Category Archives: Bedford Corners NY

Millennials Are About to Get Locked Out of the Real Estate Market—Again | Bedford Corners Real Estate

Over the past couple of years, rising pay and low mortgage rates finally converged to make make the dream of home ownership a reality for America’s millennials, many of whom had long been locked out of the housing market. But now, the door is on the verge of slamming on the under-35 crowd, leaving young families outside looking through the picture window—again.

That’s the scenario sketched by Mark Boud, chief economist for Metrostudy, a unit of real estate data and marketing company Hanley Wood. Metrostudy surveys housing trends in hundreds of towns and cities from the ground up, by visiting subdivisions to record how many homes are being built, going to contract, and sold—the latter evidenced by curtains on the windows and tricycles in the driveway.

During the housing-bubble frenzy from 2004 to 2006, as Boud recently recounted to Fortune, easy credit sent sales soaring, inflating prices and leading to a gigantic oversupply of new homes. In 2008 and 2009, the banks and other lenders, overwhelmed with defaults and foreclosures, throttled back so hard on credit that demand collapsed, and housing prices went into a tailspin.

The upshot: From 2009 to 2017, the housing market severely overcorrected, with prices steadily rising once again. “Housing went through a long period of undervalution,” says Boud. It wasn’t millennials, he points out, who benefited from the cheap prices and rescued the market. “The millennials had loads of college debt, and many had bad credit in general, often because their previous loans had been foreclosed on. And they were too young to be stable in their jobs,” he says. The upshot: The youthful cohort couldn’t get mortgages from lenders, who suddenly were rejecting all but class-A credits.

Instead, it was the affluent and investors that profited from low prices and soaked up the excess inventory. “The rich were the buyers without the credit problems,” says Boud. “And institutional investors bought houses cheap and rented them out.” In fact, he says, many of these new owners’ tenants were the very millennials shunned by the banks. In terms of home ownership, millennials became the lost generation.

A lost generation comes home

By 2015, the wealthy and the investors had absorbed the excess. America began generating far more new jobs than new homes, as construction was severely constrained by a shortage of ready-to-go lots. Starting around 2017, the millennials got back in the game, in a big way. The job rolls expanded, and wages jumped. The mortgage market reopened for the more well-to-do 30-somethings. So even though credit overall remained tight, sales to millennials rose, from 22% of new homes sales around 2011 to 50% in 2018—an extraordinary figure, given that millennials account for just one-third of the U.S. population.

Now says Boud, the market is once again turning against what’s now the biggest, and still hungriest, class of buyers. “Prices have risen a lot, and they’re still rising because we’re still way under-building compared to household formation,” he says. “At the same time, rates on home loans are rising, making it much harder for millennials to qualify.” The affordability problem will intensify because of the types of homes the builders are erecting. The only way to make money on expensive land is to build big houses, so “the average home size is 3,000 square feet, which is way too big most first-time buyers,” Boud says. “Ten years ago in Las Vegas, that sized house cost maybe $225,000 [thanks to the housing plunge]. Now it costs $350,000, way out of the reach of young buyers.”(

Hence, Boud sees sales shifting back to the affluent who’ve held high-paying jobs for decades, can qualify for more expensive mortgages, and want the big houses. Eventually, he says, the surge in prices will sow the seeds of a correction. But supply is so tight that the drop should be mild––unless America suffers a recession. “In that case, prices would be lower, but employment and incomes would also drop. So millennials could remain locked out.” Another problem: Millennials who secured a 3.5% fixed rate in 2016 or 2017 will stay in their existing home to keep the low monthly payment rather than trying to move up the housing ladder.

The solution, says Boud, is for builders to lower costs by shifting to factory-built homes they can offer at far lower prices. Homebuilders should also work with the banks to offer interest-only mortgages that would hold down monthly payments in the early years, and allow far more millennials to qualify for credit. He also notes that developers need to take steps to lower home owner association dues that can add $200 to a family’s monthly payments. More 2,000-square-foot houses would also be welcome, but for that to happen, municipalities would need to loosen zoning laws to allow far more lots to be subdivided, far more quickly. Today, towns are trending the wrong way, towards even tighter restrictions.

The outlook for sales is strong, Boud says, because so many Gen-Xers and baby boomers are renting, and more of them want to buy homes. Those folks can both afford to buy, and qualify for mortgages on $450,000-to-$700,000 homes. As for millennials, the generation that housing lost, then briefly found is about to be lost once more.

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http://fortune.com/2019/01/12/real-estate-market-millennials/

More Americans flee high tax states | Bedford Corners Real Estate

More and more Americans are fleeing high-tax states – from California to Hawaii to New Jersey to New York – and relocating elsewhere in the hopes of holding onto some more of their hard-earned cash.

Problem is that’s pushing up the cost of living in the states they’re fleeing to, according to the country’s largest real estate trade group.

They’re going to nearby secondary states that used to be “affordable” – states like Washington, Nevada, Colorado and Arizona, for example, says Lawrence Yun, chief economist of the National Association of REALTORS(r).

And it isn’t just the working class looking to move to lower-tax states.

Taxes are often a top consideration particularly when someone is relocating for work or looking to retire says tax expert Bob Meighan, a former executive with Intuit. The biggest tax you’re going to face, after the IRS, is the one your state presents.

That’s why Florida is a big draw “particularly among northeast residents currently living in high property-tax states such as New York, New Jersey (the highest in the country), and Connecticut,” says Yun. “In Florida, you get both lower taxes and a warmer climate.”

Last year, these were the ten highest income tax states, according to TurboTax (*These rates do not include local taxes.):

  • California 13.3%
  • Hawaii 11%
  • Oregon 9.9%
  • Minnesota 9.85%
  • Iowa 8.98%
  • New Jersey 8.97%
  • Vermont 8.95%
  • District of Columbia 8.95%
  • New York 8.82%
  • Wisconsin 7.65%

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https://www.foxbusiness.com/personal-finance/more-americans-fleeing-high-tax-states

Mortgage rate predictions for 2019 | Bedford Corners Real Estate

Here’s what mortgage rates will do next year, from the people who usually get it wrong

Looking back at the events that have derailed mortgage rates’ return to ‘normalcy’ over the last few years is unsettling

Rates for home loans have spent the past decade or so doing anything but what’s expected of them. Every year, it seems, the general consensus is that in the coming months, financial conditions will finally get back to “normal,” taking mortgage rates with them. And every year something has brought that “normalization” to a screeching halt.

In 2015, for example, shock-and-awe bond-buying by the European Central Bankhelped push bond yields into negative territory in Europe and behind. In early 2016, markets were rocked so badly by concerns about earnings that there were fears of another recession – and then rocked again by the upset Brexit vote.

2017, which started off with concerns about surging bond yields under a pro-growth, anti-tax president, instead saw many months of a “Trump slump” when tax reform took a while to materialize.

Mortgage rates in 2018 may be the closest thing to “normal” we’ve seen in a long time. With two more weeks in the year as of this publication, we’re likely to see a full-year average of 4.54% for the 30-year fixed-rate mortgage. That will be the highest since 2010.

And for 2019? Given all the variables in both financial markets and housing, forecasting mortgage rates is for the “intrepid,” in the words of Mark Zandi, chief economist for Moody’s Analytics, and a long-time housing watcher. And those are just the known unknowns. Who can guess the curveballs lying in wait in financial markets, earnings, economic data, housing markets, and beyond?

With that in mind, here are some thoughts from a few of those “intrepid” souls.

Name Institution Forecast, full-year average, 30-year fixed-rate mortgage
Sam Khater Freddie Mac 5.1%
Danielle Hale Realtor.com 5.3%
Mark Zandi Moody’s Analytics 5.0%
Sam Bullard Wells Fargo Economics Group 4.9%
Rick Sharga Carrington Mortgage 5.25%
Mike Fratantoni Mortgage Bankers Association 5.1%
Doug Duncan Fannie Mae 4.8%

 

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https://www.marketwatch.com/story/heres-what-mortgage-rates-will-do-next-year-from-the-people-who-usually-get-it-wrong-2018-12-14

Freddie Mac real estate predictions | Bedford Corners Real Estate

Freddie Mac November Forecast: Expect Modest Housing Market Growth in 2019


According to Freddie Mac’s  November Forecast, the biggest unknown about the housing market next year is whether current negative trends, such as lack of housing supply, will persist or the market will adjust to the shock of higher mortgage rates and resume modest growth.

Sam Khater, Freddie Mac’s chief economist, says, “Almost all the trends in the U.S. housing market have been negative in recent months as housing market activity continues to adjust to higher mortgage rates.”Khater added, “If new home sales are to resume growth in 2019, builders may have to shift their focus to more modestly priced homes and smaller sized homes to help offset housing affordability concerns. But with cost pressures pinching profitability, this will be a significant challenge.” 

Forecast Highlights 

Expect GDP growth to average 3 percent in 2018 before slowing to 2.4 percent in 2019 and 1.8 percent in 2020.

Expect total home sales to decrease 1.6 percent to 6.02 million in 2018 before slowly regaining momentum and increasing 1 percent to 6.08 million in 2019 and 2 percent to 6.20 million in 2020.  

Expect home prices to increase 5.1 percent in 2018 with the rate of growth moderating to 4.3 percent in 2019 and 2.9 percent in 2020.

Expect single-family mortgage originations to decline 9.9 percent year-over-year to $1.63 trillion in 2018, falling slightly to $1.62 trillion in 2019 and dropping once more to $1.60 trillion in 2020. This is the result of shrinking refinance activity.Adjusted for inflation in 2017 dollars, an estimated $14.2 billion in net home equity was cashed out during the refinance of conventional prime-credit home mortgages in the third quarter of 2018, down from $18.3 billion a year earlier and substantially less than the peak cash-out refinance volume of $102 billion during the second quarter of 2006.

Lumber prices drop 10.3% | Bedford Corners Real Estate

Softwood lumber prices fell 10.3% in October—the largest drop since May 2011—according to the latest Producer Price Index (PPI) release by the Bureau of Labor Statistics. The producer price index for softwood lumber has fallen 21.2% since setting the cycle and all-time high in June (see below). Even after the decrease, however, the index currently sits just 4.7% lower than the prior-cycle high set in 2004.

The final demand price index for OSB has followed a path similar to that of softwood lumber over the last three months.

Since climbing 38.1% in the first seven months of 2018, OSB prices have fallen 16.6%. The price index for OSB is now 15.2% and 15.7% higher than it was to start 2018 and 2017, respectively.

Residential construction goods input prices increased 0.4% in October and have now risen 7.5% over the last twelve months. The index decreased only twice during that period, by 0.1% and 0.5% in December 2017 and August 2018, respectively. Year-to-date residential construction goods input price increases in 2018 (+5.6) continue to outpace the increase during the same period in 2017 (+2.9%).

Gypsum prices fell 1.6% in October, continuing what has been a relatively volatile year. The price index for gypsum products is 6.3% higher than it was to start 2018, but the year-to-date price increase masks large fluctuations within the year. Consecutive-month increases of 5.4% and 6.1% have been partially offset by two-month decreases of 3.3% and 1.8%.

The last several large increases in the gypsum price index has been foreseeable, as large wallboard producers sent out price increase announcements in the March-May and October-December periods. These announcements informed customers that wallboard prices would increase effective as of January or June/July, depending on the announcement date. Examples of such announcements may be found here and here.

Ready-mix concrete prices declined 0.5% in October. After a large price increase (relative to historical data) in early 2018, prices of ready-mix concrete dropped and have remained essentially unchanged since July.

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Softwood Lumber Price Decline Largest in Seven Years

Home builder confidence rises | Bedford Corners Real Estate

Builder confidence in the market for newly-built single-family homes rose one point to 68 in October on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). Builder confidence levels have held in the high 60s since June.

Builders continue to view solid housing demand, fueled by a growing economy and a nearly 50-year low for unemployment. Lumber price declines for three straight months from elevated levels earlier this summer have also helped to reduce some cost pressures, but builders will need to manage supply-side costs to keep home prices affordable.

Favorable economic conditions and demographic tailwinds should continue to support demand, but housing affordability has become a challenge due to ongoing price and interest rate increases. Unless housing affordability stabilizes, the market risks losing additional momentum as we head into 2019.

Derived from a monthly survey that NAHB has been conducting for 30 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.

The HMI index measuring current sales conditions rose one point to 74 and the component gauging expectations in the next six months increased a single point to 75. Meanwhile, the metric charting buyer traffic registered a four-point uptick to 53.

Looking at the three-month moving averages for regional HMI scores, the Northeast rose three points to 57 and the South edged up one point to 71. The West held steady at 74 and the Midwest fell two points to 57.

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NYC prices keep falling | Bedford Corners Real Estate

Bloomberg News

Big Apple home buyers are wary of tax reform, and they’re saying so with their checkbooks. The median Manhattan home sold for around $1.1 million during the third quarter, according to a report released Tuesday, as prices took a 4.5% annual dip partially in response to changing policies in Washington.

Nearly 3,000 homes traded hands between July and the end of September, which is roughly 11% fewer than the same period last year, according to the report from Douglas Elliman Real Estate. And as prices and sales volume continue to decline, more homes hit the market. That pushed inventory to nearly 7,000 units, or about 13% more than 2017.

The market’s strength is likely being sapped by uncertainty regarding the new federal tax law, which hit high-tax states like New York hardest by limiting the amount of property taxes that can be deducted on federal tax returns. The luxury and new development sectors were hit hardest as median prices fell roughly 9% with units sitting on the market for roughly twice as long as more modest offerings. Rising interest rates are also making it more expensive to purchase, especially for lower-priced units as prospective buyers are more likely to take out a mortgage. More generally, wage growth has not kept up with rising housing prices, especially in New York City, creating a disconnect between rosy top-line economic figures and the real estate market, which is still correcting itself after a white-hot run that peaked in 2014.

“You throw that all in a cauldron,” said Jonathan Miller, head of appraisal firm Miller Samuel, which prepared the report for Douglas Elliman, “and it is putting a drag on the pace of the market.”

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https://www.crainsnewyork.com

crains.com

After Florence: Your house has flooded. Here’s what you should do | Bedford Corners Real Estate

Steps you need to take after a flood

When floodwaters from now-Tropical Storm Florence finally subside and residents are allowed to return to their communities in North and South Carolina, the shift to recovery mode may seem overwhelming.

But what you do in the days after a devastating storm can mean the difference between a relatively fast cleanup and an expensive months-long demolition nightmare.

Experts advise these steps to help protect your safety and your wallet.

Taking care of your health

“The first thing you need to do is take care of yourself. Make sure you’re emotionally OK,” said Elaina Sutley, assistant professor of structural engineering at The University of Kansas. “Only then should you start assessing any structural damage.”

What materials do I need? You should make sure you have knee-high rubber boots, long-sleeve clothing, a respirator, a flashlight, a camera and liquid bleach.

Where do I start? Start by turning off any gas or power to prevent explosions or electrocution. Then begin drying out your home and addressing the structural damage such as a wall collapse or sinking ceilings. And remember: There may still be water left either in the basement or seeping from soaked furniture.

“You need to open up windows and doors. Let things dry out,” Sutley said. Fans and humidifiers can help speed up the drying process.

While everything dries, which can take a few days, homeowners are encouraged to toss any food left in the home along with any absorbent material that has come in contact with water.

“If there was salt-water flooding, there might be corrosion so get an electrician to look at that,” said Jeffrey Schlegelmilch of the National Center for Disaster Preparedness. “Even if it’s not salt water, things could still be dangerous. Fact-check with a professional before plugging anything in.”

What do I do with damaged items? Coastal areas that have experienced floods in the past will likely have protocols for picking up and handling debris such as drywall and large furniture.

What can I keep? Family heirlooms, jewelry, photographs and other valuables can be air-dried and saved. Clean and disinfect them if they came in contact with floodwater.

What should I avoid? Other than contaminated water flow, there could also be animals trapped in your home brought in by the floodwaters.

“Areas like North Carolina have a lot of poisonous snakes. Floodwaters can bring these into your home. Look out for any critters that could be lurking in hidden areas,” Schlegelmilch said.

What happens if I wait? “If your home is just left to sit, it will continue to deteriorate, and it becomes even more of a health threat,” Schlegelmilch said.

Summer’s heat and humidity make for prime conditions for mold, so act fast, Sutley said.

Taking care of your wallet

The sooner homeowners file claims with an insurance agency or the Federal Emergency Management Agency (FEMA), the faster a resolution can be reached. However, traditional homeowner policies don’t cover flooding. Only flood insurance policies reimburse families for water damage caused by flooding.

“After Hurricane Matthew hit the southeastern United States, I worked on a project where we spoke to households and businesses about receiving assistance from their insurance or FEMA,” Sutley said. “Most people who had insurance and filed a claim received help within 30 days. Most people who applied for FEMA had received it within a month.”

What do I need? Insurance documents, home deeds and your Social Security card can get you started on making an insurance claim.

Photos and videos of the property both before and after the flood are also essential since recovery agencies will likely request proof of the damage.

Where do I start? It’s important to contact your insurance agency before you remove anything from your home. “Insurance companies sometimes want to send someone down to investigate before anything is taken out,” Schlegelmilch said.

After contacting your insurance company, work can began. Homeowners are encouraged to remove any carpet or drywall that has come in contact with water before mold starts to form.

“I would look to CDC guidance for which bleach to use. You don’t want just to get surfaces to look clean, you want to make sure that there aren’t any living mold spores,” Schlegelmilch said.

What if I don’t have insurance? It’s pretty common for people not to have flood insurance, no matter their income level. In coastal regions, it may be mandatory. But for those who live further inland, there are often local aid options.

“Find out what types of public assistance is available in your area,” Schlegelmilch said. “There are a lot of charities that pop up to help people get back in their homes. Some move people to the top of the list who are low income or have disabilities.”

To find out if you qualify for assistance or for more information, check FEMA’s website disasterassistance.gov.

Dutch city’s 3D-printed homes could help upend the construction industry | Bedford Corners Real Estate

Image: Project Milestone

An artist’s illustration of Project Milestone, an initiative in the Netherlands that will build five 3D-printed concrete homes in five years. Houben + Van Mierlo Architects / Image: Project Milestone

In the Dutch city of Eindhoven, engineers, contractors and architects have joined forces to create one of the world’s first 3D-printed commercial housing projects.

Dubbed Project Milestone, the initiative will use a huge 3D printer to fabricate five concrete houses in a wooded area near the city’s airport. Plans call for the first home, a three-bedroom dwelling of just over 1,000 square feet, to be completed in mid-2019 — though the entire initiative will take five years because the technology is still being refined.

The effort is being undertaken in the midst of a shortage of bricklayers in the Netherlands, Rudy van Gurp, a project manager at Van Wijnen, the construction firm that’s overseeing the project, told CNN. But the main goal will be to show how 3D printing can cut costs and concrete waste (and thus curb the greenhouse gas emissions associated with the production of cement, concrete’s main ingredient.)

“I feel excited,” van Gurp told NBC News MACH in an email. “We are reinventing some details in the real estate industry, and it feels to be at a start of a tech revolution in this industry.”

Image: A 3D Printer creates concrete
A 3D printer at Eindhoven University of Technology printing concrete for a bridge construction project. Imagecollectors

The robotic printer used to create the homes will follow architectural plans to put down layers of a special concrete mix. The first house’s roof and walls will be fabricated off-site and then brought to the building site for assembly. Once the technology is honed, it should be possible to print an entire home on site.

Renderings of the planned homes show futuristic-looking structures with curvilinear shapes and rectangular windows and doors. The designs are intended to show off the printer’s versatility, including the ability to create unusual shapes that are hard to make with conventional construction methods, van Gurp said.

But will 3D printing really revolutionize the construction industry?

Carlo Ratti, an architect and professor of urban technologies and planning at the Massachusetts Institute of Technology, told MACH in an email that while he believes digital fabrication will revolutionize construction, 3D printing in concrete is unlikely to be the key. “Still, it is positive that we are seeing a myriad [of] experiments in concrete printing — Project Milestone is one of them — that will be useful to perfect the technique,” he said.

Image: Project Milestone
The houses’ eccentric designs show off the 3D printer’s ability to create nearly any shape or design. Houben + Van Mierlo Architects

The project certainly seems to have captured the attention of people looking for a place to live. Within a week of the renderings’ release, van Gurp told The Guardian, 20 families had applied to rent the first home.

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https://www.nbcnews.com/mach/science/dutch-city-s-3d-printed-homes-could-help-upend-construction-ncna886351

California panel approves historic plan to require solar panels on new homes | Bedford Corners Real Estate

New homes and low-rise apartment buildings across California would include solar panels under first-in-the-nation rules approved Wednesday by the California Energy Commission.

The rules now go to the state Building Standards Commission, where they were expected to easily win approval.

“This is groundbreaking,” said Pierre Delforge, senior scientist for the Natural Resources Defense Council. He said the rules “will save energy, lower customer bills, keep homes comfortable in increasing heat waves and reduce pollution from California’s homes and buildings.”

The requirements, which would go into effect in 2020, could add more than $10,000 to the construction costs of new homes, the commission says. Some builders say the costs could be more than twice that.

But the commission and most builders agree that the costs should be more than made up in energy savings over the life of the solar energy system. And the plan has drawn generally positive reviews from the construction industry.

“Adoption of these standards represents a quantum leap in statewide buildings standards,” said Robert Raymer, technical director for the California Building Industry Association. “No other state in the nation will have anything close to this, and you can bet 49 other states will be watching to see what happens here in California.”

Some conservatives were not so enthusiastic, noting that the state already has some of the nation’s most expensive housing markets. A National Association of Realtors survey for the fourth quarter of 2017 listed four California markets among the nation’s five most expensive.

San Jose topped the list with a median price in excess of $1.2 million.

“The state’s housing crisis is real,” State Assemblyman Brian Dahle said. “California’s affordability problem is making it more and more difficult for people to afford to live here.”

The commission projects that more than 100,000 single-family homes and almost 50,000 multi-family buildings will be built across the state in 2020. Raymer acknowledged that the ambitious plan will probably roll in with some “hiccups.” Less than 20% of homes built in the state now include the panels.

The rules also address insulation and appliance efficiency. And they include efforts to increase battery storage and increase use of electricity over natural gas. Use of batteries to store solar energy will be crucial to cost savings, Raymer said.

“Battery storage technology will allow the homeowner to capture the cheaper electricity … the middle of the day,” Raymer said. “And keep that power on-site for use in the early evening hours when electrical rates go way up.”

The rules apply to building permits issued after Jan. 1, 2020. There are some exceptions to the solar panel rule, such as homes that would be shaded by trees or buildings or when roofs are too small for the panels.

Abigail Ross, CEO of the national Solar Energy Industries Association, said solar prices in the state have fallen by more than 50% in the last five years.

“Other states may not be ready for this step yet,” she said. “But this is a precedent-setting policy, one that will bring enormous benefits and cost savings to consumers.”

For more than a decade, the commission has been operating under goals that would provide “net-zero” energy for new residents by 2020 and for new commercial buildings a decade later.

 

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https://www.usatoday.com/story/news/nation/2018/05/09/california-solar-panels-state-may-require-them-new-homes/594364002/