and baby boomers, such as wide hallways that can accommodate both strollers (for young families) and/or wheelchairs (for aging boomers).

Furthermore, homes will also be built using frameworks that make it easy to add elements later, including extra support beams behind shower walls to which grab bars can be added as older generations age in place.

6. Homes prices will continue to grow, but at a slower pace.

2017 has been full of record-breaking home price growth, with economists calling it nearly “unstoppable.”

Gudell says home prices are expected to climb 4.1 percent in 2018 — 1.1 percentage points higher than the “normal” annual appreciation closer of 3 percent, but slower than the current annual pace of 6.9 percent.

Housing Inventory Problem Persists

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BUYER DEMAND CONTINUES TO OUTPACE INVENTORY OF HOMES FOR SALE


The price of any item is determined by the supply of that item, as well as the market demand. The National Association of Realtors (NAR) surveys “over 50,000 real estate practitioners about their expectations for home sales, prices and market conditions” for their Realtors Confidence Index.

Their latest edition sheds some light on the relationship between Seller Traffic (supply) and Buyer Traffic (demand).

Buyer Demand
The map on the right was created after asking the question:
“How would you rate buyer traffic in your area?”
The darker the blue, more buyers are looking for homes in that area. Only two states came in with a weak demand level.

Seller Supply
The Index also asked:
“How would you rate seller traffic in your area?”
As you can see from the map on the left, the majority of the country has weak Seller Traffic, meaning there are far fewer homes on the market than what is needed to satisfy the buyers who are out looking for their dream homes.

Bottom Line
Looking at the maps above, it is not hard to see why prices are appreciating in many areas of the country. Until the supply of homes for sale starts to meet the buyer demand, prices will continue to increase.

Now is the Best Time for Move Up Buyers!

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DON’T WAIT! MOVE UP TO THE HOME YOU’VE ALWAYS WANTED!


Now that the housing market has stabilized, more and more homeowners are considering moving up to the home they have always dreamed of. Prices are still below those of a few years ago and interest rates are still around 4%.

Sellers should realize that waiting to make the move while mortgage rates are increasing probably doesn’t make sense. As rates increase, the price of the house you can afford will decrease if you plan to stay within a certain budget for your monthly housing costs.


The chart on the right details this point.

With each quarter of a percent increase in interest rate, the value of the home you can afford decreases by 2.5% (in this example, $10,000). Experts predict that mortgage rates will increase by at least half a point by this time next year.

Act now to get the most house for your hardearned money.

Veterans cemetery will be located near ​El Toro Y

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​The Irvine City Council, in a special meeting that took place on the 73rd anniversary of D-Day, today approved by a 3-2 vote the “strawberry fields” near the 5 and 405 freeways as the site of the future Southern California Veterans Cemetery.Mayor Don Wagner and council members Melissa Fox and Christina Shea voted to move the proposed cemetery from a site north of the Great Park to the alternate site near the intersection of the 5 and 405 freeways, south of the park. Mayor Pro Tem Lynn Schott and Councilmember Jeff Lalloway opposed the action.

As the city clerk announced the 3-2 vote in favor of the “strawberry field” site, veterans leader Bill Cook and a large contingent of veterans stood, cheered and applauded.

Upon learning of the decision, FivePoint CEO and Chairman Emile Haddad issued this statement: “The Irvine council’s decision is a win-win-win for the city at large, our communities and, most importantly, the veterans who deserve a special place to honor their own, a cemetery that is worthy of the service they have given this country.” Haddad added, “FivePoint stands ready to help the city and state expedite the building of the cemetery. We are excited and proud to help deliver on the promise made to the veterans.”

In front of a standing-room-only crowd that included veterans and community and city leaders, statements from elected officials not at the meeting were read that unanimously endorsed the land exchange and the approval of the alternate site for the veterans cemetery. Statements were entered into the record from Orange County Board of Supervisors Chairwoman Michelle Steel, Congressman Lou Correa, State Senator Josh Newman and Assemblyman Steven Choi, all in favor of the freeway-adjacent alternate site near the El Toro Y, known as the “strawberry fields.”
 
Of the 55 individuals who offered public comments at the three-and-a-half hour meeting–the third in two months on the topic–32 were in favor of the “strawberry fields” site, while 21 favored the ARDA site. Two were neutral.
 
Prior to the public comments, as well as after, the five council members heatedly debated the issue. 

After sharing that the state’s funding came in $10 million less than anticipated, Mayor Don Wagner said, “Neither the state government nor the federal government is willing to be an equal partner.” The federal government had suggested it would consider adding $10 million to the project, but, Wagner said, “That amount has not been committed to us…We are quite low on the federal priority list and waiting for that funding could further delay (the project).”
 
Councilmember Jeff Lalloway, who admitted to not reading a document submitted yesterday by land developer FivePoint that included details about its commitment to the alternate site, called the alternate site proposal a “backroom deal.” He said he would ask for a delay and postponement of the vote. “I’ll be making a motion to put this off for another meeting,” he said, citing traffic as a major concern.  
 
“That dramatic misrepresentation of what is going on here is pretty sad,” said Councilmember Christina Shea in response to Lalloway’s comments. “There is nothing about this proposal tonight that will stop any process going forward through the proper channels.” Shea added, “The state knows the money’s not there. Sharon Quirk Silva knows the money’s not there.” Shea said she didn’t want to see the city have to foot the bill.

Mayor Pro Tem Lynn Schott, who arrived late to the meeting, like Lalloway pushed for a delay, saying more questions needed to be answered. “Why are we in such a hurry?” she questioned.

Lalloway twice during the meeting proposed a substitute motion to delay the decision several weeks so the issue could be studied further. Schott supported the substitute motion each time but it failed to win approval for lack of a third vote.
 
Councilmember Melissa Fox spoke passionately in favor of the alternate site, saying, “We owe this to our veterans and I will fight to make sure that it is done.” She added, “When we do that (move the cemetery site to the strawberry fields) we save the city $38 million.” Fox noted that the funds saved could fund other amenities in the city and that building the cemetery at the new site would be “a beacon of honor for this city.”

The debate over which site is the best location for the cemetery has been ongoing for three years, with one contingent pushing hard for the ARDA site. That location, with more than 70 structures, portions of remaining runway and underground utilities, would have required extensive demolition before construction could begin. The total cost to build a cemetery at the ARDA site was estimated to be nearly $80 million. In contrast, the “strawberry fields” site is currently used only for farmland. No demolition is required and construction could begin immediately upon approval and at much less cost.
 
FivePoint owns the freeway-adjacent farmland on the alternate site. After being approached by Councilmember Shea and the Orange County Veterans Memorial Park Foundation almost 18 months ago with a proposal to exchange the land at the ARDA site for the alternate site, the company agreed.

Bill Cook, a Marine Corps Vietnam veteran and chairman of the Orange County Veterans Memorial Park Foundation, reminded the council that, “Today is the 73rd anniversary of D-Day.” He told the council that a vote in favor of the “strawberry fields” site would be history making. “Today…you have the unique opportunity to create hallowed ground,” he said. 

Article By Irvine City News staff

11 things sellers should do once the for sale sign is in the ground

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  • Sellers should keep the home in a ready-to-show state, which means toning down decor, cranking the air conditioning and turning up the lights.

The sellers have decluttered, painted, made repairs and spiffed up the landscaping. The curb appeal is at its best. After the long process of getting the home listed, the for sale sign is up. Now what?

Here are 11 things your sellers should do once they’re ready to get their home sold once and for all.

1. Never turn down a showing

Remember the Murphy’s Law of real estate: Whenever it is inconvenient, the appointment center will call. Try your best to accommodate all showings.

Every showing could be “the one.” Some buyers cannot, or will not, reschedule. The more buyers who see your house — particularly, right after it hits the market — the quicker it will sell.

2. Leave the lights on

Buyers decide within 30 seconds if they like a house. Opening the door to a welcoming and cheery bright room impacts a buyer’s emotions.

On the flip side, a room with low light and shadows is a little gloomy. It makes you hesitate to enter. Many buyers ask for houses that are bright with sunlight.

If a house is not particularly “light filled,” $20 IKEA-type floor lamps can work wonders. Even if you are at work all day, it pays to leave plenty of lights on. The cost is low, and the effect is major.

3. Crank that air conditioning

If you’ve got it, flaunt it. On a hot day, that air conditioning might be just the feature that gets the buyers to make an offer.

4. Humor the nosy neighbors, and invite them in

Neighbors are naturally curious to know all about your sale. Count on them to show up at the open house. Chances are good that someone in the neighborhood knows someone who might be the perfect buyer for your house.

FacebookNextdoor posts and the neighborhood grapevine all help get the word out that your house is for sale.

5. Stay ‘show worthy’

The cleaning and decluttering never stops. Cooking smells, pet odors, wet towels in the bathroom — all signs of normal life need to go.

Keep empty laundry baskets ready for quick room sweeps before showings. Pick up toys, mail, toasters, cereal boxes — anything taking up space on horizontal surfaces. Hide the laundry baskets under the bed, in the garage or in your car.

6. Fido can cost you $10,000

That is no exaggeration. Sellers cancel showings every day because they can’t get home to walk the dog.

Putting off showings means days on market (DOM) quickly accumulate. If a house does not sell in 30 days, buyers take that as a signal to offer less than asking.

The price of doggy daycare pales next to a $5,000 or $10,000 price drop.

7. Tone down the kids’ rooms

It pays to minimize the Star Wars and princess decor — no matter how well-done. Orchid colored walls, music star posters and stuffed animal collections broadcast that you are selling a “used” house.

Even an adorable baby room that is too “precious” can hurt a sale. Keep decor and furnishings as minimal and neutral as possible.

Let the kids dream of decorating their new rooms in the new house in return for letting you box up and store their decor.

8. Keep your stuff safe

In 18 years as a Realtor, I have never known sellers who have had items stolen at a showing or open house, but it can happen.

Don’t create temptation by leaving cameras on the coffee table, diamond earrings on the dresser or prescriptions in the bathroom.

Buyers will read the paperwork that you leave out. They will open your medicine cabinets and closets. Guns should be unloaded and locked up. Hiding a gun in the back of the closet is not secure.

9. Don’t get sued

Get rid of tripping hazards, like small rugs. Make sure flooring is not loose or uneven –particularly on stairs, porches and decks.

Mark “half steps” that are hard to see with tape or some shiny indicator. Pick up stray toys.

Use mats, and put towels down when it rains. Shovel ice and snow. Sounds obvious? Many sellers don’t bother.

10. Make yourself scarce

Innocent questions from buyers can cost you. If they ask “Who cleans your chimney?” — you’ll have to admit that you haven’t had it cleaned for 10 years.

If they ask about the neighbors, what do you tell them about the crabby woman next door who complains about your kids?

Chatting with buyers is more likely to hurt the sale price than help you sell.

11. Don’t let buyers make you nuts

Buyers can be inconsiderate. They come late for appointments, or they don’t show up at all. They make offhand comments about the home that can hurt the homeowners’ feelings.

Selling a home is business. The agent should handle the buyers until it is time to hand them the keys.

Article by Zeta Cross

Foreign homebuyers: Up in California

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AP Photo/Rich Pedroncelli
There have been about 34,000 purchases by foreigners in California in the past year. That would be an increase of about 2,000 purchases, or 6 percent. (File photo)

Foreign buyers continue to find California residential real estate very attractive, but it looks like the growth of international deals in the state trails a national upswing.

The National Association of Realtors’ annual report on foreign homebuying of U.S. existing residential properties estimates foreigners bought 284,455 properties nationwide in the 12-month period ended in March, up 69,570 purchases or 32 percent. The Realtor study tracks foreign buyers, both living abroad and those living in the U.S., by annually polling its members.

Foreigners eye U.S. properties for reasons ranging from the strength of regional housing markets; relative affordability vs. real estate in their homeland, and as a place to park wealth. To some people, this shows the attractiveness of the U.S. economy. To others, it’s foreign money distorting local housing markets suffering from a shortage of homes to buy.

So what does the report say about international taste for California real estate, through the lens of my trusty spreadsheet?

Let’s start with California’s share: Deals in the state represented 12 percent of all foreign deals nationwide in the past year, down from 15 percent the previous year. The latest result trails Florida’s 22 percent share and ties Texas. It’s California’s lowest share of foreign buyers since post-recession 2011. Has California’s rising home values scared off some international house hunters, too?

So how many in California? My trusty spreadsheet lets me project the growing number of foreign buyers nationwide, which translates to roughly 34,000 purchases by foreigners in California in the past year. That would be an increase of about 2,000 purchases, or 6 percent vs. the 12-month period ended in March 2016. So we trailed the national growth pace of 32 percent.

Who was buying in California? The Realtors reported 71 percent of all foreign purchases made in California in the past year were from residents of Asian/Oceania nations, an area that stretches from Japan through the Pacific down to New Zealand and all the way to the Mediterranean in Israel. That’s up from 51 percent the previous year.

How big is that? My spreadsheet also tells me the growing Asian/Oceania share of foreign deals in the state means roughly 24,000 California residences were bought by folks from those nations in the past year. That’s up approximately 8,000 purchases — a 50 percent jump in a year! That would also mean the rest of the world buying of California homes has dropped by one-third in a year.

Is that a lot? Please note the foreign buyers’ share of all California homebuying is modest. While the data is not totally comparable, PropertyRadar reported a total of 425,000 California residences sold in 2016. That means loosely 1-in-12 home sales in the state go to foreigners, both living in and out of the U.S. Although, some folks might argue that these buyers are taking housing opportunities from locals.

Who else bought? Other significant international buyers of California properties hailed from Latin America/Caribbean/Mexico (14 percent of all foreign deals);  Europe, 6 percent; and North America, 5 percent.

Who really likes California? Another part of the Realtor report shows California housing’s popularity in international purchases, by key nations: Buyers from China, Hong Kong and Taiwan made 37 percent of their U.S. buys in California; India, 18 percent; Mexico, 11 percent; United Kingdom, 11 percent; and Canada, 4 percent.

Who sells? Once they buy, foreigners seem reluctant to part with their California properties. The Realtors also reported 6 percent of all sales nationwide in the 12-month period were made by foreigners. California properties made up 9 percent of those deals, a share one-quarter less than the state’s share of foreign buyers. This is keeping with a statewide theme of extended ownership of homes.

Article By Jonathan Lansner

5 Reasons to Sell This Summer

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Here are five reasons listing your home for sale this summer makes sense.

    1. Demand Is Strong
      The latest Buyer Traffic Report from the National Association of Realtors (NAR) shows that buyer demand remains very strong throughout the vast majority of the country. These buyers are ready, willing and able to purchase… and are in the market right now! More often than not, multiple buyers are competing with each other to buy a home. Take advantage of the buyer activity currently in the market.
    2. There Is Less Competition Now
      Housing inventory is still under the 6-month supply that is needed for a normal housing market. This means, in the majority of the country, there are not enough homes for sale to satisfy the number of buyers in that market. This is good news for home prices. However, additional inventory could be coming to the market soon. There is a pent-up desire for many homeowners to move, as they were unable to sell over the last few years because of a negative equity situation. Homeowners are now seeing a return to positive equity as real estate values have increased over the last two years. Many of these homes will be coming to the market this summer. Also, builder’s confidence in the market has hit its highest mark in over 11 years. Experts are predicting that new construction of single-family homes will ramp up this summer. The choices buyers have will continue to increase. Don’t wait until all this other inventory of homes comes to market before you sell.
    3. The Process Will Be Quicker
      Fannie Mae anticipates an acceleration in home sales that will surpass 2007’s pace. As the market continues to strengthen, banks will be inundated with loan inquiries causing closing-time lines to lengthen. Selling now will make the process quicker & simpler.
    4. There Will Never Be a Better Time to Move Up
      If you are moving up to a larger, more expensive home, consider doing it now. Prices are projected to appreciate by 4.9% over the next year, according to CoreLogic. If you are moving to a higher priced home, it will wind up costing you more in raw dollars (both in down payment and mortgage payment) if you wait. You can also lock in your 30-year housing expense with an interest rate around 4% right now. Rates are projected to increase in the next 12 months.
    5. It’s Time to Move on with Your Life
      Look at the reason you decided to sell in the first place and determine whether it is worth waiting. Is money more important than being with family? Is money more important than your health? Is money more important than having the freedom to go on with your life the way you think you should? Only you know the answers to the questions above. You have the power to take control of the situation by putting your home on the market. Perhaps the time has come for you and your family to move on and start living the life you desire. That is what is truly important.

4 Tips For Getting Your Home Ready To Sell

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1. Upgraded Kitchens and Bathrooms sell home
  • Swap out your old counter tops with granite/quartz counter tops
  • Upgrade to stainless Steel Appliances
  • Clean grouts, replace the old mirror with picture frame mirror, buy new towels
 
2. De-Clutter
  • Buyers love a home that is clean and does not have too much clutter
  • Too much clutter can make a buyer feel stressed and negative while viewing your home
  • Plan ahead!  If your thinking of selling in the near future it is never too early to start cleaning and de-cluttering
 
3. Re-paint the house, inside & out
  • Re-painting can be one of the least expensive preparation for getting your home read to sell
  • Pick colors that will feel inviting and evoke emotions of warmth and joy
  • Plan ahead!  If you’re thinking about selling in the near future it is never too early to start preparing
 
4. Maximize lighting
  • Remove heavy draperies, buyers value great lighting
  • Clean all windows inside and out
  • Open all blinds to maximize the sunlight

The Best Month And Day To Put A Home On The Market, According To Zillow

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You may want to hide during the ides of March, but the ides of May are the perfect time to put a home on the market, says a new study by Zillow.

In 20 of the 25 metro areas studied, homes listed anywhere between May 1 and May 15 sold nine days faster and for up to 1 percent more than the asking price.

“With 3 percent fewer homes on the market than last year, 2017 is shaping up to be another competitive buying season,” said Zillow Chief Economist Dr. Svenja Gudell in a statement.

“Many [homebuyers] who started looking for homes in the early spring will still be searching for their dream home months later. By May, some buyers may be anxious to get settled into a new home — and will be more willing to pay a premium to close the deal.

Mark your calendar for a Saturday in May

Moreover, Zillow’s research revealed the best day to place a home on the market is Saturday — listings that appear on Zillow’s site on this day garner 20 percent more views than early-in-the-week listings.

The second best day to list is Friday, when properties receive 14 percent more views.

Lastly, Gudell says sellers have to be cognizant of other factors, such as weather.

Sellers in Texas, California and Florida have more leeway in when to list their home due to warmer weather patterns. Also, sellers who live in areas without distinct seasonal weather tend to have little variation in sales price based on the month.

 

Thinking of selling? Call Paul Young at (949)838-6328 for a free no obligation consultation today.

 

Article image credited to Kusska / Shutterstock.com
Source: The Best Month And Day To Put A Home On The Market, According To Zillow