Monthly Archives: March 2013

Homeownership and Rapid Transit | Bedford Hills NY Real Estate

The American Public Transportation Association and the National Association of REALT0RS® recently released a study analyzing changes in residential prices for houses near high frequency public transportation. The study analyzed residential prices in five cities: Boston, Chicago, San Francisco, Minneapolis-St. Paul, and Phoenix. During the Great Recession residential property values declined substantially between 2006 and 2011. However, the data showed that residential property values performed 42 percent better on average if they were located near public transportation with high-frequency service. Homes near rapid transit in congested areas benefit from increased walkability and accessibility to jobs and amenities.

Although there has been a lot of media coverage about home prices in recent years, it is important to remember that a major reason most people purchase a house is to obtain the social benefits of homeownership. NAR studies have shown that compared to rental options homeownership provides a higher overall quality of life for families: higher educational achievement by children, increased civic participation by family members and an increased sense of community, better health outcomes, lower levels of crime in stable neighborhoods, homes that are maintained better than is the case for rental properties, and significant economic benefits over a period of time.

What does this mean for REALTORS®?
That homeownership provides significant economic and social benefits has been well documented. Homes near rapid transit in congested areas benefit further from having walkable neighborhoods, reduced congestion, more job opportunities, and accessibility to jobs and amenities.

The truth about hard-money loans | Bedford NY Real Estate

DEAR BENNY: What is a “hard money” loan? –Irene

DEAR IRENE: Technically, it is a loan that is given in exchange for money, rather than to assist a consumer in buying a house. The latter would be called a “purchase money” mortgage.

Hard-money lenders do not rely on the creditworthiness of the borrower. Instead, they look to the value of the property. The lender wants to make sure that if the borrower defaults, there will be sufficient equity in the property over and above the amount of the loan. Accordingly, you will not get a hard-money loan of 80 or 90 percent loan to value; typically, they will range from 50 to 70 percent loan to value.

Such loans are considered “loans of last resort.” If you are unable to get a conventional loan from a bank or mortgage broker, you may be forced to negotiate with a hard-money lender, who often are private individuals loaning money from their pension plans.

‘Wikipedia of real estate’ taking shape | Pound Real NY Real Estate

As listing sites ramp up efforts to augment their statistical data with local color, a real estate developer may soon launch a new website devoted solely to delivering qualitative, community information to homeowners, buyers and sellers.

WikiRealty aims to crowdsource information from professionals in all facets of the real estate industry in order to bring the sort of insider information to consumers that they traditionally can only glean from face-to-face interactions with locals, says founder Sanjay Kuttemperoor, a Naples, Fla.-based real estate developer and attorney. 

“Getting access to granular location-based information is almost impossible,” Kuttemperoor said. “I want [WikiRealty] to be the repository for that kind of information.”

Inventories are Turning the Corner in Runaway California Markets | Armonk Real Estate

The hottest housing prices in the nation at last are encourage more sellers to list their homes, promising more sales and cooler price hikes in the weeks come.

Seldom has American real estate seen such a surge of price increases as those experienced by Northern California markets over the past six month.  Median prices through March 25 are 56.8 percent above those of a year ago in Sacramento, 45.6 percent higher year over year in San Francisco and up 33.3 percent over 2012 in San Jose.

While some have been concerned that a new “bubble” is forming, the reality is that soaring prices are simply supply and demand at work.  Demand, fueled by buyers eager for a piece of pricey California real estate before prices rose even higher, crashed head on with contracting supply, which instead of growing to meet demand continued to shrink through the first weeks in the year.

Now, with the possible exception of Sacramento, soaring prices are having an effect on sellers, according to the most current weekly data from the Department of Numbers.

In San Francisco, inventories have increased 1.6 percent in the last week, 9 percent in the past month and 18.5 percent since January, but they are still 64.6 percent below the level of a year ago.  In San Jose, inventories are up 5 percent in the week ending March 25, 13.7 percent month over month and 24 percent since January.  Compared to a year ago, San Jose listings are about half of where they were a year ago, at 50.2 percent.

Sacramento, which has registered the fastest rising prices and fastest shrinking inventories in the nation though the fall and winter months and has become the unofficial headquarters for “flash sales,” where homes are being sold in 24 hours or less, is just beginning to turn around.  Prices still rose 5.5 percent over the past 30 days and are up 56.8 percent on the year.  In the past month, inventories are up only 1.5 percent, but they fell slightly from March 18 to March 25.  Since January, Sacramento inventories have increased only 2 percent, or 80 listings.

Local real estate professionals point to a shortage of new homes caused by a lack of buildable parcels. It will take 18-24 months for new construction to truly impact available inventory, they say. Others point to the activities of institutional investors like Blackstone which bought 1,000 Sacramento homes last year.  According to DataQuick, more than 38 percent of the homes sold in Sacramento County October, for example, went to so-called absentee buyers, typically, investors. Others point out that the surge is more of a bounce back from the housing crash. Some Sacramento-area homes lost more than half their value.

Home-Staging Tips: Scents and Songs May Snag You a Buyer | Pound Ridge NY Homes

Candles in family room

We’ve all done it: Baked cookies or lit a scented candle before dinner guests arrive. Maybe you even turned on some Frank Sinatra to set the mood.

But new research shows that while popular scents or songs may elicit positive emotions, they can distract from our ability to make decisions.

“If you’re trying to sell your home, having the wrong smell or music playing is worse than having none at all,” said Eric R. Spangenberg, dean for the College of Business at Washington State University and longtime professor specializing in environmental psychology. “There is a lot of cognitive processing involved in a home purchase. A 30-year mortgage is a big decision.”

Spangenberg has studied the effects of scents and music in retail environments since the late ’80s. His latest research, published in the Journal of Retailing, shows that what consumers hear and smell is a determining factor in how much time and money they spend.

“The [home] staging business should incorporate other senses,” he said. “The science of olfactory cues is not being used. People use intuition, but a lot of intuition is based on urban myths more than it’s based on science.”

Spangenberg has three key principles to help sellers use smells and songs to make their homes more marketable.

No. 1: Keep it pleasant

If you’ve ever cringed walking through the perfume aisle in a department store, it’s probably because your brain was on sensory overload. Spangenberg says when a smell is that powerful, it’s all you can think about … literally.

“You want scents to be on the edge of your perception — not centrally processed,” he explained. This leaves the central part of your brain to do what it does best: process the task at hand.

For a home buyer, the focus should be on deciding whether to buy a home, not trying to identify and sort out a powerful scent. To ensure this happens, Spangenberg says sellers should limit how much scent they infuse into a space.

Music follows the same principle. A song that is louder than you’re used to will detract from your ability to focus on anything else.

“Abercrombie & Fitch has a strong environmental psychological element to what they do,” Spangenberg said. “They don’t want me — a 50-year-old male — in their store. It’s too loud for me.”

No. 2: Keep it simple

Spangenberg’s research has shown that simple scents are most effective in influencing shopping behaviors. In fact, his study found consumers spent 31.8 percent more on average when a home-decor store had a simple orange scent instead of a complex blend of orange, basin and green tea.

“Our results suggest the more simple, the less distracting,” he said. It goes back to the idea of freeing up the decision-making part of the brain. For home selling, Spangenberg says a simple citrus scent would be a better choice than a blend of potpourri.

Moreover, in his 2011 music study, titled “It’s all in the mix: The interactive effect of music tempo and mode on in-store sales,” Spangenberg found that music in minor mode was significantly more effective when accompanied by a slow tempo.

“Our ability to perceive and process those two things (mode and tempo) is hardwired in human beings,” Spangenberg explained, recalling an experiment conducted at a Nordstrom department store.

“Popular music wasn’t effective at keeping people there,” he said. “The problem was the tempo was too fast, making people move faster through the store than we wanted them to.” As a result, Nordstrom often has a live pianist play slower music in its stores today.

In the same way, home sellers could consider using simpler scents and slower songs to keep potential buyers interested.

No. 3: Keep it consistent

Finally, Spangenberg’s research suggests consistency or congruence is key. He advises home sellers to evaluate their environment, the season and their potential buyers.

“A wood-and-stone home should have scents congruent with that environment,” he said. “But in a home with no wood, you wouldn’t expect a pine scent.”

Spangenberg says that it’s this inconsistency — the fact that the smell doesn’t fit with its surroundings — that matters.

“If you walked down the spice aisle blindfolded and smelled cumin, you would think someone needs a shower,” he said.

At the same time, consistency with the season is important. For example, Spangenberg says you wouldn’t expect a spring scent during the winter or floral notes in a home with Christmas decorations.

He says inconsistency can take away from a potential buyer’s ability to think about purchasing a home. This includes gender preferences.

“If I am trying to sell a condo to a young, professional woman versus a man, I would use different scents,” Spangenberg explains. “It’s about doing what fits.”