Category Archives: Lewisboro

Residential Construction Employment Solid | Cross River Real Estate

The count of unfilled jobs in the overall construction sector remained elevated in November, as residential construction employment continues to grow.

According to the BLS Job Openings and Labor Turnover Survey (JOLTS) and NAHB analysis, the number of open construction sector jobs (on a seasonally adjusted basis) came in at 184,000 in November. The cycle high was 225,000 set in July.

The open position rate (job openings as a percent of total employment) for November was 2.7%. On a smoothed twelve-month moving average basis, the open position rate for the construction sector increased to 2.8%, setting a cycle high and exceeding the peak twelve-month moving average rate established prior to the recession.

The overall trend for open construction jobs has been increasing since the end of the Great Recession. This is consistent with survey data indicating that access to labor remains a top business challenge for builders.

The construction sector hiring rate, as measured on a twelve-month moving average basis, remained steady at 4.9% in November. The twelve-month moving average for layoffs was also steady (2.6%), remaining in a range set last Fall. Quits rose to 2.4% in November, consistent with a tight labor market.

Monthly employment data for December 2016 (the employment count data from the BLS establishment survey are published one month ahead of the JOLTS data) indicate that home builder and remodeler employment expanded, increasing by 9,800. The December gains continue the improvement in the Fall after a period of hiring weakness early in 2016. The 6-month moving average of jobs gains for residential construction has now increased to a healthier 11,450 per month.

Residential construction employment now stands at 2.653 million, broken down as 739,000 builders and 1.915 million residential specialty trade contractors.

Over the last 12 months home builders and remodelers have added 103,000 jobs on a net basis. Since the low point of industry employment following the Great Recession, residential construction has gained 667,000 positions.

In December, the unemployment rate for construction workers stood at 6.8% on a seasonally adjusted basis. The unemployment rate for the construction occupation had been on a general decline since reaching a peak rate of 22% in February 2010, although it has leveled off in the 6% to 7% range since the middle of 2016

 

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http://eyeonhousing.org/2017/01/residential-construction-employment-solid-in-december/

Americans Move Less and Impact the Economy Less | Cross River Real Estate

The median tenure homeowners plan to stay in their homes soared with the housing recession in 2008 for good reasons. Millions of owners were underwater and millions more lacked the 20 percent equity need to sell their home.  Many facing the need to move for job or space reasons found it easier to move and keep their old home to rent out.  Thus was born the phenomenon of “accidental landlording”.

The housing economy has changed dramatically.  Values have almost regained their peaks at the top of the housing boom, far above the levels of 2008.  Yet owner tenure has not changed and repeat buyers’ expectations today are twice as long as actual tenure ten years ago.  Are longer tenures now locked in stone?

One of the leading motivations to move—change in employment—is also changing. Workers stick with the same job longer today than they did 10, 20, and 30 years ago.  U.S. workers had an average job tenure of 4.6 years in 2012, the last year for which figures are available—that’s up from 3.7 years in 2002 and 3.5 in 1983, according to the Bureau of Labor Statistics. The trend holds up within almost every age and gender category—so it cannot be explained away by women’s increased presence in the workplace, or people working past traditional retirement age.

First-time buyers now expect to live in their homes 15 years or longer 2016-10-27_9-19-07

Another contributing factor could be the popularity of “aging in place” among the Boomer generation.  More and more elderly are staying in their family homes rather than downsizing, or moving to retirement communities or rentals.  According to AARP, 87 percent of adults age 65 plus want to stay in their current home and community as they age. Among people age 50 to 64, 71 percent of people want to age in place.

The Recession Changed Ownership Patterns

According to a new analysis by economists at the National Association of Realtors, in 1985, the median tenure for sellers remaining in their home was five years, the lowest in since NAR started tracking the data in the 30-year period. From 1987 to 2008, the median tenure for sellers was a steady six years throughout the course of about a 20-year period. The only exception was in 1997 when the median tenure jumped up one year to seven years for sellers.

As the U.S. housing market entered the recession, the median tenure for sellers began to rise—seven years in 2009, eight in 2010, and to nine years in 2011 where it has remained steady through 2015. The only exception is in 2014 when the median tenure for sellers reached an all-time high at 10 years, but came back down to nine last year. Thus market changes in the last decade have caused sellers to remain in their homes longer, increasing the median number of years in the home by 50 percent more than they did 20-30 years prior.

In 2006, first-time buyers reported that their median expected tenure was just six years and nine years for repeat buyers, the lowest since we started collecting the data for both buyer types. For repeat buyers, that bumped up to 10 years in 2007, 12 years in 2009, and then up to 15 years in 2010 where it has remained steady for the past six years. For first-time buyers, the median expected tenure in the home jumped to 10 years in 2008 where it has remained ever since.

It is no surprise that repeat buyers expect to remain in their home longer than first-time buyers. It is interesting, however, to see that first-time buyers in 2006 expected to sell in just six years. Fast forward a decade to 2015 and first-time buyers expect to sell in almost double the amount of time.

Economic Implications of Longer Tenure

Significantly longer ownership tenure means that homes will change hands less frequently, which hasmajor economic implications:

  • Volumes of transactions will fall for real estate brokers and lenders.  The coming of age of the Millennial generation could theoretically offset the effects of longer tenure except that the first symptom of extended tenure could be the chronic shortage of inventories over the last two years that has plagued home sales and limited opportunities for Millennials to buy;
  • Demand for remodeling and renovation will increase as owners choose to fix up their current homes rather than sell them.  Increased home repair will create new business for Home Depot and hardware stores.

 

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http://www.realestateeconomywatch.com/2016/10/americans-move-less-and-impact-the-economy/

Are Trophy Homes Losing their Lustre? | Waccabuc Real Estate

Are Trophy Homes Losing their Lustre?

With pressure on the homebuilding industry to build fewer trophy homes and concentrate on filling the demand for affordable housing, the data does not bode well for builders.

Median prices of new homes have risen steadily during the recession. In September, the median sold price of a new home hit $313,500, 5.5 percent higher than last year’s median of $296,400 and 25.2 percent higher than the median price for existing homes in September.

Even so, over the past two years super expensive homes priced at one million or more are on the decline, according to data from the Census Bureau’s Survey of Construction.  In 2015, a total of 1,762 homes were started for sale with a price of $1 million or more and new homes started for sale with a price of $1 million or more decreased as a share in absolute number in 2015. That number was significantly lower than in 2013 (3,347 homes) and 2014 (3,019).

 

2016-11-16_14-05-42

In percentage terms, these expensive homes represented 1.06 percent of all new homes started for sale in 2015, from a peak of 1.26 percent in 2014 but about the same as in 2013 (0.99 percent). This represents a much higher percent share compared to other years. For instance, from 2008 to 2012 the percent share of $1 million or more homes started for sale was less than 0.50 percent, while it was at most 0.66 percent during the boom period, reported the National Association of Home Builders’ Eye on Housing blog.

To put things in perspective, Trulia reported in May that since 2012 the share of all million dollar homes in the United States has increased from 1.6 percent to 3 percent, but many metros and neighborhoods have seen a much larger increase.

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http://www.realestateeconomywatch.com/2016/11/are-trophy-homes-losing-their-lustre/

Santa’s home on zestimate | Katonah Real Estate

Santa’s House  The North Pole

3 beds 2 baths 2,500 sqft

OFF MARKET
Zestimate®:$656,957
EST. REFI PAYMENT$3,228/mo
A toy-lover’s paradise nestled on 25 idyllic acres at the North Pole – perfect for spirited reindeer games. The home, constructed in the 1800s of gorgeous old-growth timber logged on site, is steeped in Old World charm but offers modern-day amenities, thanks to a 2013 renovation.

A welcoming entryway leads to the living room with a floor-to-ceiling river rock fireplace for roasting chestnuts. The gourmet kitchen is a baker’s dream, boasting an oven with 12 different cookie settings... More 

FACTS

  • Lot: 25 acres
  • Floor size: 2,500 sqft
  • Home type: Single Family
  • Year built: 1822
  • Last remodel: 2013

FEATURES

  • Santa’s Toy Workshop
  • Reindeer Stables
  • River Rock Fireplace
  • Sleigh Parking Garage

Zestimate Details

Zestimate
$656,957
+$1,144 Last 30 days
$610K

$700K

Zestimate range
Rent Zestimate
$3,300/mo
+$46 Last 30 days
$2.8K

$3.5K

Zestimate range
Zestimate forecast
$671,451
+2%
One year
  • Zestimate

*Endorsement by the United States Department of Defense or NORAD is not intended nor implied.

Builder Confidence Holds Firm in November | South Salem Real Estate

Builder Sentiment Up

Builder confidence in the market for newly-built single-family homes held steady in November at a level of 63 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI).

Builder sentiment has held well above 60 for the past three months, indicating that the single-family housing sector continues to show slow, gradual growth. Ongoing job creation, rising incomes and attractive mortgage rates are supporting demand in the single-family housing sector. These factors will help keep housing on a steady, upward path in the months ahead.

 

hmi_nov

It is worth noting that most of the November HMI responses originated before the elections. Thus, builder confidence remained unchanged as the industry awaited the results.

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 components measuring buyer traffic rose one point to 47, and the index gauging current sales conditions held steady at 69. Meanwhile, the component charting sales expectations in the next six months fell two points to 69.

 

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http://eyeonhousing.org/2016/11/builder-confidence-holds-firm-in-november/

Trump’s Plan to Fix the Nation’s Infrastructure | Katonah Real Estate

The President-elect’s ambitious proposal relies on private financing, but the plan has its critics.

 

According to President-elect Donald Trump, the answer is yes. You can get $1 trillion in infrastructure using a “revenue neutral” model of private financing that won’t burden government budgets.

The declining state of America’s infrastructure has long been a major issue for both Democrats and Republicans, but the parties have disagreed about how to pay for what the American Society of Civil Engineers (ASCE) has identified as a $3.6 trillion investment gap.

Trump’s senior policy advisers say they have an answer. In late October, Wilbur Ross, a private equity investor, and Peter Navarro, a University at California, Irvine business professor, released a detailed plan for Trump’s vision on infrastructure, which calls for investment in transportation, clean water, the electricity grid, telecommunications, security infrastructure, and “other pressing domestic needs.” Trump’s vision relies heavily on private companies to make American infrastructure great again.

Road work in Kitsap County in Washington state

Kitsap County Public Works – Roads Division via flickrRoad work in Kitsap County in Washington state

To finance $1 trillion dollars worth of new infrastructure, the Trump plan would entice private companies to invest $167 billion of their own equity into projects. In return, these companies would get a tax incentive equal to 82% of that equity investment, or roughly $137 million in government tax breaks. Companies could then leverage their initial equity investment and tax credit financing to borrow more money on private financial markets, where interest rates are at historic lows. “With interest rates so low, this has got to be the best time from a break-even point of view, from a societal point of view,” Ross told Yahoo! Finance.

In addition, companies would be allowed to receive revenue—in the form of tolls or fees from users of this infrastructure—in order to offset their costs and generate profits.

An overpass project on Interstate 595 in Florida

FormulaNone via flickrJosh Lintz”An overpass project on Interstate 595 in Florida

The Trump plan hopes to pay for the financial burden of those government tax credits in two ways: First, through the increased tax revenue that would come from the wage income of construction workers and others building the projects; and second, from the taxes that would be paid on the increased revenues of the companies contracted to do the work. In other words, the income tax of workers and the profits made from fees collected from users of the infrastructure would offset the lost tax revenue from government tax credits.

Creating a deficit-neutral infrastructure plan is nothing new. In 2015, Sen. Bernie Sanders (I-VT) championed a bill calling for a $478 billion investment over six years without increasing the deficit. Funding relied on closing corporate tax breaks that allow corporations to stash money overseas. That bill was blocked by the Republican Senate.

Public-private partnerships are common in complex infrastructure projects, but what’s unusual about Trump’s plan is the extent to which private companies would take over the entirety of projects. Private entities, which are beholden to corporate revenue requirements, would be put in charge of public sphere entities. Navarro, responding to that potential criticism, said in an interviewwith Yahoo! Finance that Trump’s “form of financing doesn’t rule out the government managing the whole thing after it’s built. This is not like the prison thing.” (Stock prices of for-profit prison companies, meanwhile, are on the rise with Trump’s win.)

A sewer project in Baltimore

Elvert Barnes via flickrA sewer project in Baltimore

How important is it to close the infrastructure investment gap? The ASCE’s 2013 Report Card for America’s Infrastructure gave the country a D+ grade. The next report card is being prepped for release in March 2017. “From ACSE’s perspective, clearly there’s a role for the private sector in infrastructure development, and it’s already been involved for a long time,” says Brian T. Pallasch, managing director of Government Relations and Infrastructure Initiatives at the society. “We still have a bit of uncertainty as to what [private investment] means in the Trump administration’s proposed perspective. They clearly want private investment in infrastructure. When you get the private sector involved in infrastructure, there is going to need to be a rate of return for them to make money. Historically, municipal infrastructure hasn’t had private investors because there hasn’t been a rate of return. How does that solve itself?”

How, for example, might you make the business case for a profit-driven private company to invest in the municipal water supply in Flint, Mich.? The answer may lie in increased fees for users of that service. “We feel very strongly that users of infrastructure should pay for it. That principal is one we support,” Pallasch says. That said, he notes the need to be realistic about the financial burden certain fees could cause. “The idea of raising water rates is a struggle for many municipalities where you have low-income households. We’ve been talking to colleagues in the water world about how do you set up programs where you raise rates and it allows subsidization of lower income residents?”

As for water, the Trump plan suggests tripling funding for state revolving loan fund programs, which supply low cost financing to municipalities, but it does not identify where those increased funds would come from.

Trains in Des Moines, Iowa

Phil Roeder via flickrTrains in Des Moines, Iowa

Critics of revenue-neutral plans such as these say that what would be saved on the front end will get paid for on the back end in the form of tolls and increased fees for users. In general, “revenue neutral tax proposals by definition create winners and losers,” economist Thomas L. Hungerford wrote last year in an op-ed. “The winners would pay less in taxes and the losers would pay more in taxes. The losers tend to be highly concentrated in certain income groups and business sectors, essentially becoming special interests.”

Some economists believe the Trump plan to use tax revenues to offset costs is overly ambitious. It assumes that the income tax revenue generated from construction and other contract workers on these projects will be in addition to existing tax revenue. As Alan Cole, an economist at the independent Tax Foundation, told the Washington Post, the plan overinflates the potential revenue because it assumes workers on these projects were previously unemployed or not already contributing to income tax revenue. (This plan also means that income tax revenue would be diverted from other funding needs to underwrite infrastructure.)

Cole noted, too, that Americans would ultimately foot the bill for these new projects, not only in user fees. “Maintenance and new construction would only occur in communities where it is urgently needed if private investors were convinced users could afford to pay,” he told The Washington Post. And if, as Navarro proposed in his Yahoo! Finance interview, the government takes over the projects once built, then the government would be on the hook for long-term care and maintenance.

Indeed, having so much private investment could weight projects to wealthier demographics. “Under Trump’s plan, poorer communities that need the new projects and repairs the most would get the least attention,” writes Jeff Spross, business and economic correspondent for The Week.

Lents Town Center project in Portland, Ore.

Twelvizm via flickrLents Town Center project in Portland, Ore.

There’s also concern that Trump’s infrastructure plan doesn’t work in tandem with his other proposed policy changes, such as tax cuts for the wealthy. “He’s right that borrowing to invest in infrastructure makes sense in times like these when interest rates are low,” the editors of The New York Times write. “But combined with his other plans, Mr. Trump’s proposed borrowing would do severe fiscal damage.”

Once financed by private enterprise and tax incentives, infrastructure projects under Trump’s plan would speed through the “boondoggle” of “red tape” via a proposed streamlined approval process. Projects would “put American steel made by American workers into the backbone of America’s infrastructure,” according to the vision statement, co-authored in part by Ross. A billionaire investor, he specializes in bankruptcies and has “parlayed a series of ballsy political and financial gambles on left-for-dead assets—midwestern steel mills, southern textile mills, and Appalachian coal mines—into an empire.” It’s unclear how Trump’s administration would dictate that private companies use only American steel when Trump himself relied on cheaper Chinese steelin his own real estate development projects. The Trump vision also touts an increase in private sector investment to “better connect American coal and shale energy production with markets and consumers.” Notably absent is any mention of investment in renewable energy infrastructure.

Overall, the current Trump plan strongly focuses on traditional “horizontal” infrastructure needs—surface roads, pipelines, water distribution. Besides a call to modernize America’s airports, the infrastructure of buildings and other public spaces isn’t explicitly mentioned. The ACSE, meanwhile, categorizes schools, public parks, and recreation among the critical infrastructure needs in its report card.

Fort Irwin hospital project in California

US Army Corps of Engineers via flickrFort Irwin hospital project in California

The American Institute of Architects (AIA) has consistently lobbied the government to expand its view of infrastructure. “One of the things that we’ve communicated to presidential transition teams in the past, and will continue to do, is to remember that infrastructure is more than roads and bridges; it’s also schools and libraries and buildings,” says Andrew Goldberg, Assoc. AIA, the Institute’s managing director of government relations and advocacy. “It’s not just the infrastructure that moves people and things, it’s also what happens once you get there. Infrastructure was the first policy related item that Trump mentioned in his victory speech, and I think that there is a strong opportunity coming into next year for some serious work. It will be important to speak to the importance of the built environment and the community assets in addition to ‘traditional’ infrastructure.”

 

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http://www.ecobuildingpulse.com/news/trumps-plan-to-fix-the-nations-infrastructure_s?utm_source=newsletter&utm_content=Article&utm_medium=email&utm_campaign=EBP_111516%20(1)&he=bd1fdc24fd8e2adb3989dffba484790dcdb46483

Mortgage questions answered | Katonah Real Estate

The common questions many first-time buyers ask are now answered.

Purchasing a home and conquering financial responsibility is a goal for many people. But making this leap to homeownership is a big step, and it’s one that should be taken with careful consideration. Let’s face it, finding a home and securing a mortgage isn’t a walk in the park — and certainly nothing like signing a simple rental agreement. You’ve probably encountered confusing jargon such as “points,” “preapproval,” and “prequalification,” and funny names like Fannie Mae. Making sense of everything can leave you on the verge of frustration, but don’t worry — this is a completely normal feeling.

To help you demystify the process and get the most out of your first mortgage, we’ve asked some finance experts about things to consider before applying, some common points of confusion, and a few handy tips to help you understand the basics of mortgages.

What’s your best advice to a first-time homebuyer?

“Be prepared; do your homework. Check out reputable lenders in your area. Get prequalified so that you know the price range in which you should be shopping.” — Cathy Blocker, EVP, Production Operations of Guild Mortgage Company

“Talk to a local mortgage banker that you’re comfortable with! There are some great mortgage bankers willing to help, so you shouldn’t waste your time with someone who doesn’t make you feel comfortable with the process. Explain what you’re looking to do and what your ideal home-buying situation is. The right mortgage banker will customize your home loan to your specific scenario. Make sure they explain all the costs ahead of time, so that you know exactly what to expect once you get a purchase contract and start the mortgage process.” — Nick Magiera of Magiera Team of LeaderOne Financial

What should buyers be prepared for when applying for a loan?

“Every mortgage situation is different, so there’s really not a one-size-fits-all list of requirements. I recommend that you contact a mortgage banker that you know, like, and trust. If you don’t know any mortgage bankers, then I recommend that you choose a mortgage banker that your real estate agent suggests you work with. Your real estate agent wants you to have a smooth transaction, so they will only send you to mortgage bankers that they trust. A great mortgage banker will then walk you through the process and customize the mortgage around your specific scenario.” — Nick Magiera of Magiera Team of LeaderOne Financial

“There are a few things to get squared away before applying for a loan: 1. Cash for a down payment. Save money/acquire money for a down payment and closing costs. 2. A good working knowledge of your personal finances. Create a budget of your future expenses, as if you own the house, and make sure you can afford it. A good rule of thumb is that your mortgage should not exceed 30% of your take-home income. 3. A general idea of the price range of homes you are interested in. Research potential homes through a local Realtor or at Trulia.com. Compare by looking at real estate taxes, neighborhood statistics, and other criteria. Take your time! Your house may be the largest purchase in your life.” — Scott Bilker of DebtSmart

What is the value in getting preapproved or prequalified for a mortgage?

“It gives homebuyers an edge against competing offers. If a seller sees two offers and one has already been approved, then that is often the one that they go with, as there is less risk for them.” — Tracie Fobes, Penny Pinchin’ Mom

“First off, there is a difference between preapproved and prequalified. Prequalifying means you have done an initial lender screening. However, preapproval is the next step in the process. You have to give the bank many more documents like you’re applying for the mortgage. It’s worth doing because you will get a preapproval letter from the bank, and this will show sellers and real estate agents that you’re a serious buyer. It will also give you a better idea of which homes you can afford. Additionally, you will be able to act quickly once you find that perfect place without having to then seek out financing.” — Scott Bilker of DebtSmart

What range of rates should a first-time homebuyer expect with either a poor credit score or a strong credit score?

“On a conventional loan (Fannie Mae or Freddie Mac), the difference in price between a poor credit score (620) and a strong credit score (740-plus) could be as much as 3.0 points in fees, or 0.75 to 1.25% in interest rate. On an FHA or VA loan, the price difference may be up to 0.75 in points in fees or 0.125 to 0.250% in interest rate.” — Cathy Blocker, EVP, Production Operations of Guild Mortgage Company

“There is not a single universal standard. Lenders determine what kind of risk premium it will add to a loan based on your credit history and other information presented in a loan application. You can’t take a lender’s advertised interest rate for its best-qualified borrowers and tack on a set premium because you’re a C credit instead of an A credit (A credit being the least amount of risk).” — Nick Magiera of Magiera Team of LeaderOne Financial

What are some tips for paying off your mortgage faster?

“There are only two ways to pay off your mortgage fast: 1. Refinance at a lower rate. 2. Pay more toward the mortgage. That’s it. Don’t be fooled by biweekly mortgages because all they do is make you pay more. If you are not in a position to get a lower rate, then simply increase your monthly mortgage payment to an amount that is comfortable, keeping in mind that this is money you cannot easily get back. Conversely, if you pay more on your credit cards, you can always use the card again for cash or to buy things you need.” — Scott Bilker of DebtSmart

What does it mean when “the Fed raises the rates,” and how does it apply to mortgages?

“[The] Federal Reserve sets the interest rate that banks pay to borrow overnight funds from other banks holding deposits with the Federal Reserve. If the cost of overnight borrowing to a bank increases, this typically causes banks to increase the interest rates they charge on all other loans they make, to continue to earn their targeted return on assets. As banks increase their interest rates, other lenders or financial firms also tend to increase their rates. An increase in the federal funds rate does not directly correlate to a direct increase in mortgage rates but is viewed as a general signal to the market that the Federal Reserve views that the economy is growing and that interest rates will be increasing in the future.” — Cathy Blocker, EVP, Production Operations of Guild Mortgage Company

What are points?

“Points are fees the borrower pays the lender at the time the loan is closed, expressed as a percent of the loan. On a $200,000 loan, 2 points means a payment of $4,000 to the lender. Points are part of the cost of credit to the borrower, and in turn are part of the investment return to the lender. That said, points are not always required to obtain a home loan, but a ‘no point’ loan may have a higher interest rate.” — Nick Magiera of Magiera Team of LeaderOne Financial

“‘Discount points’ refers to a fee, usually expressed as a percentage of the loan amount, paid by the buyer or seller to lower the buyer’s interest rate.” — Cathy Blocker, EVP, Production Operations of Guild Mortgage Company

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https://www.trulia.com/blog/mortgage-101-breaking-down-basics/?ecampaign=con_cnews_digest&eurl=www.trulia.com%2Fblog%2Fmortgage-101-breaking-down-basics%2F

Miami luxury condo prices plunge | Lewisboro Real Estate

According to a new report from Douglas Elliman and Miller Samuel, the average sale price for luxury condos in Miami and Miami Beach plunged 30 percent year over year in the third quarter, to $948,700 and $2.6 million respectively.

The number of luxury condo sales also plunged, by 25 percent in Miami and 17 percent in Miami Beach.

The declines mark another step down for high-end real estate in the area, which had experienced a boom after the financial crisis. It comes as buyers from Latin America are slowing to a trickle and uncertainty around the presidential election is causing wealthy Americans to pull back.

At the same time, luxury buildings that were started during the boom years of 2013 and 2014 are now starting to come online, creating a glut of high-priced homes and condos.

Miami’s results echo those from other cities in the U.S., where the highest priced real estate is faring the worst.

Luxury “is becoming a smaller part of the market due to the reduced emphasis at the top,” said Miller Samuel’s Jonathan Miller.

Inventory of luxury condos in Miami Beach jumped 30 percent in the quarter compared with a year ago, to 1,235. These properties are now sitting on the market for an average 126 days, more than double last year’s number.

In broader Miami, inventory rose 11 percent, resulting in a 40-month supply of luxury condos. Inventories for single-family homes in both areas are also higher.

Given these broad-based increases, Miller said the luxury real estate market in Miami is likely to get worse before it gets better.

 

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http://www.cnbc.com/2016/10/19/miami-luxury-condo-prices-take-a-plunge.html?__source=newsletter%7Ceveningbrief

Key Building Materials Remain Stubbornly Expensive | Cross River Real Estate

Inflation in prices received for building materials (prior to sales to consumers) was mixed in September according to the latest Producer Price Index (PPI) release by the Bureau of Labor Statistics. Although their monthly changes were relatively modest, the prices of OSB and ready-mix concrete have been trending upward for quite some time and remain at historically high levels.

OSB prices climbed 2.5% in September, continuing a 7-month trend that has the commodity at its highest price since June 2013. Since February, monthly increases have averaged 3.2%, pushing prices up by a cumulative, eye-popping 25%.

2016-10-ppi-osb-prices1

In addition, although the price of ready-mix concrete fell marginally in September, the long-term trend remains concerning. Monthly increases have averaged 0.3% over the last five years as the price of ready-mix concrete has steadily risen by roughly 20%.  While gypsum prices picked up (+0.1%), the prices of softwood lumber and steel mill products fell by 1.4% and 0.5%, respectively.

2016-10-ppi-grmcsl

After holding steady in August, the economy-wide PPI rose 0.3% in September. Over three-quarters of the increase was the result of a 0.7% increase in prices for goods, while the rise in prices for services was a more modest 0.1%. Final demand prices for core goods (i.e. goods excluding food and energy) inched up 0.3%, and prices for core goods less trade services rose 1.5% over the 12 months ended in September. This represented the largest 12-month increase in two years.

 

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http://eyeonhousing.org/2016/10/key-building-materials-remain-stubbornly-expensive/

More First-timers Than Expected Are Now Buying Homes | Katonah Real Estate

First-time buyers may be entering the U.S. home market in greater numbers than industry watchers had assumed.

Nearly half of sales in the past year went to people who were buying their first home, according to a survey released Tuesday by the real estate firm Zillow. That’s a much higher proportion of the market than some other industry estimates had indicated.

Zillow’s survey results suggest that this year’s growth in home sales has come largely from a wave of couples in their 30s, who are the most common first-time buyers. If that trend were to hold, it could raise hopes that today’s vast generation of 18-to-34-year-old millennials will help support the housing market as more of them move into their 30s.

That’s among the findings in a 168-page report by Seattle-based Zillow. Its survey also found that home ownership is increasingly the domain of the college-educated. And it indicated that older Americans who are seeking to downsize are paying premiums for smaller houses.

Here’s a breakdown of Zillow’s findings:

— First-time buyers make up a larger chunk of the housing market than the real estate industry has generally thought. Forty-seven percent of purchases in the past year went to first-time buyers. Their median age was 33. By contrast, surveys from the National Association of Realtors have indicated that first-timers account for only about 30 percent of all buyers.

The difference between the two surveys may stem from their methodologies. The NAR has used a mail-based survey for its annual figures, while Zillow used an online survey that might have generated more responses from younger buyers.

— No college? Dwindling chance of homeownership

It’s become harder to realize the dream of home ownership without a college degree. Sixty-two percent of buyers have at least a four-year college degree. Census figures show that just 33 percent of the U.S. adults graduated from college. The gap between the education levels of homebuyers and the broader U.S. population indicates that workers with only a high school degree are becoming less likely to own a home.

This is a major shift for the middle class. Just 12 percent of homeowners in 1986 were college graduates, according to government figures. The trend is driven in part by falling incomes for people with only a high school degree.

— Millennial home buyers are increasingly Hispanic

Out of the 74 million U.S. households that own their homes, a sizable majority — 77 percent — are white. But these demographics are changing fast. Only 66 percent of millennial homeowners are white. The big gains have come from Latinos, who make up 17 percent of millennial homeowners but just 9 percent of all homeowners.

Asians also make up a greater share of millennials. This means that as today’s millennial generation ages, the housing market may look considerably more diverse than it does now.

— Older Americans aren’t just downsizing; they’re also upgrading.

The so-called “silent generation” — those ages 65 to 75— bought homes in the past year with a median size of just 1,800 square feet, about 220 square feet smaller than the homes they sold. But that smaller new home still cost more. These retirement-age buyers paid a median of $250,000, nearly $30,000 more than the home they sold. In some cases, the higher purchase price likely reflects the profits from the sale of their previous home, in other cases a desire by upscale buyers for luxury finishes and amenities.

— Starter homes are no longer popular.

When millennials buy, they’re leapfrogging past the traditional, smaller starter home. This younger generation paid a median of $217,000 for a 1,800-square-foot house. That median is nearly identical to what older generations buy.

 

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http://www.newsmax.com/Personal-Finance/zillow-housing-survey-homes-buyers/2016/10/18/id/753992/